Sree Rayalaseema Hi-Strength Hypo Ltd Management Discussions

A) Industry Structure And Developments:

The Companys main activity is manufacturing of chemicals. Other activities are generation of power through wind and Solar.

B) Opportunities And Threats:

(1) There is growing demand for Calcium Hypochlorite in the international market

(2) Most of the raw materials are easily available locally thus savings in the transportation costs

(3) The raw material prices are uncertain in the market. Any steep upward price rise would affect the profitability of the unit.

(4) The import of lime for the manufacture of Hi-strength Hypochlorite and Sodium Metal for Sodium Hydride may affect the profitability of the Company due to exchange fluctuations.

(5) The generation of power through wind mainly depends on high wind velocity which is seasonal in nature.

C) Segment-Wise Or Product-Wise Performance:

The Company surpassed its previous year performance in case of Stable Bleaching Powder (SBP), Sulphuric Acid, Chloro Sulphonic Acid (CSA) and oleum.

However, there was decline in performance in case of Calcium Hypo chloride (HSH), Sodium Methoxide, Sodium Hydride, Coal Trading, Power generation through Thermal energy, Power generation through wind,

D) Outlook:

The Company is exploring possibilities in Real Estate.

E) Risks And Concerns:

(i) Raw material prices are market driven and any upward revision will affect the profitability of the Company.

(ii) Fluctuations in foreign exchange currencies in relation to exports and Imports.

(iii) The investments in shares are market driven which are exposed to related risks.

F) Internal Control Systems and Their Adequacy:

The Company has a good system of internal controls in all spheres of its activities. All the staff of the Internal Audit Department are well trained in internal control procedures and well versed with computerized environment. Further, in key areas like stores, finalization of purchase orders and fixation of material prices are under pre-audit. The Management regularly reviews the findings of the internal auditors and effective steps to implement the suggestions/ observations of the Auditors are taken and monitored regularly. In the opinion of the Board, an effective internal control system adequate to the size of the Company are in place.

G) Discussion on Financial Performance With Respect To Operational Performance:

For the year 2024-25 net profit before Tax is Rs.12,435.82 lakhs against Rs.10,873.03 lakhs during the previous year. The Company provided Rs. 270.28 lakhs towards deferred tax, Rs.2898.03 lakhs towards current tax and net profit after Tax is Rs. 9267.51 lakhs.

H) Material Developments In Human Resources / Industrial Relations Front, Including Number Of People Employed:

During the year, the Company maintained harmonious and cordial industrial relations. The Company regularly conducting seminars and workshops to improve the safety and maintenance of the factory and for also timely dispatches of quality products. The Company is deputing employees for attending seminars for updating their skills and knowledge. The Company had around 384 employees on its rolls.