Tahmar Enterprises Ltd Management Discussions

The Company was engaged in processing and manufacturing of Coated Paper but Company has changed its main object from trading of the coasted paper to Distillery business. Company has taken approval from shareholders by postal ballot dated 11 th December, 2022 and company alter its existing object clause III (A) by replacing the entire object clause to carry on in India or elsewhere the business to manufactures, producers, processer, refiners, distributor, dealers, seller, retailers, marketer, agents, Importers and exporters of Extra Neutral Alcohol (ENA), ethyl alcohol, ethanol, biodiesel fuel, Bio-fertilizer, fuel ethanol additives, oil, fuel oil, cattle feed (protein), Dried Distillery Grain Soluble - DDGS, pallets, by-products, Indian made Foreign Liquor (IMFL), spirits, alcohol including potable, Industrial alcohols, rectified spirits, alcohols, extra neutral alcohols, ethanol, special denatured spirit, fine chemicals and to produce power, renewable energy, electricity from industrial waste, fertilizers, cattle feed, biogas, bottled water, soft drink, carbonated drinks, beverages, mineral water, alkaline water, country liquor, pot still and allied chemicals and products, Indian made foreign liquors, all kinds and descriptions of whisky, brandy, rum, gin, vodka, alcohol, beer, wine, brewery & winery and other beverages including aerated and mineral waters and other drinks .

In the Same Meeting Postal Ballot Resolution Past Dated 11 th December, 2022 The Company Change Its Name From Sarda Papers Limited To Tahmar Enterprises Limited And Consequential Alteration to MOA and AOA Of the Company. As you are aware that your Company had suspended the manufacturing operation from June 2009 due to unfavorable market condition Coated Paper and continuous cash losses and Company was under BIFR purview for its rehabilitation. The Company does not envisage starting again its manufacturing unit.

BUSINESS OVERVIEW

INDUSTRY STRUCTURE AND DEVELOPEMNT

ECONOMY OVERVIEW

Global Economy Overview

The world economy showed early signs of recovery, with inflation declining and growth rates becoming steady in early 2023. Chinas reopened economy has also rebounded strongly. Until September 2022, macroeconomic concerns such as energy-price-driven inflat ion and rising interest rates, along with the wars political instability, caused declines in overall global inflation. As per the International Monetary Funds (IMF) April 2023 outlook, the global economy would grow by 2.8% in CY 2023 as against 3.4% in CY 2022 and is predicted to grow by 3.0% in CY 2024. Supply chain disruptions have been unwinding, while dislocations in energy and food markets caused by the war have also been receding. Concurrently, the vast and synchronised tightening of monetary policy by the majority of central banks has been anticipated to be successful, with inflation returning to target levels. The IMF report also projected that global headline Inflation would decline from 8.7% in 2022 to 7.0% in 2023 as a result of falling commodity prices. The combination of robust regional growth forecasts and rising market valuation potential could result in emerging markets outperforming global markets

Indian Economy Overview

As per the Annual Report released by RBI in May 2023, Indias real GDP is expected to have grown at 7.0 percent in FY23, driven by sustained recovery in discretionary spending, particularly in contact intensive services, restoration of consumer confidence, high festival season spending after two consecutive years of COVID-19 induced isolation and the governments thrust on capex. Inflation for FY23 rose to 6.7 percent in FY23, compared to 5.5 percent in FY22.

In terms of outlook, RBI has projected real GDP growth for FY24 at 6.5 percent, led by softer global commodity and food prices, good rabi crop prospects, sustained buoyancy in contact-intensive services, the governments continued thrust on capex, higher capacity utilisation in manufacturing, double digit credit growth, receding drag on purchasing power from high inflation and rising optimism among businesses and consumers. Additionally, RBI expects headline inflation to come at 5.2 percent in FY24, on account of a stable exchange rate and a normal monsoon.

INDIAN DISTILLERY INDUSTRY OVERVIEW

Indias Distillery industry is one of the worlds fastest-growing beverage markets. The growth of Indias Distillery market is predicted to be fueled by an increase in disposable income as well as a young demographic, with more than 10 mn people estimated to be added every year to the legal drinking age population. Moreover, premiumization, introduction of flavoured variants and expansion in the out-of-home segment are also fueling the alcohol markets value growth.

