a) Industry Structure & Development
CDG Petchem Limited founded by a team of professional entrepreneurs & qualified
experts with the main objective to supply high quality product services to the discerning
clients. It will be a leading business entity in India engaged in the activities Merchant
Export & Third country Trade, Imports - Marketing & Distribution of Mats /
Mattresses, Insulation Sheet and Pillows.
Your Company has diversified its business profile through its subsidiary company
(Morbido Merchandise Private Limited) for the purpose of Imports - Marketing &
Distribution Services of world class products (Chemicals) to several industries ranging
from Plastics, Polymers, Construction, and Paint etc. It also offers to our Indian
customers a broad range of products from leading producers located worldwide through
Imports, Marketing & Distribution of multinational company.
The subsidiary Company will participate in growth of CDG Petchem Limited by expanding
its customer base of Chemicals to several industries ranging from Plastics, Polymers,
Construction, and Paint etc. with international collaborations.
b) Opportunities
The Indian Plastic Industry clearly has the potential to continue its fast growth. It
is expanding at a phenomenal pace, with plastic being significantly used in innovating new
applications in industries like food processing, packing, healthcare thereby increasing
demand for plastic altogether.
The industry has many growth opportunities owing to the wide applicability of Plastic /
disposable products. The Demand for companies Products has been constantly on an increase
in the market.
c) Threats, Risks & Concerns
Investors should read the Risk Factors mentioned in this Information Memorandum. Over
the next few years, competition in the industry is also expected to rise considerably, as
a result of Global trends. To survive competition both polymer manufacturer and processors
will need to adopt radically new methods and approaches to reduce costs, improve market
and customer services and management performance.
The international oil Prices have been constantly fluctuating leading to up and down in
raw material prices.
The threats/ risks for the industry relate to stiff competition throughout and lesser
margins. The same can gradually overcome by the industry in view of the wide usage of the
PP products and also growing of demand with new technologies to reduce costs to become
more competitive.
d) Segment wise performance
The segment wise performance is not applicable as the company has only one segment.
e) Outlook
The Company is expecting a growth rate as well as stabilization of production of PP
Disposable wares and reaches optimum capacity utilization. The company is expecting high
growth rate in this area.
f) Discussion on financial performance with respect to operational performance.
During the year under review, the standalone turnover for the current year is
Rs.2381.26 Lakhs as against Rs.2530.65Lakhs in the previous year. During the Year the
companys Loss before tax is Rs.44.39Lakhs as against a Profit of Rs.3.81 Lakhs in the
previous year.
g) Internal Control system and their adequacy
The Company has an internal control system commensurate with the size and nature of its
business. There is a proper and adequate system of internal controls to ensure that all
activities are monitored and controlled against unauthorized use or disposition of assets.
The Company ensures adherence to all internal control policies and procedures as well as
compliance with all regulatory guidelines.
The Audit Committee supervises the checks and controls exercised, and reports any
suggestions or deviation on a continuing basis. The authority and responsibility of every
employee is defined, thus, leaving no space for any deviations.
h) Material developments in Human Resources/Industrial Relation front, including number
of people employed
The focus is on capability development, performance management and employee engagement.
This is expected to improve cost competitiveness through greater levels of employee
participation, commitment and involvement.
The Company recognizes the importance and contribution of its employees to the growth
and development of the Company. The Company continued to maintain cordial relations with
employees and staff. The Company has 3 employees on the rolls, as on 31st March 2023.
II. Financial/operational performance:
Sources of Funds
1. Share capital
The Company has only one class of shares- equity shares of par value Rs. 10/- each. Our
Authorised share capital is Rs. 500.00 Lakhs (50,00,000 shares of Rs. 10/- each) and
issued and paid-up capital is Rs.307.75 Lakhs ( 30,77,500 shares of Rs. 10/- each)
2. Reserves and Surplus
At the beginning of the year the company has Reserves as follows:
Share Premium Nil, General Reserve Nil and debit balance of Profit and Loss Account of
Rs. 89.57 Lakhs and at the end it was Rs.130.99 Lakhs
Application of Funds
3. Fixed Assets
During the year under review company has incurred amounting to Rs.1.07 crores as
capital expenditure.
4. Deferred taxes - Assets and Liabilities
The Company has Deferred Tax Liability (Net) amounting to Rs. 2.96 Lakhs as against a
liability of Rs.12.50 Lakhsin previous year, attributable to difference between
depreciation as per companies act 2013 and Income Tax Act-1961
5. Trade Receivables
During the year the company has trade receivables of Rs. 349.06 Lakhs as against
Rs.707.23 Lakhs in previous year.
6. Inventories
During the year the company has inventories are Rs. 259.03 Lakhs as against of Rs.
101.10 Lakhs in previous year.
7. Cash and Cash Equivalents
The opening balance of cash and cash equivalents as at the beginning of the year is
Rs.4.53 Lakhs. The closing balance of Cash and Cash Equivalents is Rs.6.43 Lakhs held as
cash, balances in current account and in deposit accounts.
8. Liabilities
The company has Rs. 458.78 Lakhs as long term borrowings as on 31st March, 2023.
9. Trade Payables
Trade payables at the beginning of the year were at Rs. 37.90 Lakhs and at the end of
the year were Rs.11.54 Lakhs.
10. Provisions
During the year the company has provisions of Rs. 3.84 Lakhs as against Rs. 0.29 Lakhs
in previous year.
III. Results of Operations
1. Income
The Company has generated income from business operations of Rs. 2381.26 Lakhs.
2. Other Income
Other income of the company includes interest income, commission, profit on sale of
asset, rent and discount is Rs22.81 Lakhs.
3. Net Profit
The company had reported a Net Loss of Rs.41.42 Lakhs as against a Net Loss of Rs.
