A. Overview of the Indian Economy:
Driven by the pent-up demand, widespread vaccination coverage, rising employment and
substantially higher private consumption, India recovered from repeated waves of COVID-19
pandemic shock to overtake the UK and become the fifth-largest economy in the first
quarter of FY 2022-23. However, with the global economy entering a phase of severe
slowdown, India could not remain insulated from these developments. As the year
progressed, Indias economic growth slowed and dropped to 4.4% in the October-December
quarter from 6.3% in July-September. The slowdown resulted from an easing of pent-up
pandemic-era demand, continuing weakness in the manufacturing sector, and the fading of
the pandemics low base effect. But in the fourth quarter, Indias economic growth
accelerated to 6.1%, boosted by government and private capital spending. This has resulted
in full year growth of 7.2%, a level that makes it the worlds fastest-growing major
economy.
India is primarily a domestic demand-driven economy, with consumption and investments
contributing to 70% of the economic activity. With more than 100 unicorns valued at US
$332.7 Billion, India has the third-largest unicorn base in the world. The government is
also focusing on renewable sources to generate energy and is planning to achieve 40% of
its energy from non-fossil sources by 2030. The increased capital spending on
infrastructure and asset-building projects is set to increase growth multipliers for the
economy.
B. Outlook:
The Indian economy is expected to benefit from recovery in consumption propelled by
increasing normalization of activity, higher rural income, continued emphasis on
infrastructure spending by the government, and an incremental boost from pent-up household
savings. The Governments CAPEX is budgeted to grow to 2.9% of the GDP in FY 2022-23,
highest in nearly two decades. Private corporate investment is also expected to rise with
improvement in demand, leading to increased manufacturing sector capacity utilization and
rollout of the Production-Linked Incentive Scheme. The RBI expects real GDP to grow by
7.2%1 in FY 2023, however remains conscious that the outlook could potentially be impacted
given sustained inflation pressures in the next few quarters (including the impact of
Russia - Ukraine conflict), quicker tightening of financial conditions with RBIs rate
hikes, high oil prices impacting current account balance and fiscal deficit, while being
mindful of subsequent COVID-19 outbreaks.
C. Industry structure and developments:
Accounting for 51% of the Private Final Consumption Expenditure, Indias retail market
was sized at 55 trillion in 2020, reflecting a CAGR of 5% over the last 4 years. This
growth was driven by the following factors: rising income levels, up gradation in consumer
behavior, surge in demand from Tier 3, Tier 4 cities and rural markets, increased youth
spending, improvement in infrastructure and the entry of new Indian and global brands
across product categories. Indias retail sector was impacted by the first wave of
COVID-19 in 2020, where both the supply and demand of most consumer goods adversely
affected. Even post lockdown being lifted, consumers were apprehensive about stepping out
of their homes. This led to a 14% decline in the retail market size in 2020. Yet, the
impact of the second wave in 2021 was relatively limited due to the localized nature of
lockdowns and gradual easing of supply chain disruptions. Therefore as the pandemic eases
out, the retail market is expected to bounce back in the coming years and grow at a CAGR
of 11% to reach ~ 91 trillion by 2025.
D. India Online Beauty and Personal Care Market:
Key drivers of growth here include increasing online shopping penetration in Tier-2+
cities, sustained investments in growth of the sector, rising affinity for branded
products, wide assortment, increasing need for convenient shopping experiences, rising
adoption of e-commerce by Gen-Zs and millennials, and higher consumer trust on products
bought online. Online BPC retail platforms are effectively resolving challenges faced by
consumers and brands with the help of superior application of technology, efficient supply
chain and quality control, access to a wider selection and authentic products and brands
(including niche luxury brands), original content with advice from experts, door-step
deliveries, and wider geographic reach in a fragmented category.
E. Opportunities and Threats:
Opportunities:
The Online Beauty and Personal Care Market in India grew at a promising 60% CAGR
between 2016 and 2020, reaching 91 billion in 2020, representing 8-10% of the Indian
Beauty and Personal Care Market. The sector is expected to grow at 35%+ CAGR over the next
5 years. Key drivers of growth here include increasing online shopping penetration in
Tier-2+ cities, sustained investments in growth of the sector, rising affinity for branded
products, wide assortment, increasing need for convenient shopping experiences, rising
adoption of e-commerce by Gen-Zs and millennials, and higher consumer trust on products
bought online. There is substantial headroom for greater penetration in India, in the
context of online penetration of more developed markets such as the United States (20-25%)
and China (35-40%) in 2020. Online BPC retail platforms are effectively resolving
challenges faced by consumers and brands with the help of superior application of
technology, efficient supply chain and quality control, access to a wider selection and
authentic products and brands (including niche luxury brands), original content with
advice from experts, door-step deliveries, and wider geographic reach in a fragmented
category.
