himatsingka seide ltd share price Management discussions

GLOBAL ECONOMIC OVERVIEW

The worlds economies witnessed a sharp recovery in 2021 after a turbulent 2020, on account of enhanced vaccination coverage to _ght COVID-19 and continued fiscal and monetary stimuli across countries. Due to increase in economic activities across the geographies in 2021, the global economy grew by 6.1% in 2021 as compared to a contraction of 3.3% in 2020. Both Advanced and Emerging Market & Developing Economies registered growth in 2021.

Advanced Economies witnessed growth of 5.2% against contraction of 4.5%. The United States economy grew by 5.7% compared to contraction of 3.4% in 2020, the Euro Areas GDP recovery was better than that of the United States with economy growing 5.4% compared to contraction of 6.3% in 2020. Emerging Markets & Developing Economies grew faster than the Advanced Economies in 2021. Emerging Market & Developing

Economies grew by 6.0% as compared to a contraction of 2.0% in 2020. In Emerging Market & Developing Economies, India was the fastest growing economy registering growth of 8.7% compared to a contraction of 6.6% in 2020.

Growth momentum of 2021 was weakened from the start of 2022 due to new strains of the COVID-19 virus, unprecedented surge in inflation and pandemic-induced supply-demand imbalances. The situation was further worsened with the ongoing Russia-Ukraine conflict, which caused sharp escalation and volatility in agricultural, fuel and crude-linked commodity prices. This led central banks such as the US Federal Reserve, European Central Bank and the Bank of England to tightened their monetary policies. As a result, IMF has reduced the growth forecast for 2022 to 3.2% compared to growth of 6.1% in 2021.

As a result of increase in commodity prices, subsiding pandemic restrictions and a strong recovery in demand on account economic stimulus packages, Global merchandize trade increased 26.3% in 2021 to USD 22.28 trillion over 2020 and 17.3% as compared to the pre-pandemic level of 2019. The similar trend was witnessed in trade of services, which resulted in value of global trade reaching a record level of USD 28.5 trillion in 2021, an increase of over 25% over 2020 and 13% as compared to pre-pandemic levels of 2019.

As seen the chart below, the growth momentum of trade in goods and trade in services attained in the second half of 2020 continued in 2021, with stronger increases during the first half of the year and softer growth during the second half of the year.

On account of the prevailing Russia-Ukraine war and persistent high inflation, WTO has reduced its earlier forecast of 4.7% in global merchandize trade volume in 2022 to 3.0%. Additionally, WTO expects global trade to get adversely impacted due to frequent lockdowns imposed in China in order to curtail the spread of COVID-19. This is expected to disrupt seaborne trade and lead to renewed shortages of manufacturing inputs and higher inflation.

INDIAN ECONOMY OVERVIEW

The challenges of FY21 continued in FY22 for the Indian economy, marked by heightened uncertainty and volatility due to the COVID pandemic and inflation. The year for the country began with the second wave of the pandemic, which was more devastating than the first wave of COVID-19. Although the duration of the second was short compared to the first wave, it had a devastating socio-economic impact in the country. Economic activities recovered sharply post the second wave of pandemic and the economy attained pre-pandemic levels towards the end of the second quarter.

As the economy was recovering, the pandemic again hit the country, derailing growth momentum. As the economy was coming out of third wave, geopolitical tension between Russian and Ukraine sparked off a fresh round of uncertainty in the operating environment, which lead to significant increase in inflation of commodities.

Despite such a challenging environment, the Indian economy grew by 8.9%, albeit on a low base, on the back of government initiatives such as an effective and focused vaccination program, targeted localized restrictions during peak caseloads, support to economically weak sections of society and assistance to sectors most impacted by the pandemic.

The recovery was, however, uneven with different sectors of the economy and income classes experiencing varying degrees of impact. The exports sector did better than that the domestically focused sectors. Indias merchandize exports grew 45% to a record high of USD 422 billion during the year. Foreign currency reserves also remained robust, despite increase in imports with rising levels of activity. Tax collections remained buoyant during the year with record GST collections on the back of pick-up in economic activity, enhanced compliance and efficient administration. On the other hand, private consumption remained subdued and below its pre-pandemic growth path, rural demand witnessed a marked slowdown and private capital expenditure did not see any material improvement, although signs of an incipient revival emerged in certain sectors.

Unprecedented rise in commodity and crude oil prices led to persistently sticky and elevated inflation with March 2022 CPI hitting a 17-month high of 6.95%, resetting inflation expectations and the interest rate trajectory going forward. Up until January 2022, near-term prospects for the Indian economy seemed extremely promising – with all sectors of the economy, including the contact intensive service sector, having made steady recovery. However, sustained inflationary headwinds and outbreak of the Russia-Ukraine conflict leading to extended global disruptions and spiraling of commodity prices have led to downward revisions to the growth forecast for 2022.

As per IMF, although Indias GDP is forecasted to expand at lower rate in FY23 at 7.4% compared to FY22, it will be the second fastest growing economy in FY23 after Saudi Arabia. Government capital expenditure, favorable monsoon and anticipated pick-up in the private capex cycle are expected to drive growth in FY23. However, continued geopolitical tensions, surging inflationary pressures and aggressive interest rate hikes pose key downside risks for the year ahead.

On the merchandize trade front, Indias total merchandize exports during 2021-22 increased by 44.9% and stood at USD 422.0 billion compared to USD 291.2 billion in 2020-21. Major export destinations during 2021-22 were North America with a 20.0% share of total exports followed by the European Union Countries with a share of 15.4%. Total merchandize imports during fiscal 2022 stood at USD 613.1 billion, an increase of 55.8% from USD 393.6 billion in fiscal 2021. Due to higher growth in imports compared to exports, trade deficit increased 86.5% from 102.4 billion to 191.0 billion in FY22.

Infiation

FY22 witnessed a secular increase in inflation throughout the year and across commodities. The Wholesale Price Index (WPI) inflation index increased to 148.9 in March 2022 compared to 132.0 in April, 2021. The increase in inflation was due to global supply chain disruptions, container shortages and congestion in ports, which led to supply-demand imbalances and increasing commodity prices. Persistently elevated and sticky inflation has emerged as a key concern not only in India but globally. As per IMF, global inflation in 2022 is projected at 7.4%, the highest in 26 years.

