sree rayalaseema hi strength hypo ltd Management discussions

TO DIRECTORS REPORT

Management Discussion & Analysis Report:

1. Industry Structure And Developments:

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

2. 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 and thermal energy mainly depends on availability of coal both indigenous and imported .
3. Segment-Wise Or Product-Wise Performance:

The Company surpassed its previous year performance in case of Calcium Hypo chloride (HSH), Sodium Methoxide , bottling of Hydrogen Gas and Power generation through Thermal energy, Power generation through wind. However, there was decline in Stable Bleaching Powder (SBP) , Sulphuric Acid ,Sodium Hydride, Chloro Sulphonic Acid (CSA ) and oleum.

4. Outlook:

The Company is exploring possibilities in Real Estate and Trading activities.

5. Risks And Concerns:

1. Raw material prices are market driven and any upward revision will affect the profitability of the Company.
2. Fluctuations in foreign exchange currencies in relation to exports, Imports and FCTL.
3. The investments in shares are market driven which are exposed to related risks.

1. 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.

2. Discussion on Financial Performance With Respect To Operational Performance:

For the year 2022-23 net profit before Tax is Rs.19,048.28 lakhs against Rs. 13,698.67 lakhs during the previous year. The Company provided Rs. (9.17) lakhs towards deferred tax, Rs.3,625.50 lakhs towards current tax and net profit after Tax is Rs. 15,431.94 lakhs.

3. 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 414 employees on its rolls.

Ratios	March 31, 2023	March 31, 2022	% of Change
Interest coverage ratio (Profit before tax + interest + Depreciation) / Interest	4385.61	1965.32	123.08
Debtors turnover ratio (Receivable + more than 90 days) / Gross Sales	0.09	0.10	(13.38)
Inventory Turnover ratio (Inventory) / Cost of goods sold (note: cost of goods sold is excluding interest, selling and other overheads)	0.23	0.33	(31.26)
Current ratio Current Assets / Current Liabilities (excluding AMTL)	4.27	2.35	81.29
Debt equity ratio Long term Debt / Net worth	0.0004	0.001	(55.90)
Operating profit margin (%) PBIT / net sales	0.12	0.11	6.76
Net Profit margin (%) Net profit / net sales	0.09	0.08	15.30
Return on Net worth Net Profit / Net worth	0.21	0.18	14.01

Note : The better financials achieved by the Company during 2022-23, resulted in overall improvement in the financial ratios named above when compared with previous year 2021-22 and the variance is more than 25%.

Annexure G-Corporate Social Responsibility

1.	Brief outline on CSR Policy of the Company:	Appropriate steps are taken by the company to integrate CSR activities for the development of areas surrounding
		the Company in particular and other areas in general. In compliance with the guidelines prescribed under Section 135 of Companies Act, 2013, your Company has constituted a CSR Committee which monitors the implementation of C S R activities.In every financial year, at least 2% of average net profits of the company made during the three immediately preceding financial years is earmarked for undertaking CSR activities.
		The Company had undertaken CSR activity during financial year 2022-23 by way of on going project for construction of old age home/ orphanage home at Kurnool .

2. Composition of CSR Committee:

Sl. No	Name of Director	Designation / Nature of Directorship	Numberof meetingsofCSR Committeeheld duringtheyear	Numberof meetingsofCSR Committeeattended duringtheyear
1.	Sri A kailashnath	Independent Director	1	1
2.	Sri P Ramachandra Gowd	Independent Director	1	1
3.	Smt R Triveni	Independent Director	1	1

3. Provide the weblink where Composition of CSR Committee, CSR Policy and CSR projects approved by the Board are disclosed on the website of the Company. http:// www.tgvgroup.com/download/hypo/Corporate-Social-Responsibility-Policy-pdf...pdf
4. Provide the details of impact assessment of CSR projects carried out in pursuance of sub- rule (3) of rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, if applicable (attach the report) NOT APPLICABLE
5. (a) Average net profits of the Company as per section 135 (5) : Rs.87,76,75,507

2. two percent of average net profit of the Company as per section 135(5) :Rs. 1,75,53,510
3. Surplus arising out of the CSR Projects or programmes or activities of the previous financial years.: Rs.1,55,248.

(d ) Amount required to be set off for the financial year, if any : NIL

5. Total CSR obligation for the financial year (b+c-d) :Rs. Rs. 1,75,53,510

1. (a) Amount spent on CSR Projects

(both ongoing projects and other than ongoing projects) : Rs. 5,06,14,832

2. Amount spent in Administrative Overheads:
3. Amount spent on Impact assessment, if applicable: Not applicable
4. Total amount spent for the financial year[(a)+(b)+( c)] : Rs. 5,06,14,832
5. CSR amount spent or unspent for the financial year :

Total amount spent for the financial year (in Rs.)	Amount Unspent(in Rs.)
	Total amount transferred to Unspent CSR account as per Section 135(6)		Amount transferred to any fundspecified under Schedule VII as per second proviso to section 135(5).
	Amount	Date of transfer	Name of the fund	Amount	Date of transfer
5,06,14,832	-	-	-	-	-

6. Excess amount for set off, if any

Sl No	Particular	Amount (in Rs.)
1	Two percent of average net profit of the company a per section 135(5)	1,75,53,510
2.	Total amount spent for the Financial year	5,06,14,832
3.	Excess amount spent for the financial year [(ii)-(i)]	3,30,61,322
4.	Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any	1,55,248
5.	Amount available for set off in succeeding financial years [(iii)-(iv)]	3,32,16,570

7. (a)Details of Unspent CSR amount for the preceding three financial years: NOT APPLICABLE

Sl No	Preceding Financial year	Amount transferred to Unspent CSR Account under section 135(6) (in Rs.)	Amount spent in the reporting Financial year (in Rs.)	Amount transferred to any fund specified under schedule VII as per section 135(6), if any			Amount remaining to be spent in succeeding financial years.(in Rs.)
				Name of the fund	Amount (in Rs.)	Date of Transfer

8. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent in the financial year: NIL

(Asset-wise details)

1. Date of creation or acquisition of the capital asset(s)
2. Amount of CSR spent for creation or acquisition of capital asset.
3. Details of the entity or public authority or beneficiary under whose name such capital asset is registered, their address etc.
4. Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset).
9. Specify the reason(s) if the Company has failed to spend two percent of the average net profit as per section 135(5). NOT APPLICABLE

Sd/-

T G Bharath

(Chairman & Managing Director) DIN: 00125087