Niwas Spinning Mills Ltd Management Discussions

(a) Industry Structure and Developments:

The Indian Textile industry adds 14% to the industrial production and 8% to the GDP of India. It provides employment to 38 million people and thus, is the second largest employment provider after agriculture. The Indian Apparel & Textile Industry is one of the largest sources of foreign exchange flow into the country with the apparel exports accounting for almost 21% of the total exports of the country.

(b) Opportunities and Threats:

(i) Opportunities: World textile trade would continue to grow at a rate of 3-4%. Hence theres a door open for exports. The trade is growing between regional trade blocs due to bilateral agreements between participating countries. ‘Supply Chain Management and ‘Information Technology has a crucial role in apparel manufacturing. India has the opportunity to increase its UVRs (Unit Value Realization) through moving up the value chain by producing value added products and by producing more and more technologically superior products.

(ii) Threats: There has been an increase in seasons per year which has resulted in shortening of the fashion cycle. Formation of trading blocs has resulted in a change in the world trade scenario. Existence of bilateral agreements would result in significant disadvantage for Indian exports.

(c) Segment-wise or product wise Performance:

The company has business activity within a single primary business segment.

(d) Outlook:

The Company is hopeful to get orders from the existing customers and the new customers going to emerge from the infrastructure growth of the country. The infrastructure development is the engine of the economic growth of the Indian economy.

(e) Risk and Concerns:

The company is not having any credit facility from banks & financial institutions. The risk management for the repayment obligations is a minimum.

(f) Internal Control Systems and their adequacy:

The Standard Operating Policy, Procedures and Guidelines are issued from time to time to achieve best Practices for adequate control in regard to operations of the Company.

(g) Discussion on financial performance with respect to operational performance:

The company is still performing at below breakeven point although there is little improvement from the previous year. The demand for the products of the company is inadequate to operationalize the production to the level of installed capacity. The impact of Covid-19 for the year 2020-2021 is also regressive.

(h) Material developments in Human Resources / Industrial Relations front, including number of people employed. :

The industrial relations continued to be harmonious and cordial providing an atmosphere conducive to sustenance the present trajectory of the production. Adequate safety measures have been taken at all the Places of Businesses. Highest standard of hygiene is maintained. Our permanent employees as on 1^st April, 2020, were 08 and as on 31^st March, 2021 were 08.

(i) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios:

There were no significant changes in key financial ratios

(j) Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

The company has been under losses due to below breakeven production due to sluggish demand.

(k) Cautionary Statement:

Some of the statements contained within this report may be forward looking in nature and may involve risks and uncertainties. Actual Result and Outcomes in future may vary materially from those discussed herein. Factors that may cause such variances include, but are not limited to management of growth, market acceptance of Companys product and services, risk associated with new product version, dependence on third party relationship and the activities of competitors.