Threats:
The Consumer Products Industry has entered into the orbit of the high competition. The
market fights are set to intensify with unstoppable capacity build up. The Competition
from both unorganized and other organized players, leading to difficulties in improving
market share. The one of the common problem emerged for finding talent with competence or
even skilled man power for Consumer Product Industries irrespective of the Companys Brand
or Size. Due to high competition in market, the competitors are doing price cutting of
Services to compete or keep their existence in markets which is ultimate big problems for
the industries. More and more new organized players are entering into market which will
increase competition in organized sector also.
F. Segment-wise or Product-wise performance:
The Company is primarily engaged in single segment i.e. dealing in Consumer Products.
G. Risks and Concerns:
The risks are identified based on their likelihood and severity and are categorized
into critical and noncritical risks where the high and medium risks are part of critical
risks while the low risks are part of noncritical risks.
Identifying and managing risks that have the potential to affect our objectives and
operations is an essential part of our risk governance framework. Company has empowered
its group functions, making them accountable for risk identification within their area of
responsibility and these are presented to the Management. These material business risks
are also regularly reported to the Board, along with their controls and mitigation
treatments. Risk function facilitates the conversations and help monitoring the action
plans. Critical risks are escalated through existing reporting lines.
H. Material Developments in Human Resources / Industrial Relations:
Industrial Relations continued to be harmonious and cordial throughout the year. The
Company always valued its Human Resources and believes in unlimited potential of each
employee. Your directors believe and affirm the importance of developing human resources,
which is the most valuable asset of your Company and the key element in bringing all round
improvements and achieving growth. The human resource philosophy and strategy of your
Company has been designed to attract and retain the best talent. In practice, it creates
and nurtures a work environment that keeps employees engaged & motivated. Employee
relations during the year under review were peaceful. The contribution and co-operation
received from employees across all levels was excellent and the same has been appreciated
& supported by the management through its continuous & systematic training
programmes.
I. Internal control systems and their adequacy:
The Company has an independent Internal Audit function with a well-established risk
management framework. The scope and authority of the Internal Audit function are derived
from the Internal Audit Charter approved by the Audit Committee. The Company has engaged a
reputable external firm to support the Internal Audit function for carrying out the
Internal Audit reviews.
The Audit Committee meets every quarter to review and discuss the various Internal
Audit reports and follow up on action plans of past significant audit issues and
compliance with the audit plan. The Chairperson of the Audit Committee has periodic
one-on-one meetings with the Chief Internal Auditor to discuss any key concerns.
Additionally, the following measures are taken to ensure proper control:
Budgets are prepared for all the operational levels.
Any material variance from budget has to be approved by the Commercial director. Any
major policy change is approved by the managing director. Any deficiency in not achieving
target is reviewed at management meetings.
J. Discussion on financial performance with respect to operational performance:
The financial performance of the Company for the Financial Year 2022-23 is described in
the Directors Report of the Company.
K. Material developments in Human Resources / Industrial Relations front including
number of people employed:
The cordial employer - employee relationship also continued during the year under the
review. The Company has continued to give special attention to human resources.
L. Caution Statement:
Statements made in the Management Discussion and Analysis describing the various parts
may be “forward looking statement” within the meaning of applicable securities
laws and regulations. The actual results may differ from those expectations depending upon
the economic conditions, changes in Govt. Regulations and amendments in tax laws and other
internal and external factors.
Registered Office: |
|
By the Order of the Board |
405, Patel Ashwamegh Complex Jetalpur |
|
Tiaan Consumer Limited |
Road, Near Dairy Den Circle, Sayajigunj |
|
|
Vadodara 390 005 |
|
|
|
Sd/- |
Sd/- |
|
Raghav Gujral |
Iroda Ochilova |
Place: Vadodara |
Managing Director |
Director |
Date: 4th September, 2023 |
DIN: 09688181 |
DIN: 09698799 |
+91-9892691696
