INDUSTRY STRUCTURE AND DEVELOPMENTS
India is one of the fastest growing liquor markets in the world.
Alcoholic beverages are considered a sunrise industry owing to its high-growth potential
and increasing social acceptance.
As the fastest growing economy in the world, Indias favorable
demographics, growing middle class, rising levels of disposable income, increased
preference for upscale food and drink experiences, and rising acceptance of alcoholic
beverages in social gatherings, will contribute to an increase in alcohol consumption.
Another significant factor for market expansion will be drinking amongst women and
increased consumption of alcohol in rural areas.
Overall, the outlook for the Indian alcoholic beverages continues to
remain positive led by favorable demographics, expanding middle class, rising disposable
income levels, greater preference for premium food and drink experiences and greater
acceptance of alcoholic beverages in social circles.
Although the average per adult intake of alcohol is still considerably
low in India when compared to other countries such as the United States, drinkers among
young Indians are more prevalent. This provides tremendous opportunity to drive growth of
Alcobev industry on the back of its rising working age population. It is expected that per
capita consumption will increase with changes in lifestyle and aspiration of the
population.
OPPORTUNITY & THREATS, RISK & CONCERNS
Opportunities and Threats:
There is huge opportunity in the sale of potable liquor. The demand for
potable liquor is showing a steady increase year on year.
The Companys strong focus on premiumization coupled with rising
disposable income and evolving consumer lifestyles presents significant opportunity to
grow sales and expand margins.
Low per capita consumption, rapid urbanization, favorable
macroeconomics indicators, higher disposable incomes and evolving lifestyles bode well for
the industry as a whole.
The business of potable liquor is subject to policies of the State
Governments as it is a State subject. There is always a threat of change in Government
policies in terms of “Prohibition in consumption of Liquor” as imposed in States
of Gujarat and Bihar.
High competitive intensity due to inflationary pressures and other
macroeconomics factors.
Consumption degrowth due to inflationary pressures and other
macroeconomic factors.
FINANCIAL PERFORMANCE
Standalone
During the financial year 2022-2023 under review, the total Revenue of
the company was Rs.6822.45 lakh as against Rs.4128.50 lakh in the previous year and the
net profit after tax was Rs. 479.40 Lakhs as compared to profit of Rs. 304.76 Lakhs in the
previous financial year.2021-22.
Consolidated
During the financial year 2022-2023 under review, as per the
Consolidated Financial Statements, the net profit is Rs. 743.50 Lakhs which includes share
of profit of Associate company amounting to Rs 264.11 lakh..
OUTLOOK
The company is engaged in two business verticals- a) Liquor business
The company has a bottling plant for manufacture of Country Liquor
& Rajasthan Made Liquor at Ajmer, Rajasthan. The company is manufacturing Rajasthan
Made Liquor for Rajasthan State Ganganagar Sugar Mills Ltd (a Rajasthan Government
Undertaking) u n d er conatract manufacturing arrangement.
The company has also started to manufacture and sell Country Liquor in
its own brands
In order to expand its footprint in liquor business, the Company has
taken equity stakes in two companies having interest in liquor business- o 62.06 % stake
in Carya Chemicals and Fertilizers Private Limited, which has a LOI for setting up
Distillery for ENA and Ethanol and Bottling Plant for manufacture of Indian Made Foreign
Liquor and Country Liquor in Rajasthan o 20.08 % stake in Shri Gang Industries &
Allied Products Ltd which has set up a Distillery for manufacture of ENA and Bottling
Plant for the manufacture of Indian Made Foreign Liquor at Sandila, Dist. Hardoi (UP).
b) Trading Business
Under this vertical the company is mainly into trading of edible oils
like Palm Oil, Soyabean Oil etc.
The Company is expected to grow at a fast pace in the coming years
majorly in the Liquor Segment which is prime focus area for the company.
RISKS AND CONCERNS
The industry is exposed to multiple regulatory risks emanating from
state taxes, adverse ruling from courts and changes in regulations with respect to
pricing, licensing, working of operating facilities, manufacturing processes, marketing,
advertising, and distribution.
Further due to regulated nature of the industry, your Company is
exposed to the restrictions by the state governments on production, movement and sale of
spirits.
Another concern emeges from the dependence on state governments to get
price increases or changes. Margins may get severely impacted due to commodity cost
inflation.
Prohibition in certain states poses a threat to legitimate sales. The
business of potable liquor is subject to policies of the State Governments as it is a
State subject. There is always a threat of change in Government policies in terms of
“Prohibition in consumption of Liquor” as imposed in States of Gujarat and
Bihar.