GLOBAL TEXTILE INDUSTRY

The global textile and apparel trade has grown at a CAGR of 3% since 2010 to reach USD 839 billion in 2019 before witnessing decline in 2020, when global trade declined to USD 774 billion due to the pandemic. However, global trade has regained its growth trajectory and is expected to reach USD 1,000 billion by 2025, growing at a CAGR of 3%. In 2020, apparel continued to dominate T&A trade with a 54% share in the overall trade value, followed by fabrics with a share of 16%. The share of Home Textiles in global T&A trade stood at approximately 6% and is expected to remain range bound as global textile and apparel trade grows to projected USD 1 trillion mark by 2025.

China continues to be the dominant textile and apparel producer and exporter. Its share in global T&A trade has remained at approximately 38% during 2020. India was the sixth largest supplier of T&A globally in 2020. Vietnam and Germany, stood at 2nd and 3rd position, respectively, with USD 40.4 billion and USD 36.7 billion of exports due to dominate position in exports of apparels. Bangladesh slipped to 4th position with total exports of USD 35.7 billion and apparels contributing 88% to total exports.

Table 2: Largest Exporters of Textile & Apparel (2020) US$ Billion

Country	Textile Exports	Apparel Exports	Total Exports	Share (%)
China	161.4	132.5	293.9	38
Vietnam	10.1	30.3	40.4	5
Germany	14.2	22.6	36.7	5
Bangladesh	4.3	31.5	35.7	5
Italy	10.0	20.2	30.4	4
India	17.4	12.2	29.6	4
Turkey	12.1	15.0	27.0	3
USA	18.7	4.1	22.8	3
The Netherlands	5.2	11.1	16.2	2
Spain	4.2	11.6	15.8	2
ROW	101.2	124.5	225.8	29
Total	358.6	415.8	774.4

China was the leading exporter of fabrics (both knitted and woven), apparel and home textiles in 2020. India was the second largest exporter of home textile goods in 2020. In the apparel category, Bangladesh & Vietnam are competing closely as 2nd & 3rd largest exporters.

Indian Textile Industry

The Indian textile industry continues to be an important contributor to the Indian economy. It is the second largest employment generator after agriculture as it provides direct employment to over 45 million people and indirect employment to approximately 60 million people in allied sectors. It contributes to over 2% of the GDP and 10% of export earnings. The size of Indias domestic textile and apparel market, which was USD 50 billion in FY11 grew to USD 106 billion in FY20 at a CAGR of 9% before declining to USD 80 billion in FY21 on account of COVID-19. The Growth has returned in FY22 and the industry is expected to reach USD 99 billion by end of FY22 and it is expected to grow to approximately USD 190 billion by FY26, at a CAGR of 17.7% between FY22 to FY26. The home textile segment is expected to grow at 12.9% during the same period. Apparel demand at US$72 billion, dominated the domestic market with a share close to 73% of the total textile and apparel market in India.

Overall textile and apparel exports from India during 2021–22 is estimated at over USD 40.00 billion as compared to USD 31.00 billion during 2020–21, an increase of over 28%. Opening of the global economy and vaccination drives across the global post the pandemic led to this significant growth. The export of cotton textiles was USD 17.2 billion with 39% share registering a growth of 54% and 67% during 2021–22 over FY21 and FY20, respectively. The Textile and Apparel exports from India is expected to grow at a CAGR of over 11.0% to USD 60 billion by 2025–26 from estimated USD 40 billion in 2021–22.

On the import front, Indias import of textile and apparel products are estimated to stand at approximately US$ 8.2 billion during 2021–22, an increase of 27% over 2020–21, due to higher demand as economic activity gained momentum post the lifting of lockdown after the first wave of pandemic. The imports of textile and apparel products have seen a CAGR of approximately 7% over the last 11 years (2010–11 to 2021–22) and is expected to grow at a CAGR of 10% over the next four years and reach USD 12 billion.

The Government of India took several steps to support the textile industry. The Government approved continuation of Rebate of State and Central Levies (RoSCTL) scheme up to March 2024 to boost export competitiveness of Indian apparel and made-ups. Secondly, India signed Free Trade Agreements (FTAs) with Australia and United Arab Emirates that are expected to offer zero-duty access of Indias exports of textile & apparels to these regions. The Government is also currently working on FTAs with Israel, Canada, the United Kingdom and the European Union, which

US Imports of Home Textile Products

For Himatsingka, The United States (The US) continued to be the largest market in FY22. Total US imports for cotton denominated bedding and bath products stood at USD 5.2 billion during 2021. This was 36.5% higher than the total imports for such products in 2020. The share of the above United States imports that vest with India, China and Pakistan stood at 86.8% during 2021 vs 86.3% during 2020.

The demand for home textile in the US witnessed sturdy growth in 2021 primarily driven by factors such as rising consumer spending on home renovation, which got a sharp boost during pandemic period as people were keen to make their homes look good. Additionally, the rise in health awareness of consumers and higher usage of these products during the pandemic period led to increase in demand. Imports from India increased will further provide impetus to the textile and apparel industry. Furthermore, Production Linked Incentive (PLI) Scheme for Textiles was announced with special focus at high value and expanding Man Made Fiber (MMF) and Technical Textiles segments of Textiles Value Chain.

Furthermore, to give some relief to textile and apparel manufacturers from increasing cotton prices, the government exempted customs duty and agriculture infrastructure and development cess (AIDC) on the import of cotton till October 31, 2022.

47.4%, while sourcing from China increased 20.9%, resulting in increased market share for India.

The United States continue to dominate the global market for soft home products. The US total market size for these products is approximately USD 70 billion in 2021 and the same is expected to grow at a CAGR range of 5–7 per cent during 2021–2026. The chart below demonstrates the percentage share of United States imports of cotton sheets, pillow cases, bedspreads, quilts and terry towels that India, China, Pakistan and the rest of the world enjoy. Indias dominance continued in 2021 followed by China and Pakistan. Indias share in total imports of these products increased from 40% in 2020 to 44% in 2021. Chinas share continued to fall even in 2021 with companies in the US sourcing from countries other than China.

Over the years, India has surpassed China to become the largest supplier of cotton soft home products to the United States. While Indias supply of cotton soft home products to the United States stood at USD 1.24 billion in 2011, it now stands at USD 2.28 billion during 2021. This translates to a CAGR of 6.2% for

India as against a CAGR of 2.5% of the total imports by the US for these products since 2011. China, on the other hand, witnessed a CAGR decline of 1.0% over the same period. As a result, Indias contribution in US total imports of soft products has increased from 30.3% in 2010 to 43.5% in 2021.

