Alps Industries Ltd Management Discussions.


Indias vast consumer markets need to feel like spending beyond their essential requirements for the economy to pick pace beyond the recovery. The Government of India has supported the textile industry by extending Rs. 6000 crores package dedicated only to the garment and made-ups sector which gave much needed impetus for the growth in the vital segments of the textile sector. The recent announcement of Rs. 10,683 crores under Product Linked Incentive (PLI) Scheme specially to bring to fore the robustness of MMF Industry and to complement the growth of Technical Textiles in India was a cause for celebrations amongst many. It is only due initiatives of Government announcing of first-ever National Technical Textiles Mission with an outlay of Rs 1,480 crore with a target to enhance research innovation and development, enhance promotion & market development, enhance education, training and skilling and enhance export of technical textiles goods by increasing manufacturing capacities. India is going to be one of the major consumers of technical textiles especially in the segments of Buildtech, Meditech and Oekotech in the coming years and can facilitate growth in this particular sector. Aatmanirbhar Swastha Bharata and Jal Jeevan Mission will complement Indias consumption of technical textiles in the coming years. There is ample scope and end number of opportunities for the industry players for growth in technical textiles and leverage & generate employment opportunity for the youths. Today, there is a thriving 1-billion-dollar industry wherein 1100 companies are catering to the global demand of health care sector. The textile industry should leverage on this strong foundation laid by our industry during the Covid-19 pandemic, in the years to come. The global investors to take full advantage of recent development wherein the Government has planned to set up Seven Textile Parks in the next three years under the Mega Investment Textiles Parks Scheme (MITRA). This has opened up new avenues for the global investment companies to invest in India and take benefit of the emerging opportunities that India is offering to the global investors. This will also help Indian textile industry to become globally competitive and generate new employment opportunities for the rural masses, especially to the poor and illiterate women. It is required to educate MSME textile players to focus more on adopting global standards so that they can partner with the global sourcing giants in fulfilling their requirements. There are needs of Sustainable Textiles which is also the only success mantra for the future growth of the textile sector if they have to compete with the low-cost countries.


The Cotton Corporation of India (CCI) has granted a subsidy of Rs 300 per candy to cooperative spinning mills. The Corporation has also waived-off the security deposit of to pay before participating in the e-auction process of the cotton body. However industry demanded a subsidy of Rs 2,500 per candy.

The cooperative spinning mills are finding it difficult to purchase cotton at the market rates since they have been in financial distress. Cotton prices have gone up above the minimum support price (MSP) of Rs 5,825 per quintal and are currently ruling between Rs 6,300 per quintal and Rs 6,400 per quintal in the open market. CCI is currently selling cotton at Rs 47,000 per candy and with transportation charges, it costs mills around Rs 48,000 per candy which is not affordable. Imported cotton attracts a duty of 10% which again is not affordable, industry has pointed out.


The recession in the textile industry since the past five-six years, higher electricity rates, rising cotton prices and no increase in yarn rates, high-interest rates on bank loans in addition to the trade war between USA and China have adversely affected the yarn business, Of the 150 spinning mills in the state, nearly 45 mills are closed, 70 are active and another 30 mills are in the process of construction. The consumer sentiment index stood at 54 in January 2020 compared to 46 in April 2020 when there was almost a collapse of consumer sentiment due to the nationwide lockdown. The PLI scheme was launched for the textiles sector (man-made fibre segment and technical textiles) in November 2020 when the government cleared the proposal for ten sectors. The textile sector has been allocated 10,683 crores under the scheme which, as per proposed plans of the Ministry, will be offered for incremental production in 40 identified man-made fibre items and 10 technical textiles products. The PLI scheme is to promote domestic manufacturing, for both sales within the country and exports, by providing financial incentives on incremental turnover for five years. While the rates of incentive to be offered to the textiles sector linked to incremental production are set to be one of the highest amongst the existing sectors, some in the industry are of the view that it would be of limited advantage if most units get excluded.


