The Management of NUTECH GLOBAL LIMITED present its analysis report covering
performance and outlook of the Company. The report has been prepared in compliance as laid
down in the Regulation 34 ofthe SEBI (Listing Obligatbnsand Disclosure Requirements)
Regulations,2015. The management accepts responsibiityforthe integrity and objectivity of
the financial statement. However, investors and readersare cautioned thatthis discussion
contains certain forward-looking statements that involve risk and uncertainties.
INDIAN ECONOMIC OVERVIEW
India has emerged as the shining beacon in a grim global scenario by growing at 6.8% in
2022. The IMF has estimated Indias growth at 5.9% in FY23 and 6.3% in FY24, well above
other economies of significant scale causing many to state that this could well be Indias
decade. The central government has played a major role in boosting the growth of the
economy as it continued with its capital expenditure push in the Union Budget 2023-24. In
FY 2023-24, capex is budgeted at10 lakhcrore, which will constitute 3.3% of GDP. As per
the RBI, such level of capex spending can take Indias real GDP growth close to 7% in
FY-24. Despite the challenging global environment, the Indian economy with its strong
fundamentals and massive demographic strengths seems enroute to outpace other large
economies.
INDIAN TEXTILE INDUSTRY
The Textile Industry is one of the oldest and largest industries of the Indian economy.
As per the International Textile Manufacturers Federation (ITMF), the Textile sector has
seen weakening demand since June 2022 due to persistent global inflation and lingering
possibilities of a recession. Inflation has affected consumers and manufacturers alike
with manufacturers and suppliers having to pay much more along all stages of their supply
chains, from the cost of freight to wage increases for their workers. This has put textile
manufacturers in a difficult situation. In the Union Budget 2023-24, the government
announced various initiatives to aid the Textile and Apparel sector across its value chain
from raw materials to manufacturing. The government has introduced various schemes such as
the Scheme for Integrated Textile Parks (SITP) and Mega Integrated Textile Regbn and
Apparel (MITRA) Park scheme to attract private equity in the sector. The textiles sector
supported by the governments structural and productivity-related policy interventions and
fueled by a rising domestic demand looks well poised to prosperexponentially.
OUTLOOK
The government of India has initiated various policies to support textile sector growth
for long term horizon. Demand in Textiles segment will vary by market. While domestic
markets are expected to improve, US volumes may see modest growth or remain flat. Demand
from Europe and UK is expected to remain muted. Things will change for better in case
India is able to sign any free trade agreement with any of the key geographies.
OUR BUSINESS OVERVIEW:
The Company has a production of 3.6 million meters of quality fabric per year and a
fabric range that diversifies into varied products such as Suiting. Shirting. Ready-Made
Garments. Dress Material (Uniform). Home Furnishing and its recent addition of COVID-19
products. However, competition in the industry is continuously increasing, and the future
for the industry looks promising, by strong domestic consumption as well asexport demand.
OPERATIONAL REVIEW:
Please refer to the paragraph under the heading "Financial Results" and
"Operational Review" in the main Directors Report.SEGMENTWISE PERFORMANCE:
The Management reviewed the disclosure requirement of Segment wise reporting and is of
the view that since the companys products are covered under Textile Industry which is
single business segment in terms of AS-17 and therefore separate disclosure on reporting
by business segment is not required.
RISKS MANAGEMENT:
The risk management framework ofthe company ensures compliance with the requirements
ofthe CompaniesAct, 2013. The Company is exposed to risks from competitions, interest
rates, market fluctuations of foreign exchange, compliance risk, raw material price risks
and people risk. It has institutionalized the procedure for identifying, minimizing and
mitigating risks and the same are reviewed periodically. Your Company has identified the
following aspects as the major risks for its operations:
1. COMPETITIVE RISK:
The threats to the Companys product include severe competition both in domestic and
international markets leading to pricing pressures of finished goods, inflation, foreign
exchange fluctuation, volatility in input cost cotton crop, interest rates, power cost
etc. Government Policies also play major role in the growth ofthe industry. Online trades
and fast fashions are the biggest competitive risk in present scenario. Investments in the
industries have started picking up with no barriers for entry of new players. Your Company
continues to focus on increasing its market share and focusing more on Quality, Cost and
Timely delivery that help create differentiation and provide optimum service to its
customers to expose competition rsk.