EU Imports of Home Textile Products

EU-27 imports of cotton-based bed linen, terry and blankets products is comparable to the US. In 2021, EU-27 imported cotton-based bed linen, terry and blankets worth Euro 2.37 billion compared to Euro 2.01 in 2020. Import of these products have grown at a CAGR of 2.7% over the last 5 years and 2.2% over the last 10 years. India is the third largest exporter of these goods to EU-27 with a Euro 246 million share and has grown its share to this region at a CAGR of 1.1% over the last 10 years and at a CAGR of 4.2% over the last five years.

The top three supplier countries to EU-27 region constitute approximately 80% of their total imports of cotton soft home products (bed linen, terry towels and blankets). In 2021, Indias share in the total imports increased to 10.4% compared to 9.6% in 2020, retaining the position of the third largest supplier of these products to EU-27.

Pakistan continues to hold the dominant share in EU-27 imports for cotton based soft home products, this is primarily on account of duty advantage that it enjoys vis-?-vis India.

United Kingdom Imports of Textile Products

In 2021, the United Kingdom (UK) imported total textile goods (excluding Clothing) worth GBP 5.87 billion compared to GBP 8.58 billion in 2020. In 2020, their import was significantly higher due to import of medical masks and PPE kits to combat COVID-19 pandemic and majority of these imports were from China. Import of textile products have grown at a

CAGR of 2.5% over the last 10 years and 2.1% over the last 5 years. In 2021, India became the fifth largest exporter of these goods to UK with a GBP 446 million share compared to sixth largest in 2020 with share of GBP 332 million. China continues to be the largest supplier of these products to UK with GBP 1.4 billion.

GLOBAL COTTON SCENARIO

Cotton is amongst most profitable non-food crop grown across the globe and the most extensively used _bers in the global textile space with over 50% of the textile manufactured using cotton. Production of cotton provides employment to over 7% of all the labors in developing countries. Cotton is grown in over 100 countries but the main concentration is limited to few countries. After witnessing growth in 2019–20, world cotton production decreased in 2020–21 to 24.3 million metric tonnes, a decline of 5.9%, largely driven by declines in yield and lower area harvest in major cotton growing areas.

During 2020–21, the United States saw a 26.6% decrease with significantly lower area harvested, especially in Texas. Pakistan production fell 27.4% to 4.5 million bales, owed to the lowest yields in nearly 40 years. However, the decline in production by major cotton growing areas was partly offset by China and Australia. In 2021–22, the global cotton production is expected to rise 4.4% to about 25.3 million metric tonnes with rising acreage and improving yields among major cotton producing countries.

In 2020–21, India and China contributed approximately 51% of global cotton output. China regained the position of largest cotton producer in the world with a production output of 6.4 million metric tonnes, an increase of 8.3% over 2019–20. In 2020–21, Indias share in global cotton production increased to 24.8% as compared to 23.8% in 2019–20, while Chinas share increased to 26.5% from 22.7%. Cotton production in US declined 26.6% after witnessing an increase of 8.4% in 2019–20. Principal causes of the reduction in U.S. stocks in 2020–21 were a smaller harvest and strong export demand.

2021–22 is expected to see increase in share of the US and other non-major cotton producing countries. Production in India and China are expected to be lower in 2021–22 compared to 2020–21 due to projected reduction in both area and yield.

The table on the right shows Indias cotton production vis-?-vis China, the United States and Pakistan over the last 5 years and estimates for 2021–22.

Global & Indian Cotton Prices

Global and domestic cotton prices continued to increase in FY22 and reached a 11-year high on account of continued strong demand and reduction in cotton production by the major producers. During 2020–21 (Oct–Sep) crop period, the global cotton production declined 7.1% and on other hand global consumption increased 17.8% creating supply-demand mismatch. 2021–22 crop year started with lower inventory compared to previous crop year, which kept cotton prices at elevated levels even during the second half of fiscal 2022.

The table below gives a snapshot of the worlds cotton production over the last 5 years and projection for one year.

Table 3: World Cotton Balance Sheet

World Cotton Balance Sheet

Million Metric Tonnes	2017/18		2018/19		2019/20		2020/21		2021/22		2022/23 (P)
Beginning Stocks	17.5		17.6		17.7		21.3		19.2		18.3
Production	27.0		25.7		26.1		24.3		25.3		26.1
Supply	44.5		43.3		43.8		45.5		44.5		44.4
Consumption	26.7		26.2		22.5		26.5		26.1		26.1
Ending Stocks	17.6		17.7		21.3		19.2		18.3		18.3
Stocks/Use Ratio	65.9%		67.5%		94.5%		72.4%		70.2%		70.2%
China Balance Sheet
Million Metric Tonnes		2017/18		2018/19		2019/20		2020/21		2021/22		2022/23 (P)
Beginning Stocks		10.0		8.2		7.8		8.0		8.5		8.1
Production		6.0		6.0		5.9		6.4		5.9		6.0
Imports		1.2		2.1		1.6		2.8		1.8		2.2
Supply		7.1		8.1		7.5		9.2		7.7		8.2
Consumption		8.9		8.6		7.2		8.7		8.1		8.2
Exports		0		0		0		0		0		0.0
Demand		8.9		8.6		7.2		8.7		8.1		8.2
Ending Stocks		8.2		7.8		8.0		8.5		8.1		8.1
Stocks/Use Ratio		92.0%		89.9%		111.8%		98.1%		101.0%		99.5%

India Balance Sheet
Million Metric Tonnes	2017/18	2018/19	2019/20	2020/21	2021/22	2022/23(P)
Beginning Stocks	1.7	2.0	1.9	3.4	2.6	1.7
Production	6.3	5.7	6.2	6.0	5.3	6.0
Imports	0.4	0.4	0.5	0.2	0.2	0.4
Supply	6.7	6.1	6.7	6.2	5.6	6.4
Consumption	5.3	5.3	4.5	5.7	5.6	5.4
Exports	1.1	0.8	0.7	1.3	0.9	0.8
Demand	6.4	6.1	5.2	7.0	6.4	6.2
Ending Stocks	2.0	1.9	3.4	2.6	1.7	1.8
Stocks/Use Ratio	31.88%	30.92%	66.18%	37.08%	26.92%	29.40%

Our Risks & Opportunities

Himatsingka Seide Limited ("HSL/ The Company") believes in value protection and enhancement through Risk Management strategy.

HSL has a structured process and a balanced approach of identifying potential risks to the organization. The Company has a defined strategy for eliminating or mitigating the risks, as well as the mechanisms to effectively monitor and evaluate organizational Risks. The assessment of Enterprise Risk Management with a view to identify any new risks due to change in business model, external environment, Govt Regulations etc are carried out periodically.