8.69Lakhs in the previous period.
4. EPS after Exceptions
Positive Earnings per share for the year was -1.35 as against -0.28in the previous
year.
5. Liquidity
The Company has adequate working capital and is not depended on external resources for
filling up of the gap.
6. Related Party Transactions
Transactions with related parties have been made at an arms length basis and hence are
not prejudicial to the interest of the company.
These have been discussed in detail in Notes on Accounts to the standalone financial
statements in this Annual report.
IV. Opportunities and Threats
We compete with small and mid-sized companies in Government and large corporations in
Manufacturing Sector.
V. Outlook, Risks & Concerns
- Our revenue and expenses are difficult to predict and can vary significantly from
period to period.
- Our success largely depends upon retaining skilled technology professionals and our
ability to hire, motivate and retain them.
- We are a company in mid segment space and may not be providing adequate confidence to
companies / customers for long term contracts.
- We may not be able to sustain the working capital cycles.
- Our success depends on our management team and key personnel and our ability to
attract and retain them.
- Our failures to complete fixed price and fixed time frame contracts or transaction
based pricing contracts within budget and on time may adversely affect our profitability.
- We may not be able to provide end to end business solutions for our clients which
could lead to clients discontinuing their work with us which in turn could impact our
business.
VI. Internal Control Systems and their adequacies.
The CEO and CFO certification provided in the Annual report discusses the adequacy of
our internal control systems and procedures.
VII. Material Developments in Human Resources / industrial relations, number of people
employed.
Human Capital
As at March 31st 2023, the company employed about 3 employees who include trainees,
process executives and administration.
Risk Management Framework:
In todays economic environment, Risk Management is a very important part of business.
The main aim of risk management is to identify, monitor and take precautionary measures in
respect of the events that may pose risks for the business. Your Companys Board believes
that to ensure sustainable business growth with stability of affairs and operations of the
Company, periodical review of various risks having a bearing on the business and
operations is vital to proactively manage uncertainty and changes in the internal and
external environment to limit negative impacts and capitalize on opportunities. Further,
it is also belief of your management that Risk Management Framework enables a systematic
approach to risk identification, leverage of any opportunities and provides treatment
strategies to manage, transfer and avoid or minimize the impact of the risks.
Keeping in view of the above, your Companys risk management is embedded in the
continuous business processes and as a part of review of business and operations, your
Board with the help of the management periodically reviews various risks associated with
the business and products of the Company and consider appropriate risk mitigation process.
However there are certain risks which cannot be avoided but the impact can only be
minimized.
The risks and concerns associated with the segment of your companys business are
discussed while reviewing segment- wise Management and Discussion Analysis. The other
risks that the management reviews also include:
a. Industry & Services Risk: this includes Economic risks like demand and supply
chain, Profitability, Gestation period etc.; Services risk like infrastructure facilities;
Market risk like consumer preferences and distribution channel etc.; Business dynamics
like inflation/deflation etc.; Competition risks like cost effectiveness
b. Management and Operational Risk: this includes Risks to Property; Clear and well
defined work process; changes in technology / up gradation; R&D Risks; Agency network
Risks; Personnel & labour turnover Risk; Environmental and Pollution Control
Regulations etc.; Locational benefits near metros
c. Market Risk: this includes Raw Material rates; Quantities, quality, suppliers, lead
time, interest rates risk and forex risk.
d. Political Risk: this includes Elections; War risk; Country/Area Risk; Insurance risk
like Fire, strikes, riots and civil commotion, marine risk, cargo risk etc.;
Fiscal/Monetary Policy Risk including Taxation risk.
e. Credit Risk: this includes Creditworthiness; Risk in settlement of dues by clients
and Provisions for doubtful and bad debts
f. Liquidity Risk: this includes risks like Financial solvency and liquidity; Borrowing
limits, delays; Cash/Reserve management risks and Tax risks
CDG PETCHEM LIMITED
g. Disaster Risk: this includes Natural calamities like fires, floods, earthquakes
etc.; Man made risk factors arising under the Factories Act, Mines Act etc.; Risk of
failure of effective disaster Management plans formulated by the Company.
h. System Risk: this includes System capacities; System reliability; Obsolescence risk;
Data Integrity risk & Coordination and Interface risk.
i. Legal Risk: this includes Contract risk; Contractual liability; Frauds; Judicial
Risk and Insurance risk
j. Government Policy: This includes Exemptions, import licenses, income tax and sales
tax holidays, subsidies, tax benefits etc. Further your Board has constituted a Risk
Management Committee, inter-alia, to monitor and review the risk management framework.
Ratios:
S. No |
Particulars |
2022-23 |
2021-22 |
Improvement / (Deterioration) |
1. |
Debtors Turnover |
Debtors/Revenue from Operation (Days) |
4.51 |
3.94 |
0.57 |
2. |
Inventory Turnover |
Cost of goods sold/Average Inventory |
12.58 |
16.68 |
(4.1) |
3. |
Interest Coverage Ratio |
Earnings before Interest and Tax(EBIT)/Interest |
0.34 |
1.07 |
(0.73) |
4. |
Current Ratio |
Current Assets/Current Liabilities |
1.18 |
1.07 |
0.18 |
5. |
Debt Equity Ratio |
Total Outside Liabilities/Shareholders Equity |
5.91 |
3.69 |
2.22 |
6. |
Operating Profit Margin |
Operating Profit or EBIT/Sales |
0.01 |
0.02 |
(0.01) |
7. |
Net Profit Margin |
Net Profit/ Sales |
-0.02 |
0.00 |
(0.02) |
8. |
Return on Net worth |
Net profit/ Shareholders Equity |
-0.23 |
-0.04 |
-0.19 |
+91-9892691696
