(a) Industry structure and developments:
The Company caters to wide range of process industries including Oil & Gas,
Petrochemicals, LNG, Fertilizers, Chemicals, Pharmaceuticals, Power, Water, Paper &
Pulp and Aerospace with its extensive product range of Heat Exchangers, Reactors, Pressure
Vessels, Columns & Towers, Industrial Centrifuges & Formed Components. In the
recent years, the heat exchangers market has witnessed significant advancements in
technology owing to increasing demand for recovering valuable energy, reducing costs and
limiting environmental emissions. These developments include deployment of new and
efficient heat exchangers, innovative heat transfer equipment as well as the introduction
of systems of heat exchangers in various industrial processes.
(b) Opportunities and Threats:
COVID-19 disrupted operations as well as supply chains and impacted progress at
customer sites in FY 22. However we are seeing clear signs of normalcy returning to how we
lead our lives and how we conduct our businesses. We begin the new financial year with
hope and optimism with good opportunities available to the company to enhance the product
mix, enter new markets and industry sectors both in the domestic as well as export
markets. The challenges will be to curtail the impact of spiked metal prices on our
profitability.
(c) Segment–wise or product-wise performance:
Our customer focus helps us in our endeavour in innovation and also strengthen our
capabilities for providing customer satisfaction through differentiated offering. We are
in a good position to expand our product mix which is currently Shell & Tube Heat
Exchangers centric to also include other types of process equipment like columns and
reactors in the near future. This will be in complete sync with our strategy and vision
for the upcoming Kheda facility which is progressing at a rapid pace.
(d) Outlook:
Market continues to present opportunities for our company to gather a strong growth
momentum in the short term as well as the medium terms with continuing inflow of enquiries
from the traditional sectors like Refineries, Petrochemicals as well as the new ones like
Chemicals, Power, LNG, Fertilizers etc. from both Domestic as well as Export Markets. The
escalation in raw material prices due to the continuing geopolitical situation in Europe
poses a significant challenge to businesses like ours to minimise impact on profitability.
(e) Risks and concerns:
The Company has a robust Enterprise Risk Management framework which enables it to take
certain risks to remain competitive and achieve higher growth and at the same time
mitigate other risks to maintain sustainable results.
Under the framework, the Company has laid down a Risk Management Policy which defines
the process for identification of risks, its assessment, mitigation measures, monitoring
and reporting. While the Company, through its employees and Executive Management,
continuously assess the identified Risks, the Risk Management Committee reviews the
identified Risks and its mitigation measures annually.
The Company has identified 23 Risks - 9 Strategic Risks, 12 Operational Risks & 2
Regulatory Risks. Key Strategic Risks include timely completion of upcoming project,
supply chain disruptions, reputational risks, enhancement of technical know-how and
infrastructure upgradation. Key Operating Risks include price volatility in input
materials, delayed delivery to customers, health and safety. Regulatory Risks includes
litigation and regulatory compliance management.
The Company has a Risk Management Committee of the Board of Directors and Risk
Management Policy consistent with the provisions of the Act and the Listing Regulations.
The Internal Audit Department facilitates the execution of Risk Management Practices in
the Company, in the areas of risk identification, assessment, monitoring, mitigation and
reporting. The Company has laid down procedures to inform the Audit Committee as well as
the Board of Directors about risk assessment and related procedures & status.
The policy identifies the threat of such events as "Risks", which if occurred
will adversely affect value to shareholders, ability of Company to achieve objectives,
ability to implement business strategies, the manner in which the Company operates and
reputation. Such risks are categorized into Strategic Risks, Operating Risks and
Regulatory Risks.
The framework defines the process for identification of risks, its assessment,
mitigation measures, monitoring and reporting. While the Company, through its employees
and Executive Management, continuously assess the identified Risks, the Audit Committee
reviews the identified Risks and its mitigation measures annually.
(f) Internal control systems and their adequacy:
The Company has an Internal Control System, commensurate with the size, scale and
complexity of its operations. The Company has an Internal Audit department with adequate
experience and expertise in internal controls, operating system and procedures.
The system is supported by documented policies, guidelines and procedures to monitor
business and operational performance which are aimed at ensuring business integrity and
promoting operational efficiency.
The Internal Audit Department reviews the adequacy of internal control system in the
Company, its compliance with operating systems and laid down policies and procedures.
Based on the report of internal audit function, process owners undertake corrective
actions in their respective areas and thereby strengthen the controls. Significant audit
observations and corrective actions thereon are presented to the Audit Committee of the
Board of Directors from time to time.
