GLOBAL ECONOMIC REVIEW
The current state of the global economy is marked by a significant level of uncertainty
resulting from various factors. Instability in the financial sector and persistently high
inflation rates contribute to this uncertainty. Additionally, the ongoing repercussions of
Russias invasion of Ukraine and the prolonged effects of the COVID-19 pandemic further
add to the overall unpredictability.
According to the baseline forecast, global growth is expected to decline from 3.4
percent in 2022 to 2.8 percent in 2023, ultimately reaching a 3.0 percent growth rate in
2024. Advanced economies are likely to experience a more pronounced slowdown in growth,
with their growth rate dropping from 2.7 percent in 2022 to 1.3 percent in 2023. In an
alternative scenario where the financial sector experiences further stress, global growth
could decline to approximately 2.5 percent in 2023, with advanced economies witnessing
growth rates below 1 percent.
While global headline inflation is projected to decrease from 8.7 percent in 2022 to
7.0 percent in 2023 due to lower commodity prices, underlying (core) inflation is expected
to decline at a slower pace. It is unlikely that inflation will return to target levels
before 2025 in most cases.
The natural rate of interest holds significant importance in monetary and fiscal policy
as it serves as a benchmark for assessing the effectiveness of monetary policy and
determining the sustainability of public debt. The COVID-19 pandemic has led to a surge in
public debt-to-GDP ratios worldwide, and it is anticipated that these elevated levels will
persist.
The concept of geoeconomic fragmentation, characterized by disruptions in supply chains
and escalating geopolitical tensions, has become a central focus in policy discussions.
The risks, potential benefits, and costs associated with this fragmentation are currently
being carefully examined.
In summary, the global economy is currently navigating uncertainties arising from
turmoil in the financial sector, high inflation, the ongoing repercussions of the
Russia-Ukraine conflict, and the prolonged effects of the COVID-19 pandemic. The baseline
forecast indicates a slowdown in growth, particularly in advanced economies. Public debt
remains a concern, and efforts are underway to explore strategies for reducing debt-to-GDP
ratios. Geoeconomic fragmentation is being thoroughly studied to understand its
implications for foreign direct investment (FDI) and its impact on the global economy.
Source: https://www.imf.org/en/ Publications/WEO/Issues/2023/04/11/
world-economic-outlook-april- 2023?cid=ca-com-compd-pubs belt
INDIAN ECONOMIC REVIEW
Indias economy demonstrated strong growth in the fourth quarter of the fiscal year
2022-23, expanding by 6.1 percent, resulting in an annual growth rate of 7.2 percent. This
growth rate surpassed the 4.5 percent expansion witnessed in the previous quarter of
October-December 2022-23.
The official forecast for Indias economy in the fiscal year 2023-2024 is an expansion
of 7 percent. However, the Finance Ministry has identified downside risks to this
forecast. These risks include oil production cuts by OPEC, challenges in the financial
sector of developed markets affecting cash flows, and the potential impact of deficient
monsoon rains due to El Nino on farm output and prices.
According to the International Monetary Fund (IMF), Indias economy is displaying
resilience and is expected to contribute to a growth rate of 4.6 percent in Asia for the
current financial year, an increase from 3.8 percent the previous year. India, along with
China, is recognized as a key driver of growth in the Asia-Pacific region, with both
countries projected to account for approximately half of global growth in 2023, while the
remaining 20 percent comes from the rest of the region. Despite the implementation of
monetary tightening measures, domestic demand in Asia remains strong, although there is a
declining trend in external demand for technology products and other exports.
The Economic Survey report 2022-23 highlights several factors that could positively
influence Indias growth outlook. It suggests that the ongoing surge in Covid-19
infections in China may have limited health and economic repercussions for the rest of the
world, leading to the normalization of supply chains. Additionally, inflationary pressures
resulting from Chinas economic reopening are expected to be temporary and not have a
significant or lasting impact. Furthermore, if major Advanced Economies (AEs) experience a
recessionary trend, it could result in a pause in monetary tightening measures and a
return of capital flows to India. This, combined with a stable domestic inflation rate
below 6 percent, has the potential to enhance investor confidence and stimulate private
sector investment.