ETHANOL INDUSTRY

The Ethanol Industry in India is progressing towards an ambitious target set by the Government of India to achieve 20% ethanol blending with petrol by 2025-26. To meet this goal, India needs to significantly enhance its ethanol production capabilities. As of late 2023, the countrys ethanol production capacity stood at approximately 1380 crore liters, with a strategic aim to increase this capacity to cater to the projected demand for ethanol, which includes around 1016 crore liters required solely for blending purposes.

The government has implemented several ethanol interest subvention schemes from 2018 to 2022, facilitating the establishment and expansion of both molasses-based and grain-based distilleries. These schemes offer financial incentives, including interest subvention, to encourage investments in ethanol production infrastructure.

For the Ethanol Supply Year (ESY) 2023-24, spanning from November 2023 to October 2024, the Oil Marketing Companies (OMCs) issued a tender inviting bids for 825 crore liters of ethanol, aiming to increase the blending percentage to 15%. This initiative demonstrates the governments commitment to reducing import dependency on fuel, enhancing energy security, supporting the domestic agriculture sector, and addressing environmental concerns.

These efforts have also resulted in improved cash flows for sugar mills, enhancing their capacity to make prompt payments to cane farmers. This financial stability is crucial for the sustainability of the sugar sector and the livelihood of farmers. The increased production of ethanol has concurrently led to a reduction in petrol or crude oil imports, saving a significant amount in foreign exchange for the country and further securing Indias energy needs.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Company Performance

Tahmar is involved in the production of spirits, ethanol, and other by-products including cogeneration and sanitizer. Strategically situated in Westen Maharashtra, Indias second largest sugarcane-producing state. the company maintains distilleries with a total capacity of 7.602 LLPA a, solidifying its status for exceptional efficiency and recovery rates across India for the last years.

Particulars	Distillery (ENA)
	FY24	FY23
Segmental Revenue (Lakh)	544.51	255.87
PBIT (Lakh)	6.6179	(0.067)
Production Qty (In Lakh Litres)	7.602	1.6161
Sales Qty (In Lakh Litres)	8.564	Nil
Average Realisation (Rs)	544.51	255.87

KEY FINANCIAL RATIO ANALYSIS :

KEY FINANCIAL RATIOS	2022-23	2022-23
Non-Current Assets (Rs. in Lakhs) *	7892	1757
Short term Loans (Rs. in Lakhs)	209.17	0.00
Current Assets (Rs. in Lakhs)	1726.82	976.71
Cash & Cash equivalent (Rs. in Lakhs)	20.55	38.19
Inventory Turnover	0.90	5.20
Operating Profit Margin (%)	1%	2%
Net Profit Margin (%)	1%	NA
Return on equity (%)	NA	NA
Book value per share (Rs.)	1	1
Earnings per share (Rs.)	Basic 0.005	(0.00)
	Diluted 0.003
Debtors Turnover Ratio	1.57	1.47
Current Ratio	0.91	0.36
Return on Net worth (%)	NA	NA
Debt/Equity Ratio	0.25	NA
Trade Payables Turnover Ratio	4.61	149.46
Net Capital Turnover Ratio	NA	NA
Return on Capital employed
Return on Capital employed	NA	NA

MATERIAL DEVELOPMENT IN HUMAN RESOUCE/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognizes the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation. Your Company believes in trust, transparency & teamwork to improve employees productivity at all levels.

OPPORTUNITIES AND THREATS

The alcove industry in India is highly regulated. The industry also falls under the purview of national laws and regulatory bodies, such as the Food Safety and Standards Authority of India (FSSAI). Compliance with relevant regulations results in higher operating costs and also limits the Companys ability to quickly capitalize on the opportunities that Indian market offers.

Economic Activity: The economic activity in India has recovered sharply post Pandemic. However, threat of new variants is impacting many countries globally. In addition, the ongoing geopolitical instability due to ongoing tension between Russia and Ukraine is adding concerns about the economic recovery globally. Any further extension of such events or any new such events can have adverse effect on the economic recovery and performance of the Company as well.

Additional Tax: Under the current tax regime, state governments have only liquor and fuel under their control. Any additional taxation on liquor to meet target state revenue objectives can be detrimental for the industry as it will have severe impact on the demand.

