sreeleathers ltd share price Management discussions

Your Directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31,2021.

(A) INDUSTRY STRUCTURE AND DEVELOPMENTS

India is currently the second largest footwear manufacturer in the world. The footwear market consists of companies engaged in manufacturing, selling and marketing of different kinds of footwear and accessories to men, women and kids. Footwear has grown from being a necessity, as protector of feet, to an accessory which has become a style statement for customers.

The Indian footwear market is dominated by unorganized players but as consumer preference and buying behavior is changing, organized retail players are making space for themselves in the market. Of the total footwear produced, 90% are consumed within the country while the remaining 10% are exported.

The momentum of the footwear market in India has been disturbed by the Covid-19 pandemic and the lockdown measures taken to prevent it. It is presumed that with the covid-vaccination drives, the consumer sentiment would revive gradually.

(B) OPPORTUNITIES, THREATS AND CONCERNS

The outbreak of Covid-19 has already changed the way businesses across sectors function. Companies are re- strategizing and re-structuring their internal models and business plans so that they are able to efficiently get back on track when the pandemic is behind us and the economy has revived. With people observing social distancing in India and staying at home to help curb the spread of the disease, the retail sector has taken a big hit with offline stores and malls remaining shut. Being part of the footwear industry, your Company is introducing innovative and productive ways to be better prepared in times of a crisis like this. The priority is how to retain our customer base by adapting to new and emerging trends that will be here to stay post COVID-19.

Though the pandemic has brought with it a certain fear, uncertainty and regard for health, it has also, in many ways, reset the world. Once the economic stability has returned and businesses have bounced back, there will be very important lessons learnt that may elevate the footwear industry to a much better place in the future.

(C) OUTLOOK

The footwear industry is staring at a revenue loss with no revenues during the Covid-19 lockdown period, with closure of retail outlets and restriction of delivery of non-essential items in certain areas. Moreover, the pandemic may catalyze the shift to e-commerce. However, with the norms of social distancing expected to remain in place, along with the fear of stepping out in public places, the share of sales from e-commerce will increase significantly in the near term.

However, your Company presumes that during the festive seasons, the sale of footwear and accessories may see a boost. Your Company is also concentrating on sale of affordable footwear and accessories.

(D) CORPORATE VALUES

Hardly a few companies can claim the position that our company has won for itself in the hearts of millions of consumers, with its corporate values of Excellence, Quality and Trust.

• Excellence

We believe in achieving excellence in all we do. Be it crafting world-class quality products, implementing best industry practices or delivering delightful service experience, the quest for excellence is integral to the Company.

• Quality

Your Company has always been recognized for its high quality product offerings. The testimony to success is its loyal consumer base spanning domestic markets.

• Trust

Having stayed relevant for over decades, the trust bestowed on company by our consumers has enabled us to become an iconic name . Being one of Indias most trusted and apparel name , we believe that conducting business in a fair, transparent and ethical manner is pivotal in building strong relationships.

• Legacy

Having enjoyed the patronage of millions of consumers, we have been consistently delivering world class quality products and services to its consumers since the past decades. A name that has earned the trust and respect of its consumers, employees, business partners and all relevant stakeholders throughout its journey is a manifestation of the organizational values of Excellence, Quality & Trust. Having created world-class pioneering innovations, Company have not just stayed relevant but has consistently commanded a leadership position. Over the decades, company have spread its wings from a single-product focus into a multiproduct business comprising Footwear, Accessories (Belt, Wallet & Bags), etc.

(E) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has engaged the services of an independent Chartered Accountant to carry out the internal audit and ensure that recording and reporting are adequate and proper, the internal controls exist in the system and that sufficient measures are taken to update the internal control system. The system also ensures that all transactions are appropriately authorized, recorded and reported. Exercises for safe- guarding assets and protection against unauthorized use are undertaken from time to time. All these measures are continuously reviewed by the management and as and when necessary improvements are effected.

(F) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial performance during the year under reference is reasonable in terms of sales keeping in view Covid-19 situation.

(G) CORPORATE SOCIAL RESPONSIBILITY

The management of your company is of the opinion that the companys contribution to the society should be the top priority of the company. Hence, the company has contributed funds in accordance with Schedule VII of the Companies Act,2013 and the Companys CSR policy. The details have been provided in the “Annual Report on CSR Activities” as attached to the Boards Report. Also, the Corporate Social Responsibility committee formed by the Board is continuously looking forward for projects in which your company can make a contribution.

(H) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMLOYED

As on March 31,2021, the company had 47 employees at its showroom, godown and administrative office.

The company recognizes the importance of human value and ensures that proper encouragement both moral and financial is extended to employees to motivate them. The company takes initiative for training the employees at regular interval. The company enjoyed excellent relationship with workers and staff during the last year.