The Indian agriculture economy is expected to grow at a rate of 3.5% in 2022-
23, according to the Economic Survey 2022-23. This growth is driven by several factors,
including increased investment in agriculture as the government has increased its
investment in agriculture in recent years, and this is expected to continue in the coming
years. This investment will be used to improve irrigation facilities, develop new crop
varieties, and provide training to farmers. Further, the agricultural sector has been
making steady progress in terms of productivity, and this is expected to continue in the
coming years. This progress is being driven by a number of factors, including the use of
improved agricultural practices, the adoption of new technologies, and the availability of
better inputs. Lastly, the demand for agricultural products is expected to grow in the
coming years, due to the increasing population and rising incomes. This growth in demand
will provide a boost to the agricultural sector.
As per the third advance estimate for 202223 the total foodgrain production in India is
estimated to be 330.53 million tonnes in 2022-23, which is a record high. This is an
increase of 7.5% from the previous year. The total pulses production in India is estimated
to be 27.5 million tonnes in 2022-23, that of oilseeds is 40.99 million tonnes, cotton is
34.35 million tonnes and sugarcane is 494.23 million tonnes.
In summary, the Economic Survey report 2022-23 identifies various factors that could
positively influence Indias growth prospects. These include the limited impact of Chinas
Covid-19 surge on global health and economies, temporary inflationary effects from Chinas
economic reopening, a potential pause in monetary tightening by major AEs, and increased
capital flows to India. These factors, along with stable domestic inflation and improved
investor sentiment, could provide a boost to private sector investment and further drive
Indias economic growth.
Source:
https://pib.gov.in/
PressReleaseIframePage.
aspx?PRID=1927272
https://www.livemint.com/news/india/
imf-predicts-resilient-economic-growth-
for-india-in-2023-driven-by-china-
and-india-contributing-70-of-global-
growth-11683049759653.html
https://www.forbesindia.com/article/
explainers/gdp-india/85337/1
https://economictimes.indiatimes.com/
news/economy/indicators/expect-
indias-gdp-growing-over-7-pc-in-
2023-24-cea-anantha-nageswaran/
videoshow/100895649.cms
https://pib.gov.in/PressReleasePage.
aspx?PRID=1894932
GLOBAL SUPPLY CHAIN REVIEW
In todays interconnected world economy, with numerous businesses operating across
different regions and countries, smooth economic coordination is essential for the
successful functioning of the global economy. Supply chain management plays a critical
role in establishing a robust logistical network between companies and their suppliers,
enabling the efficient manufacturing, production, and distribution of goods to customers.
The supply chain network, as a complex and dynamic system involving organizations,
resources, information, and people, facilitates the intricate web of supply and demand
among various economic agents. The significance of supply chain management has further
intensified with the expansion of international trade.
The global market for supply chain management has experienced remarkable growth,
reaching approximately $28.9 billion in value in 2022. It is projected to achieve a
revenue of around $45.2 billion by the end of 2027, with a compound annual growth rate
(CAGR) of 9.4% from 2022 to 2027. This growth is primarily driven by the escalating demand
for enhanced visibility and transparency in supply chain data and processes, as well as
the rapid expansion of the retail and e-commerce sectors. Additionally, ongoing
technological advancements in supply chain management are reshaping the industry, and the
integration of Artificial Intelligence (AI) with SCM products presents lucrative
opportunities for vendors operating in this space.
Source: https://www.marketsandmarkets.com/Market-Reports/supply-chain-management-market-190997554.html
INDIAN SUPPLY CHAIN INDUSTRY REVIEW
Indias investment in its supply chain infrastructure is experiencing an upward trend.
Factors such as the implementation of the Goods and Services Tax (GST), the relaxation of
Foreign Direct Investment (FDI) Regulations, and increased government expenditure have
played a significant role in stimulating growth in the sector.
