AN OVERVIEW:
Indias post-independence journey began as an agrarian nation; however, over the years
the manufacturing and services sector has emerged strongly. Today, its service sector is
the fastest-growing sector in the world, contributing to more than 60% to its economy and
accounting for 28% of employment. Manufacturing remains as one of its crucial sectors and
is being given due push via the governments initiatives, such as "Make in
India." Although the contribution of its agricultural sector has declined to around
17%, it still is way higher in comparison to the western nations. The economys strength
lies in a limited dependence on exports, high saving rates, favorable demographics, and a
rising middle class. The long-term growth perspective of the Indian economy is positive
due to its young population, English proficiency, corresponding low dependency ratio,
healthy savings and investment rates, and increasing integration into the global economy.
The economy of India is a developing mixed economy. It is the worlds fifth-largest
economy in 2019, overtaking the United Kingdom and France. The country ranks third when
GDP is compared in terms of purchasing power parity at $11.33 trillion. When it comes to
calculating GDP per capita, Indias high population drags its nominal GDP per capita down
to $2,170. The Indian economy was just $189.438 billion in 1980, ranking 13th on the list
globally. Indias growth rate is expected to rise from 7.3% in 2018 to 7.5% in 2019 as
drags from the currency exchange initiative and the introduction of the goods and services
tax fade, according to the IMF. Following the path, Indias rank in the World Banks Ease
of Doing Business 2020 survey has consistently improved over last three years and stands
at 63, among 190 countries, making it the one of worlds top 10 most improved countries
for the third consecutive time.As per the Central Statistics Organization (CSO) second
advance estimates, the GDP growth was retained at 5 per cent in 2019-20 and however final
numbers are likely to be worse than expectations due to sharp contraction in economic
activities in March due to COVID-19. As per Moodys (a global rating company), Indias GDP
growth rate for 2020-21 is expected to be at Zero mainly led by steep deterioration in
business activities and sharp contraction in consumption trend due to disruption led by
COVID-19. However, on a positive note, it has forecasted Indias GDP growth rate to bounce
back to 6.6 per cent in 2021-22.
The government rationalised the corporate tax rate to 22 per cent from 30 per cent,
subject to the condition that companies will not avail of any exemption/ incentive.
Further, in order to boost fresh investment, new companies incorporated on or after
October 1, 2019 and making fresh investment in manufacturing, the tax rate for them has
been cut to 15 per cent from 25 per cent. The government collected Rs.15 lakh crore as net
tax revenue in 2019-20 as against Rs. 13.2 lakh crore collected in 2018-19, while direct
tax collection stood at Rs. 11.7 Lakh crore as against estimated Rs.13.4 lakh crore in
2018-19. For 2020-21, the gross direct tax collections are budgeted to increase by 12.7
per cent as per the union budget as against 2.9 per cent growth achieved in 2018-19.
Further, capital expenditure for 2020-21 is pegged at Rs. 4.12 Lakh crore as against Rs.
3.49 Lakh crore incurred in 2019-20 and fiscal deficit was targeted at 3.5 per cent in
2020-21, which will be difficult to be achieved given the disruption in economy.
COVID-19 AND COMPANYS RSEPONSE:
In last month of the financial year, the COVID-19 pandemic developed rapidly into a
global crisis, forcing governments to enforce lockdowns of all economic activity. The
humongous outbreak of the dreaded corona virus has brought about a groundbreaking change
in what the world perceived as normal. The COVID-19 has sent ripples of fear across the
masses, destroying not only lives, but also the economies of most countries, given the
stringent enforcement of lockdowns across the globe. Major industry verticals have been
adversely affected on account of the pandemic, as manufacturers strive to keep their
businesses afloat amid what is being hailed by financial analysts as a situation far
worse than the economic upheaval of 2008-2009. Among the many sectors that have witnessed
a downfall, the food & restaurant industry seems to have taken one of the worst hits.
In the coming times, the F&R market vendors will need to prepare themselves for the
long-term impact of COVID-19, which is likely to step up as one of the major challenges of
food & restaurant industry.
Due to lockdown, the Companys focus immediately shifted to ensuring the health and
well-being of all employees and has completely suspended its business operations. Further,
the Company has extended the Work from Home for all its employees and other staff of
Registered Office and Corporate Office and was quite successful in implementing the same.
The Business operations of the Company are still closed. However, the Company has started
its administrative and other work by taking all necessary steps to adhere to the
guidelines issued by relevant Government authorities and has put in place safety measures
keeping in mind the safety, health and wellbeing of the employees. All the facilities
available across the company have been sanitized so that our employees are safe and
secure. The safety protocols of temperature sensing, wearing masks, face shields, social
distancing, sanitizing, and washing hands are being adhered to very stringently. Work from
home is still being allowed to the office employees to the extent feasible.
