acrow india ltd Management discussions

Annexure - I

(a) Industry Structure and Development:

1. The Company has recently changed its main object and is starting to explore into the business of cotton / clothing / yarn/ construction & development of real estate.

2. Indias cotton exports amounts to 1.21% of Indias total exports in the financial year 2022 - 2023.The Government of India along with the export promotion council has set a long-term target of US$ 100 billion for textiles industry exports by 2025-26 and growing productivity. The focus continues to adopt the latest innovative technologies and global best farming practices to enhance productivity and achieve sustainable quality cotton output.

3. Textile Industry in India continues to be dominated by cotton, accounting for nearly 3/4th of the total fiber consumption in the country

(b) Opportunities and Risks:

Opportunities and Strengths:

1. Indian Textile industry is dependent on Cotton.

2. Large, Potential Domestic and International Market.

3. India has great advantage in Spinning Sector and has a presence in all process of operation and value chain.

4. Industry has large and diversified segments that provide wide variety of productsIndia occupies first position in the world in the cotton acreage with around 105 lakh hectare under cotton cultivation which is around 35% of the world area.

Risks:

1. Continuous Quality Improvement is need of the hour as there are different demand patterns all over the world.

2. Lacking to generate Economies of Scale

3. The prospects of this industry depend on the availability of raw materials, which is subject to vagaries of the monsoon and the policies of the Central and State Governments.

(c) Segment-Wise Performance:

The Company currently operates in a single segment i.e. cotton / clothing / yarn

(d) Business Outlook:

The Cotton industry in India comes under The Essential Commodities Act, 1955 and therefore is regulated by the Government. Being an agro based industry, performance is largely dependent on rainfall and crop.

(e) Risks and Concerns:

• Seasonal uncertainties that impact the production and price of Cotton

• Unfavorable shifts in Government policies and regulations

• Increased cost of raw materials, labour and fuel

• Work stoppage owing to availability of human capital, union strikes, and other reasons

(f) Internal Control Systems and their Adequacy:

The Company, commensurate with the size of the business, has adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations was observed.

(g) Operational Performance and Financial Performance:

The Total Other Income for the year ended March 31, 2023 is Rs. 110.53 Lakhs as against Rs. 138.50 Lakhs for the previous year. The Net Profit is Rs. 1.84 Lakhs for the year ended March 31, 2023 as against profit of Rs. 85.99 Lakhs for the previous year.

(h) Human / Industrial Relations:

The Company believes that manpower is the most valuable resource for its growth. Industrial relations have been very cordial.