nivaka fashions ltd Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS1;

INDUSTRY AND ECONOMIC OVERVIEW:

INDIAN RETAIL INDUSTRY:

The Indian retail sector stands as a dynamic and rapidly evolving domain, propelled by the entry of new players. It constitutes more than 10% of the nations GDP and employs around 8% of its workforce. Globally, India ranks as the fifth-largest retail hub, and its potential is underscored by its 73rd position in the UNs B2C E-commerce Index (2019) and 63rd in the World Banks Doing Business Index (2020).

Central to this growth is Indias burgeoning middle class and the largely untapped retail market. This combination acts as a magnet for global retail giants seeking new horizons. The purchasing power of urban Indian consumers is ascending, driving demand for branded goods like apparel, cosmetics, and more. This shift is forecasted to elevate the Indian retail sectors value to an astonishing $2 trillion by 2032, according to Boston Consulting Groups analysis.

Indias allure is evident in its 17th rank in the FDI Confidence Index. The countrys appeal is bolstered by its vast population, burgeoning middle-income class, urbanization trends, rising household incomes, and increasing consumer spending. This attraction is set to result in nearly 60 new shopping malls, encompassing a substantial retail area, becoming operational by 2025.

E-commerce is a prime driver of this transformation, with daily transactions reaching 1.2 million as of 2021. The number of online shoppers is projected to swell to around 500 million by 2030, accompanied by an anticipated $350 billion in Gross Merchandise Value.

The momentum of this retail growth extends beyond metropolitan cites, permeating smaller urban centers. A combination of economic prosperity, changing demographics, higher disposable incomes, urbanization, and evolving consumer preferences collectively fuels the surge in organized retail within India.

Recognizing the potential, the Indian government has implemented policies to enhance the business climate and simplify foreign investment procedures. These efforts are geared towards making India an even more inviting destination for retail companies looking to establish fully owned subsidiaries.

In sum, the Indian retail industrys journey is a tale of rapid evolution and immense potential. It navigates the changing tides of consumer demands, technological shifts, and regulatory enhancements with an eye toward a future that is robust, diverse, and exciting.

BUSINESS OUTLOOK:

The E-commerce sector is maintaining its growth trajectory by capitalizing on its convenience and competitive pricing, which gives it an edge over traditional brick-and-mortar stores. This success has prompted physical retailers to adopt omnichannel strategies, aiming to provide a seamless shopping experience across both online and offline platforms. The governments endorsement and support for digital commerce are adding to the positive outlook for e-retail. However, its worth noting that the potential impact of inflation is a looming concern. Inflation has the potential to influence both consumer purchasing power and the profitability of retailers. As the market evolves, navigating these dynamics will be crucial for sustaining growth and profitability in the e-commerce sector.

OPERATIONAL REVIEW:

The reviewed year witnessed a negative growth in both topline and bottom line for the company. The previous years challenges, including COVID-19-induced lockdowns and restrictons, resulted in operatonal delays and subsequent declines in topline figures. The impact was more pronounced during the second and third waves of the pandemic than the inital wave. Despite these setbacks, management remains opt mist c about returning to top-line growth in the current year..

CUSTOMER AND MARKETING OVERVIEW:

The companys market ng and promot onal actvites remain act ve throughout the year. Expenditures exceeded 12 million rupees on platforms such as Facebook and Google during the current year.

INTERNAL CONTROLS AND THEIR ADEQUACY:

The company contnues to identfy key risks and implement control processes for mitgat on. An ongoing Enterprise Risk Management process aims to identfy emerging risks and establish control mechanisms. The Internal Control Framework, encompassing financial reportng, organizatonal structure, documented procedures, and authorites, undergoes contnuous review. The companys commitment to enhancing internal control systems involves assessing control states across various locatons, particularly strengthening backend system controls.

OPPORTUNITIES:

In the dynamic landscape of ecommerce retail, numerous opportunites await businesses looking to thrive in the digital realm. The widespread adopton of online shopping presents a prime chance to reach a global customer base with relatve ease. With the right strategy, your brand can tap into a diverse market, offering products that cater to various tastes and preferences.

eps

The company has clocked in an EPS of Rs. 0.002 this year as compared to 0.03 in the last year.

review of financial performance of the company f or the year under review

Particulars	2022-23	2021-22
Sales	412.16	1200.89
Profit Before tax	6.74	30.59
Net Profit	2.27	28.84
Share Capital	1026.90	1026.90
EPS	0.002	0.03

cautionary statement:

Statement in the Management discussion and Analysis describing Companys objective, projections, estimates, expectations may be "forward looking statements" 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 markets in which the Company operates changes in the Government regulations, tax laws, statute and other incidental factors.