Annexure 2
BUSINESS OVERVIEW
The Company was engaged in processing and manufacturing of Coated Paper but Company has
changed its main object from trading of the coasted paper to Distillery business. Company
has taken approval from shareholders by postal ballot dated 11th December, 2022
and company alter its existing object clause III (A) by replacing the entire object clause
to carry on in India or elsewhere the business to manufactures, producers, processer,
refiners, distributor, dealers, seller, retailers, marketer, agents, Importers and
exporters of Extra Neutral Alcohol (ENA), ethyl alcohol, ethanol, biodiesel fuel,
Bio-fertilizer, fuel ethanol additives, oil, fuel oil, cattle feed (protein), Dried
Distillery Grain Soluble – DDGS, pallets, by-products, Indian made Foreign Liquor
(IMFL), spirits, alcohol including potable, Industrial alcohols, rectified spirits,
alcohols, extra neutral alcohols, ethanol, special denatured spirit, fine chemicals and to
produce power, renewable energy, electricity from industrial waste, fertilizers, cattle
feed, biogas, bottled water, soft drink, carbonated drinks, beverages, mineral water,
alkaline water, country liquor, pot still and allied chemicals and products, Indian made
foreign liquors, all kinds and descriptions of whisky, brandy, rum, gin, vodka, alcohol,
beer, wine, brewery & winery and other beverages including aerated and mineral waters
and other drinks .
In the Same Meeting Postal Ballot Resolution Past Dated 11th December, 2022
The Company Change Its Name From ‘Sarda Papers Limited To ‘Tahmar
Enterprises Limited And Consequential Alteration to MOA and AOA Of the Company. As
you are aware that your Company had suspended the manufacturing operation from June 2009
due to unfavorable market condition Coated Paper and continuous cash losses and Company
was under BIFR purview for its rehabilitation. The Company does not envisage starting
again its manufacturing unit.
INDUSTRY STRUCTURE AND DEVELOPEMNT
India is the third largest spirits market by volume in the world, just behind China and
Russia. The Indian alcobev industry can broadly be classified into five categories, namely
Indian Made Foreign Liquor (IMFL), India Made Indian Liquor (IMIL), foreign liquor Bottled
in Origin (BIO), Beer and Wine. IMFL primarily comprises of brown spirits such as whisky,
rum, and brandy whereas white spirits comprises of gin, vodka and white rum. The alcoholic
strength of IMFL generally does not exceeds 42.8%. IMIL is also referred as country
liquor. It is produced in licensed distilleries and made of cheaper raw material,
primarily rectified spirits of grains or molasses. IMIL generally has an alcohol content
of around 30%. BIO forms a very small part of alcohol consumption in India. It is usually
consumed by the rich and the upper middle class in metropolitan cities. It is also subject
to customs duty which makes it much more expensive. Beer can broadly be classified into
two subcategories, strong beer with an alcohol content of around 6-8% and mild or lager
beer which has an alcohol content of 4-6%. Wine is an alcoholic drink made from fermented
grapes. The major variants of wine are red, white and sparkling. The recent trends in the
alcoholic beverages segments includes launch of flavoured alcoholic drinks and ready to
drink (RTD).
The alcobev sector was among the most impacted industry due to the pandemic. The impact
was due to combination of factors such as production and sales restrictions, higher
taxations / cess, limiting capacity and restaurants / pubs. The beer industry was further
impacted as consumers preferred avoiding cold beverages. However, the pandemic also led to
some structural changes in the industry such as home delivery. Many states have not
allowed home delivery of liquor which is anticipated to be a big boost to the industry in
the medium to long term. It is expected that the other states will also follow the trend
and overall, the sector will benefit from increased number of point of sales. The demand
for alcoholic beverages has been steadily increasing driven by rapid urbanization,
changing consumer preferences and a sizeable and growing middle-class population with
increased purchasing power. In addition, the alcohol consumption share by middle income
group is steadily increasing and is currently around 21%, which is anticipated to reach
over 40% by 2030. [Source: Indian Council for Research on International Economic Relations
(ICRIER)].
OPPORTUNITIES AND THREATS
The alcobev industry in India is highly regulated. The industry also falls under the
purview of national laws and regulatory bodies, such as the Food Safety and Standards
Authority of India (FSSAI). Compliance with relevant regulations results in higher
operating costs and also limits the Companys ability to quickly capitalise on the
opportunities that Indian market offers.
• Economic Activity: The economic activity in India has recovered sharply post
Pandemic. However, threat of new variants is impacting many countries globally. In
addition, the ongoing geopolitical instability due to ongoing tension between Russia and
Ukraine is adding concerns about the economic recovery globally. Any further extension of
such events or any new such events can have adverse effect on the economic recovery and
performance of the Company as well.
• Additional Tax: Under the current tax regime, state governments have only liquor
and fuel under their control. Any additional taxation on liquor to meet target state
revenue objectives can be detrimental for the industry as it will have severe impact on
the demand.
• Promotional Restrictions: The alcobev industry cannot do direct promotion of its
product as it is banned in India. Typically, the companies use surrogate advertisement to
inform consumers about the product. Therefore, it becomes challenging to promote new
brands which has limited brand recall.