2. FINANCIAL(FUNDING RISK):
Any increase in interest rate can affect the finance cost. The Companys policy is to
borrow long-term borrowing in Indian Rupee to avoid any rate variatbn risks. The Company
has adopted a prudent and conservative risk mitigation strategy to minimize interest
costs.
3. FOREIGN EXCHANGE RISK:
Foreign exchange risks are quantified by identifying contractually committed future
currency transactions. The Companys policy is to hedge all tong-term foreign exchange
risk as well as short term exposures with in the defined parameters.
4. COMPLIANCE:
The Company is exposed to risks attached to various statutesand regulations including
the CompetitonsAct. The Company is regularly monitoring and reviews the changes in
regulatory framework and also monitoring its compliance mechanism so as to ensure that
instances of non-compliance do not occur.
5. RAWMATERIAL PRICE RISK:
The Company is exposed to the risk of raw material prices of Polyester, Viscose, PA/
blended yarn, Cotton Yarn. The Company hedges this risk by purchasing the required raw
material at the time of booking of sales contracts. Also, this risk is being managed by
way of inventory managementandforward booking.
6. HU MAN RESOURCES RISK:
Retaining the existing talent pool and attracting new manpower are major risks. The
Company hedges this risk by setting benchmark of the best HRpractices and carrying out
necessary improvements to attract and retain the best talent. The Company has initiated
various measures such as rollout of strategic talent management system, training and
integration of learning activities.
7. ENVIRONMENT ANDSAFETY:
The company is conscious of the need for environmentally clean and safe operations. The
Company Policy requires the conduct of all operations in such manner so as to ensure
safety of all concerned, compliance of statutory and industrial requirements for
environment protection and conservation of natural resources to the extent possible.
INTERNAL CONTROL SYSTEMS &THEIRADEQUACY:
Your Company has an effective internal control and risk mitigation system, which is
constantly assessed and strengthened with new/revised standard operating procedures. The
main thrust of the internal audit process is test and review of controls, independent
appraisal of risks, business processes and benchmarking internal controls with best
practices.
The Audit Committee of the Board of Directors actively reviews the adequacy and
effectiveness of the internal control systems and suggests improvements to strengthen
them. The Audit Committee of the Board of Directors, Statutory Auditors and Functional
Heads are periodically apprised of the internal audit findings and corrective actions to
betaken. Audit plays a key role in providing assurance to the Board of Directors.
FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
This part has been discussed in Boards Report.
HUMAN RESOURCE ANDINDUSTRIAL RELATION
The Company takes pride in the commitment, competence and dedication shown by its
employees in all areas of business. The Company is committed to nurturing, enhancing and
retaining top talent through superior Learning & Organization Development
interventions. Corporate learning and Organization Development is a part of Corporate HR
function. It is a critical pillar to support the organization growth and its
sustainability over the tong run.
DISCLOSURE OF ACCOUNTING TREATMENT:
In preparation of the financial statements, the Company has followed the Accounting
Standards issued by ICAI. The significant accounting policies which are consistently
applied are set out in the Annexure to Notes to the Accounts.
CAUTIONARY STATEMENT:
Statements in this Management Discussion and Analysis Report describing the Companys
objectives, estimates etc. may be "Forward Looking Statements" within the
applicable laws and regulations. Actual results may vary from these expressed or implied.
Several factors that may affect Companys operations include Raw material prices,
Government policies, cyclical demand and pricing in the Companys main market and economic
developments within India and countries in which the Company conducts its business and
several other factors. The Company takes no responsibility for any consequence of
decisions made based on such statements and holds no obligation to update these in the
future.
|
For and On behalf of the Board of Directors |
|
Sd /- |
| Place: Bhilwara |
(RAJEEV MUKHUA) |
|
Managing Director |
|
DIN 0050736 |
| Dated: 27.05.2023 |
Sd /- |
|
(SHYAM SUNDER MUKHUA) |
|
Director |
|
DIN 01552629 |
+91-9892691696
