winsome yarns ltd Management discussions

INTRODUCTION

Indias textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital-intensive sophisticated mills sector on the other end. The decentralised power looms/ hosiery and knitting sector forms the largest component in the textiles sector. The close linkage of textiles industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles makes it unique in comparison to other industries in the country. Indias textiles industry has a capacity to produce wide variety of products suitable for different market segments, both within India and across the world.

SHORTAGE OF RAW MATERIALS AND LOW PRODUCTIVITY OF LABOUR

35% of the overall cost of production is determined by raw materials. Cotton is in low supply in the nation, especially long-staple cotton that is imported from Pakistan, Kenya, Uganda, Sudan, Egypt, Tanzania, the United States of America, and Peru. It is unfortunate that despite having the largest amount of cotton planted (26% of the worlds acreage), the country only contributes 9% to global cotton production. Low production and illnesses in the mills are caused by fluctuating prices and unpredictability in the availability of raw materials.

HIT BY COMPETITION, GARMENT INDUSTRY SEEKS TECH UPGRADE :

Punjab textile industries facing major competition from industries located in other states, the micro and small units dealing in the garment and products in Punjab pinned high hopes on the new Punjab government to equip them with the latest technology by starting new schemes.

The garment and textile industry of Punjab which at one point of time was the leader in the country is now lagging behind other states. That happened as the newer units which came up in other states especially in South India adapted latest technologies. Therefore demand from the new government should pay special attention to technological upgrade of the existing units in and support financially to adopt new machinery and technology.

Textile and garment units of Punjab are fast becoming uncompetitive as compared to similar units in other states. The cost of production of textile and garment industry in other states is decreasing due to adoption of new technologies. We have already suffered a lot as significant percentage of the total business of garment and textile units has been taken over by the industry from other states. Its high time that the state government takes appropriate measures like starting unconditional technology upgrade fund scheme for old units so that we can easily adopt new techniques.

FINANCIAL PERFORMANCE:

During the year ended 31.03.2023, the Company incurred a loss of Rs. 2641.85 lakhs in comparison to the loss of Rs. 1397.59 lakhs for the previous year ended 31.03.2022. Your Companys turnover of Rs. 3564.06 lakhs was marginally low against the previous year turnover of Rs. 4372.19 lakhs for the aforementioned reasons. The Company has since undertaken manufacturing for third parties on job work basis, and is able to recover variable costs and part of fixed costs.

RISK MANAGEMENT:

Current & Future Challenges and Problems in the Apparel Industry:

The new trends, changing consumer habits, and market shifts have shed a light on the new challenges the eCommerce apparel industry is facing in 2023.

Difficulty in managing customized order allocation and inventory sync.

Unable to align warehouse operations manually amid such hard times.

Problems in selling pandemic essentials such as face masks in combo packs.

Inability to manage deliveries, leading to higher % of Customer Initiated Returns (CIR).Hard to align multiple sales channels and offline stores alongside.

Back-breaking for eCommerce platforms to manage multiple vendors

.Untimely and inefficient delivery of products.

No stock rotation leads to outdated stock.

The increased cost of Reverse Logistics.Hard transition to present Taxation policies.

The issues in textile industry of India is facing like :

Shortage in supply of raw materials.Increase in the cost of raw materials.Environmental problems.

Infrastructure bottlenecks.

Impact of GST.

Shortage of laborers due to a mass return

.Increasing of power cuts.

HUMAN RESOURCE:

The Company keeps developing its organizational structure consistently over time. Efforts are made to follow excellent Human Resource practices. Adequate efforts of the staff and management personnel are directed on imparting continuous training to improve the management practices. The objective of your Company is to create a workplace where every person can achieve his or her full potential. The employees are encouraged to put in their best. Lot of hard work is put in to ensure that new and innovative ideas are given due consideration to achieve the short and long term objectives of your Company. There were 480 employees of the Company as on 31.03.2023.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/ INDUSTRIAL RELATION FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

The employees are satisfied and having good relationship with the Management.

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANYS CODE OF CONDUCT:

This is to con rm that the Company has adopted a Code of conduct for its employees including the director. It is confirmed that the Company has in respect of the financial Year ended 31st March, 2023, received from the Senior Management team of the Company and the members of the Board, a declaration of Compliance with the code of Conduct as applicable to them.