The Management of Gravity (India) Limited, is pleased to present its report analyzing
the Companys operations in the textile industry segment. The report contains expectations
of the Companys business based on the current market environment.
The Management of Gravity (India) Limited, is pleased to present its report analyzing
the Companys operations in the textile industry segment. The report contains expectations
of the Companys business based on the current market environment.
OVERVIEW OF THE TEXTILE INDUSTRY:
The economic development of India is greatly dependent on export earning of Textile
Industry. Textiles represent nearly 30% of the country’s total exports. Providing
direct employment to over 45 million persons in the mill, power loom and handloom sectors
making it the biggest employer in the country after the agricultural sector.
At present, a third of India’s textile production is exported. India is the
world’s second-largest exporter of textiles and apparel, and the textile industry
contributes significantly to the country’s economy, making up 7% of industry output,
2% of the national GDP, and 15% of the country’s total exports earnings. The US and
the European Union are the two largest markets for Indian textile exporters. With all the
export promotion & development planning it is expected to grow to US$2,600 billion by
2025.
OPPORTUNITIES & THREATS:
Ambition of the Government of India, to make India a hub for technical textiles will
create an opportunity for the industrial fabric division of your Company to function
better as compared to earlier years. Performance of the fabric will see a reasonable
growth which will benefit the industry in moving up the value chain. Severe power shortage
in most of the states will remain a biggest threat for the utilization of the plant and
equipment. Due to shortage of power, the utilization may drop severely and hence
volatility in yarn prices may continue. Even though the industry expects the cotton prices
to best able, the whole scenario may change, in case China decides to increase their
cotton reserves. Hence, it is expected that cotton prices too may have volatility. Due to
severe recessionary trends which are continuing in the developed countries, unit
realization of products may continue to be under pressure.
SEGMENT-WISE / PRODUCT-WISE PERFORMANCE:
The business segment of the Company is Textiles. Segment wise performance together with
discussion on financial performance with reference to operational performance has been in
the Directors Report, which should be treated as forming part of this Management
Discussions and Analysis.
FUTURE OUTLOOK:
The Indian textile and apparel industry is expected to grow to US$ 190 billion by FY26,
driven by increased awareness of goods and higher disposable incomes. Increased
penetration of organized retail, favorable demographics, and rising income level will
drive demand for textiles. The Government initiatives such as the National Textile Policy,
the SMARTH scheme, the easy availability of raw materials, and the rising income levels
will also add to this sector’s critical growth.
The future of the textile industry as a whole looks bright. Textile Units with low
financial costs and labour costs with modern Machinery will do well. Economy of size and
location of the unit will also play a great role in the success of the unit.
RISK AND CONCERNS:
Being an agro-based industry the production of raw material varies from year to year
depending on weather conditions, customer demand, price fluctuation etc. And as mentioned
before the textile industry has gone through and still going through a pandemic, still
slowly it has started recovering. Also the textile industry being a highly fragmented
industry leading to high competition and low profit margins is a matter of concern.
Changing export dynamics is also a matter of concern.
? Volatility in the raw material prices: Cotton yarn and fabric accounts for
approximately, 70% of the total raw material cost. Currently, the Company is able to pass
on any rise in the prices of raw material to the consumer. Any inability to pass on the
impact of rise in raw material prices may negatively impact the estimated margin of the
Company, resulting in lower earnings.
? Entry of Foreign Players: With markets being global and digital, it is
becoming easier for foreign brands to penetrate into Indian domestic markets, via direct
and indirect strategic tie-ups, largely, in the premium and super-premium segments, thus,
creating stiff competition for the existing players in the organized sector.
? Changing customer’s behavior and spending capacity: Rapid change in the
customers’ preferences, from one brand to another, makes it very difficult for a
Company to establish a permanent connect and in gaining brand loyalty, consequently,
leading to loss of business to its competitors. Furthermore, where, the improving Indian
demographics have given credence to the Indian consumption story, any downward deviation
in economic growth, will impact the consumers’ discretionary spends, thereby,
negatively impacting the earning potential of the Company
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
Your Company continues to prioritize sustainable control processes that are integral
part of organization culture. It has built strong Internal Controls Environment and Risk
Assessment / Management systems. These systems enable Company to comply with Internal
Company policies, procedures, standard guidelines and local laws to help protect
Company’s assets and confidential information against financial losses and
unauthorized use. The robust controls environment at your Company is efficiently managed
through:
? Controls Self-Assessments (CSAs) are performed during July to December period of
every Financial Year across business processes. The purpose of this thorough exercise is
to review and evaluate process compliances against standard control objective, activities
and attributes. This enables the Company to proactively identify control weaknesses and
initiate actions to sustainably mitigate them,
? Governance Board comprises of the Managing Director, Chief Financial Officer, Chief
Human Resource Officer, Supply Chain Leader, General Counsel and Sales leader. The Board
assesses and reviews enterprise level risks and works with process owners and functional
managers to ensure that corrective action is taken, and risk is mitigated as appropriate.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The Company has achieved a turnover of Rs 12,75,91,125 (Rupees Twelve Crore Seventy
Five Lakh Ninety One Thousand One Hundred and Twenty Five Only) during the year. The net
profit of the Company for the year is Rs. 823,907 as against a net loss of Rs. (28,68,040)
in the previous year.
HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS:
Over the last few years, your Company has brought with it the need for skills and
knowledge to successfully meet the requirements of different charters. Also, with the
added emphasis placed on the safe operation. The training given not only covers knowledge
and technical skills but also lays stress on behavioral areas, like creating a safety
mindset, and attitude building. The Company also seeks the views of its employees for
improving human relations through employee satisfaction surveys. The Company continues to
have cordial relations with the employees. It recognizes the potential and performance of
its employees, provides challenges and opportunities. It endeavors to upgrade knowledge,
attitude and skill of the employees. The labour welfare activities are organized by the
Company as an ongoing process. The Company has manpower strength of approximately 30
employees we have established key processes like Stewardship and Governance Process, POSH
awareness and always doing the right thing. In order to keep the workforce highly engaged
& motivated we follow the best-in-class recruitment practices, innovation and
digitization, development of employee skills and capabilities, celebrating the key
milestones of our employees and employee recognition
DISCLOSURE OF ACCOUNTING TREATMENT:
During the year under review the Company has been adopted prescribed Accounting
Standards issued by the Institute of Chartered Accountants of India as applicable to the
Company in the preparation of Financial Statements.
CAUTIONARY STATEMENT
Statements in the Management Discussion and Analysis describing the Companys
objectives and expectations may be "forward-looking statement" 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 economic conditions affecting demand/supply and price
conditions in the domestic and overseas markets in which the Company operates, changes in
the Government regulations, tax laws and other statutes and other incidental factors.
CONCLUSION:
Your Companys primary focus will be to grow volumes across markets. Gravity (India)
will address each market depending on local conditions and consumer trends. While were
cognize that the global environment is extremely challenging there are new opportunities
merging to meet consumer needs. Gravity India will focus on profit able growth through a
mix of brand led growth, innovation, efficient cost management and successfully scaling up
new businesses.
|
For and on behalf of the Board of Directors |
|
Varun Rasiklal Thakkar |
| Place: Mumbai |
Chairman & Managing Director |
| Date: 02, August, 2022 |
DIN: 00894145 |
+91-9892691696
