GLOBAL ECONOMY
Following a turbulent year in 2022, the global economy is seen
demonstrating signs of resilience in 2023. The geopolitical tensions caused by the
prolonged Russia-Ukraine war, supply chain disruptions, higher inflation, and tighter
monetary conditions made it hard to complete the economic recovery in 2022-23. Global
economic growth remains low by historical standards and financial risks have increased.
International trade was also severely impacted in 2022-23 due to global economic slowdown,
persistent inflation, supply chain bottlenecks, and subdued consumer sentiments. However,
economic conditions have started showing signs of stabilisation in early 2023.
A key factor in the improvement in economic activity has been the
easing of energy and food prices and input costs. After a year of the Russia-Ukraine war,
the value of Russian exports of cobalt, copper, diamonds, iron ore, gold and other
selected metals and mining products dropped 35.5% between February and April 2022, Russia
war against Ukraine has been a key driving force behind aluminum and nickel price
movements, while high energy prices have affected most metals, especially copper. Metal
prices are projected to increase 16 percent in 2022 and ease somewhat in 2023.
INDIAN ECONOMY
India outperformed and repositioned itself amongst the worlds
fastest growing economies, even as most developed countries faced slowing growth amidst
high inflation in FY 2022-23. Indias GDP growth during FY 2022-23 is estimated at 7.0% as
against 9.1% growth achieved in FY 2021-22, as per the second advance estimates of
National Income released by the National Statistical Office (NSO). The accelerated pace of
economic reforms has led to the sustainable growth of the Indian economy and strengthened
its position in the world.
The IMF projects the Indian economy to grow at 5.9% in FY 2023-24
before rising to 6.3% in FY 2024-25. The optimistic growth stems from positive factors
such as strong investment activity bolstered by the governments push for infrastructure
development with an allocation of 10 Lakh Crores, the rebound of private consumption,
improvement in capacity utilisation, and revival in credit growth. The Reserve Bank of
India (RBI) has also increased the repo rate by 250 basis points to 6.50% in FY 2022-23 to
curb inflation and boost economic growth.
Moreover, growth-enhancing policies such as the production linked
incentives (PLI) schemes and the governments emphasis on self-reliance will boost
productivity and have a multiplier effect on the Indian economy. The Indian economy
remains relatively well positioned to navigate global headwinds in FY 2023-24 with
unprecedented levels of optimism and multiple growth levers at play.
INDUSTRY STRUCTURE & DEVELOPMENT
Copper is the third-most-consumed metal in the world. It is also
known as a highly electrically conductive material. The properties of copper include good
electrical conductivity, excellent thermal conductivity, corrosion resistance, high
ductility, recyclability, and non-magnetic nature. The copper market is segmented by
end-user industry (automotive and heavy equipment, construction, electrical and
electronics, industrial and other end-user industries). Copper is the most widely used
metal in energy generation, transmission infrastructure, and energy storage. It is the
next most used metal after aluminum and steel in the construction, telecommunications,
transportation, and automobile manufacturing sectors. The size of Indian copper industry
(consumption of refined copper per annum) is around half a million tones which constitutes
only 3 percent of the world copper market. India, a major exporter of refined copper till
a few years ago, is set to become a net importer in recent years due to disturbance of
production in various plants because of various environmental concerns.
FORWARD-LOOKING INFORMATION
This MD&A contains certain forward-looking statements and
information relating to the Company that is based on the beliefs of its management as well
as assumptions made by and information currently available to the Company. When used in
this document, the words "anticipate", "believe",
"estimate", "expect" and similar expressions, as they relate to the
Company or its management, are intended to identify forwardlooking statements. This
MD&A contains forward-looking statements relating to, among other things, regulatory
compliance, the sufficiency of current working capital, and the estimated cost and
availability of funding for the continued exploration of the Companys properties. Such
statements reflect the current views of the Company with respect to future events and are
subject to certain risks, uncertainties, and assumptions. Many factors could cause the
actual results, performance or achievements of the Company to be materially different from
any future results, performance or achievements that may be expressed or implied by such
forward-looking statements. Aside from factors identified in the interim MD&A,
additional, important factors, if any, are identified here.
SEGEMENT WISE PERFORMANCE
Our Companys operations belong to a single segment and therefore
no segment wise performance given.
OPPORTUNITIES AND THREATS
Our success as an organization depends on our ability to identify
opportunities and leverage them while mitigating the risks that arise while conducting our
business. The electronics production was halted temporarily in many countries. Also, the
mining of metals, including copper, slowed down in 2022-23. Also due to Russian-Ukraine
war, there has been major reduction in demand for copper. These factors negatively
impacted the copper market worldwide including India.
However, now with increasing demand from construction,
electronics, and telecommunication industries is boosting the markets growth. During the
financial year 2022-23, the Company started to expand the product base in copper and
copper alloy products and also to increase its production capacity in Copper Busbar.
However due to frequent ups-downs in industry for demand of copper products, there has
been no surge in margin and profitability of the company. During the year, the import of
Copper also get affected due to disturbances worldwide because of the pandemic and such
disturbances resulted into price rise of main raw material i.e. copper scrap of the
Company and increased the working capital requirement of the Company. Price rise in copper
scrap also affected the price of our products and buyers waited for their Orders and these
all affected the financial performance of the Company. Looking to the present improvements
in industrial sentiments in India and Worldwide, the Management is very optimistic in
positive improvement of turnover and profit margin in current as well as coming years. The
Company is continuously exploring all available opportunity to expand its market reach in
products relating to Copper and Copper Alloy.