The Company has a robust Enterprise Risk Management framework which enables it to take certain risks to remain competitive and achieve higher growth and at the same time mitigate other risks to maintain sustainable results. Under the framework, the Company has laid down a Risk Management Plan which defines the process for identification of risks, its assessment, mitigation measures, monitoring and reporting. While the Company, through its employees and Executive Management, continuously assess the identified Risks, the Risk Management Committee reviews the identified Risks and its mitigation measures annually. The Company has identified 17 Risks - 5 Strategic Risks, 10 Operational Risks & 2 Regulatory Risks. Key Strategic Risks include demand destruction, changing customer preference and supply chain disruption due to pandemic, reputational risk, succession planning & business continuity planning. Key Operating Risks include customers credit risk, fluctuating forex rates and cotton prices, cyber security risk, IT system breakdown, labour unrest, fire & safety, concentration of business with certain customers and sustainability. Regulatory Risks include changes in bilateral/ multilateral trade agreements, international trade disputes and regulatory compliances. Our approach to performance management is a holistic one wherein, while holding people accountable, we look at continuous development and create opportunities for them to excel in new and/ or larger roles. Performance dialogues create opportunities.


In the wake of the ongoing pandemic, all nations have suffered at large across all industries. Textile Industry too has been no exception to the brunt faced due to the impact of the coronavirus. While most economies are still struggling to get up, India surprisingly has sprung back with the ferociousness of a panther from the third quarter onward. Despite the country coming to a standstill for months and finances and supply chains being adversely affected, Indian textile industry too is gradually scaling back to its pre-covid glory. While credit for this does go to our robust organizations, the various initiatives and steps taken by the Government of India to facilitate this positive movement in the textile industry cannot be ignored. The support provided by the government with its ongoing schemes and the launch of new measures have provided the strong framework that domestic textile manufacturers were seeking to setup their products on. Atmanirbhar Bharat, one of the most important lessons learnt this year has definitely been the need to be self reliant. As part of the "Atmanirbharat Bharat" program, "Make in India" slogan has been launched to reboot and revamp the economy post the first impact of the pandemic. As per data, India has jumped up 79 positions on the ease of doing business ranking after the launch of various schemes under "Make in India" campaign. The new proposed law regarding indirect taxes will result in Fibre-neutrality effect on the Indian textiles sector. The new proposed law regarding indirect taxes will result in Fibre-neutrality effect on the Indian textiles sector, according to the Ministry of Textiles.


In terms of the Ind AS, there is only one reportable segment i.e., Textile Segment. Hence the segment wise reporting is no applicable.


Outlook for global economic growth started on a weak note in 2020, and continued to be weak through the year. Manufacturing activity and trade growth continued to be low key. The year was marked by geopolitical tensions and trade-war rhetoric mainly between the US and China. This clearly reflected in reduced confidence on the future of the global trading system and international cooperation, and impacted investment decisions, and global trade. Several economies signaled and adopted an accommodating monetary policy which cushioned the impact of global tensions on financial market sentiment and activity. Overall, the year wrapped up with World Economic Outlook estimating 2.9% growth in global GDP - tepid by any measure. From an Indian perspective as well, the Indian economy delivered a mere 4.2% during 2019-20, vs. a revised estimate of 6.1% for the previous year. April 2020, of course saw the start of the Covid-19 pandemic, and the associated lockdowns which brought most economic activity to a grinding halt. The new government had assumed office in summer 2019 with a historic mandate, and has been widely expected to take on more difficult reform items.


Raw Material Price Risk: Cotton are the major raw materials used by the Company for textile. Volatility in prices impacts the overall cost of production, and thus, the profitability.

Currency Risk: As the Company deals in the international market, it is exposed to currency volatility, which impacts the overall revenue of the Company.

Geographical Risk

Concentration in a particular territory leads to a depleting market presence of the Company.

Policy Risk

Implementation of any policy which is not in favour of the Company hampers the operations of the Company.

Competition Risk

There are many emerging countries, where production costs are relatively lower than that of India. This poses a potential threat to the Company.


As regards the COVID VIRUS, the challenge are to guard against any community spread and move to flattening the curve, as quickly as possible. In the case of the Lockdown, a clearly defined roadmap moving swiftly away from the system of "passes and permissions" can help the plan to normalcy. The industry on its part would have to ensure a pandemic resilient manufacturing environment with functional exchange of peoptudle and goods. However such controls will shortly be removed as the vaccination programmes widens. Once larger parts of the population are immunized against COVID-19 and restrictions start to be lifted, companies expect a gradual improvement in economic conditions which will translate into output growth. Meanwhile, goods producers expect output to increase over the coming 12 months.

