abhishek corporation ltd Management discussions

Your Directors take pleasure in presenting the Management Discussion and Analysis Report for the year ended March 31, 2023.

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

The textile sector is a significant contributor to Indias economy, and the governments focus on it in the 2023-24 budgets is expected to have a positive impact on the sectors growth and development. The governments commitment to the textile sectors development is also in line with its\ goal of making India a global manufacturing hub and boosting its exports. The Management is quite optimistic that Industry with the support of favorable Government Policies and Programs will capitalize on this opportunity to increase its share in Domestic Textile Markets.

2. OPPORTUNITIES AND THREATS

The Company has a robust Risk Management framework which enables it to take certain risks to remain competitive and achieve the goal and at the same time mitigate other risks to maintain sustainable results. The success of the Spinning Industry is dependent on the availability of Raw Cotton at reasonable prices and it is dependent on the Nature i.e. Good/Bad Monsoon. So availability of raw cotton at reasonable prices is crucial for the spinning Industry. Any significant change in raw cotton prices and Monsoon can affect the performance of the Industry. This year also steep increase in the prices of raw cotton has severally impacted the Textile Industry.

The Textile Industry is also not free from normal business risks and threats. High prices of raw cotton, low demand of yarn has affected the business of textile products.

3. SEGMENTS WISE PERFORMANCE

In terms of the Ind AS, there is only one reportable segment i.e., Textile Segment. The construction division of the company is inoperative, therefore the whole of the operations of the Company relates only to the Textile unit and hence Segment wise reporting is not necessitated.

4. OUTLOOK

Outlook for global economic growth started on a weak note in 2023, Manufacturing activity and trade growth continued to be low key. The year was marked by geopolitical tensions and trade-war with each other. This clearly reflected in reduced confidence on the future of the Domestic as well as global trading system, and impacted investment decisions, and trade region. Since the company under the liquidation, company is trying to work with their available capacity. The management is looking at the future with optimism and expects that with the improvement in demand and softening of raw cotton prices in the coming periods, will give a relief to the Textile Industry.

5. RISKS & CONCERNS

No industry is free from normal business risk and concerns. Such as:

• Raw Material price risk:

Cotton are the major raw materials used by the company for textile. Volatility in process impact the overall cost of production and thus the profitability.

• Geographical Risk:

Concentration in a particular territory leads to a depleting market presence of the company.

• Policy Risk:

Implementation of any policy which is not in fever of the company hampers the operations of the company.

• Competition Risk:

There are many emerging area, where production cost is comparatively lower than existing area. This poses potential threat to the company.

To mitigate the risk it is a need to adopt a strategies as:

• Strong relationship with vendors and proximity to the raw material sources ensures easy availability. The Company also plans to save inventory management keeping in view the historical cycle of input prices.

• The Government of India has come up with various incentives such as rebate and duty drawback. The company has leveraged on these initiatives to stay ahead in the market.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company is having adequate internal control systems and procedures which are commensurate with the size of the Company. All the departments of the Company are following the established rules and regulations for internal control systems. The company established an Internal Control Audit Department which ensures that the internal control systems are properly followed by all the concerned departments of the Company. Management also reviews from time to time the internal control systems and procedures to ensure their proper application.

7. HUMAN RESOURCES

Beyond Balance Sheet, Companys single biggest asset is its Human Resources. The Company is of firm belief that the human resources are the driving force towards progress and success. The Company continued its policy of attracting and recruiting the best available talents so that it can face business challenges ahead. The industrial relationship continues to be cordial during the year. The total permanent employees strength of the Company was 458 as on 31 st March, 2023

Though the statement and views expressed in the above-said report are on the basis of certain assumptions and expectations of future events, actual results may differ from whatever is stated in the annual report.

8. FINANCIAL AND OPERATIONAL PERFORMANCE

During the year, Company has made turnover of Rs.1658.96 Lakhs as compared to Rs.2716.55 Lakhs during the previous financial year whereas company has incurred a loss before tax of Rs.1699.30 Lakhs as against Loss before tax of Rs.1809.24 Lakhs in previous year.

9. FINANCIAL RATIOS

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Amendment Regulations, 2018, the Company is required to give details of significant changes (changes of 25% or more as compared to immediately previous financial year) in financial ratios are as follows:

Sr. No. Ratio	Formula	22-23 Working	21-22 Working	% Change
1 Debtors Tunover Ratio	Net Credit sales	51.40	6.19	729.98
	Average Accounts Receivable
2 Inventory Turnover Ratio	Cost of goods sold		-	-
	Average Inventory
3 Interest Coverage Ratio	Earning Before Interest & Taxes (EBIT) Interest expenses	N.A	N.A	N.A
4 Current Ratio	Current assets	0.01	0.01	-19.81
	Current Liabilites
5 Debt Equity ratio	Total liabilities	-1.06	-1.08	-1.57
	Total shareholders Equity
6 Operating Profit Margin (%)	Operating Income	-26.33	2.01 -	1408.83
	Sales Revenue
7 Net profit Margin (%)	Net profit	(102.43)	(66.60)	-53.80
	Revenue
8 Return on Net Worth	Net Income	-	-	-
	Shareholders Equity

1 Due to continuing losses, the company has taken advance from the customers to fullfill its obligation, thereby it appears that the debtors recovery has improved.

2 The Inventory T/O Ratio is not applicable as the company has achieved its turnover only from job work service as no goods are sold by the company.

3 The Interest Coverage Ratio not applicable as no interest is provided during the year due to inception of liquidation process.

4 The Operations of the company were partially closed during the first half of the current financial year and hence operating profit has declined.

5 The operations of the company were partially closed during the first half of the current financial year and hence the net profit margin has declined due to non obsorption of fixed costs.

10. CAUTIONARY STATEMENT

Statement in the Management Discussion and Analysis may be "forward looking statements" and are based on the currently available information. The management believes these to be true to the best of its knowledge at the time of preparation of this report. However, these statements are subject to certain future events and uncertainties, which could cause actual results to differ materially from those, which may be indicated in such statements.

Date : 1st September, 2023	By order of the Board of Directors (Power Suspended)
Place : Kolhapur	For Abhishek Corporation Limited (Under Liquidation)
	Anant Y. Bhide
	Managing Director
	(DIN: 10244641)