Pil Italica Lifestyle Ltd Management Discussions.

Pursuant to SEBI (LODR) Regulations, 2015, your Directors have the pleasure in presenting the Management Discussion and Analysis Report for the year ended on March 31, 2019.

A. INDUSTRIAL STRUCTURE AND DEVELOPMENT

PIL Italica Lifestyle Limited has been a pioneer in the plastic moulded furniture industry. Your company is carrying out its activities in mainly three segments i.e. manufacturing of Plastic moulded articles, Trading and Financing and investment activities.

Manufacture of Plastic Moulded Articles:

Your company is leading producer of plastic moulded furniture and is engaged in manufacturing of chairs, tables, crates, bins etc. We have an all-inclusive and varied range of plastic furniture products. Our brand -ITALICA Moulded Furniture, is one of the leading brands in the plastic furniture market in India. It has presence in various International markets such as Middle East, Qatar, Australia, Haiti etc. In the current year, we have introduced several new products in our portfolio to stay ahead in line of furniture, to provide innovative products which will enhance the offerings and availability of wide range of products to distributors, retailers and consumers to a large extent. We offer products both in the affordable and h t e premium categories, catering to all the segments of the society.

For the first in India, a product named "Spine Care 2109" especially designed to eradicate spinal problems and strongly recommended by doctors. This product was especially designed by your Company to help people facing spinal disorders due to improper sitting / continuous long sitting during their working. Spine Care guarantees comfortable seat with flexible backrest. This super comfortable chair is available in three colors- Metallic Brown, Camel Brown and Orange. By the third quarter the company will introduce new designs in the furniture category to offer a wider variety to their loyal distributors, dealer and consumers. The Company also introduced a new model ‘9006 and ‘2277 under chair category, to offer the best to its consumers in the furniture category. The Company now moving into the direction of establishing a strong offering in the premium and luxury range of chairs with the upcoming product launches.

During the year the company witnessed a substantial growth in the production of its latest range of various crates adding a new crate moulds (size of crate: 500*325*200), (500*325*250 ) , (600*400*370) ,(600*400* 320), (600*400*220) to cater to the industrial and catering sector along with food and vegetable vendors. The crates division has seen a steady growth since its introduction as company strive to give the most durable and sturdy products to all its customers. The company has also started supplying the industrial crates to popular e-grocery platforms.

While Company have been consistent with its efforts in supporting the Swachh Bharat initiative and spreading awareness in all areas including rural and urban, Italica has introduced new range of dustbins and storage bins in various designs and colors in the 80 ltrs and 110 ltrs capacity range. The Company have witnessed substantial growth of the brand on major e-commerce platforms as its product is now reaching every part of India. Our products have already gained popularity on Pepper fry, Amazon, Industry buying, etc. and in a short span of time, Company has become a preferred brand for furniture for customers.

Trading Segment: Company deals into trading activities. During the year, the revenue from trading segment is Rs. 741.54 lacs (p.y. 2669.81 lacs). The reduction is due to now Company is focusing more on its manufacturing segment.

Finance and Investment: Company is engaged in the business of finance and investing activities. The Company is trying to generate more revenues from this segment in coming years.

B. OPPORTUNITIES AND THREATS

Despite the increasing competition from the unorganized sector, company is continuously trying to increase its presence in the untapped market.

The Company is hopeful that it will be able to perform even better in future with the new product launches. Company will endeavor to maintain and enhance its position in the furniture market and increase focus on the range of Crates and Bins. The Company has to ensure that the people working for it who constitute its major competitive advantage continue to contribute productivity to its business. The Company has to be on the lookout for tracking the competition and maintaining its competitive edge in terms of quality and value proportion.

C. SEGMENT-WISE PERFORMANCE

During the year the company clocked a turnover of Rs. 4314.26 Lakhs ( p.y. - Rs. 4241.11 Lakhs) from manufacturing of plastic articles, Rs.741.54 Lakhs (p.y. - Rs.2669.81 Lakhs) from trading and Rs. 268.74 lakhs ((p.y. Rs. 366.24 Lakhs) from finance and investment segment.

D. OUTLOOK

Your company has introduced new products during the year and is expecting good growth over time. The outlook for the Company appears bright on a long-term basis. The Company is hopeful that its performance in h t e years to come would be encouraging, as the Company is planning to launch new models of chairs and other articles. Your Company will endeavor to maintain and enhance its position in the furniture market.

E. RISKS AND CONCERNS

Your company is exposed to risk of price fluctuation on raw material as well as on finished goods, business risk, commodity risk, etc. in its entire product range and economic risk. The risk identified are reviewed and evaluated on continuous basis and suitable steps are taken on timely basis o t mitigate the same. The board reviews the Risk Management Process periodically.

F. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Your company has adequate systems of internal control covering all financial and operational activities. The internal control is designed to provide reasonable assurance with regard to maintaining proper accounting controls, protecting assets from unauthorized losses and ensuring reliability of financial and operational information and proper compliance with regulations. In the opinion of the Board, an internal control system are in place is efficient to the size of the Company. Your companys statutory auditors have, in their report, confirmed the existence of effective internal control procedures.

G. FINANCIAL PERFORMANCE

During the year, your company achieved revenue of Rs. 5410.49 Lakhs in comparison to previous year i.e. Rs. 7319.83 Lakhs. Out of which exports were Rs. 18.30 Lakhs as against Rs. 39.02 Lakhs in the previous year. The profit before tax is Rs. 372.28 Lakhs as against Rs. 607.70 Lakhs in the previous year.

H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company is of the opinion that our people play a vital role in shaping the organization and hence we lay great emphasizing on optimizing their performance. The company provides fair and safe, equal environment at work to all the employees. The training and education of employees across department is ongoing process of the company. Your Company has the strength of 51 staffs and 67 workers. Our technical and well qualified staff efficiently uses their skills in internal as well as external opportunities for capturing new market trends and high growth of your organization. The company acknowledges and appreciates the contribution made by each and every employee.

I. SIGNIFICANT CHANGES IN FINANCIAL RATIOS

During the year, the significant changes in the financial ratios of the Company, which are more than 25% as compared to the previous year are summarized below:

Financial Ratio FY FY Change (%) Reason for change
2018-19 2017-18
Inventory Turnover 6.12 8.78 (30.29) Company is managing inventory level better in comparison to previous year
Interest Coverage Ratio 25.84 38.70 (33.22) Decrease in interest payment and company do not have borrowings.
Current Ratio 10.32:1 5.34:1 93.25 Current ratio increased due to increase in current assets.
Return on net worth 12.65% 17.25% (26.66) Profitability is less due To decrease in sale in view of competition.

For and on behalf of the Board of Directors

Sd/- Sd/-
DAUD ALI NARENDRA BHANAWAT
Managing Director Whole Time Director &Chief
Place : Udaipur DIN: 00185336 Financial Officer
Date : 15.05.2019 DIN: 00146824