new light appare share price Management discussions

The Management of the Company is pleased to present its Report on Industry scenario during the financial year 2022-23:

1. Industry Structure and Developments

The industry continues to contribute immensely to the exchequer 4% to the global trade in textiles and apparel, 2% to the GDP (approx. $70 billion), and constitutes 7% of industry output in terms of value. As India strives to become Atmanirbhar, textiles assume higher significance in helping the country expand its global footprint and achieve the mission of Make in India for the world. No wonder it is called ‘the silent cash cow. Further, textiles are one of the few industries to throw huge employment opportunities to both the skilled and unskilled workforce over 45 million direct jobs and another 100 million opportunities in allied sectors. It is also one of the primary sources of employment to include women, especially in rural India. This sector contributes immensely to foreign earnings. Government data states that roughly four crore people are engaged across the total textile value chain, and the number is only expected to increase. Sensing immense opportunities here, the government is even planning 75 textile hubs on lines of that in Tamil Nadus Tiruppur. Name exports and the textile sector feature prominently in the list. The countrys exports have steadily increased since FY16, barring a slight decline in FY20 and FY21 largely due to the Covid-19 pandemic. In FY22, textile exports contributed to around 15% of the earnings.

2. OPPORTUNITIES & THREATS:

Fundamentally, the Indian Textile industry is supported by rich resources of raw materials availability in India. It is one of the largest producers of cotton in the world and is well placed in manufacturing of fibres like polyester, silk, viscose, jute, etc. It has highly trained and skilled manpower and has advantage of wage rates. The Government has approved the Production Linked Incentive (PLI) Scheme for promotion of MMF Apparel, MMF Fabrics and Products of Technical Textiles. Incentives under the scheme will be available for 5 years period i.e. during FY 2025-26 to FY 2029-30 on incremental turnover achieved during FY 2024-25 to FY 2028-29 with a budgetary outlay of Rs. 10,683 crore. Contractors of global demand of textiles due to after effects of Covid and due to prolong war between Russia and Ukraine is presently severally effecting textile industries and also Current Cotton high prices is reversing good performance achieved during recent past. The frequently changing policies stated by the government at the central and state levels create an immense pressure on the textile industry.

The GST applied on the products make the garments and clothes even more expensive. Broken value chain in GST has created input credit accumulation issues. Another challenge that the textile industry faces is the limitation to access the latest and best technology while also failing to meet the global standards in the competitive export market. Apart from these issues like child labour, competition from neighbouring countries regarding low-cost garments, personal safety norms are some of the challenges the Indian textile industry faces.

3. Segment-wise or product-wise performance

The Company has presently operated in textile and consumer products segments. The textile segment includes spinning, Knitting, fabric processing garment and spunlace nonwoven fabric, a technical textile product. During recent past, Spinning and Fabric industry have shown adverse performance. Companys technical textiles and Consumer product segments have witnessed lower demand in exports. However, because of aggressive marketing efforts made by management, we were able to show decent performance.

4. Risks and Concerns

The global demand of textiles is a big concern at present. The demand of textiles have been severally afftected post covid effects and due to prolong war between Russia and Ukraine. The supply chains are being refigured as distributors are preferring to buy goods locally or from neighboring country.

5. Internal Control System and their adequacy

Internal control system means the orderly and efficient conduct of its business, including adherence to management policies. The company has Internal Control System commensurate with the size, scale and complexity of its operations. The framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorized use, executing transaction with proper authorization and ensuring compliance with corporate policies. The controls, based on the prevailing business conditions and processes have been tested during the year and no reportable material weakness in the design or effectiveness was observed. The Company has engaged independent Chartered Accountant firms with vast experience and knowledge in order to monitor internal controls. The scope and authority of the Internal Audit function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit Function Report to The Chairman of the Audit Committee. The Internal Audit team develop an annual audit plan based on the risk profile of the business activities.

The Internal Audit plan is approved by the Audit Committee, which also reviews compliance to the plan. The Internal Audit team monitors and evaluates the efficiency and adequacy of internal control system in the Company, its compliance with operating system, accounting procedures and policies at all location of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action(s) in their respective area(s) and thereby strengthen the control. Significant audit observations and corrective action(s) thereon are presented to the Audit Committee. The consumption of textile products is an essential requirement of human needs and therefore, the long term outlook of the textile Industry globally and in India looks brighter. The strong availability of all fibers provide a positive outlook for textile industry in India. However, in short term textile industry is facing challenges of competition in demand.

6. Outlook

The consumption of textile products is an essential requirement of human needs and therefore, the long term outlook of the textile Industry globally and in India looks brighter. The strong availability of all fibers provide a positive outlook for textile industry in India. However, in short term textile industry is facing challenges of competition in demand.

7. Human Resources / Industrial Relations

The Company believes that the human resources are the most critical element responsible for growth. Company strives towards attracting, retaining and developing the best talent required for the business to grow. The employees are regularly provided with training and development programmes to enhance their skills and focus on career progression. Company nurtures a work culture that leads to employee satisfaction, unflagging motivation and high retention rate. Our code of conduct ensures that there is no bias towards gender, race, religion, ethnicity, nationality, age, disability, family status or sexual orientation. Industrial relations at all the manufacturing units of your Company have been harmonious and peaceful with active involvement of the employees in the collective bargaining process. Company HR policies ensure working together with the employees for their personal and professional development and at the same time aligning their goals with those of the Company to create a win-win situation. Company focus on ensuring transparent, safe, healthy, progressive and engaging work environment is aimed at creating leaders of the future. Employees have a sense of belongingness and feel empowered in driving business profitability. The well-disciplined workforce which has served the Company for thirty years lies at the very foundation of the companys major achievements. The focus is on adopting best practices to ensure better work life balance for the employees of the Company. There were 20 permanent employees on the rolls of the Company as on 31.03.2023.

8. Cautionary Note

Statement in this management Discussion and Analysis Report, describing the Companys objectives, estimates and expectations may constitute Forward Looking statement within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.