Risk Factors	Risk	Mitigation
Customer Concentration	Dependence on few large customers / brands in North America and their ability to increase volumes.	HSL has exclusive license agreements with Brand owners and business is appropriately spread across licensed brands and own private labels.
		The Company is continuously focusing on opportunities in identifying new customers across new geographies.
Market Dynamics	Failure to anticipate and respond to changes in consumer preferences purchasing behavior and market trends.	The Company has an in-house development team working constantly with brands and studying product sensitivities in the market. In line with consumer preferences, the Company manufactures bed-linen / towels with increased demand in anti microbial / anti bacterial finishes.
	Risk of shift in consumer spending pattern leading to decreased sales; on account of high inventory holding by retailers and increase in inflation.	The company has already explored the E-commerce business and expecting to progress significantly in future.HSL is closely monitoring inflation situation in US market and inventory levels maintained by retailers. Production and shipping patterns are being altered accordingly.
Revenues	Risk of customers / brands rationalizing the sales price of products impacting overall earnings / revenue.	HSL has exclusive license agreement with Brand owners. Product rationalization is done in discussion with retailers without impacting the product feature and utility. Negotiations with brands are being carried out on continuous basis for price revisions due to increase in cotton prices.
Raw Materials	Dependency on foreign / single source of supply for raw materials leading to pricing pressures when considering alternatives during time of unavailability Adverse impact on margins on account of steady and continuous increase of Cotton procurement price.	The Company has longer dated agreements with vendors for supply of materials at fixed prices.
		Negotiations with brands are being carried out for price revisions due to increase in cotton prices. Successfully completed negotiations for few brands The Company is closely monitoring movement in cotton prices and corresponding pricing pressure and margin impact.
Logistics and Supply Chain	Non availability of adequate and self-sufficient supply chain and logistics.	Majority of exports are carried out by nominated forwarders. Company has entered agreement / fixed rate contracts with freight forwardersto ensure availability of containers and coordination with nominated forwarders of customers for other shipments on a continuous basis.
	Increase in shipping cost on account of global rise in ocean freight costs.	Appropriate measures have been put in place to monitor ocean freight costs and enforce adherence to agreed rates. Consequent impact on costs and margins are also being monitored.

Risk Factors	Risk	Mitigation
Regulatory	Non-compliance to statutory requirements and country specific regulations may lead to business sanctions, management indictments, compounding fees or penalties.	Company has in place mechanism to track and ensure regular and periodic compliances applicable to the Company.
Environmental, health and safety	Accidents involving significant injuries, loss of life or damages to equipment/facilities.	Regular trainings/adequate awareness on the safety requirements is done. Random audits / visits are performed by the OHC team.
	Risk of employees/workers being affected by Covid-19 and ability to meet obligations in view of Covid-19.	Use of PPE / masks, regular sanitization has been made mandatory. COVID-19 care center was established during the pandemic phase and continues to be in operation.
Liquidity and Credit Risk	Insufficient short-term liquidity and asset liability mismatch may affect the companys ability to meet short term and long-term obligations. Adverse impact on working capital requirements on account of increase in Repo rate by RBI and consequently hike in interest rates of lending institutions in India.	Rolling plans are prepared and reviewed. Company has a clear visibility for next 150 -180 days cash flow estimates. Company has in place a strategy of availing working capital loans from diversified bankers; continuous rebalancing of debt portfolios to avoid mismatch in short term/long term.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Companys internal control systems to mitigate material business risks ensure proper safeguarding of assets, maintaining proper accounting records and reliable financial information and is designed to provide reasonable assurance that all material misstatements, frauds or violations of laws and regulations will be prevented.

Independent External Assurance

An external independent firm carries out the internal audit of the Companys operations and reports its findings to the Audit Committee on a regular basis.

HUMAN RESOURCES

Human resources function anchors organization transformation within the company. Our Human Resources efforts are directed towards establishing progressive practices creating technology-led, engaged work environment. This has enabled us to attract, integrate, develop and retain the talent required for driving sustainable growth.

Learning & Development

The focus on value driven, competency based development differentiates us as market leader in attracting and retaining top talent. Our continued focus on enhancing employee capabilities to deliver a best-in-class working environment has enabled us to maintain a collaborative, transparent and participative organization culture, and rewards merit and sustained high performance.

Internal Assurance

Internal Audit also evaluates the functioning and quality of internal controls and provides assurance of its adequacy and effectiveness through periodic reporting.

Governance Structures & Policies

The combination of policies and processes cover and mitigates the various risks associated with the Companys business. The Company periodically reviews the effectiveness of risk management framework and addresses the emerging challenges that arise in a dynamic business environment.

Diversity & Quality in the Talent Pool

The Company engages over 10,000 people across its businesses and continues to invest in and nurture its talent pool in order to align with the broader vision of the Company. It ensures diversity in workforce by promoting employees to maintain their identity, while adhering to the Companys values and behaviour. Concentrated effort on gender, age and regional diversity has been initiated through workshops and training programs.

Human Resource Transformation

Our HR processes and systems have evolved with the digital global environment. Technology transformation is integrated in our Human Resources processes to provide an agile, high quality work experience.

Analysis of Consolidated Financials

CONSOLIDATED INCOME STATEMENT SUMMARY — FY 22 ( Lacs)

Particulars		Consolidated
	2021–22	2020–21	Change %
Revenue from Operations	3,18,395	2,25,832	41.0%
Other Income	1,962	1,421	38.1%
Total Revenue	3,20,357	2,27,253	41.0%
Cost of Materials Consumed	1,64,413	1,23,764	32.8%
As a % of Revenue	51.64%	54.80%	-5.8%
Employee Benefit Expenses	32,719	25,933	26.2%
Other Expenses	68,233	47,239	44.4%
EBITDA	54,992	30,317	81.4%
Depreciation	15,842	15,245	3.9%
EBIT	39,150	15,072	159.8%
Interest and Finance Cost	18,117	17,720	2.2%
Profit Before Tax	21,033	-2,648	894.1%
Profit After Tax	14,082	-5,335	363.9%

Revenue Analysis:

? Consolidated Total Revenues for the year increased by 41.0 % and stood at _ 3,20,357 Iacs. This growth was primarily driven on account of volumes across categories and a robust performance from our global portfolio of brands. ? Revenues from brands for FY 22 stood at _ 2,26,129 lacs versus _ 1,79,829 lacs during FY21.

Expenditure Analysis:

? The cost of materials consumed stood at _ 1,64,413 Iacs during the year. Material costs as a percentage of revenue from operations decreased from 54.8 % to 51.64%.

