TMT (I) Management Discussions


OVERVIEW:

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013, guidelines issued by the Securities and Exchange Board of India (SEBI) and other statutory requirements. Our Management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner the form and substance of transactions and reasonably present our state of affairs, profits and cash flows for the year.

INDIAN ECONOMY:

World Economy: According to the IMF report, global growth is projected to fall from an estimated 3.5% in 2022 to 3% in both 2023 and 2024.

The IMF on July 25 projected a growth rate of 6.1% for India in 2023, which is a 0.2 percentage point upward revision compared with the April projection."Growth in India is projected at 6.1% in 2023, a 0.2 percentage point upward revision compared with the April projection," it said in its latest update of the World Economic Outlook.

While the forecast for 2023 is modestly higher than predicted in the April 2023 World Economic Outlook (WEO), it remains weak by historical standards.

The rise in central bank policy rates to fight inflation continues to weigh on economic activity. Global headline inflation is expected to fall from 8.7% in 2022 to 6.8% in 2023 and 5.2% in 2024, it said.

Underlying (core) inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward, it said. The IMF said the recent resolution of the U.S. debt ceiling standoff and, earlier this year, strong action by authorities to contain turbulence in the U.S. and Swiss banking, reduced the immediate risks of financial sector turmoil. This moderated adverse risks to the outlook, it said.

However, the balance of risks to global growth remains tilted to the downside.

Inflation could remain high and even rise if further shocks occur, including those from an intensification of the war in Ukraine and extreme weather-related events, triggering more restrictive monetary policy, the report said.

Financial sector turbulence could resume as markets adjust to further policy tightening by central banks. Chinas recovery could slow, in part as a result of unresolved real estate problems, with negative cross border spillovers, it said.

"Sovereign debt distress could spread to a wider group of economies. On the upside, inflation could fall faster than expected, reducing the need for tight monetary policy, and domestic demand could again prove more resilient," said the WEO report.

The IMF said central banks in economies with elevated and persistent core inflation should continue to clearly signal their commitment to reducing inflation.

A restrictive stance - with real rates above neutral - is needed until there are clear signs that underlying inflation is cooling.

"With fiscal deficits and government debt above pre-pandemic levels, credible medium-term fiscal consolidation is in many cases needed to restore budgetary room for maneuver and ensure debt sustainability," the IMF said.

Source: https://www.thehindu.com

GLOBAL ECONOMY:

Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russias invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook. Global growth is forecast to slow from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023.

This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic. Global inflation is forecast to rise from 4.7 percent in 2021 to 8.8 percent in 2022 but to decline to 6.5 percent in 2023 and to 4.1 percent by 2024.

Monetary policy should stay the course to restore price stability, and fiscal policy should aim to alleviate the cost-of-living pressures while maintaining a sufficiently tight stance aligned with monetary policy. Structural reforms can further support the fight against inflation by improving productivity and easing supply constraints, while multilateral cooperation is necessary for fast-tracking the green energy transition and preventing fragmentation.

Chinas economy expanded 4.5 per cent year-on-year according to its National Bureau of Statistics, while Washingtons Commerce Department said the United States grew by an anaemic 1.1 per cent.

China is rebounding after the end of zero-Covid measures that battered business and supply chains, but is bedevilled by a host of other headaches.

Meanwhile, the United States is battling persistently elevated inflation, Germany is in a technical recession amid an energy crisis triggered by the Ukraine War, and Jpan expanded by just 0.4 percent in the first quarter.

As per the data, the real GDP or GDP at constant (2011-12) prices in the year 2022-23 is estimated to attain a level of Rs. 160.06 Lakh Crore, as against the first revised estimates of the GDP for the year 2021-22 of Rs. 149.26 lakh crore.

Source: https://timesofindia.indiatimes.com

OPERATIONS:

The Operations of the Company are at minimal scales and the management is actively working towards bagging new orders for execution and is evaluating all the possibilities of bringing back the glory of the Company with good order book and generation of sizable revenues.

FUTURE OUTLOOK:

The management is successful in scouting for new orders and markets. In the coming years, the management will strive to identify and produce distinct varieties of products to cater to the needs of overseas markets.

OPPORTUNITIES & THREATS

Strength: Huge demand for natural agro products produced in India in foreign countries, providing high export potential.

Weakness: The necessity of any product is mostly unpredictable and in this connection needs to be purchased in bulk quantity whenever it is available, requiring heavy capital investments in stocks.

Opportunities: We are a historical Company having vast amount of experience which will enable us to execute any orders received by the Company.

Threats: The business of the Company is exposed to normal industry threats.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The philosophy we have with regard to internal control systems and their adequacy has been formulation of effective systems and their strict implementation to ensure that assets and interests of the Company are safeguarded; checks and balances are in place to determine the accuracy and reliability of accounting data. The Company has a well defined organization structure with clear functional authority, limits for approval of all transactions. The Company has a strong reporting system, which evaluates and forewarns the management on issues related to compliance. Company updates its internal control system from time to time, enabling it to monitor employee adherence to internal procedures and external regulatory guidelines.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

(Rs in Thousands)

Particulars

2022-23 2021-22

Total Income

102.91 4,354.75

Total Expenses

8,112.39 15,870.70

Profit Before Taxation

(16,939.56) (11,515.95)

Profit after Tax

(16,939.56) (11,515.95)

Earnings per Equity share - Basic & Diluted

(3.42) (2.32)

KEY FINANCIAL RATIOS:

S. Particulars No

2022-23 2021-22 Change as a %

Reason for change

1. Debtors Turnover

0 1.19 -100%

Reduction is due to reduction in turnover

2. Inventory Turnover

0 2.05 -100%

Reduction is due to reduction in turnover

3. Debt to Equity Ratio

-1.1 -1.45 -24%

-

4. Interest Coverage Ratio

0 0 -

-

5. Current Ratio

1.2 7.47 -84%

Reduction in receivables lead to overall reduction in value of Current Assets

6. Operating Profit Margin

0 (2.71) -100%

Increase in sales and reduction in Other expenses

7. Net Profit Margin

0 -207.67 -100%

Increase in sales and reduction in Other expenses

8. Return on Net Worth

0 0.29 -100%

Increase in sales and reduction in Other expenses

PERSONNEL:

Human wealth is the ultimate wealth for any industry. The Company recognizes this fact and understands that employees are one of the most important sources for sustained growth of any business. Quality personnel delivering their optimum potential for the organization is the key differentiator. The Company maintained good relations with its employees and there was no unrest in the Company at any point of time.

Industrial relations in the organization continued to be cordial and progressive.

HEALTH AND SAFETY:

The Company places considerable emphasis on health and safety throughout its operation and displays commitment to ensure the high standards being maintained in compliance with applicable laws and regulations.

FORWARD LOOKING / CAUTIONARY STATEMENT:

Certain statements in the Management Discussion & Analysis Report detailing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. These statements being based on certain assumptions and expectation of future event, actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting domestic demand supply conditions, finish goods prices, changes in Government Regulations and Tax regime etc. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of subsequent developments, information or events.

BY THE ORDER OF THE BOARD For TMT (India) Limited

Sd/-

T G Veera Prasad

Chairman & Managing Director

(DIN:01557951)

Place

: Hyderabad

Date :

14.08.2023