CASH FLOW ANALYSIS
The Cash Flow Statement for the year under reference in terms
ofRegulation 34(2) of the (Listing Obligations and Disclosures Requirements) Regulations,
2015 is annexed with the Annual Accounts of the Company.
FINANCE COST
The financial charges for the year ended March 31, 2023 was Rs. 69.63
Lakhs. This is mainly on account of interest payable on the unsecured loans and vehicle
loan taken by the company.
OTHER EQUITY (RESERVES AND SURPLUS)
As on March 31, 2023, the Reserves and Surplus in the Balance Sheet at
Rs 2386.99 Lakh as compared to the negative balance of Rs. 499.46 Lakhs during the
previous Financial Year 2021-22..
EARNING PER SHARE
Earnings per share of the company is 4.12 as against the EPS of 3.42 in
the previous year.
SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
| Ratios |
2022-23 |
2021-22 |
Variation (in %) |
Reason for change |
| Debtors Turnover |
0.20 |
0.07 |
199.05 |
This is due to higher level of trade
receivables vis a vis previous year. |
| Inventory Turnover Ratio (in days) |
142.89 |
497.17 |
-71.26 |
The ratio has improved with increase in
the turnover of the Company. |
| Interest Coverage Ratio |
10.94 |
166.66 |
-93.44 |
In the previous financial year the
interest cost was negligible. |
| Current Ratio |
0.64 |
0.41 |
54.67 |
Current ratio has improved due to higher
increase in current assets as compared to current liabilities. |
| Debt Equity Ratio |
0.72 |
4.24 |
-83.00 |
Debt equity ratio has improved due to
increase in the shareholders equity. |
| Operating Profit Ratio (in %) |
13.18 |
11.50 |
14.61 |
Increase is d ue to better o p erating
margins. |
| Net Profit Margin (in %) |
7.03 |
7.38 |
-4.89 |
Marginal decline due to increase in
finance cost. |
INTERNAL CONTROLS AND THEIR ADEQUACY
The Company has a well-framed internal control system commensurate with
the size and nature of its business. These internal controls ensure safeguarding of assets
from unauthorised use or disposition, proper recording and reporting o f all transactions
and compliance with applicable regulatory requirements. The internal control systems are
reviewed and modified continually to keep up with the changes in business environment and
statutory requirements.
The framework is monitored by the internal audit team of the Company.
The Audit Committee of the Board is periodically apprised of the internal audit findings.
The Audit Committee reviews the efficacy and effectiveness of the internal control system,
takes corrective actions and suggests measures for strengthening it. The Company has a
robust Management Information which forms an integral part of the control mechanism.
ENIVRONMENT AND SAFETY
Quality and Environment safety is of primary importance to the Company.
It ensures that the quality control system remains robust and the products undergo strict
quality checks.
HUMAN RESOURCES AND CORPORATE SOCIAL RESPONSIBILITY
Human capital is the most essential part of the Company. The Company
keeps promoting a collaborative work environment where all the employees feel safe and a
part of the Company. The Human Resources policies of the Company are aimed at attracting,
nurturing and retaining talent in a constantly evolving business environment while
ensuring trust, transparency and teamwork amongst its employees.
The Company recognizes the importance of human resources in realising
its growth ambitions and believes in nurturing talent within the organization to take up
leadership positions. During the year Company continued to maintain healthy and cordial
relationship with its employees.
CAUTIONARY STATEMENT
Statements in this report describing the Companys objectives,
projections, estimates and expectations may constitute “forward looking
statements” within the meaning of applicable laws and regulations that involve risks
and uncertainties. Such statements represent the intention of the Management and the
efforts being put into place by them to achieve certain goals. Actual results might differ
materially from those either expressed or implied in the statement depending on the
circumstances. Therefore, the investors are requested to make their own independent
assessments and judgments by considering all relevant factors before making any investment
decision.
|
By Order of the Board |
|
For Suraj Industries Ltd |
| Place: New Delhi |
|
| Date: 28.08.2023 |
|
| Sd/- |
Sd/- |
| Suraj Prakash Gupta |
Syed Azizur Rahman |
| Managing Director |
Director |
| DIN: 00243846 |
DIN: 00242790 |
| Address: W-15/40, W-15, |
Address: Flat B-104 (FF), Ananda |
| Western Avenue, Sainik Farms, |
Apartments, Sector-48, Noida, |
| Pushpa Bhawan, Delhi-110062 |
Uttar Pradesh- 201301 |
+91-9892691696