? Employee benefit expenses stood at _ 32,719 Iacs as compared to _ 25,933 Iacs and as a percentage of total revenue, employee benefit expense stood at 10.21% in FY22 as compared to 11.41% in FY21. ? Total operating expenses stood at _ 2,65,365 lacs in FY 22 vs _ 1,96,936 lacs during the previous year. ? Interest and finance charges increased by 2.2% to _ 18,117 Iacs in FY 22 as compared to _ 17,720 lacs in FY 21.

Profitability Analysis:

? The consolidated EBITDA increased by 81.4% to _ 54,992 Iacs in FY22 versus _ 30,317 Iacs in FY21. The consolidated EBITDA margins stood at 17.2% in FY 22 versus 13.3% during the previous year. ? The consolidated EBIT increased by 159.8% to _ 39,150 lacs versus _ 15,072 lacs during the previous year. The consolidated EBIT margins stood at 12.2% versus 6.6% during the previous year. ? The consolidated Profit after tax for the year stood at profit of _ 14,082 Iacs versus loss of _ 5,335 lacs during the previous year.

CONSOLIDATED BALANCE SHEET

The analysis of our consolidated Balance Sheet as on 31st March 2022 is as below: ( Lacs)

Particulars	As at March 31, 2022	As at March 31, 2021
Property, Plant and Equipment *	2,81,484	2,93,301
Goodwill	48,415	47,334
Other Financial Assets	21,701	17,380
Deferred Tax Assets, (Net)	1,650	1,650
Non-Current Income Tax Assets (Net)	1,360	1,045
Other Current and Non-Current Assets	38,640	22,912
Inventories	1,13,125	79,548
Trade Receivables	39,946	33,151
Cash And Cash Equivalents^	18,042	14,438
Total Assets	5,64,363	5,10,759
Equity Share Capital	4,923	4,923
Other Equity	1,42,048	1,26,599
Total Borrowings	2,80,541	2,46,651
Current and Non-Current Provisions	3,445	2,972
Deferred Tax Liabilities (Net)	9,723	6,773
Current and Non-Current Other Liabilities	30,218	31,731
Trade Payables	70,826	60,959
Other Current and Non-Current Financial Liabilities	18,097	27,695
Current Income Tax Liabilities (Net)	4,542	2,456
Total Liabilities	5,64,363	5,10,759

* Includes CWIP, other intangible assets, right of use asset and assets held for sale ^ Includes Current Investments

Analysis of Assets

Property, plant and equipment including CWIP and intangible assets increased by _ 11,817 Iacs as a part of budgeted capital expenditure.

Goodwill decreased by _ 1,081 lacs to _ 48,415 Iacs on account of the depreciation of the Rupee against the US Dollar.

Cash and cash equivalents including current investments increased by 3,604 Iacs and stood at _ 18,042 lacs versus _ 14,438 lacs in the previous year.

Analysis of Equity and Liabilities

The Consolidated Net Worth of the Company increased from _ 131,522 lacs during FY 21 to _1,46,971 lacs in FY 22 mainly due to higher profits.

Total borrowings increased from _ 2,46,651 in FY 21 to _ 2,80,541 lacs in FY 22 due to additional borrowings and enhanced workings capital requirements across business.

Trade Payables stood at _ 70,826 lacs versus _ 60,959 lacs during the previous year.

KEY CONSOLIDATED FINANCIALS & RATIOS ( Lacs)

Particulars	As at March 31, 2022	As at March 31, 2021
Total Income	3,20,357	2,27,253
EBITDA	54,992	30,317
EBIT	39,150	15,072
Net Profit after Tax	14,082	-5,335
Net Worth	1,46,971	1,31,522
Net Debt	2,73,565	2,44,870
Net Profit Margin	4.4%	-2.3%
Operating Profit Margin	17.2%	13.3%
Leverage Ratios
Net Debt/Equity (Times)	1.86	1.86
Interest Coverage Ratio (Times)	2.16	0.85
Capital Efficiency Ratios
Return on Equity (ROE)	10.1%	-4.0%
Return on Capital Employed (ROCE)	9.4%	3.7%
Working Capital Ratios
Inventory Days	110	152
Receivable Days	42	36
Payable Days	76	79

Boards Report

Your Directors are pleased to present the Thirty Seventh Annual Report on the operations and performance of your Company, together with Audited Financial Statements and Auditors Report for the year ended March 31, 2022.

_. FINANCIAL HIGHLIGHTS

The financial highlights for the year under review are given below: (Rs. in Lacs)

Particulars		Standalone			Consolidated
	2021-22	2020-21	Change %	2021-22	2020-21	Change %
Revenue from Operations	2,85,898	168,191	69.98	3,18,395	225,832	40.99
Other Income	1,994	2,805	(28.91)	1,962	1,421	38.07
Total Revenue	2,87,892	170,996	68.36	3,20,357	227,253	40.97
EBITDA	48,455	33,412	45.02	54,992	30,317	81.39
EBITDA Margin (%)	16.95%	19.87%	(14.68)	17.27%	13.42%	28.66
EBIT	37,070	22,525	64.57	39,150	15,072	159.75
Profit before tax	22,384	8133	175.22	21,033	(2,648)	(894.30)
Tax Expense	6,951	2,757	152.12	6,951	2,686	158.79
Profit after tax	15,433	5375	187.13	14,082	(5,335)	(363.96)

_. BUSINESS HIGHLIGHTS

Some key highlights of FY22 are as follows:

• The Consolidated Total Revenue for Financial Year 2021-22 increased by 40.97% and stood at an all time high of Rs 320,357 lacs and the Consolidated EBITDA increased by 81.39% and stood at Rs 54,992 lacs.

• During the fiscal the demand for the Companys products continued to be robust and helped to cross the Rs. 3200 Crores mark in consolidated total revenues. However, the operating profitability was adversely impacted during the fiscal on the back of unprecedented levels of raw material costs, energy costs and supply chain cost. As a result the EBIDTA margins were muted in FY 2022.

• In view of the current demand and inflation environment, the organic capital expenditure to debottleneck the Sheeting and Terry Towel plants has been deferred for additional 6 months till H2 FY23 and shall be undertaken once demand and other parameters stabilize.

• The current fiscal also saw the second and third waves of Covid-19 pandemic and the continuing Covid protocols ensured that the operations at the plants were not impacted.

• During FY 22, the revenue from brands stood at _ 226,129 lacs compared to _ 179,829 lacs in FY 21.

_. CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of Business carried out by the Company during the period under review.

