Aditri Industries Ltd Management Discussions.

1. INDIAN TEXTILE INDUSTRY

India’s textiles sector is one of the oldest industries in Indian economy dating back several centuries. The Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector.

Indias overall textile exports during FY 2017-18 stood at US$ 39.2 billion in FY18 and are expected to increase to US$ 82.00 billion by 2021 from US$ 31.65 billion in FY19. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world. (Source: www.ibef.org)

2. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company engaged in the retail apparel segment and same is substantially depends on the growth of retail segment in the country.

3. STRENGTH , OPPORTUNITIES , THREATS AND DRIVERS FOR GROWTH

Strengths:

Labour:?

Cheap labour and strong entrepreneurial skills have always been the backbone of the Indian Apparel and textile Industry.

Flexibility:?

The small size of manufacturing which is predominant in the apparel industry allows for greater flexibility to service smaller and specialized orders.

Raw material base:?

India has high self sufficiency for raw material particularly natural fibers. India’s cotton crop is the third largest in the world. Indian textile Industry produces and handles all types of fibers.

Rich Heritage:?

The cultural diversity and rich heritage of the country offers good inspiration base for designers.

Domestic market:?

Natural demand drivers including rising income levels, increasing urbanisation and growth of the purchasing population drive domestic demand.

OPPORTUNITIES:

Integration of Information technology:?

Supply Chain Management’ and ‘Information Technology’ has a crucial role in apparel manufacturing. Availability of EDI (Electronic Data Interchange), makes communication fast, easy, transparent and reduces duplication.

Opportunity in High Value Items:?

India has the opportunity to increase its UVR’s (Unit Value Realization) through moving up the value chain by producing value added products and by producing more and more technologically superior products.

Market access through bilateral negotiation:?

The trade is growing between regional trade blocs due to bilateral agreements between participating countries.

Growing Industry:?

World textile trade would continue to grow at a rate of 3-4% to reach $200-210 billon by 2010.

THREATS:

Phasing out of Quotas:?

India will have to open its protected domestic market for foreign players thus domestic market will suffer.

Formation of Trading Blocks:?

Formation of trading blocks like NAFTA, SAPTA, etc; has resulted in a change in the world trade scenario. Existence of bilateral agreements would result in significant disadvantage for Indian exports.

Decreasing Fashion Cycle:?

There has been an increase in seasons per year which has resulted in shortening of the fashion cycle.

4. SEGMENT WISE- PRODUCT WISE PERFORMANCE

The business of the company falls under a single segment i.e. For the purpose of accounting standard.

5. OUTLOOK

The year ahead looks profitable for the Indian Textile Industry. With Government initiatives for incentive schemes like Technology Up-gradation Fund Scheme (TUFS), export promotion policies and with the entry of several textile companies into the India markets, the retail sector has experienced a rapid growth. Your Company is continuously working to improve its position in the market by focusing on the advanced technologically and market segment and working aggressively in the area of productivity, efficiency and cost reduction.

6. RISK AND CONCERN

The Company is exposed to following risks resulting into pressure on margins. However, the management is aware of the said problems and therefore is in process of designing the system to address the same.

• Non-availability of funds from the banks.?

• Lower average consumption in domestic market.?

• Distance of the potential market.?

• Increase in Competition in textile Sector.?

• Change of fashion trends and designs affecting production.?

7. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has in place an adequate internal financial control system, commensurate with the size and complexity of its operations. Necessary checks and controls are in place to ensure that all assets are safeguarded, to detect and prevent errors and frauds and that the transactions are properly verified, adequately authorized, correctly recorded and properly reported The Audit Committee regularly reviews the internal control systems and the Company when needed takes corrective actions and the adequacy of which has been reported by the auditors of the Company in their Audit report as required under the Companies (Auditor’s Report) Order 2015.

8. DISCUSSION ON FINANCIAL PERFORMANCE OF THE COMPANY WITH RESPECT TO OPERATIONAL PERFORMANCE.

a) Share Capital

The Paid up Share Capital of the Company as on 31st March, 2019, at Rs.12,46,95,600/- divided into 1,24,69,560 equity shares of Rs.10 each fully paid up.

b) Reserves and Surplus

The reserves and surplus is Rs.-13,61,62,518/- as on the end of the current year.

c) Total Income

During the year under consideration, the total income was Rs. 1,70,07,332/- as against Rs. 1,14,04,507/- during the previous year.

9. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company has an equal opportunity for employer and employees and practices fair employment policies. The Company is confident that its Human Capital will effectively contribute to the long term value enhancement of the organization.

10. DETAILS OF SIGNIFICANT CHANGES

(i.e change of 25% or more as compared to the immediately previous financial year ) in key financial ratios, along with detailed explanation:

Sr. No. Particulars 2018-19 2017-18
1. Operating Profit Margin 0.00 (0.10)
2. Net Profit Margin 0.00 (0.27)

*Due to Higher operating profit and lower cost of goods sold.

11. CAUTIONARY STATEMENT

Statement in the Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be forward looking statements as they are based the perceptions of the Company and the data and information available with the company.

The company does not and cannot guarantee the accuracy of various assumptions underlying such statements and they reflect Company’s current views of the future events and are subject to risks and uncertainties. Changes in economic conditions, cyclical demand, availability of raw materials, changes in tax regimes and Government policies and other incidental factors are likely to affect the operations of the Company. The Company does not assume any obligation for such variations.

Date: 29.08.2019 by order of the Board of Directors
Place: Ahmedabad For, Aditri Industries Limited
SD/-
Keyur Majmudar
Chairman & Managing Director
DIN: 00656071