Dear stakeholders,
The financial year 2020-21 presented highly challenging conditions, with the
unprecedented Covid-19 pandemic sweeping through India and the world, leaving in its trail
a deep economic, social and humanitarian toll. Navigating through the uncertainties of a
dual lockdown and changing rules and regulations, we drew from our experience and
expertise built over the years to implement initiatives that kept our business steady,
thus enabling us to report a satisfactory performance for the year. We were also spared
from the worst effects of the pandemic on account of the "essential goods"
nature of our business. I thank each of my colleagues and team members for their courage,
commitment, dedication and hard work. They rose to the occasion when it mattered the most
and were central to the Company's performance for the year.
Our positioning in the global agri supply chain
The events of the past year have underlined the importance of our Company in the global
food and agri supply chain. Even in the midst of a pandemic, our diversified product
portfolio and footprint in more than 12 countries enabled us to successfully navigate
through the challenges for our customers, keeping essential products moving and
contributing to food security. The strength of our relationships with our global
stakeholder network and continued focus on risk management, including sound product and
financial planning, were also critical to our response to the pandemic.
As a Company with longstanding business experience, we have built established positions
in the market. We have created a strong reputation for the import of lentils, fava beans,
black urad dal and tur dal in India in bulk quantities, with our major source markets
comprising Canada, Australia and Burma. We have also developed specialist merchant (B2B)
credentials in essential commodities, such as sugar, corn and dal. We maintain adequate
stock and distribute them to various institutional customers, including manufacturers,
exporters, etc.
Our key strengths comprise our ability to deal in bulk quantities, our flexibility to
alter products based on demand seasonality, our alignment with government regulations, and
our robust financial track record that ensures sufficient liquidity at all times. In a
capitalintensive business, our demonstrated financial wherewithal has ensured business
sustainability, we being among the oldest companies in the trade in India. Thus, through
our focus on the global agriculture and food systems, we aim to address the many
challenges involved in meeting the food and feed needs of a growing population, while
achieving positive impact for farming communities, our planet and all our key
stakeholders.
Our performance for the year
Covid-19 has adversely impacted the global economy, with the World Health Organization
declaring the outbreak a pandemic on March 11,2020. While the Indian government announced
the first nation-wide lockdown from 24 March 2020, subsequently, in view of the second
wave, a second complete lockdown was imposed during the first quarter of 2021, targetted
to control regional outbreaks of the disease.
However, as we are engaged in the import-export and trading of agricultural produce and
commodities, which are classified as essential goods, our operations were not under the
purview of the shutdowns. However, due to restricted availability of labour and logistics
and constraints around supply chains, our business was impacted, reflected in an 8%
decline in our income from operations to Rs.74,215.52 lakh. Yet, our strong focus on cost
curtailment yielded a 46.50% reduction in our finance cost to Rs.464.56 lakh and, together
with decline in purchase expenses by 0.20% to Rs.71,968.93 lakh as a result of lower
business volumes and major change in inventory value from Rs.1,620.61 lakh in 2019-20 to
Rs.(4,654.30) lakh in 202021, enabled us to register a 46.27% increase in our net profit
for the year to '1,218.47 lakh.
Today, with the relaxation of the restrictions, our procurement, day-to-day operations
and logistics have become more regular and normalized, and we expect our revenues to gain
momentum, subject to how the rest of the current fiscal year pans out.
Further, in a major initiative of the year in meeting our objective of having an
overseas presence, the Company acquired 100% shareholding of U.E.L. International FZE,
having its registered office in Ras Al Khaimah, United Arab Emirates. U.E.L. is engaged in
the business of trading in sugar, spices and textiles, and its location in an established
trading hub provides us with better insights into the global food and agri-markets.
Roadmap for the future
Similar to establishing our presence in the UAE, we are also in the process of setting
up a procurement office in Australia through a wholly-owned subsidiary, which will allow
us to procure commodities directly in Australia through our proposed local office and
dispatch commodities directly to various other global locations. This initiative will
enable cost savings on freight and import duties and thereby create scope for
profitability improvement.
Our Company primarily exports sugar to Sri Lanka, the UAE and Afghanistan and corn to
Bangladesh. In the fiscal years 2021, 2020 and 2019, exports constituted 9.53%, 5.42% and
37.64%, respectively of our total income. With the infusion of additional capital via our
proposed initial public offering (IPO), we shall be in a better position to bid and
participate in bigger tenders, thus contributing positively to our key financial metrics.
In closing, I would like to mention that though Covid-19 as well as macroeconomic and
geopolitical uncertainties will continue to define our operating environment in the
nearterm, Uma Exports has firm foundations on which we will continue to build new pathways
of growth to meet the current and future demands of our customers and create value for all
our other stakeholders.
Thank you,
Rakesh Khemka
Chairman