3. SHARE CAPITAL

The Company during the period under review has not issued and/or allotted any shares with/ without differential voting rights as per Section 43 of Companies Act, 2013 read with Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014. The Authorized Share Capital of the Company is _ 67,00,00,000 divided into 13,40,00,000 Equity Shares of _ 5 /- each and the Paid-up Capital of the Company is _ 49,22,85,800/- divided into 9,84,57,160 Equity Shares of _ 5 each.

_. DIVIDEND

The Board has recommended a dividend of 10% (_ 0.5 per equity share) for the financial year ended March 31, 2022, subject to approval by the shareholders at the ensuing Annual General Meeting.

–. TRANSFER TO RESERVES

During the year the Company has not transferred any amount to Reserves.

_. SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES AND CHANGES THEREON

As on March 31, 2022, the Company had the following subsidiaries and Joint Ventures:

Subsidiaries

• Himatsingka Wovens Private Limited, - (Wholly Owned Subsidiary)

• Himatsingka Holdings NA Inc, - (Wholly Owned Subsidiary)

• Himatsingka America Inc., (Step down Wholly Owned Subsidiary)

Joint Venture

• Twill & Oxford LLC*

*Twill & Oxford LLC, ("T&O") Joint Venture Company based out of Dubai has filed for voluntary liquidation and is currently undergoing liquidation under the laws of Dubai.

Consolidated Financial Statements

As required under section 129(3) of the Ccompanies Act, 2013 the Company has prepared consolidated financial statements which form a part of the Annual Report. The consolidated financial statements presented by the Company include the financial results of its subsidiary companies. Further, a statement containing the salient features of the financial statements of its subsidiaries in form AOC-1 is annexed to this report as Annexure 1.

Pursuant to section 136 of the Companies Act, 2013, the Annual Report of your Company containing inter alia financial statements including consolidated financial statements and financial statements of the subsidiaries are available on the Companys website - https:// www.himatsingka.com/investors/financial-reports

_. ANNUAL RETURN

As required under the Companies Act, 2013, the draft of the Annual Return for the year 2022 is available on the website of the company - https://www.himatsingka.com/investors/financial-reports?tab=annualfireportfitab

. PUBLIC DEPOSITS

The Company has not accepted any deposits from the public during the year as per the provisions of the Companies Act 2013.

BOARD OF DIRECTORS AND COMMITTEES

Composition of Board and changes thereto

As on March 31, 2022, the Board of the Company comprised of 7 (Seven) Directors out of which 4 (Four) were Independent Directors including one Independent Woman Director, 1 (One) Non-Executive Non-Independent Director, and 2 (Two) were Executive Directors both of whom are Promoter Executive Directors. During the year under review, Ms. Manjiri Bhalerao, ceased to be the Nominee Director of the company by the virtue of withdrawal of Nomination by EXIM Bank with the effect from April 30, 2021.

The designation of Mr. V. Vasudevan (DIN: 07521742) was changed from Whole Time Director to Non-Executive Director of the Company effective May 29, 2021 and consequently he ceased to be a KMP of the Company.

Additionally, Mrs. Sangeeta Kulkarni (DIN: 01690333) resigned as an Independent Director due to pre-occupation with her own business and paucity of time and ceased to be a Director of the Company w.e.f. August 30, 2022.

Board Meetings

The Board met 5 (Five) times during the year under review and the intervening gap between the meetings was within the period prescribed under the Companies Act 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). The details of the meetings and attendance thereof are provided in the Corporate Governance Report forming part of the Annual Report.

Board Committees

The details pertaining to the composition of Board Committees are included in the Corporate Governance Report which is part of the Annual Report.

The details of the Composition of CSR Committee, the CSR Policy and the CSR spending have been elaborated in the Annexure-2 to this report.

Re-appointment of Director retiring by rotation

In accordance with the provisions of the Companies Act, 2013, and Articles of Association of the Company, Mr. V. Vasudevan, Non-Executive Director, (DIN: 07521742), retires by rotation and being eligible, offers himself for re-appointment. His re-appointment will be considered at the ensuing Annual General Meeting for seeking approval of shareholders.

Declaration by Independent Directors

The Company has received from each of its Independent Directors, the declaration as stipulated under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of Listing Regulations, confirming that the Director meets the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Regulation 16(b) of Listing Regulations. The Independent Directors have also declared compliance with Rule 6(1) and 6(2) of Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019.

Directors Responsibility Statement

As required by the provisions of Section 134(3)(c) of the Companies Act, 2013, we the Directors of Himatsingka Seide Limited, confirm the following: a) in the preparation of the Annual Financial Statements for the year ended March 31, 2022, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; b) the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2021-22 and of the profit of the Company for that period; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Annual Financial Statements have been prepared on a Going Concern basis; e) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively; and f) the Directors have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively.

Key Managerial Personnel (KMP)

During the year under review, the designation of Mr. V. Vasudevan (DIN: 07521742) was changed from Whole Time Director to Non-Executive Director of the Company effective May 29, 2021 and consequently he ceased to be a KMP of the Company. There was no other change in the Key Managerial Personnel during the year under review.

Board Performance Evaluation

The Company has, during the year, conducted an evaluation of the Board as a whole, its Committees and the individual Directors including the Independent Directors. The evaluation was carried out through different evaluation forms which covered among others the evaluation of the composition of the Board/committee, its effectiveness, activities, governance, and with respect to the Chairman and the individual Directors, their participation, integrity, independence, knowledge, impact and influence on the Board. The Independent Directors of the Company also convened a separate meeting and evaluated the performance of the Board, the Non-Independent Directors and the Chairman.

AUDITORS AND AUDITORS REPORTS a) Statutory Audit

The report of Statutory Auditors M/s. BSR and Co., LLP, Chartered Accountants, for F.Y-2021-22 (appearing elsewhere in the Annual Report) does not have any qualification, reservation or adverse remarks. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed thereafter, M/s. BSR and Co., LLP, Chartered Accountants, were appointed as Statutory Auditors of the Company and are to hold office until the conclusion of the 37^th Annual General Meeting of the Company. The Board at their meeting held on August 30, 2022, on the recommendation of the Audit Committee, has recommended to the members the appointment of M/s MSKA & Associates, Chartered Accountants, (FRN: 105047W), a Member Firm of BDO International, as the Statutory Auditors of the Company for a term of five years and their appointment is subject to approval by the members at the ensuing 37^th AGM.

