Vasundhara Rasayans Ltd Management Discussions

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Vasundhara Rasayans Limited was incorporated in the year 1987. During the year 1990, the Company entered into the business of Antacid API facility offering product in paste, powder and micronised grade of powder. The shares of the Company were listed on Stock Exchanges w.e.f 2011. The Company has steadily grown over the years with a continued focus on customer satisfaction, evolving itself into countrys one of the most promising mid cap Companies. The Company is the leading manufacturer and exporter of Antacids therapeutic category of Active Pharm Ingredients with annual capacity of about 1500 MT of powder or its equivalent products. A) INDUSTRIAL STRUCTURE AND DEVELOPMENTS : Antacid API being used mostly in combination, we offer wide range consistent high quality products under one roof with strong technical and logistic customer support. In addition to this we also offer products which are used other than pharmaceutical use.“Antacid API““Aluminium Hydroxide Gel“Magnesium Hydroxide“Magaldrate (Alu- minium Magnesium Hydroxide Sulphate )“Magnesium Trisilicate*Magnesium Silicate“Aluminium Phosphate“The products are offered in paste, powder and micronised grade powder which is been successfully used to make liquid antacid formulations in place of conventional paste form of the products.“Product for Lake Colour*“Aluminium Hydroxide Gel Low Heavy Lead Content“Product is specially developed for Lake colour as per customers specification“Product for other application of water treatment, Alu- minium Salts etc.““Aluminium Hydroxide Amorphous“Aluminium Sulphate“Poly Aluminium Chloride“Friedel Crafts Reaction We caterto the needs of the Pharmaceutical, Food, Chemical industry not just as sup- pliers but also provide technical backup support. Following international quality guide- lines and through optimal utilization of limited resources, today we have developed our wide client base all across the globe. B) OPPORTUNITIES AND THREATS: The current situation in Europe due to Russia and Ukraine war and sanction against Russia have opened new doors of business in Russia. Under such situation the approvals are much faster which would take other wide much longer time. The major business is at present on one major sector and any adverse impact on that also would impact the business. The company is trying to expand the customer base from different sectorto minimise such impact. C) SEGMENT-WISE OR PRODUCT WISE PERFORMANCE: During the year under review, the Company has recorded revenue of Rs. 3794.10 Lakhs and made a net profit of Rs. 559.10 Lakhs against revenue of Rs.2675.03 Lakhs and net profit of Rs. 217.26 Lakhs in the previous financial year 2021-22. The following segment wise turnover in percentage wise during the financial year 31.03.2023: Sale of product: 3794.11 lacks D) BUSINESS OUTLOOK: Due to the War between Russia and Ukraine the business in Europe has impacted which has overall impact of lower consumption pattern and then to that extent additional competition in the region which are not directly effected by the above. Based on the above there is already price erosion in the sales price of the products and based on this seems to be difficult to maintain the same level of sales and revenues for coming year. We are trying to concentrate on possible improvement of sales ofthe higher price and margin to be able to retain similar numbers forthe current year.

E) RISKS AND CONCERNS:

The common effluent treatment plant at Mahad continue to have regular problem and this would have impact on the operational capacity of the plant. The sea freight has been very low and the INR against the USD & Euro has been weak which has been able to helpto be competitive in international market and shift in this would have impact on the profitability as well as sales year. The overall slow down in intermediate chemical business might impact the costing of input as well. Unfortunately, all these factors are beyond our control but we try to find solution as per the situation

F) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate Internal Control Systems and Procedures with regard to purchase of Stores, Raw Materials including Components, Plant and Machinery, equipment, sale of goods and other assets. The company has clearly defined roles and responsibilities for all managerial positions and all operating parameters are monitored and controlled. The Company designs and maintains accounting and internal control systems to provide reasonable assurance at reasonable cost that assets are safeguarded against loss from unauthorized use or disposition, and that the financial records are reliable for preparing financial statements and maintaining accountability for assets.