Minimum Legal Age: All the states in India have legal ages varying between 18-25 years. If these states increase the drinking age or states with lower age bracket decides to increase the age, it could impact sales of alcohol.

Limited Pricing Power: In many states, where the government is also the biggest distributor, it fixes the prices at which it buys products from the alcoholic beverage companies and the prices at which they will sell to the end consumers. The state governments decide the end consumer price, leaving manufactures with no say in determining their selling price.

Complex Taxation Structure: The alcohol industry has been kept outside the purview of GST. However, the industry would be liable to pay GST on the input raw materials, which may impact the gross margins. Taxation by volume continues to adversely impact the beer segment. The tax structure for alcoholic drinks does not adjust for the level of alcohol in a particular drink. Considering the ratio of excise duty adjusted to alcohol content, IMFL appears to be more affordable than beer because it has a higher alcohol/price ratio. This makes beer an expensive drink compared with other spirits in terms of price per unit of alcohol. The excise and other taxes put together comprise over 50% of the final retail price.

Affordability: The high taxation on alcobev products results in higher MRPs for the end customer. So even a small change in price or taxes has severe impact on the purchasing power of the customer and can impact affordability of the product.

Volatility in Raw Material: The beer and IMFL industry can be adversely impacted due to the volatility in key input raw material prices such as barley, ENA and glass bottles. Since the pricing power is limited, companies cannot fully pass on the higher costs to consumers thereby margins gets impacted.

Competition: Over last few years, many international companies have entered the Indian market due to the immense potential prevailing in the country. These players could impact volumes primarily in the metros as their products are well known among affluent or lifestyle seeking consumers. Furthermore, increasing trend of the craft beer among urban population also increases the competition as beers can be manufactured with very limited investment in a smaller size brewery as compared to significant investment required in traditional breweries.

RISK AND CONCERNS

The company is exposed to risk of market fluctuation of its import and export in Distillery. The company is also exposed to national price fluctuation for its products.

in compliance with section 203 of the Companies Act, 2013The Company has been, maintaining a well-established procedure for internal control system. There had been a review conducted on regular interval by the internal Auditors about the financing and operating control at various locations of the Company and any, significant findings are reviewed by the Audit Committee of the Board of Directors.

HUMAN RESOURCES

The Companys human resource management focuses on enabling each employee to realise his or her full potential and utilising that potential to achieve organizational goals. The company places a strong emphasis on helping each employee recognize and tap into their strengths. This approach acknowledges that every employee has unique skills, talents, and capabilities that can contribute to company success. This journey is facilitated by an inclusive workplace culture, flexibility and a challenging work environment which allows personal growth along with job satisfaction. The resource value is increased through employee training, along with structured learning pathways and skill enhancement. Further, with integration of technology in business processes enables individuals to focus on assignments that add value and innovate. Overall, the companys approach is comprehensive and forward-looking, focusing on both the individual and collective growth of employees to drive organizational success.

INFORMATION TECHNOLOGY

The Company views technology as a key pillar for organizational growth and business continuity. Innovations in technology enable processes and operational effectiveness. TIs data-driven platform with trusted software and hardware platforms drives seamless processes across the Company. During the year, In-house hosted critical enterprise application software, SAP has been seamlessly migrated and hosted on to Cloud4C Cloud, which offers enhanced security, elasticity, improved performance and built-in automatic backups to secure data.

Cloud4C is a rated 4 datacenter with a SAP certified in SAP hosting services, and provides right combination of technology, people and services to host SAP application.

INTERNAL CONTROL

The Company has designed a reliable internal financial reporting and control system to record financial and operational information in accordance with all applicable internal controls and other regulatory compliance requirements. The Companys Internal and Statutory Auditors periodically review the internal control systems to ensure that day-to -day operations are conducted with minimal risk of fraud or other discrepancies.

The Audit Committee reviews the findings of the Internal and Statutory Auditors. This ensures the sustained adequacy and efficiency of internal controls. Additionally, the Board oversees the Audit Committees examination and ensures that prompt and adequate measures are taken to limit the risk and rectify the situation.

CORPORATE SOCIAL SERVICE

The Company is below the threshold limit for mandatory spend on Corporate Social Responsibility.

CAUTIONARY STATEMENT

Statement in the Management Discussion and analysis describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities, laws and regulation Actual results may differ materially from those expressed in the statement. Several factors could make significant difference to the companys operation. These include climatic conditions and economic conditions affection demand and supply, government regulation and taxation, natural calamities etc. over which the company does not have any control.

