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Nutech Global Ltd Management Discussions

Jul 12, 2024|03:31:00 PM

Nutech Global Ltd Share Price Management Discussions

The Management of NUTECH GLOBAL LIMITED present its analysis report covering performance and outlook of the Company. The report has been prepared in compliance as laid down in the Regulation 34 ofthe SEBI (Listing Obligatbnsand Disclosure Requirements) Regulations,2015. The management accepts responsibiityforthe integrity and objectivity of the financial statement. However, investors and readersare cautioned thatthis discussion contains certain forward-looking statements that involve risk and uncertainties.


India has emerged as the shining beacon in a grim global scenario by growing at 6.8% in 2022. The IMF has estimated Indias growth at 5.9% in FY23 and 6.3% in FY24, well above other economies of significant scale causing many to state that this could well be Indias decade. The central government has played a major role in boosting the growth of the economy as it continued with its capital expenditure push in the Union Budget 2023-24. In FY 2023-24, capex is budgeted at10 lakhcrore, which will constitute 3.3% of GDP. As per the RBI, such level of capex spending can take Indias real GDP growth close to 7% in FY-24. Despite the challenging global environment, the Indian economy with its strong fundamentals and massive demographic strengths seems enroute to outpace other large economies.


The Textile Industry is one of the oldest and largest industries of the Indian economy. As per the International Textile Manufacturers Federation (ITMF), the Textile sector has seen weakening demand since June 2022 due to persistent global inflation and lingering possibilities of a recession. Inflation has affected consumers and manufacturers alike with manufacturers and suppliers having to pay much more along all stages of their supply chains, from the cost of freight to wage increases for their workers. This has put textile manufacturers in a difficult situation. In the Union Budget 2023-24, the government announced various initiatives to aid the Textile and Apparel sector across its value chain from raw materials to manufacturing. The government has introduced various schemes such as the Scheme for Integrated Textile Parks (SITP) and Mega Integrated Textile Regbn and Apparel (MITRA) Park scheme to attract private equity in the sector. The textiles sector supported by the governments structural and productivity-related policy interventions and fueled by a rising domestic demand looks well poised to prosperexponentially.


The government of India has initiated various policies to support textile sector growth for long term horizon. Demand in Textiles segment will vary by market. While domestic markets are expected to improve, US volumes may see modest growth or remain flat. Demand from Europe and UK is expected to remain muted. Things will change for better in case India is able to sign any free trade agreement with any of the key geographies.


The Company has a production of 3.6 million meters of quality fabric per year and a fabric range that diversifies into varied products such as Suiting. Shirting. Ready-Made Garments. Dress Material (Uniform). Home Furnishing and its recent addition of COVID-19 products. However, competition in the industry is continuously increasing, and the future for the industry looks promising, by strong domestic consumption as well asexport demand.


Please refer to the paragraph under the heading "Financial Results" and "Operational Review" in the main Directors Report.SEGMENTWISE PERFORMANCE:

The Management reviewed the disclosure requirement of Segment wise reporting and is of the view that since the companys products are covered under Textile Industry which is single business segment in terms of AS-17 and therefore separate disclosure on reporting by business segment is not required.


The risk management framework ofthe company ensures compliance with the requirements ofthe CompaniesAct, 2013. The Company is exposed to risks from competitions, interest rates, market fluctuations of foreign exchange, compliance risk, raw material price risks and people risk. It has institutionalized the procedure for identifying, minimizing and mitigating risks and the same are reviewed periodically. Your Company has identified the following aspects as the major risks for its operations:


The threats to the Companys product include severe competition both in domestic and international markets leading to pricing pressures of finished goods, inflation, foreign exchange fluctuation, volatility in input cost cotton crop, interest rates, power cost etc. Government Policies also play major role in the growth ofthe industry. Online trades and fast fashions are the biggest competitive risk in present scenario. Investments in the industries have started picking up with no barriers for entry of new players. Your Company continues to focus on increasing its market share and focusing more on Quality, Cost and Timely delivery that help create differentiation and provide optimum service to its customers to expose competition rsk.


Any increase in interest rate can affect the finance cost. The Companys policy is to borrow long-term borrowing in Indian Rupee to avoid any rate variatbn risks. The Company has adopted a prudent and conservative risk mitigation strategy to minimize interest costs.


Foreign exchange risks are quantified by identifying contractually committed future currency transactions. The Companys policy is to hedge all tong-term foreign exchange risk as well as short term exposures with in the defined parameters.


The Company is exposed to risks attached to various statutesand regulations including the CompetitonsAct. The Company is regularly monitoring and reviews the changes in regulatory framework and also monitoring its compliance mechanism so as to ensure that instances of non-compliance do not occur.


The Company is exposed to the risk of raw material prices of Polyester, Viscose, PA/ blended yarn, Cotton Yarn. The Company hedges this risk by purchasing the required raw material at the time of booking of sales contracts. Also, this risk is being managed by way of inventory managementandforward booking.


Retaining the existing talent pool and attracting new manpower are major risks. The Company hedges this risk by setting benchmark of the best HRpractices and carrying out necessary improvements to attract and retain the best talent. The Company has initiated various measures such as rollout of strategic talent management system, training and integration of learning activities.


The company is conscious of the need for environmentally clean and safe operations. The Company Policy requires the conduct of all operations in such manner so as to ensure safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.


Your Company has an effective internal control and risk mitigation system, which is constantly assessed and strengthened with new/revised standard operating procedures. The main thrust of the internal audit process is test and review of controls, independent appraisal of risks, business processes and benchmarking internal controls with best practices.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen them. The Audit Committee of the Board of Directors, Statutory Auditors and Functional Heads are periodically apprised of the internal audit findings and corrective actions to betaken. Audit plays a key role in providing assurance to the Board of Directors.


This part has been discussed in Boards Report.


The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. The Company is committed to nurturing, enhancing and retaining top talent through superior Learning & Organization Development interventions. Corporate learning and Organization Development is a part of Corporate HR function. It is a critical pillar to support the organization growth and its sustainability over the tong run.


In preparation of the financial statements, the Company has followed the Accounting Standards issued by ICAI. The significant accounting policies which are consistently applied are set out in the Annexure to Notes to the Accounts.


Statements in this Management Discussion and Analysis Report describing the Companys objectives, estimates etc. may be "Forward Looking Statements" within the applicable laws and regulations. Actual results may vary from these expressed or implied. Several factors that may affect Companys operations include Raw material prices, Government policies, cyclical demand and pricing in the Companys main market and economic developments within India and countries in which the Company conducts its business and several other factors. The Company takes no responsibility for any consequence of decisions made based on such statements and holds no obligation to update these in the future.

For and On behalf of the Board of Directors
Sd /-
Place: Bhilwara (RAJEEV MUKHUA)
Managing Director
DIN 0050736
Dated: 27.05.2023 Sd /-
DIN 01552629

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