Driven by the ambition to establish itself as a prominent global manufacturing hub, the
Indian governments focus on the "Make in India" initiative has further
accelerated the need for comprehensive supply chain reforms across the country. This has
resulted in the introduction of various schemes and investment incentives at both the
federal and state levels to encourage and facilitate investments in the supply chain
sector.
A wide range of technology, such as GPS, RFID, Artificial Intelligence, and Internet of
Things and automation have made it possible to monitor and improve operations in realtime,
while the growth of e-commerce has created new demands for faster and more flexible
delivery methods with last mile delivery.
Moreover, e-commerce and online grocery shopping with contactless deliveries and
cashless payments are redefining consumer-facing business. Retailers are facing more
pressure than ever before to provide a seamless and personalized experience for their
customers, as well as provide value in ways that go beyond traditional retail models. With
the rise of drones, retailers can now offer lightweight goods delivery, making it easier
for them to reduce fulfilment costs and capital expenditures associated with physical
stores.
Opportunities in the supply chain sector
• National Logistics Policy: A strategic framework aimed at optimizing
logistics efficiency and promoting seamless integration across various modes of
transportation for enhanced economic growth and competitiveness.
• PM Gati Shakti: It will integrate infrastructure initiatives from
multiple Ministries and State Governments, such as Bharatmala, Sagarmala, inland
waterways, dry/land ports, UDAN, etc. It will encompass diverse economic zones like
textile clusters, pharmaceutical clusters, defence corridors, electronic parks, industrial
corridors, fishing clusters, and agri zones, with the aim of enhancing connectivity and
bolstering the competitiveness of Indian businesses.
• Sustainable Supply Chain: With
increasing awareness of sustainability and environmental concerns, companies are
looking to optimize their supply chains to reduce waste, minimize carbon footprint, and
promote ethical sourcing. Offering sustainable supply chain solutions, including green
logistics, reverse logistics, and waste management, presents an emerging opportunity.
• E-commerce Logistics: With the
rapid growth of e-commerce in India, there is a significant demand for efficient and
reliable logistics and supply chain solutions. Companies specializing in last-mile
delivery, warehousing, order fulfillment, and reverse logistics can explore opportunities
in this sector.
Threats
• Infrastructure Bottlenecks: Indias infrastructure, including roads,
ports, and railways, still faces challenges in terms of capacity, efficiency, and
connectivity. Inadequate infrastructure can lead to delays, increased transportation
costs, and supply chain disruptions.
• Complex Regulatory Environment: India has a complex regulatory
environment with multiple layers of bureaucracy and varying state-level regulations.
Navigating through these regulatory hurdles, obtaining licenses, permits, and dealing with
compliance issues can be time-consuming and challenging.
• Inefficient Logistics and
Transportation: The logistics and
transportation sector in India can be fragmented and inefficient, leading to delays,
higher costs, and poor service quality. Inconsistent road conditions, congested ports, and
limited multimodal connectivity can impact supply chain efficiency.
• High Dependence on Road
Transportation: The majority of goods in India are transported via road, leading to
heavy congestion, traffic delays, and increased risk of accidents. Reliance on road
transportation increases vulnerability to disruptions caused by strikes, natural
disasters, or fuel price fluctuations.
• Inventory Management Challenges:
Effective inventory management is crucial in supply chain, but it can be challenging in
India. Factors such as demand variability, inadequate forecasting, and inefficient
warehouse management can lead to excess inventory, stockouts, and increased costs.
SUUMAYA CORPORATION LIMITEDS SUPPLY CHAIN ENGINEERING
In India, the expenditure associated with logistics stands at approximately 12%-13% of
the GDP, a considerably higher figure in comparison to BRICS nations as well as the United
States and Germany, where it stands at 11%, 9.5%, and 8% respectively. The government has
already devised a comprehensive plan encompassing various measures to reduce this
percentage to 8% by 2030, with the aim of enhancing operational effectiveness for
businesses.
Based on business analysis and demand and supply forecasts, company procures raw
materials in bulk from importers and local suppliers. The procedure in the procurement of
raw materials, is the identification of buyers of these raw material products, providing
logistics and warehousing services to deliver products to the customers at their
doorsteps, providing financial assistance and also finding sellers for their products.
