Pazel International Ltd Management Discussions.
The economy of India is a developing mixed economy. It is the worlds seventh-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). The country ranks 139th in per capita GDP (nominal) and 119th in per capita GDP (PPP) as of 2018. After the 1991 economic liberalization, India achieved 6-7% average GDP growth annually. Since 2014, Indias economy has been the worlds fastest growing major economy, surpassing China.
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. India topped the World Banks growth outlook for the first time in fiscal year 2015-16, during which the economy grew 7.6%. Despite previous reforms, economic growth is still significantly slowed by bureaucracy, poor infrastructure, and inflexible labor laws (especially the inability to lay off workers in a business slowdown).
India has one of the fastest growing service sectors in the world with an annual growth rate above 9% since 2001, which contributed to 57% of GDP in 2012-13. India has become a major exporter of IT services, Business Process Outsourcing (BPO) services, and software services with $177 billion revenue in FY 2019. The IT industry continues to be the largest private-sector employer in India. India is the second-largest start-up hub in the world with over 3,100 technology start-ups in 2018-19. The Indian automobile industry is one of the largest in the world with an annual production of 21.48 million vehicles (mostly two and three-wheelers) in 2013-14. India had $600 billion worth of retail market in 2015 and one of worlds fastest growing e-commerce markets.
ABOUT THE COMPANY
A) INDUSTRY STRUCTURE AND DEVELOPMENT:
The company is engaged in Single Segment i.e. trading of various consumable goods. The Company has achieved satisfactory growth during the year 2018-19 which is evident from the increase in its total income and focus on controlled expenses.
B) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
During the year, the Company has generated revenue from operations of Rs. 133.34 lakhs as against the revenue of Rs. 341.25 lakhs during the previous year. The company has earned net profit of Rs. 57.10 lakhs during the financial year as against the net profit of Rs 49.55 lakhs during the previous year. Further details are included in notes to Accounts of Financial Statements.
The Company is on an accelerated growth path. With a solid foundation and sound business strategy, the company has embarked on the primary phase of growth. It will continue to focus on effective business cycle which will further strengthen its cash flows.
D) 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.
E) 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 internal control is supplemented on an ongoing basis, by an extensive program of internal audit being implemented throughout the year by independent Chartered Accountants firm of "Internal Auditors". The internal audit reports along with management comments thereon are review by the Audit Committee of the Board comprising of independent and non-executive Directors, on a regular basis. Implementations of the suggestions are also monitored by the Audit Committee. 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.
F) OPPORTUNITIES, RISKS, CONCERNS AND THREATS:
In view of the legalized operation of the Company and limited alternatives to which the Companys resources can be put to use, opportunities and threats cannot be quantified and enlisted in details. Risk and concerns, if any, cannot be predicted with certainty. However, any adverse change in government policy and global economic changes can affect the performance of the Company.
G) 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.
F) KEY FINANCIAL RATIOS
|Debtors Turnover||3.78||NA||In order to increase profitability, the Company has started giving credit to Debtors.|
|Inventory Turnover||N.A.||1.83||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||11.74||5.7||During the year under review the company has repaid short term borrowings and dues of creditors are also being timely paid.|
|Debt Equity Ratio||N.A.||N.A.||The Company does not have any long term debt.|
|Operating Profit Margin (%)||33.48%||13.83%||The company has focused on optimizing the use of various resources and due to cost efficiency.|
|Net Profit Margin||24.78%||11.81%||The company has focused on optimizing the use of various resources and due to cost efficiency|
|Return on Net Worth||3.07%||2.77%||Net profit of the Company has increased during the year as compared to previous year.|