The Company has an Internal Audit System commensurate with its size and nature of business. M/s.S.B.Kabra & Co., a firm of Chartered Accountants, are acting as Internal Auditors of the Company. Planned periodic reviews are carried out by Internal Audit. The findings of Internal Audit are reviewed by the top management and by the Audit Committee of the Board of Directors. Compliance with laws and regulations is also ensured and confirmed by the Internal Auditors of the Company. Standard operating procedures and guidelines are issued from time to time to support best practices for internal control.

G) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

i) FINANCIAL PERFORMANCE:

Capital Structure:

The Equity Share Capital of the Company as on 31 st March 2023 is Rs. 3,17,82,000 comprising of 31,78,200 Equity Shares of Rs. 10 each fully paid Other Equity: The Other Equity of the Company for the 31.03.2023 year is Rs. 2364.03 lakhs as compared to Rs. 1835.85 lakhs in the previous year. Property, Plant and Equipment: During the year, the Company has added Fixed Assets amounting to Rs.11.49 lakhs making the gross fixed assets as on 31.03.2023 to Rs. 49.29 lakhs. Inventories: Inventories amounted to Rs. 399.91 lakhs as on 31 st March, 2023 and in the previous yearwas Rs. 221.26 lakhs. Trade Receivables: Trade receivables amounted to Rs. 805.04 lakhs as on 31 st March, 2023 as against Rs. 733.53 lakhs in the previous year.

Cash and Bank Balances:

Cash and Bank balances with Scheduled Banks amounted to Rs. 773.61 lakhs as on 31 st March, 2023 as against Rs 1077.31 lakhs in the previous year. Financial Assets Loans (Non-Current): Loans amounted to Rs 12.82 lakhs as on 31 st March, 2023 as against Rs 14.70 lakhs in the previous year. Financial Assets Loans (Current): The amount of Loans amounted as on 31 st March, 2023 is 1275.49 lakhs as against Rs. 151.35 lakhs in the previous year. Other Current Assets: Other Current Assets amounted to Rs. 27 lakhs as on 31 st March, 2023 as against Rs. 24.57 lakhs in the previous year. Current Liabilities: Current Liabilities amounted to Rs. 681.38 lakhs as on 31 st March, 2023 as against Rs. 368.48 lakhs in the previous year. ii) OPERATIONAL PERFORMANCE: Tumover: During the year 2022-23 the turnover of the Company (Net of GST) is Rs. 3794.10 lakhs and Rs. 2675.03 lakhs in the previous year. Other Income is Rs. 229.78 lakhs as on 31 st March, 2023 and Rs. 104.45 lakhs in the previous year. Depreciation: The Company has provided a sum of Rs. 13.10 lakhs towards depreciation and amortisation forthe year and Rs 11.49 lakhs in the previous year. Net Profit: The Net Profit of the Company aftertaxis Rs. 559.10 lakhs and the profit for the previous yearis Rs. 217.26 lakhs. Earnings per Share: Basic Earnings per Share for the year ended 31 st March, 2023 is Rs 17.59 per share for Face Value of Rs.10 and Rs 6.84 per share forthe previous year.

H) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED: The Company believes that the quality of its employees is the key to its success inthe long run and is committed to provide necessary human resource development and training opportunities to equip them with skills, which would enable them to adapt to contemporary technological advancements. Industrial Relations during the year continues to be cordial and the Company is committed to maintain good industrial relations through negotiations, meetings etc.

1) DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS: (Request the management to fill this)

J) CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Companys Objectives and Expectations may be “Forward-Looking Statements” within the meaning of applicable Securities Laws and Regulations. 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 demand/supply and price conditions in the domestic and overseas markets in which the Company operates, technological obsolescence, changes in the Government Regulations and Policies, Tax Laws and other Statutes and other inidental factors.

By Order of the Board For VASUNDHARA RASAYANS LIMITED