The Company believes in long term trustworthy, satisfactory and sustainable
relationships with customers by providing them end to end solutions to make their business
grow.
SECTOR-WISE OVERVIEW
INDIAN AGRICULTURAL SECTOR OVERVIEW
India is one of the major players in the agriculture sector worldwide and it is the
primary source of livelihood for ~55% of Indias population. India has the largest area
planted to wheat, rice, and cotton, and is the largest producer of milk, pulses, and
spices in the world. It is the second-largest producer of fruit, vegetables, tea, farmed
fish, cotton, sugarcane, wheat, rice, cotton, and sugar. Agriculture sector in India holds
the record for second-largest agricultural land in the world generating employment for
about half of the countrys population.
Thus, farmers become an integral part of the sector to provide us with means of
sustenance.
Consumer spending in India will return to growth in 2021 post the pandemic-led
contraction, expanding by as much as 6.6%. The Indian food processing industry accounts
for 32% of the countrys total food market, one of the largest industries in India and is
ranked fifth in terms of production, consumption, export and expected growth.
In terms of exports, the sector has seen good growth in the past year. In FY22, exports
of marine products stood at US$ 7.77 billion, exports of rice (Basmati and Non-Basmati)
stood at US$ 6.98 billion, buffalo meat exports stood at US$ 3.30 billion, sugar exports
stood at US$ 4.60 billion, tea exports stood at US$ 750.93 million, coffee exports stood
at US$ 1,020.80 million.
The sector has also recorded a sharp increase in investments with a cumulative FDI
inflow of US$ 2,600.70 million between April 2000-June 2022. Indias agricultural and
processed food products exports stood at US$ 9,598 million in FY23 (April- July 2022), up
by 30% YoY.
Source: https://www.ibef.org/industry/
agriculture-india
PRODUCT OVERVIEW
During the year under review, the Company was engaged in supply chain engineering of
polymers, non-ferrous metals, medical textiles, agro and textile yarns. The Company
provides comprehensive solutions, supplying customers with raw materials, fabrics, yarns
and polymers for onward use in manufacturing operations. This timely service helps
customers liberate their precious managerial bandwidth for other business-strengthening
functions.
Products |
Industries associated |
Polymers
PVC, HDPE, LDPE, LLDPE, PP, Mettalocene |
Agriculture, Automobile, Real estate, Packaging. |
Textiles (Medical textile and yarns) |
Medical, Apparels etc |
Manganese ores |
Iron, steel, agriculture, aluminium alloys |
BUSINESS STRATEGY
Our vision for the year 2023-24 revolves around "Creating Value with
Intelligence".
Along with polymers, fabrics, the companys aim for the future is to build a
sustainable business by diversifying risks over a wide range of products. These include
dairy goods of various types, agricultural commodities and produce, medicinal and aromatic
plants, Tur, Chana, Rice, Wheat, Bajra, Turmeric, Maize, Guar, and Mentha. Furthermore, we
intend to engage in various trading modes, such as sourcing partners, general trade,
exchange-based trading, and trading in processed Tur/Chana Dal, to ensure flexibility and
maximise market prospects.
GENERAL TRADING
Our success and growth in the trading of raw materials like polymers grains and other
agricultural commodities, respectively, have been greatly influenced by our commercial
relationships with some of the major agro business players. We plan to expand our product
options and market reach through experience, networks, and resources, which we have
access. We believe that our partnerships & strategies will position us as a
trustworthy and competitive player in the agricultural trade industry, in addition to
helping our firm to develop.
COLLABORATION WITH FPOS
To enhance our distribution network and effectively reach end consumers, we plan to
strategically form alliances and partnerships with multiple Farmer Producer Organizations
(FPOs). These collaborations will allow us to tap into their expertise and local networks,
enabling us to establish efficient last-mile supply chains. By working together with FPOs,
we can ensure timely and seamless delivery of our products to the target market, thereby
enhancing customer satisfaction and optimizing our overall distribution operations.