Conservation of Energy, research and development, Technology absorption, foreign exchange earnings and outgo.

Particulars pursuant to the Companies (Accounts) Rules, 2014

(A) Conservation of energy-

(i) The steps taken or impact on conservation of energy - The Company is engaged in manufacturing and processing of Grain Extra Neutral Alcohol (GENA), Dried Distillers Grain Solids (DDGS), Distillers Wet Grains Soluble (DWGS) and as such its operations do account for substantial energy consumption. Air Curtains have been installed in production areas where doors are required to keep open for operational purposes. These Air Curtains reduces penetration of insects and unconditioned air into a conditioned space resulting into preservation of air conditioning effect and low consumption of power. However, the Company is taking all possible measures to conserve energy. Several environment friendly measures were adopted by the Company such as Installation of capacitors to save power, Installed Thin Film Transistor (TFT) monitors that saves power, LED Lights, Creating environmental awareness by way of distributing the information in electronic form, Minimizing air-conditioning usage, Shutting off all the lights when not in use.

The company is also steadfast about maintaining a zero wastage and eco-friendly business process. To do so the company has established its own water treatment and recycling unit. Company stands true to its vision statement and strives to continuously innovate, upgrade, and contribute back to society.

(ii) The steps taken by the company for utilizing alternate sources of energy - The company uses soler panel to generate extra electricity.

(iii)The capital investment on energy conservation equipments -

(B)Technology absorption-

(i)The efforts made towards technology absorption - The Company continuously monitors and keep track of technological up gradation in the field of ENA manufacturing and the same are reviewed and considered for implementation. Your Company continued its focus on quality upgradation and product enhancements. The benefits derived like product improvement, cost reduction, product development or import substitution

a. Enhanced productivity & reduction in production time; b. Total traceability of each piece during entire manufacturing process through customized software; c. Reduction in re-work & rejection in manufacturing. ; d. Enhancement of product spectrum e. Improvement in quality of existing products.;

(ii)The benefits derived like product improvement, cost reduction, product development or import substitution - Not Applicable

(iii)In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - Not Applicable (a) The details of technology imported; (b) The year of import; (c) Whether the technology been fully absorbed; (d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and (iv)The expenditure incurred on Research and Development - Nil

(C)Foreign exchange earnings and outgo-

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows - Nil

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

(Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)

To,

The Members of,

TAHMAR ENTERPRISES LIMITED

R.S. No. 131/2 Shop No. 7 Guruchandra Residency, Gadhinglaj, Kolhapur-416 502,

I have examined the relevant registers, records, forms, returns and disclosures received from the Directors of TAHMAR ENTERPRISES LIMITED (Formerly known as Sarda Papers Limited) having CIN:L15100PN1991PLC231042 And Having Registered Office At R.S. No. 131/2 Shop No. 7 Guruchandra Residency, Gadhinglaj, Kolhapur-416 502, hereinafter referred to as the (Company) produced before me by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34 (3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In my opinion and to the best of my information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in as considered necessary and explanations furnished to me by the Company & its officers, I hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on March 31, 2024 have been debarred or disqualified from being appointed or continuing as Directors of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.

Sr. No. Name of Director	DIN	Date of appointment in the Company	DIN Status
1 *Manish Dharanendra Ladage	00082178	22/12/2014	Active
2 Sarita Sequeira	01203100	04/08/2022	Active
3 Rajshekhar Cadakketh Rajasekhar Nair	01278041	04/08/2022	Active
4 Sandeep Kumar Sahu	06396817	12/10/2022	Active
5 Meena Menghani	09772262	04/11/2022	Active
6 Kanika Kabra	10291001	05/09/2023	Active
7. #Shilpa Sushant Phadnis	03085651	06/08/2022	Active
8. @Sangramsinh Bhagyeshrao Kupekar Desai	10232182	06/08/2022	Active

*Mr. Manish Dharanendra Ladage resigned w.e.f. 22/07/2024. Ms. #Shilpa Sushant Phadnis and @Mr. Sangramsinh Bhagyeshrao Kupekar Desai was appointed w.e.f. 06/08/2022.

Ensuring the eligibility of / for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.