INDUSTRY STRUCTURE AND DEVELOPMENT:
The Company is engaged in single segment. During the year, the Company has changed the
nature of its principal business activity to food and restaurant business. The Company has
gradually started its operations under new activity since September 2019. Being first year
new business line, the Company has not achieved satisfactory growth during the year
2019-20. Further, due to Covid-19 pandemic, the operations of the Company were affected
from the start of March, 2020 and largely from the 3rd week of March 2020 due to sudden
direction by Government for complete lockdown throughout the Country. The revenue of the
Company was impacted and will continue throughout the F.Y. 2020-21, whereas the Company
continues to incur its fixed expenses. The Company continues to evaluate the impact of
COVID-19 as the situation evolves.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
The Companys performance is discussed in detail under the head Financial Results and
Financial Performance in the Directors report.
OUTLOOK:
The Company is striving to accelerate growth path. With a solid foundation and sound
business strategy, the company will embark the primary phase of growth. The management is
of the view that, due to COVID-19 pandemic, food and restaurant business will be impacted
for F.Y. 2020-21 and accordingly the Company has started looking after various business
opportunities and management has resolved to diversify its business activities and the
same is proposed to members at ensuing annual general meeting. In the current environment,
preservation of cash remains key. Therefore, the Company will have a sharp focus on cost
optimization and are working on eliminating any unnecessary costs. The Company will
continue to focus on effective business cycle which will further strengthen its cash
flows.
MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATION FRONT AND HUMAN RESOURCES
POLICIES:
There have not been any material / major development in human resources front and
industrial relations have been cordial. The company is being managed by its Directors and
few employees who look after the day to day functioning of the Company. The company has
cordial relationship with employees.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
An appropriate and adequate system of internal controls exist in your company to ensure
that all assets are safeguarded and protected against loss or from misuse or disposition,
and that the transactions are authorized, recorded and reported suitably. Internal control
systems are ensuring effectiveness of operations, accuracy and promptness of financial
reporting and observance with laws & regulations. The Company has an independent
internal audit function which continuously evaluates the adequacy of, and compliance with,
policies, plans, regulatory and statutory requirements. Internal audit also evaluates and
suggests improvement in effectiveness of risk management, control and governance process.
The Audit Committee of the Board provides necessary oversight and directions to the
internal audit function and periodically reviews the findings and ensures corrective
measures are taken. The internal control is designed to ensure that the financial and
other records of the company are reliable for preparing financial statements and other
data, and for maintaining accountability of assets.
OPPORTUNITIES, RISKS, CONCERNS AND THREATS:
In view of the current situation across the globe and limited alternatives to which the
Companys resources can be put to use, opportunities and threats cannot be quantified and
enlisted in details. The Food & restaurant Industry is one of the most dynamic
industries around. Just as in the world of fashion, the food sector too experiences
constant evolution. The changing industrial climate makes this industry particularly
challenging for manufacturers, suppliers and retailers alike. Risk and concerns, if any,
cannot be predicted with certainty.
CAUTIONARY STATEMENT:
The statements in report of the Board of Directors and the Management Discussion &
Analysis Report describing the Companys outlook, estimates or predictions may be forward
looking statements within the meaning of applicable securities laws and regulations.
Actual results could differ materially from those expressed or implied since the Companys
operations are influenced by many external and internal factors beyond the control of the
Company. The Company takes no responsibility for keeping the members updated on changes in
these factors except as may be statutorily required from time to time.
KEY FINANCIAL RATIOS:
| Ratios |
2019-20 |
2018-19 |
Remarks |
| Debtors Turnover |
N.A. |
3.78 |
The Company does not have any debtors as on March 31, 2020 |
| Inventory Turnover |
N.A. |
N.A. |
The company does not have closing stock of inventory as on March 31,
2019 |
| Interest Coverage Ratio |
N.A. |
N.A. |
The Company does not have any debt |
| Current Ratio |
12.67 |
11.74 |
Liabilities of the Company has decreased during the year under review |
| Debt Equity Ratio |
N.A. |
N.A. |
The Company does not have any long term debt. |
| Net Profit Margin (%) |
45.31% |
24.78% |
The company has focused on minimizing the expenses and optimum use of
various resources |
| Return on Net Worth (%) |
2.75% |
3.07% |
Net profit of the Company has decreased during the year as compared to
previous year. |
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