(g) Discussion on financial performance with respect to operational performance:
This discussion covers the financial results and other developments during the
Financial Year 2021-22 in respect of the Company. Published result is as prepared on
Indian Accounting Standards (IND AS). Highlights below given only for comparison.
Financial Highlights for operating performance of FY 2021-22:
| Particulars |
FY21 |
FY22 |
| Revenue from Operation |
279.1 |
288.2 |
| EBITDA |
68.8 |
70.0 |
| MARGIN |
25% |
24% |
| PAT |
53.5 |
62.1 |
Overall revenues for the year grew 3% and stood atRs.288.2 Crores. Sales and Other
income for the year ended 31st March 2022 were
292 Crores as compared toRs.283 Crores on 31st March 2021. The net profit stood
atRs.62.1 Crores (previous yearRs.53.5 Crores).
Strong order pipeline ofRs.393 Crores as on Q4 end to provide good execution
visibility.
(h) Material developments in Human Resources / Industrial Relations front, including
number of people employed:
A company grows when its people grow. At Anup we believe that talent truly shapes
organizational success and destiny. There is highest commitment to investing in hiring the
right talent, sustainably engaging and developing them, retaining and rewarding them to
deliver organizational results and growth.
An important focus area for the organization has been to respond to trends shaping the
future of work that make the company agile, productive and help improve HR systems,
processes and enhance employee experience.
The company has invested efforts in bringing effectiveness in hiring and creating an
employer brand, creating internal mobility, reorganizing structures in line with business
plans and performance and establishing the right rewards and recognition.
To ensure that our employees continue to challenge themselves and grow, the company has
brought a significant focus to internal mobility and to rotating employees across
different functional roles in order to grow into higher roles.
On learning our focus shall continue to be towards digitalization of learning and
introduction of various e-learning courses on managerial & functional competencies.
Adoption of digital tools, incorporation of hybrid work culture, in our new way of working
has ensured that our employees are equipped to work with these through the right skills.
While doing so, we have been cognizant of understanding what motivates and engages our
people and how they perceive their work environment. Therefore, we encourage open and
regular dialogue between managers and their team members and offer hand holding support
which ensures our people feel comfortable to speak up, raise concerns and are empowered to
initiate improvements.
Our approach to performance management is a holistic one wherein, while holding people
accountable, we look at continuous development and create opportunities for them to excel
in new and or larger roles. This approach is directly linked to our compensation framework
and promotion process. We also offer a wide range of benefits to our employees.
To ensure we develop future leaders, we provide a number of opportunities to foster
management and leadership skills. The purpose is to equip our people with the necessary
capabilities to lead the organization through change, develop their teams, manage
performance and ensure business success in line with the organizational strategy.
As on 31st March 2022 there were 171 permanent employees of Management Staff on role of
the Company.
(i) Details of significant changes (i.e. change of 25% or more as compared to the
immediately previous financial year) in key financial ratios, along with detailed
explanations thereof, including:
| Parameters |
Numerator |
Denominator |
FY21 |
FY 22 |
| Debtors Turnover |
Revenue from |
Average |
3.2 |
2.4 |
| Ratio (times) |
Operations |
Debtors |
|
|
| Inventory Turnover |
Revenue from |
Average |
3.2 |
3.6 |
| Ratio (times) |
Operations |
Inventory |
|
|
| Interest Coverage |
EBIT |
Finance Costs |
169.1 |
56.6 |
| Ratio (times) |
|
|
|
|
| Current Ratio (times) |
Current Assets |
Current Liabilities |
2.7 |
2.3 |
| Debt Equity Ratio (times) |
Total Debt |
Equity |
0.0 |
0.0 |
| Operating Profit Margin (%) |
EBIT |
Revenue from Operations |
21% |
20% |
| Net Profit Margin (%) |
Net Profit after Tax |
Revenue from Operations |
19% |
22% |
| Return on Net Worth (%) |
Net Profit after Tax |
Net worth |
16% |
16% |
Interest Coverage Ratio: Interest expense increase due to enhancement of limits
with Bank. Company do not have any debt in books.
(k) Cautionary Statement:
Statements in this report on describing the Company’s objectives, expectations or
predictions may be forward looking statements within the meaning of applicable security
laws or regulations. These statements are based on certain assumptions and expectations of
future events. Actual results could however differ materially from those expressed or
implied.
The Company assumes no responsibility in respect of the forward looking statements
herein which may undergo changes in future on the basis of subsequent developments,
information or events.
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