The Management see risk in raising price of metals including
copper which can affect the profitability of the Company. Price rise in copper will also
result into increase in working capital cost and slow growth in sales and lower capacity
utilization.
OUTLOOK, RISKS & CONCERNS
Our Outlook, risks and concerns are as follows:
• Looking ahead, we remain optimistic about the future of
Sagardeep Alloys Limited in the copper industry. As global demand for copper continues to
grow, we are well-positioned to capitalize on market opportunities. Our existing plants,
coupled with ongoing operational enhancements, will enable us to meet the rising demand
while maintaining our commitment to sustainability and responsible business practices. We
foresee a positive outlook for the copper market and are confident in our ability to
deliver sustainable value to our stakeholders.
• We are seeing very good business opportunity for Metal
Sector in coming Years and this will also result into positive improvement of our Company.
• During the year the Company has discontinued the
production of Copper Sulphate as it did not lead to improvement of turnover and
profitability.
• As with any business there are various risks that could
impact operations. We actively monitor and manage these risks to safeguard our business
and stakeholders interests. Market volatility, regulatory changes, geopolitical
uncertainties, and environmental factors are among the key risks we continually assess and
address. Our risk management strategies aim to ensure resilience and adaptability in
dynamic market conditions.
• A large part of our revenue depends on our top clients and
loss of any one of major client may lead to negative impact on our business.
• Our success depends on our top management and key
personnel and our ability to attract and retain them.
• Price volatility of metal sector including copper can
affect the performance of the Company negatively.
INTERNAL CONTROL SYSTEM AND ADEQUACY
The Company has an adequate internal control system commensurate
with its size and the nature of its business in order to achieve efficiency in operation
and optimum utilization of resources. These controls ensure safeguarding of assets,
reduction and detection of fraud and error, adequacy and completeness of the accounting
records and timely preparation of reliable financial information.
FINANCIAL AND OPERATIONAL PERFORMANCE
Financial and Operational performance is provided in Board of
Directors Report and same can be referred in point no 1 of the director report.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The industrial relations remained cordial throughout the year.
The employees of the Company have extended a very productive cooperation in the efforts of
the management to carry the Company to greater heights. Continuous training down the line
is a normal feature in the Company to upgrade the skills and knowledge of the employees
and workmen of the Company. The Management took this opportunity to thank all of its
employees including laborers for their continuing support in this pandemic and helped
Company to continue its business operation in this odd time period.
CAUTIONARY STATEMENT
Statement in this report describing the Companys objectives,
expectations or predictions may be forward looking statements within the meaning of
applicable securities laws and regulations. Actual results may differ materially from
those expressed in the statement. Important factors that could influence the companys
operations include economic conditions affecting demand / supply and price condition in
the domestic markets in which the company operates, changes in the government regulations,
tax laws and other statutes and other incidental factors.
Details of significant changes (i.e. change of 25% or more as
compared to the immediately previous financial year) in key financial ratios, along with
detailed explanations therefor, including:
| Sr Particulars of Ratio |
As at 31.03.2023 |
As at 31.03.2022 |
| 1. Debtors Turnover |
9.71 |
10.52 |
| 2. Inventory Turnover |
6.78 |
7.89 |
| 3. Interest Coverage Ratio |
0.02 |
0.02 |
| 4. Current Ratio |
2.79 |
1.80 |
| 5. Debt Equity Ratio |
0.22 |
0.48 |
| 6. Debt service Coverage ratio |
- |
- |
| 7. Operating Profit Margin (%) |
0.02 |
0.02 |
| 8. Net Profit Margin (%) |
0.01 |
0.01 |
| 9. Net capital Turnover Ratio |
7.70 |
7.69 |
| 10. Trade payable Turnover Ratio |
42.40 |
22.80 |
(j) details of any change in Return on Net Worth as compared
to the immediately previous financial year along with a detailed explanation thereof:
: In comparison with the last year Return on Net-worth ratio
there is no major change in Return on Net-worth ratio in the current Financial Year
CONCLUSION*
In conclusion, the fiscal year 2023 was a period of significant
achievements for Sagardeep Alloys Limited. We achieved strong financial results, and
demonstrated our dedication to sustainability and ESG principles. Despite the challenges
posed by the industrys inherent risks, we have managed to position ourselves favorably
for the future. As we continue to navigate the evolving landscape of the copper business,
we remain focused on delivering sustainable growth and value to our shareholders,
employees, and communities.
Thank you for your continued support and trust in SAGARDEEP
ALLOYS LIMITED We look forward to seizing new opportunities and achieving even greater
success in the coming years.
| Regd Office: |
By Order of the Board of Directors |
| Plot No. 2070 , Rajnagar Patiya , |
For, Sagardeep Alloys Limited |
| SantejKhatraj Road, |
|
| SantejKalol, |
|
| Gandhinagar 382721 |
Sd/- |
|
Satishkumar Mehta |
| Date:23/08/2023 |
Chairman & Managing Director |
| Place:Santej (Kalol) |
(DIN: 01958984) |
+91-9892691696