M/s MSKA & Associates, Chartered Accountants, (FRN: 105047W), have consented to the said appointment, and confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act. They have further confirmed that they are not disqualified to be appointed/reappointed as statutory auditor in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

b) Secretarial Audit

The Company has appointed Mr. Vivek Bhat, Company Secretary in Practice, Bengaluru, to conduct the secretarial audit as required under Section 204 of the Companies Act, 2013. The report is appended as Annexure 3 to this report.

In the abovementioned report, Mr. Vivek Bhat has made the following comment:

 

"A _ne was levied by BSE Limited and National Stock Exchange of India Limited in respect of one day short notice for a Board Meeting under Regulation 29(2)/(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, on the Company. The _ne has been duly paid."

c) Secretarial Compliance Report

The Company has appointed Mr. Vivek Bhat for issuing Annual Secretarial Compliance Report under Regulation 24A of Listing Regulations which is appended as Annexure 4 to the Boards Report. In the abovementioned report, Mr. Vivek Bhat has made the following comment:

 

"There were no actions taken against the Company/ its promoters/ directors/ material subsidiaries either by SEBI or by Stock Exchanges (including under the Standard Operating Procedures issued by SEBI through various circulars) under the aforesaid Acts/ Regulations and circulars/ guidelines issued there under except for the _ne levied by BSE Limited and National Stock Exchange of India Limited in respect of one day short notice for a Board Meeting under Regulation 29(2)/(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, on the Company. The _ne has been duly paid."

Boards Response

The _ne levied by BSE Limited and National Stock Exchange of India Limited on the Company was in respect of one day short notice pertaining to an enabling resolution for issue of securities, proposed to be taken up at a Board Meeting. The _ne has been duly paid. The Company has not acted upon the abovesaid enabling resolution.

d) Cost Auditors

Since the Companys export revenue in foreign exchange, for the financial year 2021-22 was greater than 75% (seventy five percent) of the total revenue of the Company, the Company falls within the exemption specified in Clause 4(3) of The Companies (Cost Records and Audit) Rules, 2014. In view of this, there is no requirement to furnish cost audit of cost records of the Company for its units at Hassan and Doddaballapur.

e) Internal Auditors

Pursuant to the provisions of Section 138 of the Companies Act, 2013, the Board of Directors of the Company have reappointed Grant Thornton India LLP for carrying out the Internal Audit of the Company for the financial year 2022-23. The audit committee of the Board of Directors in consultation with the Internal Auditor formulates the scope, functioning, periodicity and methodology for conducting the internal audit.

f) Internal Financial Controls (IFC)

The Board reviews the effectiveness of controls as part of the IFC framework. There are regular scheduled reviews that covers controls, process level controls, fraud risk controls and the Information Technology environment. Based on this evaluation, no significant events have been noticed during the year that have materially affected, or are reasonably likely to materially affect, IFC of the Company. The management has also come to a conclusion that the IFC and other financial reporting was effective during the year and is adequate considering the business operations of the Company. The Statutory Auditors of the Company has audited the IFC over Financial Reporting and their Audit Report is annexed as Annexure A to the Independent Auditors Report under Standalone Financial Statements and Consolidated Financial Statements.

g) Fraud Reporting

There have been no instances of fraud reported by the Auditors under section 143(12) of the Companies Act 2013 and Rules framed thereunder either to the Company or to the Central Government.

PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES MADE

The particulars of loans made, guarantees given, investments made and securities provided as per the provisions of Section 186 of the Companies Act, 2013 and the relevant rules made thereunder are given in the notes to the standalone financial statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into by the Company with its related parties are at arms length and in the ordinary course of business. However, the list of material related party transactions as per the Companys policy on related party transactions, as required under rule 8(2) of Companies (Accounts) Rules, 2014, is annexed to the Boards Report as Annexure 5.

_3. SIGNIFICANT OR MATERIAL ORDERS PASSED BY REGULATORS/ COURTS

There are no significant or material orders passed by Regulators/ Courts during the year under review.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE

A statement containing the necessary information on Conservation of energy, Technology absorption and Foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed to this report as Annexure-6.

_–. RISK MANAGEMENT

The Company has developed and implemented a comprehensive Risk Management Policy and framework to counter and mitigate the various risks encountered by the Company. In terms of the provisions of Section 134 of the Companies Act, 2013 a Risk Management Report is set out elsewhere in this Annual Report.

REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL a) The remuneration of Directors is given herein below: (Amounts Rupees in Lacs)

Director	DIN	Sitting fees	Salaries and perquisites	Profit linked Commission	Total	Ratio to Median remuneration of employees	Percentage (%) increase/ (Decrease) over previous year
Mr. D K Himatsingka	00139516	Nil	219.27	260.00	479.27	242.26:1	237.04
Mr. Shrikant Himatsingka	00122103	Nil	234.14	Nil	234.14	118.35:1	64.65
Mr. V. Vasudevan*	07521742	3.50	27.80	Nil	31.30	77.79:1	(76.15)
Mr. Rajiv Khaitan	00071487	7.00	Nil	10.00	17.00	8.59:1	11.48
Ms. Sangeeta Kulkarni#	01690333	4.50	Nil	10.00	14.50	7.33:1	5.45
Mr. Pradeep Bhargava	00525234	8.00	Nil	10.00	18.00	9.10:1	15.16
Mr. Raja Venkataraman	00669376	6.50	Nil	10.00	16.50	15.82:1	10.89

* Change in designation of Mr. V. Vasudevan and terms of appointment w.e.f. May 29, 2021.

** EXIM Bank Withdrew the nomination of Ms Manjiri Bhalerao as Nominee Director w.e.f. April 30, 2021. # Ceased as Director of the Company with effect from August 30, 2022.

In the remuneration mentioned above, the sitting fees, salaries and perquisites form the fixed component of the total remuneration and the commission is a variable component linked to the performance of the Company. b) Percentage Increase/ Decrease in the Remuneration of the Key Managerial Personnel (other than Directors mentioned above)

Key Managerial Personnel	Designation	Percentage Increase/(Decrease) in the remuneration, if any
Mr. K P Rangaraj	President - Finance and Group CFO	44.03
Mr. Sridhar Muthukrishnan	Company Secretary & Compliance Officer	44.36

c) The percentage increase in median remuneration of the employees is 16.90 % d) The number of permanent employees in the rolls of the Company is 8,687 e) The average increase in the salaries of managerial personnel during the year was 53.54% and the average increase in the salaries of employees other than managerial personnel was 11.78%. f) The variable component of remuneration were availed by the Executive Directors to the extent as below:

Director	% of variable component availed
Mr. D.K. Himatsingka	50%
Mr. Shrikant Himatsingka	Nil

g) During the year, there were no employees (including KMP) whose remuneration was higher than that of the highest paid director. h) It is hereby afirmed that the remuneration paid during the year is as per the Nomination and Remuneration Policy of the Company. i) Information as per rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: The Statement containing names of top ten employees in terms of remuneration drawn and particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 shall be provided to the shareholders upon a request made to the Company Secretary. Further, the Annual Report is being sent by email to the members excluding the aforesaid information in terms of Section 136 of the Act.

INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the applicable provisions of the Companies Act, 2013 read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after the completion of seven years. Further, according to the Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. During the year, the Company has transferred the unclaimed and unpaid dividend aggregating to Rs 1,023,003. Further, 21,311 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF Rules. Year-wise amounts of unpaid / unclaimed dividends lying in the unpaid account up to the year, and the corresponding shares, which are liable to be transferred are provided in the Shareholder Information section of Corporate Governance Report and are also available on our website - https://www.himatsingka.com/investors/shareholder-information?tab=dividendfitab

_ . INSURANCE

The Companys assets are subject to risks/ peril and are adequately insured. The Company has also taken a Directors & Officers Liability Policy to provide coverage against the liabilities arising on them. The Policy extends to all Directors and Officers of the Company and its Subsidiaries.

POLICIES a) Whistle Blower Mechanism

As a conscious and vigilant organization, Himatsingka Seide Limited believes in the conduct of the affairs of its constituents in a fair and transparent manner, by adopting the highest standards of professionalism, transparency and ethics.

In its endeavour to provide its employees a secure working environment, the Company has established a "Whistle Blower Policy" as required under the Companies Act, 2013 and Listing Regulations and the same is also available in the Companys website - https://www.himatsingka.com/investors/corporate-governance

The Company Secretary of the Company, has been designated as the Chief Compliance Officer under the policy and the employees can report any instance of unethical behaviour, fraud and/or violation of the Companys code of conduct or policy to the Chief Compliance Officer. The Company has put in place adequate measures for visibility of the whistle blower policy to employees and stakeholders at the workplace and the plants. In exceptional and appropriate cases, an employee can make direct appeal to the Audit Committee Chairman. The contact details of the Audit Committee Chairman are also available in the Whistle Blower Policy. The details of complaints received under this mechanism are provided in the Corporate Governance Report forming part of the Annual Report.

b) Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company is committed to provide a safe and secure work environment to all its employees. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Therefore, any discrimination and/or harassment in any form is unacceptable and the Company has in place a Prevention of Sexual Harassment Policy and an Internal Complaints Committee as per the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The details of complaints thereof are provided in the Corporate Governance Report forming part of the Annual Report.

c) Nomination and Remuneration Policy

The Company has formed a Nomination and Remuneration Committee as required under Section 178 of the Companies Act, 2013 and Regulation 19 of Listing Regulations. The Committee has formulated a policy as required under Section 178(3) of Companies Act, 2013 and Regulation 19 read with Schedule II to the Listing Regulations, stipulating the criteria for determining qualifications, positive attributes and independence of a director and also the criteria relating to the remuneration of the directors, key managerial personnel, senior management personnel and other employees and their performance evaluation. Pursuant to the proviso of sub-section (4) of Section 178 of the Companies Act, 2013, the aforesaid policy is available on the Companys website - https://www.himatsingka.com/ investors/corporate-governance d) Dividend Distribution Policy

The Board of Directors of the Company have adopted a Dividend Distribution Policy as required under Regulation 43A of Listing Regulations. The Policy is available at the website of the company - https://www.himatsingka.com/investors/corporate-governance.

e) Policy for determining material subsidiaries

As required under Regulation 24 of Listing Regulations, the Company has adopted a policy for determining material subsidiaries. The policy has been disclosed in the Companys website - https://www.himatsingka.com/investors/corporate-governance

f) Policy on Related Party Transactions:

The Company has also formulated a policy on dealing with Related Party Transactions as required under Regulation 23 of Listing Regulations. The same is available in the Companys website - https://www.himatsingka.com/investors/corporate-governance.

g) Corporate Social Responsibility

Corporate Social Responsibility (CSR) is central to the operating philosophy of the Company and it is the Companys constant endeavour to ensure that its businesses uphold the highest standards of governance and compliance. It aims to deliver sustainable value to society at large as well as shareholders. In keeping with its philosophy, the Company has set up a CSR Committee that identifies CSR projects and overlooks, supervises and provides guidance for the implementation of the projects. The CSR Committee explores various activities based on the thrust areas, _lters and shortlists projects for CSR activities with the approval of Board of Directors. The companys CSR activities envisage initiatives primarily in the areas of health, education, environmental protection, community development and sanitation among others.

CORPORATE GOVERNANCE

We comply with the corporate governance code as prescribed by the stock exchanges and the Securities and Exchange Board of India (SEBI). The detailed report on corporate governance forms a part of the Annual Report and the Corporate Governance Report along with the Auditors Certificate on compliance with the mandatory recommendations on corporate governance is available in a separate section.

MANAGEMENT DISCUSSION AND ANALYSIS _MDA_

In terms of Regulation 34 of SEBI Listing Regulations, the Management Discussion and Analysis Report (MDA) forms part of the Annual Report outlining the International and Domestic economic outlook, key developments in the International and Domestic Textile Industries etc.

BUSINESS RESPONSIBILITY REPORT _BRR_

The Listing Regulations mandate the inclusion of the BRR as part of the Annual Report for the top 1,000 listed entities based on market capitalization. As per the market capitalization on March 31, 2022, the Company is within the purview of top 1000 companies. The Business Responsibility Report is in line with the key principles enunciated in the ‘National Voluntary Guidelines on Responsible Business Conduct framed by the Ministry of Corporate Affairs. It forms part of the Annual Report.

_3. PENDING PROCEEDINGS UNDER THE IBC CODE,

There is no proceeding pending under the IBC Code, 2016 for the Financial Year 2021-22.

VALUATION FOR LOANS OBTAINED FROM FINANCIAL INSTITUTIONS/ BANKS

There was no instance of one time settlement with any Bank or Financial Institution during the period under review.

Acknowledgement

Your Directors wish to place on record their appreciation of the continuous efforts made by all employees in ensuring excellent all-round operational performance. We also wish to thank our Customers, Vendors, Shareholders and Bankers for their continued support. Your Directors would like to express their grateful appreciation to the Central Government and Government of Karnataka for their continued co-operation and assistance.

Place: Bengaluru	For and on behalf of the Board
Date: August 30, 2022
	D.K. Himatsingka
	(Executive Chairman)