Mitigation Strategy

• Strong relationship with vendors and proximity to the raw material sources ensures easy availability. The Company also plans to save land costs and inventory management keeping in view the historical cycle of input prices. From time to time, the Company hedges raw-material against order book.

• Currency risks are managed by constant monitoring exposures and limiting the same in view of applicable margins under the relevant Market engagements. Also, some portion of the foreign currency is hedged to mitigate any adverse movements in currency fluctuations.

• The Government of India has come up with various incentives such as rebate on state levies, duty drawback, and ATUFS, among others. The Company has leveraged on these initiatives to stay ahead in the market.

• The Company benefits out of economies of scale, cutting-edge technology, and loyal partnerships to offer competitive rates to its clients across the globe.


Internal control systems for financial reporting. High accuracy in recording and providing reliable financial & operational support is ensured through stringent procedures. The Companys internal team and Audit Committee monitor business operations and any deviations are promptly brought to the notice of the Management board. These findings provide input for risk identification and assessment, post which prompt risk mitigation strategies are deployed towards a seamless growth of the Company. Internal audit process verifies whether all systems and processes are commensurate with the business size and structure. Adequate internal control systems safeguard the assets of the company with timely identification and intervention to assuage risks. The internal audit report is discussed with the senior management and members of Audit Committee to keep a check on the existing systems and take corrective action to further enhance the control measures. Regular internal audits and checks are carried out to ensure the robustness of the system. The Management also reviews from time to time the internal control systems and procedures to ensure their proper application. The emphasis on internal controls prevails across functions and processes, covering the entire gamut of various activities.


Your company is struggling to attain the growth in sale of new product range in such slowdown market due to COVID 19 restriction. Under the Made-ups Division, company is growing and progressing very well in this segment in both Global and Domestic Markets. With changing global demands & stiff competition, your company has taken many steps towards its constant improvements, in creating new benchmarks in the industry, like constant improvements in design & development w.r.t advanced & versatile equipments, competent team which helps in reducing turnaround time from CADs to actual physical sample, ability to offer specific developments along with coordinated product across categories. Further relentless dedication of each and every employee who leave no stone unturned to take company to glorious height. Your company has formulated its strategies and has well identified key areas to improve performance in the current market scenario / environment. In the Auto and Technical Textiles segment, your company has reasonably done well. In processing division company has taken up the process optimization targets that will reduce process cost as well as process time without impacting product quality. Your company had made a new fabric with the use of Linen yarn development which have been commercialize. Your company also looking forward to expand the business in other segments during the current financial year. It has also reinvented commodity products to have good response from exports as well as domestic buyers. The company has started new products during the period under review in Yarn segment. Under the Made-up & Fabric Products, your company offers a range of furnishing products for house and office use. Several initiatives were taken for update the quality and changing the product mix.

This are value added items with good demand in domestic and exports markets. The efforts to change the Product Mix at our Yarn Spinning Mill at Haridwar, adding value added Melange Yarn, affected the production, temporarily thus adversely affecting the Productivity In the Auto & Technical Textiles segment. It is expected that the possibility of re-engineering the product constructions and raw materials utilization mix will give positive results. Your company is aggressively increasing share of business with existing customers & focusing on getting new strategic customers, focusing on increasing share of product categories, opening up for outsourcing products & services to meet the market demands. Under the Made-up & Fabric Products, your company offers a range of furnishing products for house and office use and Under the Yarn products it offers a gray yarn for industrial use. Further company has also undertaken various learning & development initiatives during the year for strengthening & upgrading its human capital. Constant efforts are being made to increase the throughput & reduce the OE. While we continue to strive and deliver through performance, we maintain our endeavour to be a socially responsible corporate. Several initiatives were taken for update the quality and changing the product mix.

However due to nationwide Lock down by competent authorities the performance of the company in coming year will be impacted adversely.

