INDUSTRY STRUCTURE AND DEVELOPMENT
Your Company is focused on International Trade & Distribution of Chemicals -
Petrochemicals / Polymers / Paper & Paper Boards / Rubber / Heavy Distillates. The
company has expanded globally reducing its dependence on a particular region. The company
has established overseas subsidiaries and offices. Our unique and distinct models of
International Trade and Distribution hubs in India, and U.A.E affords us to serve our
partners in cross country/continent trade across our Business Verticals duly integrated
with the various Industry Verticals. This distinct model not only mitigates risk but also
creates opportunities to capitalise on products, volumes and volatility.
Global Chemical Industry
As per the Chemicals Global Market Report 2022, the global chemicals market is expected
to grow from $4,241.18 billion in 2021 to $4,620.17 billion in 2022 at a compound annual
growth rate (CAGR) of 8.9%. The market is expected to grow to $6,371.09 billion in 2026 at
a CAGR of 8.4%.
The main types of chemicals are general chemical products, printing inks, toiletries,
soap and cleaning compounds, adhesives, paints and coatings, pesticide and other types of
agricultural chemicals, chemical fertilizers, synthetic rubber and fibers, plastic
material and resins, ethyl alcohol, and other basic types of organic chemical, and other
types of basic inorganic chemical, synthetic dye, and pigment, industrial gas, and petrochemicals.
Printing ink is ink used in printing and contains a pigment or pigments of the required
color mixed with oil or varnish.
The types of intermediate chemicals are methanol, ethylene oxide, and propylene oxide.
The end-users involved are pharmaceuticals, agrochemicals, water treatment, construction,
paints and dyes, oil and gas, rubber chemicals, surfactants, personal care, and other
end-users.
Asia Pacific was the largest region in the chemicals market in 2021.North America was
the second- largest region in the chemicals market.
Indian Chemical Industry
The market size of Chemicals & Petrochemicals sector in India is around $178 bn;
expected to grow to $300 bn by 2025.
• The quantum of production of Major Chemicals increased to 115.82 lakh tonnes
during 202122 (up to February 2022) as compared to 101.52 lakh tonnes during the
corresponding period of the previous year, recording an increase of 14.09%.
• The quantum of production of Major Petrochemicals increased to 408.50 lakh
tonnes during 2021-22 (up to February 2022) as compared to 381.07 lakh tonnes during the
corresponding period of the previous year, recording an increase of 7.2%
• Overall growth in production of Major Chemicals in 2021-22 (up to February 2022)
over 2020-21 (up to February 2021) has been 14.09% with major rise accounted in all sub
sectors
> Alkali chemicals - 16.8%
> Inorganic chemicals - 7.5%
> Organic chemicals - 3.75%
> Pesticides & Insecticides - 19.51%
> Dyes & Pigments - 25.6% •
• Overall growth in production of Major Petrochemicals in 2021-22 (up to
February 2022) over 2020-21 (up to February 2021) has been 14.09% with major rise
accounted in all sub sectors -
> Synthetic Fibres - 31.7%
> Fibre Intermediates - 9.87%
> Polymers - 3.89%
> Synthetic Rubber - 9.42%
> Synthetic Detergent Intermediates - 7.23%
> Performance Plastics - 11.8%
> Olefins - 4.94%
> Aromatics - 0.76%
> Other Petrochemicals - 7.54%
• The petrochemical demand is expected to grow at 7.5% CAGR from FY 2019-23, with
polymer demand growing at 8%.
• Exports of Organic & Inorganic Chemicals values at USD 2618.54 mn in July
2022 and records positive growth vis-a-vis July 2021 of 7.93%.
• The Average Index of Industrial Production of Manufacturing of chemicals and
chemical products in the FY 2021-22 is 120.7 and has grown by 4.1 percent.
• The agrochemicals market in India is expected to grow at 8% CAGR reaching $4.7
bn by FY25.
• The specialty chemicals constitute 22% of the total chemicals and petrochemicals
market in India. The demand for specialty chemicals is expected to rise at a 12% CAGR in
2019-22.
• The production of total Major Chemicals & Petrochemicals in 2021-22 (Up to
February 2022) is 52,432.4 thousand MT and indicates an increase of 8.6% from February
2021.
The petrochemicals segment in India is expected to see a domestic demand growth of 8%
CAGR over the next decade. Moreover, petrochemical capacity is projected to grow by more
than 40 percent over the next five to seven years.
