atharv enter Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosures Requirements) Regulation 2015, the Management Discussion and Analysis has been given hereunder.

Industry scenario

Indias textiles sector is one of the oldest industries in Indian economy. Textile plays a major role in the Indian Economy (i) It contributes 14 per cent to industrial production and 4 per cent to GDP (ii) With over 45 million people, the industry is one of the largest source of employment generation in the country. The size of Indias textile market as of July 2017 was around US$ 150 billion, which is expected to touch US$ 250 billion market by 2019, growing at a CAGR of 13.58 per cent between 2009-2019. The textiles industry is also labour intensive and is one of the largest employers. The textile industry has two broad segments. First, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale.

The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route. The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market. High economic growth has resulted in higher disposable income. This has led to rise in demand for products creating a huge domestic market.

Opportunity & Threats

Increased penetration of organised retail, favourable demographics, and rising income levels are likely to drive demand for textiles. India is the worlds second largest exporter of textiles and clothing. Rising government focus and favourable policies is leading to growth in the textiles and clothing industry. The Ministry of Textiles is encouraging investments through increasing focus on schemes such as Technology Up-gradation Fund Scheme.

Increasing seasons per year has shortened fashion cycles. International labour and environmental laws becoming more stringent. Increasing competition from other apparel hubs also major threat to the company.

Financial Performance & Outlook

The Company main activities are trading into textiles related items. The Company is exploring various options to improve margins of the Company, by having tight control on expenses & exploring various business activities. Chinese products had flooded our markets which has impact on every Indian Companies. The company is planning to venture into trading of other merchandise products through the existing chain of retailers. During the year company has made total profit of 12.94 Lakhs and total revenue stood at 118.24 lakh. The margin pressure continue stand profit reduced from 21.05 lakh for the previous year. Company management is now looking for other option to increase overall growth and profitability.

Key Risks to business

This year, factors such as rupee appreciation, higher cotton prices, higher MSP affected the textile industry. In FY18, rupee has seen some appreciation. The average USDINR stood at rupees 64.48US$ which is lower by ~3.7% compared to rupees 66.97US$ in FY17. This affected revenues of textile players negatively as for many of them, a major chunk of revenue comes from exports. However for the on going financial year the negative appreciation of rupee may result into competitive rate in the international market. Rising cotton prices following the pink bollworm infestation in the cotton crops, has affected margins to major textile players. Apart from this, the Union Budget 2018 also announced to increase MSP prices of Kharif crops to 1.5x of cost of production. However, we do not expect any significant impact of the rise in cotton MSP on the textile industry, as current cotton prices are at the same level.

Description of the companys Internal control systems & their adequacy.

The Company has adequate internal control systems in place which are commensurate with the size and nature of the business. The internal controls are aligned with statutory requirements and designed to safeguard the assets of the Company. The internal control systems are complemented by various Management Information System (MIS) reports covering all areas. Increased attention is given to auto generation of MIS reports as against manual reports to take care of possible human errors or alteration of data. The Management reviews and strengthens the controls periodically.

Human Resources/Industrial Relations

There are no material developments in the Human Resources area. The Industrial relations have been considered to be satisfactory. The Company constantly reviews the manpower requirements and effective steps are being taken to meet the requirements.

Cautionary Statement

The Statement in this Management Discussion and Analysis report, describing the Companys outlook, projections, estimates, expectations or predictions may be "Forward looking Statements" within the meaning of applicable securities laws or regulations. Actual

	For and on behalf of the Board of Directors,
Date: 01-09-2018	Jagdish Gadiya
Place: Kolhapur	Director