tgv sraac ltd share price Management discussions

TO THE DIRECTORS REPORT

MANAGEMENT DISCUSSION AND ANALYSIS :

Economy:

The pace of Indian Economy is expected to remain strong in the context of structural reforms under taken by the Government and estimated to be a USD Four Trillian Economy by 2024-25. Easier complains and robust single window systems installed will enhance ease of doing business in the Country and helps growth. India is now ranks 5^th in overall world economies. The Reserve Bank of India (RBI) has projected India s GDP at 6.5% for 2023-24 which is slightly lower compared to 2022-23 of 7.2%. The downward revision was made by RBI keeping in view of continuation of ongoing war between Ukraine & Russia resulting in adverse effect on Indian as well as Global Economies. This has resulted in volatility in Commodity Market, Fuel etc., prices. Positive steps initiated by Government for further progress of Economy is showing results in right direction. Though the current season has started with scanty rains, now abundant rain in July & August 2023 will help agriculture in general power generation with improvement in rural spending.

Products & Performance:

Indian chemical industry, ranks 4^th place in the world. The presence of India in global trade of chemicals is in a laudable position. Chloro-Alkali products are prominent in chemical industry with installed capacity of 48 lakh MTs, the industry is growing at CAGR of 6.4 %.

The Company Operations are divided into three segments. They are: (a) Chemicals Segment (b) Oils and Fats Segment and (c) Power Segment. Segment wise products and their uses are described here under.

a. Caustic Soda with its versatile nature finds its consumption in Aluminum, Pulp and Paper, Textile, Pharmaceuticals etc., etc. Industries. Chlorine is used in Water treatment, Pesticides, Pigments, Pulp & Paper, Textiles etc. Company manufactures Hydrochloric Acid using in house materials that is Chlorine and Hydrogen. Sodium Hypo. Potassium Hydroxide is used in industries like Soaps, Detergents, Batteries, Bio fuel, Dyes, Medical Products, Photovoltaic Cells etc., Chloromethanes products namely Methylene-di-Chloride, Chloroform, are used as solvents, Pharmaceuticals, Drugs, Refringent Gasses, PTFE Pipes, Fluoropolymers, Insecticides etc., applications.

b. Hydrogenated Castor Oil is used as Surfactant, Specialty Lubricants, Skin care products, Toiletry Creams etc. With regards Fatty Acids, Company manufactures Stearic Acid of various grades and Soap Noodles.

c. The power plant at Bellary (power segment) is in closed condition due to elapse of power purchase agreement entered with Electricity Authorities, Karnataka.

All products of the company are for industrial use and hence the performance depends on the wellbeing of the respective Industry.

Chlorine, a Joint Product while manufacturing Caustic Soda is witnessing continuous reduced in demand and being marketed with unremunerative prices. In Indian Market Caustic Soda is Centric unlike European and other Countries where Chlorine is centric. Chloromethanes plant operations are absorbing sizable quantities of Chlorine internally with value addition, which otherwise is to be disposed in the market with unremunerative prices. In order to have flexibility in marketing operations of Chlorine commercial disposal the company has taken steps to further increase its Chloromethane Capacity by another 125 TPD to the existing capacity of 250 TPD.

The Company has scaled down the operations of Oils & Fats Segment consisting of Hydrogenated Castor Oil, 12 Hydroxy Stearic Acid, and Soap Noodles, as the margins have become very thine due to intensive price fluctuations for both inputs and finished goods.

The Ukraine / Russia war has not only disrupted Global economy but also has led to rise of prices of commodities, fuel supply chain etc., aspects. With this, the prices of many commodities in India have shown a temporary rise including in Chloro-Alkali Products.

The Company has achieved a Gross Turnover of Rs.2076.41 Cr against previous year (2021-22) Turnover of Rs.1775.19 Cr. The increase in Sales value is the resultant of increased production coupled with better market conditions prevailed during the year.

In order to have better quality of Salt, the raw material for Caustic Soda production the company has resorted procurement of same from Gujarat belt incurring increased transportation cost. All inputs used in manufacture are mainly sourced locally except Potassium Chloride the raw material for Caustic Potash.

Being Caustic Soda / Potash manufacture Power intensive, the company s drive before it is to ensure proper supply and contain the power cast. Continuous monitoring system is installed in this direction. During the year the company has installed 22.75 MW Solar Power Plant adjacent to the Factory. Plans are in anvil for further increase of the capacity by another 17.25 MW.

GENERAL-SEGMENT-WISE PERFORMANCE TOGETHER WITH DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Segment-wise performance together with discussion on financial performance with respect to operational performance has been dealt with in the Directors Report which should be treated as forming part of this Management Discussion and Analysis.

CREDIT RATING:

The Company has improved its Credit Rating from CARE A- to CARE A with the Outlook improving from Stable to Positive for long term bank facilities and CARE A2+ to CARE A with the Outlook from Stable to Positive for Short Term Bank facilities, awarded by M/s. CARE Rating Limited. Company is working in a direction to improve the rating further.

Details of Key Financial Ratios with significant variance:

Details of Financial Ratio Increase / Decrease when compared to previous years (2021-22/2022-23).

Overall variances in ratios is the result of better performance in main products of the company.

S. No	Details of Financial Ratio - Increase / Decrease	For the year ended 31st March, 2023	For the year ended 31st March, 2022	Variance %
01	Current Ratio	1.44	1.14	26.30
02	Debt Equity Ratio	0.20	0.59	-65.45
03	Return on Equity Ratio	40.40	19.82	103.82
04	Interest Turnover Ratio	18.62	13.44	38.55
05	Trade Payables Ratio	12.33	8.09	52.40
06	Net Profit Ratio	15.61	8.87	76.10
07	Return on Investment	40.40	19.82	103.82

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%.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY :

The Company has established an appropriate system of internal control to ensure that there exists a proper control over all the transactions and that all its assets are properly safeguarded and not exposed to risk arising out of unauthorised use or disposal. The Internal Audit conducted at all divisions for all the key areas of business. The Internal Control System is supplemented by a programme of Internal Audits to ensure that the assets are properly accounted for and the business operations are conducted in adherence to laid down policies and procedures. The Internal Audit is oriented towards review of controls and operational improvements.

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

Relations with the employees remained cordial in general throughout the year. In order to optimise the contribution of the employees to the Company s business and operations, in-house training is given to the employees to induce contribution to productivity increase and development programmes for all levels of employees have been devised. Occupational Health Safety and Environmental Management are given utmost importance. As at 31^st March, 2023 the employee strength (on permanent rolls) of the Company was 1069.

CAUTIONARY STATEMENT :

Statement in this Management Discussion and Analysis describing the Company s objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations and such forward-looking statements involve risks and uncertainties. Actual results could differ materially from those expressed or implied important factors that could make a difference to the Company s operations include raw material availability and prices, cyclical demand and pricing in the Company s principal markets, changes in Government regulations, tax regimes, economic developments within India and the Countries in which the Company conducts business and other incidental factors. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new informations, future events, or otherwise. Readers are cautioned not to place undue reliance on these forward looking statements that speaks only as of their dates.

On behalf of the Board of Directors

	Sd/-	Sd/-
	CA K. KARUNAKAR RAO	N. JESVANTH REDDY
Place : Hyderabad	Executive Director & CEO	Executive Director (Technical)
Date : 14th August, 2023	(DIN : 02031367)	(DIN: 03074131)