OPPORTUNITIES & THREATS
Opportunities:
Growth in chemical industry is seen due to shift in production and consumption towards
Asian and Southeast Asian countries in all sectors leading to increase in demand for
chemicals and petrochemicals. There is opportunity to produce more than 100 Billion worth
of chemical products by 2023 for domestic requirements. Another factor that is boosting
chemical industry is shift in consumer preferences towards a healthier lifestyle and
environment-friendly products.
Threats:
One of the key issues facing the chemical industry is sustainability. From being an
economic and an environmental issue, it has also acquired strong socio-political
overtones, which already have a deep impact on the industry, and this impact will only
deepen in the coming years. The main issues the industry will have to address actively in
the next two decades are related to water, environmental impact, raw materials, and energy
use in the Indian chemical industry.
OUTLOOK
The management is quite confident that the market and business would be positive in the
coming financial year. Indias existing good business relations with foreign countries and
efforts for developing relations with the few other foreign countries would prove
beneficial in the interest of various industries including chemical industry. The
government recognizes the Chemical Industry as a key growth element of the Indian Economy,
thus giving boost to the chemical sector.
The Company is open for new opportunities and may grow sizably in the coming future.
RISK AND CONCERNS
As like any other business, the company is prone to various risks and concerns
including but not limited to fluctuating foreign exchange, increase in operational cost,
etc. The Company evaluates and monitors all risks associated with various areas of
operations such as procurement, sales, marketing,
inventory management, debtors management, operational management, insurance, supply
chain management, legal and other issues having a material impact on the financial health
of the company on a regular basis with a view to mitigate the adverse impact of the risk
factors.
INTERNAL CONTROL SYSTEMS
The Company has an adequate internal control system in place which is commensurate with
its size and nature of its business, which is periodically evaluated by the management.
The internal control system ensures that all the assets of the company are safeguarded
from loss, damage or unauthorized disposition. Checks and controls are in place to ensure
that transactions are adequately authorised and recorded and reported correctly to the
concerned personnel.
REVIEW OF FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
A summary of major performance indicators is given below, while the detailed and
physical performance may be viewed from the Balance Sheet and Profit & Loss account
and the annexure thereto.
(Amount in Rs.)
| Year |
2021-2022 |
2020-2021 |
Percent Increase /(Decrease) |
Remarks |
| Revenue from Operations (Sales) |
3,538,966,841 |
4,22,85,46,857 |
-16.3% |
Sales Turnover reduced In Absolute Terms as the prices of Crude and its downstream
products cooled down during the last financial year. Therefore, the Turnover has reduced
due to slow down of the economy. |
| PBT |
7,29,10,520 |
8,23,53,498 |
-11.47% |
Reduction in PBT is largely due to slow down of the economy |
| PAT |
6,19,91,869 |
6,77,60,883 |
-8.51% |
PAT is consequently reduced due to slow down of the economy |
| Change in Inventories (Inventory Turnover Ratio) |
8.64 |
1542.19 |
-99.44% |
Calculated on Cost of Goods Sold Reason for variation is due to purchase done in last
quarter |
| Debtors Turnover Ratio |
2.62 |
2.25 |
16.44% |
As per industry norms |
| Interest Coverage Ratio |
27.75 |
34.64 |
-19.89% |
- |
| Operating Margin (%) |
2.06 |
1.94 |
6.19% |
- |
| Net profit margin (%) |
1.74 |
1.56 |
11.54% |
- |
| Return on Net worth |
68.97 |
66.75 |
3.33% |
- |
HUMAN RESOURCE MANAGEMENT
Your company recognizes the importance of building a strong human capital for the
futuristic world. Flexible HR policies reflecting our organization value of Trust and
work-life balance have been continuously devised. Learning Opportunities & employee
engagements have been consistently rendered and HR policies are re-tuned to changing needs
of our business.
The Company provides suitable environment for development of leadership skills which
enables it to recruit and retain quality professionals in all fields. The employer-
employee relationships are cordial and mutually supporting at all levels.
ACCOUNTING TREATMENT
There is no change in Accounting Treatment in preparation of Financial Statements as
compared to last financial year.
Your Company has adopted Indian Accounting Standards ("Ind AS") from the
accounting periods beginning April, 2017 pursuant to Ministry of Corporate Affairs
Notification dated 16th February, 2015 notifying the Companies (Indian
Accounting Standard) Rules, 2015.
CAUTIONARY STATEMENT
Certain statements in the Management Discussion and Analysis Report may be forward-
looking statements within the meaning of applicable laws and regulations. Actual results
may differ from those expected, expressed or implied.
| For and on Behalf of the Board |
| Sd/- |
| Nitinkumar Didwania |
| Chairman |
| DIN: 00210289 |
| Place: Mumbai |
| Date: 02nd September,2022 |
+91-9892691696
