Your Directors have pleasure in presenting the management discussion and analysis
report for the year ended on March 31, 2023.
1. GLOBAL ECONOMIC OVERVIEW:
The global economy faced several challenges in CY 2022, starting from the initiation of
the Russia-Ukraine war, supply chain disruption, high inflation, and high key policy rates
by the central banks. Global inflation remained a matter of concern in most of the
economy, which reached a multi-year high of 8.7% in CY 2022. Monetary tightening by the
central banks across the world helped bring the trajectory downwards. The unwinding
economic events weighed down global economic growth prospects. World economic growth in CY
2022 is estimated to have declined from 6% in CY 2021 to 3.4%, as per IMF.
Europe was significantly impacted by the war, which led to high energy and food prices
created by the supply chain disruption. This stretched the purchasing power of the
consumers while also impacting the manufacturing sector that led to production cuts. In Q4
CY 2022, the energy crisis improved, supported by high gas inventory levels, favourable
weather conditions, and the central banks monetary policy tightening, which eased
inflation. IMF estimates the Euro area to have grown by 3.5% in CY 2022. The monetary
tightening is expected to limit the GDP growth in CY 2023 to 0.8% before increasing to
1.4% in CY 2024.
GDP GROWTH
GLOBAL GROWTH HAS STABILISED, BUT THE IMPROVEMENT IS FRAGILE
Global GDP growth in 2023 is projected to be 2.7%, the lowest annual rate since the
global financial crisis, with the exception of the 2020 pandemic period. A modest
improvement to 2.9% is foreseen for 2024. Annual OECD GDP growth is projected to be below
trend in both 2023 and 2024, although it will gradually pick up through 2024 as inflation
moderates and real incomes strengthen.
2. INDIAN ECONOMY:
The last two years have seen the global economy struggling to deal with overlapping
crises, the latest being the liquidity troubles after a series of global bank crises.
While the impact appears to have been contained, these uncertainties continue to undermine
the confidence among consumers and businesses to spend, therefore impacting economic
growth.
GDP REVISIONS POINT TO INDIAS RESILIENCE IN THE PAST
India recently released GDP estimates for the October December quarter of FY 2022 23
(Q3) along with revisions of the past three years data. GDP data suggests that India
emerged stronger from the pandemic than initially assumed, with growth gathering steady
momentum since FY 2022 23. GDP growth for FY 2020 21 was revised up by 0.77 percentage
points, implying the recession was not as deep as previously thought. For FY 2021 22,
meanwhile, growth was revised up from 8.7% to 9.1%, suggesting stronger rebound. This
upward revision was primarily because of the stronger-than-anticipated growth in
manufacturing and construction.
FUTURE GROWTH WILL BE CONTINGENT ON INVESTMENT
Growth in investments will be critical to meet Indias rising demand and ensure
non-inflationary growth in the long run. The inability to build up capacity would mean
that India will have to suppress demand, failing which will result in inflation spiraling
up. The challenge is several headwinds have kept investors at bay, and may likely continue
doing so, at least in the near term.
THE ECONOMIC PROJECTIONS WHAT LIES AHEAD
We are positive that investments will likely see a turnaround soon. In fact, the next
two years will be crucial for investment to gain momentum before the economy takes off on
a sustained and rapid growth path. High-frequency data for example, electricity
generation, GST collections (through e-way bills), average fuel consumption per day, sale
of two-wheelers and tractors, credit growth across sectors and industry, occupancy rates
in hotels, and the purchasing managers indices (PMIs) clearly indicate that growth
drivers have maintained a positive momentum despite uncertainties.
As always, our estimates for GDP growth account for uncertainties. We expect the
economy to grow 6.0% 6.5% during FY 2022 23 in our baseline estimate followed by growth
ranging 6.5% 7.0% the following year. We expect growth to stabilize around 6.5% in the
medium term as global economy turns buoyant (figures 5 and 6). Economic activity will
likely pick up rapidly later this year, contingent on the revival of the global economy
and improving economic fundamentals. However, if downside risks weigh on the economic
fundamentals and outlook (listed in the assumptions below), we may see a substantial
economic slowdown.
