riddhi siddhi gluco biols ltd share price Management discussions


MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Economy:

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next few years backed by its robust democracy and strong partnerships. The growth in Indias GDP during 2022-23 was 7.2 percent as compared to a 9.1 percent in 2021-22. Government over the past few years have taken various initiatives that have contributed to the high growth of the Indian economy. Policy support has included the introduction and application of the Insolvency and Bankruptcy Code (IBC), Goods and Services Tax Reform, cut in the Corporate Tax Rate, the Make in India and Start-up India strategies, and Production Linked Incentive Schemes, among others. Government has also focused on capex led growth strategy and substantially increased its capital investment outlay during the last three years.

The Union Budget 2023-24 serves as the blueprint for an inclusive and empowered economy focused on sectors like green growth, youth power, financial sector, infrastructure & investmemt. It aims to establish India as a forward-thinking nation. The new tax limits could increase peoples spending power and boost the economy in the upcoming financial year. Further, the focus on educating and empowering the youth will help create a young and vibrant population hungry to make India an economic superpower. This Union Budget laid a foundation and blueprint of the economy over Amrit Kal of the next 25 years - from India at 75 to India at 100.

Further in November 2020, the Government of India announced Rs. 2.65 lakh crore stimulus package to generate job opportunities and provide liquidity support to various sectors such as tourism, aviation, construction and housing. Also, Indias cabinet approved the production-linked incentives (PLI) scheme to provide Rs. 2 trillion over five years to create jobs and boost production in the country.

Make in India initiative was launched with an aim to boost countrys manufacturing sector and increase purchasing power of an average Indian consumer. Government has also come up with Digital India initiative, which focuses on three core components: creation of digital infrastructure, delivering services digitally and to increase the digital literacy. Road Ahead Indias GDP is expected to reach US $ 5 trillion by F.Y. 2025 and achieve upper-middle income status on the back of digitization, globalization, favorable demographics, and reforms.

India is also focusing on renewable sources to generate energy. It is planning to achieve 40 per cent of its energy from non-fossil sources by 2030, which is currently 30 per cent, and have plans to increase its renewable energy capacity from to 175 GW by 2022.

Industry Structure and developments:

Indias wind energy sector is led by indigenous wind power industry and has shown consistent progress. The expansion of the wind industry has resulted in a strong ecosystem, project operation capabilities and manufacturing base of about 10,000 MW per annum. Wind energy accounts for 10% of the overall installed power capacity in India and 43% of renewable energy capacity in the country. Wind power generation capacity in India has significantly increased in recent years. The country currently has wind installed capacity of approx. 42.63 GW on 31.03.2023 and has generated around 71.81 Billion Units during 2022-23. [source: mnre.gov.in; cea.nic.in]

The increasing demand for energy in India, can no longer be met through traditional energy sources alone. Renewable energy must be a major part of the solution because it can meet the demand in a cost-effective and sustainable manner. With policy stability, availability of land and grid infrastructure and timely payments by utilities, Governments target of achieving 500 GW of Renewable Energy by 2030 out of which 140 GW will be from Wind.

Opportunities and Threats:

Opportunities

1. Technology improvements

2. Fastest Growing Segment of renewable energy resources

3. Unlimited Resources Available

4. Government Policies Risk, Concerns and Threats

1. Variable Wind speed

2. Uncertainty of monsoon

3. Availability of grid from State Electricity Board during wind season

4. High Investment and Operating Costs

5. Prolonged Impact of COVID-19

Segment-wise Performance:

At the end of F.Y. 2022-23 the total capacity of wind mills stood at 33.15 MW located in Tamil Nadu (28.50 MW), Maharashtra (3.00 MW) and Gujarat (1.65 MW). Energy generated from the wind mills were sold to the respective state level distribution companies. There is no change in the capacity during the year under consideration. Total energy generated during the year under review was 31.44 million units as against 25.71 million units in the previous year yielding revenue of 1,018.69 Lakhs against Rs. 862.41 in the previous year. The reason for decrease in revenue was due to non-operation of 7.50 MW of wind mill in state of Maharashtra and Tamil Nadu and change of O&M contractor.

Revenue from trading business stood at Rs. 11,604.36 Lakhs during the year under review as against Rs. 3534.13 Lakhs during the previous reporting period. The reason for substantial decrease in trading revenue was price volatility in agro commodity throughout the Year. Hence Company has reduced business in trading activity during the Financial Year.

Outlook:

Over the years, India has successfully created a positive outlook to promote investment in, demand for and supply of renewable energy that includes wind energy. In view of same Government is committed to increased use of clean energy sources and is already undertaking various large-scale sustainable power projects and promoting green energy heavily. The Ministry of New and Renewable Energy (MNRE) targets for achieving 175 GW renewable energy capacity by 2022, out of which 60 GW for wind energy.

Internal control systems and their adequacy:

The Company and the Management has established adequate Internal Control systems to ensure reliable financial reporting. The Companys internal control procedures commensurate with the size and nature of business. Detailed procedural manuals are in place to ensure that all the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. The Company always adheres to set guidelines and follows all Accounting Standards prescribed for maintenance of books of accounts and reporting of financial statements. The internal control systems of the Company are monitored and evaluated by internal auditors and their audit reports are periodically reviewed by the Audit Committee of the Board of Directors.

Discussion on financial performance with respect to operational performance:

During the financial year 2022-23, the revenue from operations and other income of the Company has increased from Rs. 15,038.26 lakhs to Rs. 19,346.24 lakhs. However the Net Profit of the Company has decreased from Rs. 7192.62 lakhs to Rs. 3327.49 lakhs on account of exclusion of profit of LLPs which were ceased to be subsidiaries on account of withdrawal of investment by the Company.

Material developments in Human Resources / Industrial Relations front, including number of people employed:

The Company recognizes human capital as strategic resource and believes empowerment of employees across the organization in order to achieve organizational effectiveness. There have been no material developments/significant changes in Human Resource during the year under review. The companys industrial relations remained cordial during the year. Your Directors acknowledge the support and cooperation from employees at all levels. As on 31.03.2023 there are 11 employees on the records of the Company.

Details of any change in return on net worth and key financial ratio as compared to the immediately previous financial year along with a detailed explanation thereof:

Return on Net worth for Financial Year 2022-23 stood at 2.28% as compared to 5.15% for Financial Year 2021-22. The same is decreased on account of lower earnings during the current financial year. The other key financial ratios and reasons for variance are explained in detail in note 40 of standalone the financial statements.

Cautionary Statement:

The statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied.