south india projects ltd Management discussions

I. OVERVIEW:

The objective of this report is to convey the Managements perspective on the external environment and IT industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in the Company during the FY 2022-23. This should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Integrated Report. The Companys financial statements have been prepared in accordance with Indian Accounting Standards (‘Ind AS) complying with the requirements of the Companies Act, 2013, as amended and regulations issued by the Securities and

Exchange Board of India (‘SEBI) from time to time.

II. EXTERNAL ENVIRONMENT:

1. Global Economy

The global economy enters 2022 in a weaker position than previously expected. As the new Omicron COVID- 19 variant spreads, countries have reimposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, notably in the United States and many emerging market and developing economies. Further, the ongoing retrenchment of

Chinas real estate sector and slower-than-expected recovery of private consumption and the ongoing tension between Russia and Ukraine have limited the growth prospects

Outlook

Global growth is projected to slow-down from an estimated 6.1% in 2021 to 3.6% in 2022 0.8 percentage-point lower than what was envisioned in the last World Economic Outlook (WEO) of January 2022, largely reflecting forecast markdowns in USA and China. In USA, a revised assumption of removing the Build Back Better fiscal policy package from the baseline, earlier withdrawal of monetary accommodation, and continued supply shortages have induced a downgrade in the outlook by 1.2 percentage-points. In China, pandemic-induced disruptions related to the zero-tolerance COVID-19 policy and protracted financial stress among property developers have induced a 0.8 percentage-point downgrade. Global growth is expected to slow down to 3.6% in 2023.

2. Indian Economy

Amidst the challenges brought by the COVID-19 pandemic leading to disruptions in supply chain and surging inflation rate, the Indian Government introduced various policies to cushion the impact on the domestic economy and in specific vulnerable sections of society and the business sector. Through its policies, the Government significantly increased capital expenditure on infrastructure projects to build back medium-term demand and aggressively implemented supply-side measures to prepare the economy for a sustained long-term expansion. With the vaccination programme having covered the majority of the population, recovering economic momentum and the likely long-term benefits of supply-side reforms in the pipeline, the Indian economy is in a good position to witness GDP growth of around 8.0%-8.5% in 2022-23.

III. INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Company is a part of an Industry, which largely operates through unorganized constituents. However, unlike the industry, the Company has attempted to operate through as systematic and organized manner as possible.

IV. OPPORTUNITIES AND THREATS:

Following can be termed as the opportunities / strengths of the Company:

Induction of widely experienced and specialized personnel on the Board.

Good combination of technical as well as advisory personnel in the management. Some of the world retail majors have decided sometime back to source part of their requirements from India. The unfavorable government policies cut throat competition amongst manufacturers and exporters remains major concerns for the Business.

V. CHANGES IN KEY FINANCIAL RATIOS:

Pursuant to provisions of Regulation34 (3) of SEBI (LODR) Regulation, 2015 read with Schedule V part B(1) details of changes in Key Financial Ratios is given hereunder:

S.no	Key Financial Ratio	-	FY 2022-23	FY 2021-22
1	Debtors Turnover Ratio	Times	5.01	11.71
2	Current Ratio	Times	0.21	1.31
3	Debt Equity Ratio	Times	0.51	0.34
				0.34
4	Operating Profit Margin	%	85%	65%
5	Debt Service Coverage Ratio	%	0.33%	5.87%
6	Net Profit Margin	%	19%	17%
7	Change in Return on Net Worth	%	7.36%	6.51%

*Previous years Figures have been regrouped / rearranged wherever necessary

VI. RISK AND CONCERNS :

Looking at the scenario in India in case of Food and Beverage industry, Risks associated with operating in a particular industry and include risks arising from demand changes, changes in customers choice and industry changes. Forex risks could arise from the company being exposed to foreign currency fluctuations which could impact its rupee earnings.

The Company has adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of stores, raw materials, components, plant and machinery, equipment and other assets, and for the sale of goods.

The Company also has in place an Audit Committee to have a periodic overview of the internal control procedures of the Company. The Audit committee is accessible at all times to the employees of the Company for any improvement to be recommended in the procedures in place.

VII. DISCUSSION ON FINANCIAL PERFORMANCE OF THE COMPANY:

The financial performance of the Company has declined in the year under review.

During the year under review, the Standalone total Income was INR 5610.51 Lakhs as against INR 1767.82 lakhs for the corresponding previous year.

Total Comprehensive income for the period was INR 1068.94 Lakhs as against INR 249.56 Lakhs in the corresponding previous year.

VIII. INDUSTRIAL RELATIONS AND HUMAN RESOURCES:

The Company considers that its relationship with its employees is vital and ensures that employees feel valued and is endeavoring to create an environment and culture within which every employee can put his best efforts and maximize his contribution.

The Company ensures that all its employees remain competent through education, skills, training and experience as necessary. The Company has had cordial relations between the management and employees and an atmosphere of harmonious working to achieve the business objectives of the Company throughout the year. The Company is poised to motivate each of its employees to perform to the fullest extent possible and to appropriately reward their excellence.

IX. CAUTIONARY STATEMENT:

Statements in this report and Corporate Governance Report read together with the Directors Report and financial statement describing the Companys objectives, projections, estimates, expectations and predictions, may be “forward looking statements”. Actual results may differ from those expressed or implied due to variations in prices of raw materials, seasonal demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and other incidental factors.

For and on behalf of the Board of Directors

Jagan Mohan Reddy Thumma	Joseph Sudheer Reddy Thumma
(Director)	(Managing Director)
[DIN: 06554945]	[DIN: 07033919]

Date: September 2, 2023

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Dallas Centre, 6th Floor 83/1, Plot No A1, Knowledge City Rd, Rai Durg, Telangana 500032