mayur leather products ltd share price Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Leather industry in India holds a significant place in the Indian economy. This sector is known for its consistency in high export earnings and it is among the top ten foreign exchange earners for the Country. The leather industry is bestowed with an affluence of raw materials as India is endowed with 20% of world cattle & buffalo and 11% of world goat & sheep population. Added to this are the strengths of skilled manpower, innovative technology, increasing industry compliance to international environmental standards, and the dedicated support of the allied industries.

The Indian footwear industry is currently under transformation phase and moving from a traditionally labour- intensive industry to a more technological and innovation driven industry. The leather industry is an employment intensive sector, providing job to about 4.42 million peoples, mostly from the weaker sections of the society. Women employment is predominant in leather products sector with about 30% share. India is the second largest producer of footwear in the world. The Council for Leather Exports has been playing an active role in the overall growth and development of the leather and footwear industry. [Source: Council for Leather Exports]

OPPORTUNITIES AND THREATS OPPORTUNITIES

There are bright opportunities for start-ups in the leather and footwear sector, as there are good prospects for growth both on the domestic front and in exports, post COVID. Despite the continuing Covid-19 pandemic, the Council for Leather Exports is undertaking a multi-pronged, aggressive and pro-active marketing strategy to tap the potential available in various markets. Future growth of Indian footwear in India will continue to be market driven. The European countries and the US are major consumers for the Indian footwear. On the whole, the leather footwear industry has very good potential for growth and development both on the domestic front and in exports.

THREATS

The leather footwear industry operates in a complex regulatory environment and fully abides by law and regulations of the country. Any change in the laws and regulations governing the leather footwear industry may affect the business and financial performance of the industry.

The ever increasing list of foreign players keeping their foothold in India is also posing a threat to the local players who find it difficult to keep pace of their growth in an extremely competitive environment. High rate of inflation which leads to increase in cost of raw materials, non availability of skilled labourers and regulatory environment also considered as challenges for the footwear industry in India. Your Company is moving in the right direction so that it can seize the opportunities available in the Indian footwear industry and also battle the challenges the industry is facing.

SEGMENT WISE PERFORMANCE

The Company deals/operates in only safety leather footwear segment. The detailed performance is given in the notes forming integral part of the financial statements of the Company.

INDUSTRY OUTLOOK

Your Company establish itself as a leading supplier of international standard leather safety footwear to the domestic as well as global footwear market. There is still lot of potential for growth in the turnover of the Company because the demand of Companys safety footwear products in the market is fast increasing. The Company is specially developing an innovative and different type of product as per requirement of the customers/market. There is a strong demand of leather safety footwear product in the market hence your Company is proactively engaged in taking appropriate steps to tap these opportunities in order to improve its market share and retain its position in the leather safety footwear section of the industry.

RISKS AND CONCERNS

Your Company continuously ascertains risks and concerns in the safety footwear industry affecting its present operations, future performances and business environment. In order to overcome such risks and concerns, your Company adopts preventive measures as considered expedient and necessary.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details of internal control systems and their adequacy has been provided in the Directors Report, which forms part of this Annual Report.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The revenue from operations of the Company stands at Rs 926.79 lakhs as against Rs. 823.47 lakhs in the previous financial year. During the financial year under review, the Company has incurred loss of Rs. 67.21 lakhs as compared to Rs. 183.88 lakhs recorded in the previous financial year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS

Your Company has been continuously working to improve human resources skills, competencies and capabilities in the Company, which is critical to achieve desired results in line with its strategic business ambitions. During the year under review, there was no material development in human resources/industrial relations of the Company. Number of people employed in the Company as at March 31, 2022 is 40.

SIGNIFICANT CHANGES IN FINANCIAL RATIOS

During the year, on a standalone as well as consolidated basis, there was no significant change in the financial ratios compared to that of the previous year.