SPV Global Trading Ltd Management Discussions.
SPV GLOBAL TRADING LIMITED
(FORMERLY KNOWN AS TARRIF CINE & FINANCE LIMITED)
SPV Global Trading Limited (Formerly Known as Tarrif Cine & Finance Limited) currently has a spectrum of non-ferrous metals which serves the copper alloy manufacturing industry, which in turn serves many industries such as Automobiles, Electricals, Electronics, horological, coinage, etc.
For Financial Year 2018-19 on a consolidated basis, the Companys profit after tax stood at Rs.786.89 lakhs as against profit of Rs.705.93 in the previous year thereby an increase in profits as compared to the previous year.
I. ECONOMIC & INDUSTRY OVERVIEW:
CY 2019 was a highly volatile year for the non-ferrous metals industry with the US being a pivot for major events. The year was impacted by the eruption of trade war between the US and China. The US-China trade war dampened the global economic environment with most of the major economies experiencing a slowdown in growth, which in turn impacted consumption. The copper market was impacted by global uncertainties, trade disputes, slowing Chinese economy (constitutes 50% of global consumption) and strengthening US dollar. The other non-ferrous metals were also volatile during the year.
II. OPPORTUNITIES AND THREATS:
Increased focus on sourcing products from cheaper sources.
Ready market for copper and other non-ferrous metals due to high consumption
Global prices of forex and raw material price volatility. Competition from China, FTA.
III. INDUSTRY OUTLOOK:
In CY 2019, the global macroeconomic environment is likely to remain highly volatile due to increased trade tensions between the US and China and uncertainty around Brexit. Central banks of major economies are taking an accommodative policy stance to aid economic growth. According to the International Monetary Fund (IMF), global economic growth is expected to moderate further to 3.3% in CY 2019 from 3.6% in PY 2018. However, any moderation in the global trade war scenario and Chinese stimulus are expected to support the overall copper demand in CY 2019. Copper and copper alloy demand in India is expected to grow at 9-10% in tandem with economic growth in the country. This is due to increasing urbanization, development of industrial corridors, smart city project, housing for all Indians by 2022, National highway development project, Rail project, Defense production policy to encourage indigenous manufacture, India energy plan 2022- 100GW solar, 32GW wind, 260GW thermal & nuclear, 62 GW hydro and in addition to this there is plan for green energy corridor for transmission of renewable energy. The per capita copper consumption in India is expected to increase from the current level of 0.5 Kg to 1 kg by 2025. The per capita copper consumption of China is 6 Kg and world average is 2.7 kg. The market for electric vehicles (EV) is expected to witness growth in coming years as government incentives continue around the world. Copper is essential to EV technology and its supporting infrastructure. The evolving market will have a substantial impact on copper demand. The increase in the electric vehicles market will significantly impact copper. The projected demand for copper due to electric vehicles is expected to increase by 1,700 kilotons by 2027.
IV. RISKS AND CONCERNS:
The Company has laid down risk management framework keeping the Companys objectives, growth strategy and process complexities arising out of its business operations. Risk management in organization is a continuous process of identifying, assessing and managing all the opportunities, threats and risks faced by the company to achieve its goals.
V. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has internal control systems and procedures commensurate with its size and nature of business. The Company has in place delegation of authority, policies and manuals approved by the Board.
VI. SEGMENT WISE OR PRODUCT WISE PERFORMANCE:
The Company is engaged solely in trading activity segment and all activities of the Company revolve around this business.
VII. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL
The financial performance for FY 2018-19 vis-a-vis FY 2017-18 is summarized below:
(Amount in Lacs)
|Revenue from Operations||44125.13||43,264.94||1088.39||1000.38|
|Profit/(Loss) before Tax||1264.80||1110.07||(10.71)||(21.06)|
|Add/ (Less): Current Tax||286.72||255||-||-|
|Add/ (Less): Deferred Tax Liability/ Assets||180.05||145.64||0.48||-|
|Add/ (Less): Taxation of earlier years||11.14||3.47||-||-|
|Profit/(Loss) After Tax||786.90||705.96||(11.19)||(21.07)|
|Add: Other Comprehensive Income||(3.57)||0.05||(0.36)||0.06|
|Total Comprehensive Income for the Year||783.33||706.01||(11.55)||(21.01)|
|Profit Attributable to Owner of The Company||385.34||346.16||-||-|
|Profit Attributable to Non- Controlling Interests||401.56||359.81||-||-|
VIII. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS
FRONT INCLUDING NUMBER OF PEOPLE EMPLOYED
As on 31.3.2019, the manpower of the Company was 2 (Two).
During the year, the Employee Relations continued to be harmonious and peaceful in all Units of the Company and have contributed immensely towards smooth functioning of the Company.
Human Resource Development
Training and Development, based on identified needs is given due priority by the Company for all levels of employees to increase employee effectiveness, employee utilization and productivity as well as to usher in a culture of innovation and creativity with emphasis on deciphering problem-solving skills.
IX. KEY FINANCIAL RATIOS AND DETAILS OF SIGNIFICANT CHANGES THEREIN (I.E.
CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) ALONG WITH DETAILED EXPLANATIONS THEREOF:
During the year under a review there were no significant changes increase from 25 % or more as Compared to the Immediately previous Financial Year.
|Sr. Key Financial Ratio No.||FY 2018-19||FY 2017-18||Reason for significant changes (i.e. change of 25% or more)|
|1 Debtors Turnover||1.70||Nil|
|2 Inventory Turnover||Nil||Nil|
|3 Interest Coverage Ratio||Nil||Nil|
|4 Current Ratio||0.75||0.12||NA|
|5 Debt Equity Ratio||Nil||Nil|
|6 Operating Profit Margin (%)||0.42%||1.35%|
|7 Net Profit Margin (%)||Nil||Nil|
X. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE
IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:
Return on Net Worth for Financial Year 2018-19 is -11.50% as against -18.77% in Financial Year 2017-18. The increase in Return on Net Worth is due to increase in Net
Profit for Financial Year 2018-19 which is attributable to positive impact of higher sales volume, higher sales realization and decrease in operating expenditure.
XI. DISCLOSURE OF ACCOUNTING TREATMENT
Your Company has prepared its financial statements for F.Y. 2018- 19 in accordance with the Indian Accounting Standards (Ind AS) issued by the Institute of Chartered Accountants of India (ICAI) and as per Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (India Accounting Standards) (Amendment Rules), 2016. The implementation of Ind AS is a major change in the accounting treatment.
XII. CAUTIONARY STATEMENT:
The Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those expressed or implied.
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 events.