Your Directors hereby presents the Management Discussion and Analysis
Report (MDAR) for the year ended on 31st March, 2023:
Global Economic Review
The baseline forecast is for growth to fall from 3.4 percent in 2022 to
2.8 percent in 2023, before settling at 3.0 percent in 2024. Advanced economies are
expected to see an especially pronounced growth slowdown, from 2.7 percent in 2022 to 1.3
percent in 2023. In a plausible alternative scenario with further financial sector stress,
global growth declines to about 2.5 percent in 2023 with advanced economy growth falling
below 1 percent. Global headline inflation in the baseline is set to fall from 8.7 percent
in 2022 to 7.0 percent in 2023 on the back of lower commodity prices but underlying (core)
inflation is likely to decline more slowly. Inflations return to target is unlikely
before 2025 in most cases.
The outlook is uncertain again amid financial sector turmoil, high
inflation, ongoing effects of Russias invasion of Ukraine, and three years of COVID
Indian Economic Review
Strong economic growth in the first quarter of 2022-23 helped India
overtake the UK to become the fifth-largest economy after it recovered from repeated waves
of COVID-19 pandemic shock. The Indian economy showed resilience in 2022-23. Indian
economy staging a broad based recovery across sectors, positioning to ascend to
Pre-pandemic growth path in 2022-23. Retail inflation is back within RBIs target range,
Direct Tax collections for the period remained buoyant. Enhanced Employment generation
seen in the declining urban unemployment rate and in the faster net registration in
Employee Provident Fund. Gross Non-Performing Assets (GNPA) ratio of SCBs has fallen to a
seven-year low of 5.0. Central and State Governments budgeted expenditure on health
sector touched 2.1% of GDPin FY23 (BE) and 2.2% in FY22 (RE) against 1.6% in FY21. Social
sector expenditure (Centre and States combined) increases to Rs. 21.3 lakh crore in FY23
(BE) from Rs. 9.1 lakh crore in FY16.
The outlook for FY24 is mixed with continued global demand softening,
higher inflation, higher interest rate regime, uncertainty in crude prices and sustained
geopolitical crisis
Business Overview
With respect to GDP growth, the extent of divergence between the
projected growth rate of the economy and the actual outcome is disconcertingly large.
Rapidly changing global economic & business conditions and technological innovation
are creating an increasingly competitive environment that is driving companies to
transform their operations globally. The divergence between expected growth rates and
actual growth rate is large. Yet, overall investment and fixed investment rates have
remained reasonably high. Company is committed to satisfy the clients with improved
quality and accelerated delivery schedules with a focus on developing long term
relationships and strengthening strategic partnerships. There has been no occurrence of
any event or circumstance since the date of the last financial statements that may
materially and adversely affect or is likely to affect the trading or profitability of our
Company or the value of our assets or our ability to pay our liabilities.
Industrial Structure and Developments
The Indian chemical industry is among the established traditional
sectors of the country that play an integral role in the countrys economic
development. This sector forms a part of the basic goods industry and is a critical input
for industrial and agricultural development. The Indian chemical industry is one of the
oldest industries in India and has made immense contribution to the industrial and
agricultural development of India. It encompasses both large and small-scale units. The
chemical industry covers over 70,000 commercial products, and provides the feedstock to
many downstream industries such as finished drugs, dyestuffs, paper, synthetic rubber,
plastics, polyester, paints, pesticides, fertilizers and detergents.
During the year 2022-23, the Companys performance showing
increasing trend in turnover and in profitability as compared to last year. Looking at
global economic slowdown and other factors, the performance of Company is satisfactory.
The Management is hopeful that Companys future is bright in the coming years.
Opportunities and Threats
Just as the world was on the mend post multiple waves of COVID, the
continuation of Russia-Ukraine conflict induced a trail of irreversible economic, social
and political effects. Accordingly as of 31st March 2023, based on the facts
and circumstances existing as of that date, the Company does not anticipate any material
uncertainties which affects its liquidity position and also ability to continue as a going
concern. The management will continue to closely monitor the evolving situation and assess
its impact on the business of the Company.
The future performance of your Company would depend to a large extent
on its ability to successful diversification, market of commodities. We are hopeful that
through the combination of market developments and expansion activity, there will be
healthy growth over the next few years. Due to COVID-19 pandemic and Russia-Ukraine war,
the situation is uncertain and it is difficult to predict when economies will fully
normalize. Hence, FY24 is likely to be a challenging year.
