Scarnose International Ltd Management Discussions

Your Directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2024.

GLOBAL ECONOMIC OVERVIEW

Global recovery is steady but slow and differs by region. The baseline forecast is for the world economy to continue growing at 3.2 percent during 2024 and 2025, at the same pace as in 2023. A slight acceleration for advanced economies—where growth is expected to rise from 1.6 percent in 2023 to 1.7 percent in 2024 and 1.8 percent in 2025—will be offset by a modest slowdown in emerging market and developing economies from 4.3 percent in 2023 to 4.2 percent in both 2024 and 2025. The forecast for global growth five years from now—at 3.1 percent—is at its lowest in decades. Global inflation is forecast to decline steadily, from 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. Core inflation is generally projected to decline more gradually.

INDIAN ECONOMY

Indias economy grew by 8.2 per cent in the financial year ended March 2024, sharply higher than 7 per cent expansion recorded in the previous year, led by a robust performance of manufacturing and construction sectors, official data showed on Friday.

Beating expectations of analysts as well as the government, including the Reserve Bank of India (RBI), the countrys gross domestic product (GDP) grew by 7.8 per cent in January-March quarter (Q4FY24), "The Q4 GDP growth data for 2023-24 shows robust momentum in our economy which is poised to further accelerate.

Real GDP, or GDP at constant prices, increased to Rs 173.82 lakh crore in FY24 from Rs 160.71 lakh crore in the previous year, registering a growth of 8.2 per cent, data released by the National Statistical Office (NSO) showed.

INDUSTRY OVERVIEW

The Financial Year 2023-24 was a year of very good performance for Scarnose International Limited. The Company would like to maintain its performance in future. The Indians textiles sector is one of the oldest industries in Indian economy dating back several countries. The close linkage of the textile industry to agriculture (for a raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments both within India and across the world. The textiles industry has made a major contribution to the national economy in terms of net foreign exchange earnings and contribution to the GDP.

OPPORTUNITIES & THREATS

Opportunities:

• Technical Textiles.

• Growing domestic market.

• Large Potential Domestic and International Market.

• Vast export marked to explore.

• Buyers preference for India.

Threats:

• Competition from other developing countries especially China.

• Geographical Disadvantage.

• Political/Economic Instability.

• To male balance between price and quality.

SEGMENT-WISE PERFORMANCE

The Companys main business activity is Trading of Textile.

OUTLOOK

The textile industry is a well-established with showing storing features and bright future. The textile industry is capital and technology intensive comparable with automobiles aircraft computers and heavy machinery industry. In comparison with other countries like China the cost of textile production in India is quite less. Textile sector is the oldest and largest manufacturing sector in India. The textiles manufacturing business is a pioneer activity in the Indian manufacturing sector and it has a primordial importance in the economic life of the country which is still predominantly based on the agro-alimentary sector. The sector profitability is likely to improve gradually with players passing on increased raw material prices to end-users given the healthy demand a depreciating rupee and waning impact of the structural issues.

The future for the Indian textile industry looks promising buoyed by both strong domestic consumption as well as export demand. High economic growth has resulted in higher disposable income. This has led to rise in demand for products creating a huge domestic market.

RISK & CONCERNS

In todays complex business environment almost every business decision requires executives and managers to balance risk and reward. Effective risk management is therefore critical to an organizations success. Timely and effective risk management is of prime importance to our continued success.

AUDIT AND INTERNAL CONTROL SYSTEM

One of the key requirements of the Companies Act, 2013 is that companies should have adequate Internal Financial Controls (IFC) and that such controls should operate effectively. Internal Financial Controls means the policies and procedures adopted by the Company for ensuring orderly and efficient conduct of its business, including adherence to Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. Your Companys process of assessment ensures that not only does adequate controls exist, but it can also be evidenced by unambiguous documentation. The process involves scoping and planning to identify and map significant accounts and processes based on materiality. Thereafter, risk is identified and their associated controls are mapped, else remediation is implemented. These controls are tested to assess operating effectiveness. The auditor performs independent testing of controls. The Auditors Report is required to comment on whether the Company has adequate IFC system in place and such controls are operating effectively. Your Companys Internal Control System is robust and well established. It includes documented rules and guidelines for conducting business. The environment and controls are periodically monitored through procedures/ processes set by the management, covering critical and important areas. These controls are periodically reviewed and updated to reflect the changes in the business and environment.

RAW MATERIAL PRICES

The prices of basic major raw materials used in our manufacturing process viz. stainless steel scrap /flats of various grades doesnt affect much, as we are working in open market scenario.

FINANCIAL PERFORMANCE

During the year under review, the Company has generated total revenue of ?1386.34/- (in Lacs)(Previous Year ?4106.93/-(in Lacs)). The net profit before exceptional items and taxes is ?1.44/- (in Lacs) (Previous Year ?5.70/- (in Lacs). The net profit after taxes resulted into the profit for the year at ?0.93/- (in Lacs) (Previous Year ?4.34/- (in Lacs).

MATERIAL DEVELOPMENTS IN HR / INDUSTRIAL RELATION / NUMBER OF PERSON EMPLOYED

Our Company believes that the human capital is key to bring in progress. The Company believes in maintaining cordial relation with its employees, which is one of the key pillars of the Companys business. The Companys HR policies and practices are built on core values of Integrity, Passion, Speed, and Commitment. The Companys focus is on recruitment of good talent and retention of the talent pool. The Company is hopeful and confident of achieving the same to be able to deliver results and value for our shareholders. As on 31^stMarch, 2024, the total employees on the Companys rolls stood at 12 and on contract basis.

ACCOUNTING POLICIES

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. The financial statements have been prepared under the historical cost convention on an accrual basis. The management accepts responsibility for the integrity and objectivity of the financial statements, as well as for the various estimates and judgment used therein.

DISCLOSURE OF ACCOUNTING TREATMENT IN PREPARATION OF FINANCIAL STATEMENT

The Company has followed all relevant Accounting Standards laid down by the Institute of Chartered Accountants of India (ICAI) while preparing Financial Statements.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS

The Company has identified the following ratios as key financial ratios:

Sr. No.	Particulars	2023-24	2022-23	Changes	Reason
1.	Return on Capital Employed	0.15%	0.74%	(79)%	(In %) It is primarily decreased due to decreased in net profit.
2.	Debtors Turnover Ratio	2.58%	3.95%	(35)%	(In %) It is beaing decreased due to decrease in turnover
3.	Current Ratio	207.93%	2.56%	8029%	(In %) It is primarily increased due to decrese in short term borrowings.
4.	Net Profit Margin	0.07%	0.11%	(37)%	(In %) It is decreased as Companys profitability is decreased on account of decrease in turnover.

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

Sr. No.	Particulars	2023-24	2022-23	Changes	Reason
1.	Return on Net Worth	0.10%	0.43%	(0.78)%	It is decreased as Companys profitability is decreased on account of decrease in turnover.

CAUTIONERY STATEMENT

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 securities laws and regulations. Actual results could differ materially from those expressed or implied.

Registered Office:		By the Order of the Board of
503, Sun Square, Nr. Hotel Nest, Off. C.G. Road Navrangpura,		Scarnose International Limited
Ahmedabad, Gujarat-380006.	Sd/-	Sd/-
	Vimalkumar M Shah	Kunjal J Soni
	Managing Director	Director
Place: Ahmedabad Date: 22nd May, 2024	DIN: 03011067	DIN: 08160838