3. INDUSTRY OVERVIEW:
With the emergence of economies driven by industrialization at the beginning of the
twentieth century, countries with sound steel industries benefited from a first-mover
advantage. India became independent in the middle of this century and looked to become
self-reliant under its newly adopted model of a mixed economy. Today, the steel industry
contributes slightly more than 2% to the GDP of the country. This percentage accounts for
direct contribution. The indirect contribution of steel is much larger, owing to the
dependence of other sectors. The rising demand in India, combined with the fact that
global manufacturing companies focus to diversify their production by setting-up low-cost
plants in countries other than China, is expected to drive the Indias manufacturing
sector to grow more than six times by 2025, to USD 1 trillion.
4. OPPORTUNITIES & THREATS: Opportunities
We believe that our growth in other states in the country can fetch us new business
expansion and opportunities. Presently, our presence is in the states of India except
Orissa, Chhattisgarh, Bihar, Jharkhand and J&K. Going forward we intend to establish
our presence in more locations in the country. Our emphasis is on scaling up of our
operations in other markets which will provide us with attractive opportunities to grow
our client base and revenue.
Threats
? Rise in cost of material and cost of transportation may affect the margin ? Changes
in Government Policies ? Intense competition may reduce profitability ? Act of God ?
Client Dissatisfaction
? Customers inability to pay
5. SEGMENT-WISE PERFORMANCE:
The Companys main business activity is trading and Manufacturing of Steel Patta,
Ceramics Products and Sodium Silicate.
6. OUTLOOK:
The Company continues to explore the possibilities of expansion and will make the
necessary investments when attractive opportunities arise.
7. RISK & CONCERNS:
The Company has in place a mechanism to identify, assess, monitor and mitigate various
risks to key business objectives. Key business risks and mitigation strategy are
highlighted below:
Business Risk
To mitigate the risk of high dependence on any one business for revenues, the Company
has adopted a strategy of launching new products/services, globalizing its operations and
diversifying into different business segments. The strategy has yielded good results and
the Company therefore has a diversified stream of revenues. To address the risk of
dependence on a few large clients, the Company has also actively sought to diversify its
client base.
Legal & Statutory Risk
The Company has no material litigation in relation to contractual obligations pending
against it in any court in India or abroad. The Company Secretary, compliance and legal
functions advice the Company on issues relating to compliance with law and to pre-empt
violations of the same. The Company
Secretary submits a quarterly report to the Board on the Companys initiatives to
comply with the laws of various jurisdictions. The Company also seeks independent legal
advice wherever necessary.
Human Resource Attrition Risk
Unison Metals Limited key assets are its employees. In a highly competitive market, it
is a challenge to address the attrition. Unison Metals Limited continues to accord top
priority to manage employee attrition by talent retention efforts and offering a
competitive salary and growth path for talented individuals.
Macroeconomic Risks
Companys business may be affected by changes in Government policy, taxation,
intensifying competition and uncertainty around economic developments in Indian and
overseas market in which the Company operates.
Mitigation Strategy
The Company has well defined conservative internal norms for its Business. The Company
ensures a favourable debt/equity ratio, moderate liquidity, strong clientele with timely
payment track record, appropriate due diligence before bidding and focus on expanding
presence in newer markets to minimize the impact in adverse conditions. The Company has
geographically and operationally diversified into multiple countries and business segments
thereby reducing its dependency on one country or market.
Operational Risks
The Companys operations and financial condition could be adversely affected if it is
unable to successfully implement its growth strategies. Competition from others, or
changes in the products or processes of the Companys customers, should reduce market
prices and demanding for the Companys products, thereby reducing its cash flow and
profitability. Product liabilities claims may adversely affect the Companys operations
and finance.
Mitigation Strategy
The Company does strict monitoring of prices and adopts appropriate strategies to
tackle such adverse situations. The Company also adopts technological innovations to bring
about operational efficiency in continuous basis to remain competitive.
Others
The Company is exposed to risks & fluctuations of foreign exchange rates,
raw-material prices and overseas investments exposures.
8. INTERNAL CONTROL SYSTEMS & THEIR ADEQUEACY:
One of the key requirements of the Companies Act, 2013 is that companies should have
adequate Internal Financial Controls (IFC) and that such controls should operate
effectively. Internal Financial Controls means the policies and procedures adopted by the
Company for ensuring orderly and efficient conduct of its business, including adherence to
Companys policies, safeguarding of its assets, prevention and detection of frauds and
errors, accuracy and completeness of the accounting records, and timely preparation of
reliable financial information. Your Company process of assessment ensures that not only
does adequate controls exist, but it can also be evidenced by unambiguous documentation.