Outlook
The outlook for the Company for the coming years continues to be
positive. Most of the customers have indicated robust growth plans which augurs well for
the growth of the Company. Indian government achieved the fiscal deficit target of 6.4% of
GDP in FY23. Upbeat gross tax collections and thrust on capex have been the major
highlights of the Centres fiscal performance during the year. With the majority of the
population being vaccinated and fading mobility restrictions, India is in a favourable
position to become one of the fastest growing major economics.
The country was already battling inflation, which has been exacerbated
by the ongoing conflicts. This has triggered the Central Bank to adopt liquidity
tightening measures. Together with the encouraging performance of several high-frequency
indicators and an increase in investment, the country is well-equipped to tackle such
external shocks.
Risk and concerns
The business of the company totally depends upon the changes taking
place in the economy either it be relating to fluctuations in stock and capital market,
regulations governing such markets, government policies, taxation policies, changes taking
place in global economies, etc. The growth of industry provides necessary opportunities
for the company to grow. However, the company is under constant pressure due to steep
competition from unorganized sector and industrial scenario in the nearby area.
The companys strength is built around domestic and international
marketing network. The company has a network of 3 marketing offices in India as well as
over 30 corporate customers and over 3 channel partners as a part of its domestic network
which is comprised from various industry segments, allowing the company to de-risk its
business. The company does face threats from imports and other new emerging players in
these product lines
Internal control system and their adequacy
The Company maintains adequate internal control systems, which provide
reasonable assurance of recording the transactions of its operations in all material
respects and of providing protection against significant misuse or loss of Company assets
and compliance with applicable laws and regulations, etc.
The adequacy of the same has been reported by the statutory auditors of
your Company in their report.
Segment wise performance
The operation of the company consists of the single statement. Hence,
Accounting Standard on Segment Reporting (AS-17) issued by The Institute of Chartered
Accountants of India does not apply. Factors that may affect results of the operations:
Financial conditions and results of operations of the company are affected by numerous
factors inter alia-
? Growth of unorganized sector and threat from local regional players.
? Change in freight and forwarding charges.
? General economic and business conditions.
? Companys ability to successfully implement our growth strategy.
? Prices of raw materials the company consume and the products it
manufactures.
? Changes in laws and regulations relating to the industry in which the
company operates.
? Changes in political and social conditions in India.
? Any adverse outcome in the legal proceedings in which the company is
involved.
? The loss or shutdown of operations of our Company at any time due to
strike or labour unrest or any other reasons.
Discussion on Financial Performance with respect to Operational
Performance
The performance of the Company for the financial year 2022-23 is
summarized below:
|
|
|
|
(Rs. in Lacs) |
| Balance Sheet |
STANDALONE |
CONSOLIDATED |
|
As at March 31, 2023 |
As at March 31, 2022 |
As at March 31, 2023 |
As at March 31, 2022 |
| a. Property, Plant and |
130.27 |
22.52 |
273.26 |
149.54 |
| Equipment |
|
|
|
|
| b. Capital Work-in-progress |
0.00 |
0.00 |
0.00 |
0.00 |
| Financial assets |
3206.02 |
3985.36 |
2555.82 |
3335.16 |
| Other Non-current assets |
0.00 |
0.00 |
0.65 |
8.35 |
| Current assets |
644.70 |
544.48 |
2020.43 |
1726.18 |
| Total Equity |
3360.06 |
3810.21 |
6727.41 |
6831.67 |
| Non- current liabilities |
167.11 |
181.46 |
372.15 |
949.09 |
| Current liabilities |
456.54 |
564.17 |
683.78 |
661.43 |
|
|
|
(Rs. in Lacs Except EPS) |
| PARTICULARS |
STANDALONE |
CONSOLIDATED |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Revenue from operations |
2068.30 |
1734.55 |
4429.71 |
4638.59 |
| Other Income |
11.36 |
13.97 |
67.16 |
28.25 |
| Total Income |
2079.66 |
1748.52 |
4496.87 |
4666.84 |
| Total Expenses |
2122.27 |
1805.77 |
4190.15 |
4584.10 |
| Profit/(Loss) before exceptional items & tax |
(42.62) |
(57.25) |
306.72 |
82.74 |
| Exceptional Items |
0.00 |
18.84 |
3.64 |
20.34 |
| Profit/(Loss) before tax |
(42.61) |
(76.09) |
303.08 |
62.40 |
| Tax Expenses |
0.76 |
0.18 |
0.54 |
2.70 |
| Profit/(Loss) after tax |
(43.37) |
(76.27) |
302.54 |
59.70 |
| Paid up Equity Share Capital |
624.72 |
624.72 |
624.72 |
624.72 |
| Earnings per share (Rs.) Basic & diluted |
(7.21) |
(5.89) |
(1.67) |
(3.71) |
Material development in Human Resources / Industrial Relations front
Your Company considers the quality of its human resources to be the
most important asset and constantly endeavors to attract and recruit best possible talent.