During the period under review your company has recorded a positive EBITDA, which comes to Rs.629.40 Lacs in comparison to Negative EBITDA of Rs.604.40 Lacs in previous year due to improvement in business. The PAT for the period is again negative at Rs.7455.87 Lacs in comparison to the previous year Negative PAT of Rs. 11509.58 Lacs. During the year the company has recognized an impairment of assets as well as provision of interest in terms of IND AS.


The year started with centurys biggest crisis Covid-19 Pandemic without alerting the organization as well as the World. No one was able to ascertain the severity its going to impact the businesses. The Industry has already been working hard to deal with consistent market-slow-down since last two years. The Pandemic brought the Business in the whole world to stand still for couple of months. On one side, it was important to consolidate our operating expenses and on the other hand it was also necessary to keep up the confidence of our human resources and support them in this unprecedented crisis. Learning from

TOC helped in controlling the operating expenses with rigorous close monitoring, applying different ways of reducing the cost and at the same time extending generous help to our employees so that they are able to meet their basic expenses and retain with us. With unparallel support of the management as well employees, the company sailed through the tough time successfully retaining most of our key resources and clients. With continued efforts to improve the female workers/employees ratio, particularly at the shop floor, in-line with the national policy of gender equality and policy to restrict the sexual harassment, there has not been any case of sexual harassment reported and homogeneity of the Work environment is maintained. The companys concerns for welfare of its workforce continued during the year and accordingly Group pension/Accident Insurance policy/ESI/WC policies were continued further as in the past. To deal with Pandemic, Corona Kavach Insurance Policy was also taken. The company has been consistently maintaining harmonious & cordial relations with the employees at all the locations. The Company continues to lay emphasis on building and sustaining culture of larger family, caring & supporting each other. During the year, with consistent review and efforts for optimization of available manpower resources, average employment, has been 1640, almost same as last year. Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floors of all the plants.


In terms of SEBI/HO/CFD/CMD/CIR/P/2018/79 May 10, 2018 the disclosure of Medium and Long-term strategy of the company, for the next financial year ending on March 31, 2022 is within the limits set by its competitive position and the long-term metrics specific to the companys long term strategy measurement of the progress will be reflected in coming years.


The Executive Director makes a declaration at each Board Meeting regarding the compliance with the provisions of various statutes, after obtaining confirmation from all the units of the company. The Company Secretary ensures compliance accordance to SEBI regulations and provisions of the Listing Regulations.


As required the details of changes of 25% or more as compared to the immediately previous financial year in key financial ratios along with detailed reasons therefore are as under:

S. No. Particulars Current Year 31.03.2021 Previous Year 31.03.2020 Reasons of change.
1. Debtors /Turnover 7.69 12.08 due to lockdown during the April & May, 20, the total sales were affected negatively while debtors at closing date was higher as compared to last year.
2. Inventory/ Turnover 13.06 7.66 No material variations.
3. Interest Coverage Ratio (0.29) (1.00) As per Ind AS and also refer to note no. 38 of
financial statement.
4. Current Ratio 0.18 0.15 No material variations.
5. Debt Equity Ratio (1.32) (1.41) No material variations.
6. Operating Profit Margin (%) (20.19)% (18.38)% Due to increase in sale price.
7. Net Profit Margin (%) (29.21)% (35.75)% Due to increase in sale price.
8. Change in Return on Net Worth (0.12) (0.21) Due to impairment on assets in current year and due to low volume of turnover as there was economic slowdown and continuation of fixed expenses and further better in previous year due to exceptional profit for the reason of write back of debt payable to lenders because of settlement with them


The Management Discussion and Analysis Report containing your Companys objectives, projections, estimates and expectation may constitute certain statements, which are forward looking within the meaning of applicable laws and regulations. The statements in this Management Discussion and Analysis Report could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in the Governmental regulations, tax regimes, forex markets, economic developments within India and the countries with which the Company conducts business and other incidental factors. It is much more unpredictable due to COVID VIRUS, the challenge are to guard against any community spread and move to flattening the curve, as quickly as possible to get normalize the market trends. The Management has made these statements based on its current expectations and projections about future events. Wherever possible, it has tried to identify such statements by using words such as anticipate, estimate expect, project, intend, plan, believe and words of similar substance. The management cannot guarantee that these forward-looking statements will be realized, although it believes that it has been prudent in making these assumptions.