Iris Clothings Ltd Management Discussions.

Indian Economic Scenario

India witnessed major economic disruptions in FY 2020-21, as the outbreak of COVID-19 perversely impacted human health and safety of the countrys inhabitants. This prompted the Government to undertake one of the worlds tightest lockdowns, bringing manufacturing and trade activities to a screeching halt. Prolonged lockdowns exacerbated existing vulnerabilities of the country including the weakened financial sector, private investments, and consumption demand. This forced the Indian GDP to contract by 8.0% as against a growth of 4.0% in FY 2019-20, marking a recession since 1980.

The Government announced a special comprehensive package of Rs_20 trillion, equivalent to 10% of Indias GDP under the ‘Self-Reliant India movement to revive the countrys economic activity. As per the FY 2020-21 Budget, fiscal deficit is expected to be 3.8% of GDP in FY 2019-20 and 3.5% in FY 2020-21. This is higher than the 3.3% and 3% envisaged for FY 2019-20 and FY 2020-21, respectively, in the FY 2019-20 Budget.

The Reserve Bank of India (RBI) continued with the accommodative monetary stance by bringing the key repo rate and reverse repo rate to 4% and 3.35% respectively to provide monetary stimulus and trigger economic growth back to the earlier trajectory.

The fiscal and monetary stimulus provided by the Government and RBI would assist greatly in the recovery of the economy. Despite the challenges posed by the COVID-19 in FY 2020-21, creating a possibility of a second wave of surge in the cases, the outlook for FY 2021-22 seems promising largely due to relaxations in lockdowns, normalisation of economic activities, thrust on reviving manufacturing and infrastructure sector, and the countrys increasing prominence in the global supply chain. Further, rolling out of vaccination drive across the globe to combat the pandemic is expected to boost economic recovery. However, India is witnessing an expected second wave of the COVID-19 pandemic due to an increase in the number of cases.

(Source: IMF WEO April 2021)

Opportunities and Threats

Currently, the biggest threat is the second and third waves of the coronavirus disease. The actions taken by the governments to control the pandemic, such as closing of borders and lockdown restrictions, have resulted in significant disruption to people and businesses. It is expected that overall textile business will be severely affected which would result in various job losses across the value chain. However, the Company has been able to sustain itself on basis of quality product offerings in the market. The growth is expected to be driven by factors such as increased purchasing power, driving growth in primary discretionary spend, better access and availability of products, brand consciousness, increasing urbanisation and rising digitisation. The Company is in process of evaluating various options for the same and plan to grow internationally keeping in view the new opportunities created.

Company Overview

Iris Clothings Limited is a fast-growing readymade garments company with presence in 26 States and having 100+ distributors. It is engaged in designing, manufacturing, branding, and selling garments for kids wear in India. It manufactures a broad range of apparels for infants, toddlers, and junior boys and girls that suit both indoor and outdoor requirements. A new and developing competitor in Indias burgeoning fashion trade, Iris Clothings Limited pursues to depict the movement of consumers developing increasingly in sync to fashion and brands.

Segments

The Company is dealing in only one segment i.e., manufacturing and trading of readymade garments and clothing accessories.

Key Strategies

Enhancing brand collection

Widening product portfolio

Strengthening brand presence

Increasing customer connect

Product Portfolio

Tops

T-shirts

Trousers

Shorts

Dresses

Loungewear/Nightwear Sets

Accessories

Strengths

Cohesive Operations

Manufacturing Expertise

Extensive Network

Vibrant Management

Strong Relationships with Suppliers

Quality Mindfulness

Outlook

Our focus remains on a key agenda of localisation for some of high cost imports as a key de-risking mechanism against future currency depreciation impact on our business.

Risk and Concerns

The management believes the new fiscal year will be full of challenges due to uncertainties related to the pandemic. Your Company expects demand to gradually come back to normalcy over the next few quarters. Immediate strategic imperatives will be to operate at heightened intensity on safety and hygiene, optimise cost and cash flows, accelerate digital and omni-channel outreach and stay watchful of attractive real estate opportunities. As the year progresses and things return to normal, your Company expects to bounce back, with its new worldwide product range.

Internal Control Systems and their Adequacy

The Company maintains adequate and effective Internal Control Systems commensurate with its size and complexity. It believes that these systems provide, among other things, a reasonable assurance that transactions are executed with management authorisation. It also ensures that they are recorded in all material respect to permit preparation of financial statements in conformity with established accounting principles along with the assets of the Company being adequately safeguarded against significant misuse or loss. An independent Internal Audit function is an important element of Companys Internal Control System. This is supplemented through an extensive internal audit programme and periodic review by the management and the Audit Committee of Board.

Discussion on financial performance with respect to operational performance

The discussion on financial performance with respect to operational performance is given in Boards Report.

Human Resource Development and Industrial Relations

Your Company strongly believes that its employees are the key pillar of your Companys success in the market. Your Company continues to attract the best of talent, thanks to its diverse yet inclusive culture and ability to seek opportunities for their career growth. The Company provides a professional work environment and maintains healthy relations with its employees.

As on March 31, 2021, the employee strength of the

Company stood at 1127.

Cautionary Statement

Statements in this report on Management Discussion and

Analysis, describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking, considering the applicable laws and regulations. These statements are based on certain assumptions and expectation of future events. Actual results could, however, differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include finished goods prices, raw materials costs and availability, global and domestic demand-supply conditions, fluctuations in exchange rates, changes in Government regulations and tax structure, economic developments within India. The Company assumes no responsibility in respect of the forward-looking statements herein, which may undergo changes in future based on subsequent developments, information or events.

For and on behalf of the Board
Iris Clothings Limited
Santosh Ladha Geeta Ladha
Place: Howrah Managing Director Whole-time Director
Date: August 27, 2021 (DIN: 03585561) (DIN: 03585488)