Our training programs emphasize on general management perspective to business. The Company
continues to empower its people and provide a stimulating professional environment to its
officers to excel in their respective functional disciplines.
The industrial relations of the Company continue to remain harmonious
and cordial with focus on improving productivity and quality.
The number of permanent employees on the rolls of Company as on
31.03.2023 is 11
KEY FINANCIAL RATIOS ANALYSIS
Details of key financial ratios are as follows:
|
FINANCIAL RATIOS |
|
|
|
|
| Sl. No. Particulars |
Numerator |
Denominator |
31.03.2023 |
31.03.2022 |
Variance (PY-CY) % |
| 1. CURRENT RATIO |
CURRENT ASSETS |
CURRENT LIABILITES |
1.41% |
0.99% |
0.42% |
| 2. DEBT EQUITY |
TOTAL DEBT |
TOTAL EQUITY |
0.05 |
0.05 |
0.00 |
| 3. DEBT SERVICE COVERAGE RATIO |
EARNINGS BEFORE INT, TAX, DEPRECIATION AND EXCEPTIONAL ITEMS |
INTEREST AND PRINCIPAL REPAYMENT OF LONG TERM DEBT WITHIN ONE
YEAR |
(0.68) |
(2.83) |
(2.15) |
| 4. INTEREST SERVICE |
EARNINGS BEFORE INT, TAX, DEPRECIATION AND EXCEPTIONAL ITEMS |
INTEREST EXPENSES |
(1.18) |
22.06 |
23.24 |
| 5. RETURN ON EQUITY |
PROFIT FOR THE YEAR |
TOTAL EQUITY |
0.07% |
(25)% |
(25.07)% |
| 6. INVENTORY TURNOVER RATIO |
REVENUE FROM OP |
AVERAGE INVENTORY |
(0.13) |
4.80 |
4.93 |
| 7. TRADE RECV |
REVENUE FROM OP |
AVERAGE TRADE |
(0.16) |
(38.91) |
|
| TURNOVER RATIO |
|
RECIVABLES |
|
|
(38.75) |
| 8. TRADE PAYABLE TURNOVER RATIO |
ANNUAL NET CREDIT PURCHASE |
AVERAGE ACCOUNTS PAYABLES |
2.67 |
2.92 |
0.25 |
| 9. NET CAPITAL TURNOVER RATIO |
NET SALES |
WORKING CAPITAL |
(0.23) |
(325.47) |
(325.70) |
| 10. NET PROFIT RATIO |
PROFIT AFTER TAX |
REVENUE FROM OPERATION |
(0.02)% |
(21.21)% |
(21.23)% |
| 11. RETURN ON CAPITAL EMPLOYED |
EARNING BEFORE INTEREST AND TAX |
CAPITAL EMPLOYED |
(0.01)% |
(2.00)% |
(1.99)% |
| 12. RETURN ON INVESTMENTS |
INCOME GENERATED FROM INVESTMENT |
AVERAGE INVESTMENTS |
0.00 |
(8.60)% |
(8.60)% |
Explanation for Variances more than 25%
a) Net Capital Turnover ratio : There is change in Ratio due to in
decrease in working Capital and Increase in Turnover. b) Return on Equity : There is
change in ration due to decrease in Profit as Company has suffered loss during the current
year.
Cautionary Statement
Statements in this Management Discussion and Analysis Report describing
the Companys objectives, projections, estimates and expectations may constitute
"forward looking statements" within the meaning of applicable laws and
regulations. Actual results might differ materially from those either expressed or
implied.
Disclosure of Accounting Treatment in Preparation Of financial
statements:
The Company has followed the guidelines of accounting standards as
mandated by the Central Government in preparation of its financial statements.
+91-9892691696
