Shanti Overseas Management Discussions


ANNEXURE-5

ECONOMIC REVIEW Global Economy

The global economy witnessed a good extent of volatility in FY2023, with rumours of a potential recession in the US and Europe exacerbated by rising inflation, supply chain predicaments and continuous geopolitical tensions in Europe. Central Bank policy continues to combat these issues, but time will be needed to fully show the counteractive effects.

According to International Monetary Fund (IMF), the world economy is expected to grow by 2.8% in 2023, 0.6% lower than the 2022 growth. This decline is influenced by slower growth in China, a major exporter to many economies, a trade-war brewing between China- US, and has been exacerbated by ongoing trade fallout from Russia-Ukraine conflict resulting into supply chain disruptions. The IMF noted that inflation continues to be persistent, although it is expected to decline slightly in 2023 due to falling food and energy prices.

However, developing economies have shown extreme resilience, growing nearly double the rate of developed economies. This is largely driven by the fact that developing countries have relatively more affordable alternatives towards economic recovery. Off shoring and outsourcing activities have led to larger inflow of funds, ultimately helping these economies in combating issues such as unemployment and driving up consumer demand. Global growth is expected to slow from 3.4% in 2022 to 2.9% in 2023, with advanced economies displaying a more pronounced slowdown. China and India are expected to account for 50% of global growth. Global headline inflation is expected to fall from 8.8% in 2022 to 4.3% in 2024.

(Source: IMF)

Indian Economy

FY2023 was a strong year for the Indian economy, displaying growth of 7.0% from the previous year. This is largely due to the increased pervasiveness of off shoring and outsourcing as multi-national corporations (MNCs) continued to optimise costs and India providing a vast pool of young talent as an attractive prospect to obtain quality services at a reduced cost.

The Reserve Bank of India (RBI) forecasts Indias FY2024 GDP growth to be 6.5%, with global trade disruptions and inflation posing a threat. However, Indias continued focus to improve physical infrastructure has supported the domestic economy. The push for better public digital infrastructure acted as a catalyst to the domestic economy, providing opportunities and growth prospects for business owners.

However, inflation of 6.7% in FY2023, has eased to 4.3% in May 2023 but there is still a long way to go before we can claim that India has achieved an ideal economic state. The RBI has implemented assertive monetary policies to guide headline inflation from 5.7% as of March 2023, towards the medium-term target of 4% by 2024. The RBI has projected Indias Gross Domestic Product (GDP) growth to reach 6.4% for FY2024.

(Source: IMF)

Company Overview

The Whole organic Soyameal Manufacturing Industry in India saw a substantial fall in export to United States Of America (USA) due to levy of Countervailing Duty and Anti Dumping Duty on produce imported from India. The Soybean Processors Association of India (SOPA) has challenged such levy by USA before the appropriate forum and the matter is sub-judice as on date. The Company also got impacted by the same and saw decline in export turnover since last two years. Considering the same Company has decided to part away with Fixed Assets on going concern basis, related to the Manufacturing Process.

The Shareholders approval to dispose off the Fixed Assets is already taken vide Resolution passed in the last AGM dated 30th September, 2022.

Industry Overview

The Indian agriculture sector, with second-largest agricultural land in the world is the backbone of the economy. The sector is projected to grow by 3.5% in FY23. The sector met domestic requirements, and also rapidly emerged as the net exporter of agricultural products in recent years. Agriculture exports touched US$ 50 billion in FY23. The total kharif foodgrain production in the country is estimated at 150 MMT higher than the average of the previous five years. although, the area sown under paddy was about 20 lakh hectares less than compared to 2021.

According to Soyabean Processors Association of India (SOPA), the domestic production of soyabean is expected to reach 120.40 lakh tones in the 2022-23 season compared to 118.89 lakh tonnes in the last season. Indias soyabean import is pegged lower by 64 per cent at 2 lakh tones in 2022-23 season compared to 5.55 lakh tonnes on prospects of higher domestic production. The countrys carry-over stock remains higher at 25.15 lakh tonnes as against 1.83 lakh tonnes in the previous year. The total availability of soyabean is estimated at 147.55 lakh tonnes in 2022-23 season compared to 126.27 lakh tonnes in 2021-22 season. Out of the total soyabean, about 100 lakh tonnes would be available for crushing in 2022-23 season as against 84 lakh tonnes in 2021-22.

