vinyl chemicals i ltd Management discussions

The Companys current business activity is Trading in Chemicals.

Industry Structure and Developments:

Large number of companies are active in trading of chemicals. About 10-15 importers are regularly importing Vinyl Acetate Monomer (VAM) for trading into India.

Opportunities, Threats, Outlook, Risks and Concerns:

The Company is currently engaged in trading of Chemicals, mainly VAM. The Company has so far not deemed it appropriate to add other chemicals to its trading activity.

The price and demand of various chemicals undergo fluctuations. Similarly, there are fluctuations in foreign currency rates. Hence, there is an inherent risk in trading activities.

Segment-wise Performance:

The Companys current business activity has only one primary reportable segment, namely trading in chemicals.

Internal Control Systems and their Adequacy:

The Company has adequate internal control procedures commensurate with the size and nature of its business. The internal control systems provide for policies, guidelines, authorisations and approval procedures.

The Audit Committee of the Board of Directors periodicallyreviewstheinternalauditreports,significantrisk area assessment and adequacy of internal controls for ensuring checks and balances. The Company has appointed Internal Auditors who regularly check the adequacy and effectiveness of all internal controls and suggest improvements.

Financial Performance:

The financial results and performance for the year are elaborated in the Directors Report.

Human Resources:

Harmonious relations continued to prevail with the employees. The total number of employees as on 31^st March, 2023 were 11.

Changes in Key Financial Ratios:

The details of changes in Key Financial Ratios are as under:

Sr. No.	Ratio	As on 31.03.2023	As on 31.03.2022
1	Debtors Turnover Ratio	45.33	13.51
2	Inventory Turnover Ratio	13.98	13.06
3	Debt Equity Ratio	—	0.01
4	Current Ratio	2.83	2.47
5	Operating Profit Margin (%age)	6.25	6.44
6	Net Profit Margin (%age)	4.94	5.67
7	Return on Networth (%age)	34.06	51.90

The Debtors Turnover Ratio for the Current Year is higher due to increase in sales and reduction in debtors. The Return on Networth for the Current Year is lower due to marginal increase in profit after tax and rise in average net worth on account of substantial profit of the Previous Year.