Ambassador Intra Holdings Ltd Management Discussions.

(a) Business Scenario:

The financial year under review continued to be challenging and eventful in terms of the business environment. The Government introduced a significant change in terms of introduction of Goods and Services Tax.

Financial Year 2018-19 was a year of average performance for Ambassador Intra Holdings Limited as we continued to maintain our position. Indias trading and textile sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to Indias with approximately 15 per cent of total exports. The Indian textiles industry, currently estimated at around US$ 108 billion, is expected to reach US$ 223 billion by 2021. The industry is the second largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to Indias Gross Domestic Product (GDP), and 14 per cent to overall Index of Industrial Production (IIP). Further the company also dealing in the animal feed supplement business. The company also plans for the expansion in the business of animal feed suppliments.

(b) Opportunities and Threats:

Opportunities:-

The Indian Textile Industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand. Urbanization is expected to support higher growth due to change in fashion & trends. Technological advancement along with favorable Government policies should act as a Catalyst in Textile Sector Growth. Abundant raw material availability helps control costs and reduces lead- time across operations, Strong relationship with local customers.

Government has undertaken a number of steps to improve Ease of Doing Business in India, to function as single window for obtaining government clearances. The government has also proposed to extend 24/7 customs clearance facility at 13 airports and 14 seaports resulting in faster clearance of import and export cargo.

India is the third largest producer of cotton with the largest area under cotton cultivation in the world. It has an edge in low cost cotton sourcing compared to other countries.

Threats:-

Striking a balance between the quality and price of products. Striking a balance between demand and supply. Satisfying the demands of people all across the globe and at the same time, steadily improving the quality of the products. Geographical disadvantage.

On an average, an Indian factory worker only handles 380 spindles and 2 looms as compared to 1,500-2,000 spindles and 30 looms in Japan and USA. Also, industrial relations are not very good in the country. Strikes, layoffs, retrenchments are the common features of many cotton mills in the country.

The Indian cotton textile goods is facing stiff competition in foreign markets from Taiwan, South Korea and Japan whose goods are cheaper and better in quality. It is really paradoxical that in a country where wages are low and cotton is internally available, production costs should be so high.

An important factor for the growing sickness of the mill sector is the growth of the decentralized sector. Being a small-scale sector, the Government allowed excise concessions and other privileges. This accompanied with low wages have led to the low cost of production in the decentralized sector.

(c) Outlook and Future Prospects:

The Indian textiles industry, currently estimated at around US$ 120 billion, is expected to reach US$ 230 billion by 2020. The Indian Textile Industry contributes approximately 4 per cent to Indias Gross Domestic Product (GDP), and 14 per cent to overall Index of Industrial Production (IIP). The textiles sector has witnessed a spurt in investment during the last five years. The Industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth US$ 3.35 billion during April 2000 to March 2018. The India government has come up with a number of export promotion policies for the textiles sector. The Indian textile industry is now going through a consolidation phase. There are now 30 companies with a turnover of more than $200 million, and many of them are registering double-digit growth. There are another 100 companies which are seen as stars of the future. We believe that it is these companies that could attract a host of leading edge, international textile and apparel companies into successful joint ventures. A more experienced and commercially enhanced system can be created in order to successfully compete against other Asian nations and drive Indias textile industry forward to reach new heights

Seeing the future potential, Indian textile companies have already lined up investments for future capacity expansion. These companies have announced significant investments in areas like home textiles, denim and garmenting.

The textile industry is expected to attract investment of about $120 billion by 2024-25. Exports are also expected to rise from the current $39 billion to $300 billion by 2024-25. The action plan notes that attracting the required investment entails ready availability of developed land with adequate infrastructure, skilled manpower and easy connectivity to ports, along with creation of new mega textile parks, lowering the cost of production and logistics, and encouraging new entrants through start-ups as well as FDI.

Further, the animal feed is produced in more than 130 countries globally. Different species are reared across these countries for various purposes including milk, protein etc. Feed is considered to be a major component of the animal rearing as it adds significant cost to the production system. Type of feed production varies across various regions and largely depends on the animal population and their economic importance in the region. Feed requirement of the animals also vary with the purpose of rearing it, including meat, egg and milk production. The industry makes a significant contribution to the economic and nutritional well being of millions of people globally.

(d) Risks & Concerns:

The unit leads to a significant rise in labour cost which greatly impacts the profit margin. In todays complex business environment, almost every business decision requires executives and managers to balance risk and reward. Effective risk management is therefore critical to an organizations success. Timely and effective risk management is of prime importance to our continued success. Increased competition between local and International suppliers of the product, the Company believes that its year of experience, quality, research and development, brand image and customer loyalty are success factors to sustain even in the global economic scenario. In todays business environment, almost every business decision requires executives and managers to balance risk and reward. Effective risk management is therefore critical to an organizations success. Timely and effective risk management is of prime importance to our continued success.

(e) Subsidiaries/Joint Ventures:

The Company does not have subsidiaries, associates and joint venture companies.

(f) Human Resources:

The Companys relations with the employees continued to be cordial and harmonious relations with its employees. It considers manpower as its assets and that people had been driving force for growth and expansion of the Company. Focus was kept on acquisition, retention and development of necessary skilled manpower keeping in view our current operations requirement as well as the future business expansion and growth plans. The Company continues to conduct employee trainings across several functions pertaining to technical, behavioral, general health safety and environment. A regular employee performance evaluation system is in place to evaluate the individual performance as well as determining their development needs and future potential.

(g) Segment -Wise or product wise performance:

The Company operates in only single segments. Hence segment wise performance is not applicable.

(h) Internal Control Systems and their adequacy:

Your Company has an effective system of accounting and administrative controls supported by an internal audit system with proper and adequate systems of internal check and controls to ensure safety and proper recording of all assets of the Company and their proper and authorized utilization. As part of the effort to evaluate the effectiveness of the internal control systems, your Companys internal audit department reviews all the control measures on a periodic basis and recommends improvements, wherever appropriate. As a part of the effort to evaluate the effectiveness of the internal control systems, your Companys internal audit department reviews all the control measures on a periodic basis and recommends improvements, wherever appropriate. The internal audit department is manned by highly qualified and experienced personnel and reports directly to the Audit Committee of the Board. The Audit Committee regularly reviews the audit findings as well as information Security Assurance Services is also provided by independent external professionals. Based on their recommendations, the Company has implemented a number of control measures both in operational and accounting related areas, apart from security related measures.

(i) Cautionary Statement:

Certain statements in the Management Discussion & Analysis describing the Companys objectives, projection, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results may differ from those expressed or implied. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and other identical factors.

Company follows all mandatory Accounting Standards.

By order of the Board of Directors
SIDDARTHA AJMERA
Place: Ahmedabad Managing Director
Date: 05/08/2019 DIN: 06823621