The process involves scoping and planning to identify and map significant accounts and
processes based on materiality. Thereafter, risk is identified and their associated
controls are mapped, else remediation is implemented. These controls are tested to assess
operating effectiveness. The auditor performs independent testing of controls. The
Auditors Report is required to comment on whether the Company has adequate IFC system in
place and such controls are operating effectively. Your
Companys Internal Control System is robust and well established. It includes
documented rules and guidelines for conducting business. The environment and controls are
periodically monitored through procedures/ processes set by the management, covering
critical and important areas. These controls are periodically reviewed and updated to
reflect the changes in the business and environment.
The Audit Committee periodically reviews the internal controls systems and reports
their observations to the Board of Directors.
The Directors have appointed M/s. Jain Jitendra & Co, Chartered Accountants as the
Internal Auditors of the Company for the FY 2022-23 on 30/05/2022.
9. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
During the year, the Company has generated turnover of Rs. 11,036.16/- Lakhs as
compared to Rs. 9,334.35/- Lakhs in the previous year. The net profit before exceptional
items and taxes is Rs. 97.63/- Lakhs as compared to Rs. 138.48/- Lakhs in the previous
year. The Company has made net profit after taxes of Rs. 62.35/- Lakhs as compared to Rs.
99.64/- Lakhs of the previous year for the year ended 31st March, 2023.
10. MATERIAL DEVELOPMENTS IN HR / INDUSTRIAL RELATION / NUMBER OF
PERSON EMPLOYED:
Our Company believes that the human capital is key to bring in progress. The Company
believes in maintaining cordial relation with its employees, which is one of the key
pillars of the Companys business. The Companys HR policies and practices are built on
core values of Integrity, Passion, Speed, and Commitment. The Companys focus is on
recruitment of good talent and retention of the talent pool. The Company is hopeful and
confident of achieving the same to be able to deliver results and value for our
shareholders. As on 31st March, 2023, the total employees on the Companys
rolls stood at 21.
The Company continues to run an in-house training programmer held at regular intervals
and aimed at updating their knowledge about issues.
11. ACCOUNTING POLICIES:
The accounting policies have been consistently applied by the Company and are
consistent with those used in the previous year. The financial statements have been
prepared under the historical cost convention on an accrual basis. The management accepts
responsibility for the integrity and objectivity of the financial statements, as well as
for the various estimates and judgment used therein.
12. DISCLOSURE OF ACCOUNTING TREATMENT IN PREPARATION OF FINANCIAL
STATEMENT:
The Company has followed all relevant Accounting Standards laid down by the Institute
of Chartered Accountants of India (ICAI) while preparing Financial Statements.
13. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS
COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS:
The Company has identified the following ratios as key financial ratios:
Sr. No. Particulars |
2022-23 |
2021-22 |
Changes |
Reason |
| 1. Return on Equity (%) |
3.35 |
5.61 |
-40.23% |
As per Note 1 |
| 2. Net Profit Ratio (%) |
0.56 |
1.07 |
-47.08% |
As per Note 1 |
Note 1: During the financial year under consideration there was high volatility in
raw material prices in the industry which was not converted in equal margins in the
revenue because of uneven demands.
Due to the same the net profit margins and returns have decreased which has affected
the companys profitability.
14. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE
IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:
Sr. No. Particulars |
2022-23 |
2021-22 |
Changes |
Reason |
1. Return on Net Worth (%) |
3.35 |
5.36 |
-37.43% |
Decrease in the profit due to less margin. |
15. CAUTIONERY STATEMENT:
Statements in this report on Management Discussion and Analysis describing the
Companys objectives, projections, estimates, expectations or predictions may be
"forward-looking statements" within the meaning of applicable securities laws
and regulations. Actual results could differ materially from those expressed or implied.
PLACE: AHMEDABAD |
By Order of the Board |
DATE: 02.09.2023 |
For, UNISON METALS LIMITED |
Sd/- |
Sd/- |
Maheshbhai Changrani |
Tirth Uttam Mehta |
Wholetime Director |
Managing Director |
DIN: 00153615 |
DIN: 02176397 |
Registered Office: Plot No 5015, Phase 4,
Ramol Char Rasta, GIDC, Vatva Ahmedabad 382445 Tel: (079)-25841512 Website:
www.unisongroup.net
CIN: L52100GJ1990PLC013964
+91-9892691696
