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Samyak International Ltd Management Discussions

32.97
(3.84%)
Jul 12, 2024|03:40:00 PM

Samyak International Ltd Share Price Management Discussions

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.

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