Ador Multi Products Ltd Management Discussions

FORWARD LOOKING STATEMENTS

This report contains forward-looking statements based on certain assumptions and expectations of future events. The Company, therefore, cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements can thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The company manufactures and distributes cosmetic and personal care products for the world with an innovative suite of technologies designed to improve the effectiveness of raw material, formulation, safety and quality control testing. The developments within the industry in India and globally is more towards safer ingredients, enhanced certifications and state of the art innovation for skincare. The industry is also going through a surge with new entrants into the market and a heavier focus on D2C and digital platforms for distribution. This comes with challenges of clutter and commoditization of products which leads to margin pressures for manufacturers as well as brand owners. Furthermore there is a shift in trends which lead to a product mix shift. For example, talcum powder is seeing muted growth whereas serums are witnessing expontential growth.

While D2C as a business model is here to stay, a more stable omni channel approach is what is being envisioned as prudent. Furthermore innovation in product formulation and convenience of packaging with a sustainable mindset is what the industry is moving towards.

BUSINESS OVERVIEW

Ador Multi Products Limited is an India-based contract manufacturer in the personal care industry. The company has facilities in Puducherry. The factory is well equipped with a variety of machines and facilities to cater to the needs of the personal care industry. The company also has all the required certifications and capacities to grow exponentially.

Over the past twenty four months, the company had invested heavily to transition the company to the next stage of growth. The company has the right equipment and packaging options to cater to a wide array of products across liquids, creams and talcum powder. The company hopes to stabilize this year with filling up the capacities of this factory and utilizing the right cash flow to invest in testing and certifications for a wider reach globally.

The Company offers a range of personal care products, including hand sanitizers, hand wash, skin care products, serums, talc and face wash. The Company offers personal care products to various brands, such as Himalaya Drug Company, Baypure, Wipro, TTK, Argus, Inde Wild and more. With an enhanced alcohol capacity your company is a leader in the hand sanitizer segment.

The company is exploring white labelling opportunities for the hospitality sector.

With a more cautious approach and a heavy focus on positive cash flow, your company is adapting to the manufacturing requirements of its customers and building a new customer base for white label and contract manufacturing with a lower focus on marketing spends on own brands.

OPPORTUNITIES AND THREATS

Our strength is our fully integrated solutions of product development, manufacturing and testing. This is further supported with our reliable team providing brands the flexibility their require for manufacturing and productivity.

Our opportunity is to exponentially grow to create a house of brands with a manufacturing backbone for brands across India and beyond with the right level of flexibility.

Threats continue to be about operating in a competitive, discount driven environment and a change in product mix that requires constant R&D updates.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an internal control system, commensurate with the size of its operations. Adequate records and documents were maintained as required by laws. The Companys audit Committee reviewed the internal control system. All efforts are being made to make the internal control systems more effective.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE PERSONAL CARE PRODUCTS DIVISION

Your Companys continues to grow its Personal Care Products business. Your company continues to be a preferred supplier to leading brands like Himalaya, Argus and more. With the ambition to be a complete solution provider, your company also supports and manufactures for startup brands like Baypure, Cocomo, Inde Wild, etc.

The company is also looking for opportunities in the hospitality sector as well as bulk exports for further filling up its capacities.

All these initiatives are for building for a long term and sustainable future for the company, the results of which you will see in the coming years.

Going forward, the Company will continue to review and reinforce its strategies and action plans to rapidly scale up its global foot print.

RISKS AND CONCERNS

In any business, risks and prospects are inseparable. As a responsible management, the Companys principal endeavor is to maximize returns. The Company continues to take all steps necessary to minimize losses through detailed studies and interaction with experts.

FINANCIAL PERFORMANCE OF COMPANY

During the period under review the revenue from the operations of the company has decreased to Rs.515.14 Lakhs as compared to previous years Revenue of Rs. 588.75 Lakhs because of fall in demand for santizers as well as narrower margins in the talcum powder segment.

HUMAN RESOURCES

The Company believes in the adage "If you want to build your business, build the people first." Ador understands that the employees are the greatest strength and a foundation for long-term success. The Company has strongly embedded core values and all employees are encouraged to use these values as the basis upon which decisions are made and policies and practices defined, The Company has always laid focus on employee engagement and employee development. The company has also collaborated with strong consultants with years of experience in the industry to further strengthen various areas across supply chain, governance and marketing. The company has an extremely stable and tightknit manufacturing team and further plans to enhance the business development team.

CAUTIONARY STATEMENT

Statement in this Managements Discussion and Analysis detailing the Companys objectives, projections, estimates, expectations or predictions are "forward- looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand- supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations.