Adinath Textiles Ltd Management Discussions.

The company primarily operates in spinning of worsted and spun yarn. The company has manufacturing set up base in Ludhiana in the state of Punjab and Corporate Office is located in Ludhiana in Punjab. The company has devoted major part of its production capacity to Job works.

OPPORTUNITY, RISK AND CONCERN

The company is dependent upon the orders for the job work for its manufacturing facilities. Due to no job work orders and accumulating losses the Companys Plant at Village Bholapur, Chandigarh Road, Ludhiana, has been shut down and the Company has discontinued its operations during the FY 2019-20. In view of outbreak of Corona virus disease 2019 (COVID-19) which has been declared as a pandemic by World Health Organization and subsequent lockdown imposed by the Central and State Government(s) in India, the Company is closely monitoring the impact of this pandemic and believes that there has been no significant adverse impact on its financial position for the financial year ended 31st March, 2020 as its manufacturing plant located at Village Bholapur, Chandigarh Road, Ludhiana had already been closed prior to imposition of lockdown.

SEGMENTWISE- PRODUCTWISE PERFORMANCE

The company has only one segment i.e. manufacturing of Acrylic and worsted yarn.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has a proper and adequate internal control system to safeguard and protect against loss from unauthorized use or disposition and to ensure that all transactions are authorized, recorded correctly and adequately. Internal control is designed to ensure that financial and other records are reliable for preparing financial information and for maintaining accountability of assets.

The internal audit report, plans, significant audit findings and compliance with accounting standards is in turn reviewed by the Companys Audit Committee to ensure proper audit coverage and adequate consideration along with execution of the auditors recommendations.

FINANCIAL STATEMENT

Financial statements of the company have been prepared in compliance with the requirements of the Companies Act, 2013 and Indian accounting standard The management of the Company accepts responsibility for the integrity and objectivity of these financial statements, as well as various estimates and judgments used therein.

However, any unforeseen and uncontrollable external factors may alter these judgments.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS

The human resources development function of the Company is guided by a strong set of values and policies. Your company maintains a work environment that is free from any harassment.

FINANCIAL PERFORMANCE AND ANALYSIS The discussions in this section relate to the financial results pertaining to the year ended March 31,2020 prepared in accordance with the Indian Accounting Standards prescribed under section 33 of the Companies Act, 2013, read with the Companies [Indian Accounting Standards] Rules, as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the financial statements. The following table gives as overview of the financial result of the Company:

(Rs in lakhs)

Particulars 2019-20 2018-19
Income from Operations - 74.47
Other Income 138.71 117.32
Profit/ (Loss) before interest & depreciation 19.36 (35.08)
Less Interest 0.12 5.83
Gross Profit/ (Loss) 19.24 (40.91)
Depreciation and amortization expense 18.96 20.54
Profit/ (Loss) Before Tax 0.28 (61.45)
Provision For Taxation (including deferred tax) (1.63) (15.86)
Net Profit/ (Loss) after Tax from continuing opreations 1.91 (45.59)
Profit / (Loss) from discontinued operations (8.73) -
Profit / (Loss) for the year (6.82) (45.59)

The income of Rs. 15.66 Lacs and expenses of Rs. 24.39 Lacs relating to the discontinued period have been shown under the head "Profit/(Loss) for the year from discontinued operations" as per Indian Accounting Standards.