A distinctive aspect of our business model of directly sourcing of produce from
farmers, will also ensure that Indian farmers receive a just and equitable portion of the
profits within the supply chain. By establishing robust market linkages, we aim to empower
farmers and enhance their socio-economic standing.
FINANCIAL PERFORMANCE VIS-A-VIS OPERATIONAL PERFORMANCE
FINANCIAL REVIEW
Revenues: Revenue from operations during the year stood at Rs.40.78 /- crore, as
compared to Rs. 3364.01/- crore in FY 202122.
Interest and finance costs: Net interest and finance costs decrease by 97.17 % during
the year.
Profit after tax: The Company registered a loss of Rs. 37.19 crores compared to Rs.
0.29 crores profit in FY 2021-22
OPERATIONAL REVIEW
Key Ratios:
| Particulars |
FY 2022-23 |
FY 2021-22 |
Reason |
| Debt- equity ratio |
0.08 |
1.73 |
Due to restrucuring and revised business model in current FY. |
| Inventory turnover (Days) |
170.17 |
7.73 |
Changes in business model in the Company, Inventory completely sold off
during the year. |
| Interest coverage ratio |
0.00 |
7.02 |
Due to restructuring, changes in business model interest convering ratio
reduced. |
| Current ratio |
0.11 |
1.19 |
Reduction in short term Loans (Assets). |
| Debt- equity ratio |
0.08 |
0.39 |
Reduction of debt by effective handeling of working capital |
| Operating margin ratio (%) |
(100.53) |
0.67 |
Due to significant reduction in revenue and increased in expenses,
operating ratio declined. |
| Net profit margin (%) |
(96.92) |
0.01 |
Due to significant reduction in revenue and increased in expenses,
operating ratio declined. |
RISKS AND RISK MITIGATION
The Risk factors have been determined based on their materiality. The following factors
have been considered for determining the materiality.
1. Some risks may not be material individually but may be material when considered
collectively.
2. Some risks may have material impact qualitatively instead of quantitatively.
3. Some risks may not be material at present but may have a material impact in the
future.
The Company faces the following Risks and Concerns Economic Risk:
Any business is in a way or other, dependent on the prevailing global economic
conditions. Inflation, changes in tax, trade, fiscal and monetary policies, scarcity of
credit etc. However, we do not expect to be significantly affected by this risk.
Mitigation:
Economic risk can be mitigated by proper planning and staying updated with the global
and economic scenarios.
Finance risk:
Inability to fund the expansion of the business in a cost-effective manner could affect
growth. Competition risk: Growing competition could affect profitability.
Mitigation:
The Company plans to raise funds for working capital by way of owned and working
capital finding and utilise the same to the optimum.
Competition risk:
Growing competition could affect profitability.
Mitigation:
The Company offered a unique and sustainable business-strengthening proposition to its
customers, which could be measured in terms of bps contributed to the overall EBITDA
margin, validating the reasons for sustained engagement. In view of this, the company
strengthened its recall around A partner that is good for our business.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The internal control and risk management system is structured and applied in accordance
with the principles and criteria established in the corporate governance code of the
organisation. It is an integral part of the general organisational structure of the
Company and the Group and involves a range of personnel who act in a coordinated manner
while executing their respective responsibilities. The Board of Directors offers its
guidance and strategic supervision to the Executive Directors and management, monitoring
and support committees. The control and risk committee and the head of the audit
department work under the supervision of the Board-appointed Statutory Auditors.
HUMAN RESOURCE
Human resources are a valuable assets and the company seek to attract and retain the
best talent available. Systematic training, development, continuance of productivity and
employee satisfaction are some of the highlights of human resource development activities
during the year. Employee relations continued to be cordial. The company strives to
develop the most superior workforce so that it can accomplish along with the individual
employees, their work goals & services to its customers & stakeholder. Our
fundamental belief in immense power of the human potential and team work. A
transformational force that stimulates enterprise accelerates our constant pursuit of
excellence and empowers our people to release their full potential. The company also
believes human resources as the supporting pillars for the organizations success. Your
director acknowledges and thanks employees for their continued contribution.
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