• Minimum Legal Age: All the states in India have legal ages varying between 18-25
years. If these states increase the drinking age or states with lower age bracket decides
to increase the age, it could impact sales of alcohol.
• Limited Pricing Power: In many states, where the government is also the biggest
distributor, it fixes the prices at which it buys products from the alcoholic beverage
companies and the prices at which they will sell to the end consumers. The state
governments decide the end consumer price, leaving manufactures with no say in determining
their selling price.
• Complex Taxation Structure: The alcohol industry has been kept outside the
purview of GST. However, the industry would be liable to pay GST on the input raw
materials, which may impact the gross margins. Taxation by volume continues to adversely
impact the beer segment. The tax structure for alcoholic drinks does not adjust for the
level of alcohol in a particular drink. Considering the ratio of excise duty adjusted to
alcohol content, IMFL appears to be more affordable than beer because it has a higher
alcohol/price ratio. This makes beer an expensive drink compared with other spirits in
terms of price per unit of alcohol. The excise and other taxes put together comprise over
50% of the final retail price.
• Affordability: The high taxation on alcobev products results in higher MRPs for
the end customer. So even a small change in price or taxes has severe impact on the
purchasing power of the customer and can impact affordability of the product.
• Barriers to Scale: Every state government has its own rules and regulations in
addition to the regulations set up by the central government. As a result, tax and duties
are imposed on inter-state movement of alcohol which restricts consolidated of operations
and synergy benefits are not fully realized.
• Volatility in Raw Material: The beer and IMFL industry can be adversely impacted
due to the volatility in key input raw material prices such as barley, ENA and glass
bottles. Since the pricing power is limited, companies cannot fully pass on the higher
costs to consumers thereby margins gets impacted.
• Competition: Over last few years, many international companies have entered the
Indian market due to the immense potential prevailing in the country. These players could
impact volumes primarily in the metros as their products are well known among affluent or
lifestyle seeking consumers. Furthermore, increasing trend of the craft beer among urban
population also increases the competition as beers can be manufactured with very limited
investment in a smaller size brewery as compared to significant investment required in
traditional breweries.
OUTLOOK
The Company had suspended its manufacturing activities w.e.f 14.06.2009. The Company
had brought in an investor who had subscribed preference capital and net worth of the
Company turned positive and the Company had come out from the purview of the BFIR. The
Company aims to service the domestic and export markets, contributing towards the
‘Make in India initiative and empowering sustainable growth for a safer and brighter
future.
RISK AND CONCERNS
The company is exposed to risk of market fluctuation of its import and export in
Distillery. The company is also exposed to national price fluctuation for its products.
in compliance with section 203 of the Companies Act, 2013The Company has been,
maintaining a well-established procedure for internal control system. There had been a
review conducted on regular interval by the internal Auditors about the financing and
operating control at various locations of the Company and any, significant findings are
reviewed by the Audit Committee of the Board of Directors.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
KEY FINANCIAL RATIOS |
2022-23 |
2021-2022 |
| Non-Current Assets (Rs. in Lakhs) * |
38.19 |
1.75 |
| Short term Loans (Rs. in Lakhs) |
NIL |
NIL |
| Current Assets (Rs. in Lakhs) |
976.71 |
22.46 |
| Cash & Cash equivalent (Rs. in Lakhs) |
38.19 |
1.75 |
| Inventory Turnover |
0.51% |
1.75% |
| Operating Profit Margin (%) |
-0.03% |
-23078.11% |
| Net Profit Margin (%) |
-0.02% |
-23078.11% |
| Return on equity (%) |
-0.02% |
75.20% |
| Book value per share (Rs.) |
1 |
10 |
| Earnings per share (Rs.) |
(0.00) |
(0.33) |
MATERIAL DEVELOPMENT IN HUMAN RESOUCE/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF
PEOPLE EMPLOYED
The Company regards its human resources as amongst its most valuable assets and
proactively reviews policies and processes by creating a work environment that encourages
initiative, provides challenges and opportunities and recognizes the performance and
potential of its employees attracting and retaining the best manpower available by
providing high degree of motivation. Your Company believes in trust, transparency &
teamwork to improve employees productivity at all levels.
KEY FINANCIAL RATIOS:
Particulars |
FY 2022-2023 |
FY 2021-2022 |
Debtors Turnover Ratio |
38.48% |
0.28% |
Inventory Turnover Ratio |
0.51% |
1.75% |
Current Ratio |
8.38% |
52.13% |
Operating Profit Ratio |
-0.00 |
-23078.11% |
Net Profit Margin |
-0.00 |
-23078.11% |
Return on Net worth |
-0.00 |
54.65% |
Debt/Equity Ratio |
8.73% |
-216.43% |
CAUTIONARY STATEMENT
Statement in the Management Discussion and analysis describing the Companys
objectives, expectations or predictions may be forward looking within the meaning of
applicable securities, laws and regulation Actual results may differ materially from those
expressed in the statement. Several factors could make significant difference to the
companys operation. These include climatic conditions and economic conditions affection
demand and supply, government regulation and taxation, natural calamities etc. over which
the company does not have any control.
CORPORATE SOCIAL SERVICE
The Company is below the threshold limit for mandatory spend on Corporate Social
Responsibility.
+91-9892691696