Madhya Pradesh, Maharashtra, Karnataka, Rajasthan and Gujarat are the major soyabean growing states in India. Soyabean production in Maharashtra is pegged at 5.5 to 6.0 Million tonnes in 2022- 23 season against 4.5 to 5.0 Million tonnes in 2021-22 season due to adequate rainfall and favourable weather conditions. Madhya Pradesh is the leading soyabean producing state with over 40 per cent share in the countrys total production of around 13 Million tonnes. The ban on future and option trade has left soyabean farmers associated with farmer producer organisations in Madhya Pradesh in lurch as they are forced to sell their produce in local mandis to traders and nearby processing plants in the absence of an efficient price discovery process.

(Source: Business Standard, Informist)

FUTURE OUTLOOK

SOIL has team of professionals which includes Sales & marketing team, business & strategy experts, technology experts, finance experts and many more. Today we can proudly say that, we are now ready to expand, diversify and grow from here to the field of Sales, Marketing and Distribution of various products available to market globally and enter into service segment as well.

Your Company is also going towards debt-free Approach of operations and in an asset light model by grabbing various opportunities in sharing economy model and by way of using technology at its core.

We see a tremendous decrease in Debt Equity Ratio by (67%) in F.Y. 22-23.

Your Companies mission still remains to be ‘World-Class Sales name in Quality of Products and Services. Its business philosophy is based on five core values: Trust, Respect, Documentation, Operational Excellence and Dealing in Right Products and creating Value.

In line with the above objective, the company aims is to take digitalisation to the next level to deliver superior experience and greater convenience to all its stakeholders, increase market share in Indias and in the Global markets by cross-selling the broad product portfolio which company is in and getting into and expand in geographical reach.

SOIL - Shanti Overseas (India) Limited family, remains committed to the highest levels of ethical standards, professional integrity, corporate governance, and regulatory compliance and the same is also articulated in its Code of Conduct.

FINANCIAL REVIEW

The total revenue from operations of the Company is INR 2,566.29 Lakhs and the profit / (Loss) before tax amounted to INR (1,447.69) Lakhs and the net profit / (Loss) after tax amounted to INR (1,052.26) Lakhs. The EBITD is INR (1,168.88) Lakhs, which is (45.55%) of Turnover.

Profit after tax: During the period under review the Company registered a consolidated profit / (Loss) of INR (1,690.20) Lakhs.

DEBT: The Consolidated Borrowings of the Group in F.Y 2021-2022 811.70 Lakhs which was reduced in F.Y 2022-2023 to 140.62 Lakhs. This shows that company is slowly moving towards Debt Free condition since its new facilities were built with huge capex.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Companys business activities fall within single or primary business segment as of now. Accordingly, disclosures under Accounting standard 17, segment reporting as mandated under Section 133 of Companies Act, 2013 read with rules framed there under are not required to be made.

RISK MANAGEMENT

Several risks can impact the achievement of your Companys business objectives. Being present in a competitive and regulated environment, your company is exposed to various strategic and operational risks such as financial, regulatory, compliances, political, legal and market risk, among others. Our focused risk management approach seeks to minimize the adverse impact of these risks on our business and enables us to leverage market opportunities.

The focus of the risk management framework is primarily to mitigate perceived risks in the current structure of market dynamics including strategic and operational risks that may affect the business.

HUMAN RESOURCES

The Company believes that its skilled and trained workforce is the biggest asset that it possesses and is instrumental towards the achievement of organizational goals. The Company is dedicated to furnish them with skills, resulting the continuous growth of employees. Our primary objective is to establish a secure, supportive, cooperative and salubrious work setting, which fosters both personal and professional development for our employees. The Companys employee strength stood at 21 as on 31st March, 2023.

INTERNAL CONTROL SYSTEMS AND THETR ADEQUACY

The Companys internal audit system has been continuously reviewed and upgraded to that assets are protected; existing regulations are followed with and unsettled issues are promptly addressed. The audit committee reviews reports presented by the internal auditors periodically. The committee takes care of the audit observations and takes remedial measures, if necessary. It constantly communicates with statutory and internal auditors to ensure that internal control systems are operating efficiently.

CAUTIONARY STATEMENT

The statements made in this report describe the Companys objectives and projections that may be forward-looking statements within the meaning of applicable laws and regulations. The actual result might differ materially from those expressed or implied depending on the economic conditions, government policies and other incidental factors which are beyond the control of the Company. The Company is not under any obligation to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information or even.

BY THE ORDER OF THE BOARD

PLACE: INDORE FOR SHANTI OVERSEAS (INDIA) LIMITED

DATE: 06th SEPTEMBER, 2023

SD/-

AYUSH KACHOLIA CHAIRMAN DIN:03096933