akm lace embrotex ltd share price Management discussions

Overview

Your Directors are pleased to present the Management Discussion and Analysis Report for the year ended March 31, 2023.

Our Company was originally incorporated on 26th November, 2009 as a private limited company under the provisions of the Companies Act, 1956 as "AKM Lace and Embrotex Private Limited". On 04th May, 2017 our company was converted into a public limited company and is called "AKM Lace and Embrotex Limited". On 29th September, 2017, our company was listed on the BSE SME platform through an Initial Public Offering (IPO). It has listed its equity shares on the BSE SME platform.

The main business of the Company is trading in textile products primarily fabrics. We act as an intermediary between buyer and seller buying goods on cash basis and providing credit to cash-strapped businessmen in this field.

Industry Structure & Development

Textile Business: Textile industry is facing tough times due to the adverse market scenario in domestic and export markets. India is the second largest exporter after China of textiles and apparel products having estimated 4-5% share in the global trade. However, the market pickup to improve export performance is still to happen. Our focus remains on value added products and new product development to cater to the niche segment of the market.

Opportunities and Threats

Textile Business: Positive steps taken by the Central Government for the textile industry, from allocation of funds to giving extra rebate to exporters (mainly on made-ups) and various other benefits, are expected to improve investment in this sector and provide more business opportunities in the near future. With increasing capacities of man-made fibers as compared to cotton, the preferred shift of the consumer to use products of man- made fibres i.e. viscose, polyester, polyamide, acrylic, etc. and its blends, is expected.

We believe that the principal factors affecting competition in our business include client relationships reputation, the abilities of employees, market focus and the liquidity on the Balance Sheet.

Risk and Concerns

Textile Business: The rupee is strengthening against the dollar and other currencies. Hence, there will be pressure on margins in exports. The cotton prices have also increased and to a certain extent, the increase has been absorbed in yarn sales. But, due to lower demand, the prices have not increased in finished fabrics, made- ups and garments, which is a matter of concern.

Outlook

The present consumption of global man-made fiber product is 65% of the textile trade as against 35% in India. The trend in India is also shifting towards use of man-made fiber products. In order to satisfy the taste of customers in future, we have developed innovative products with man-made fiber and its blends which have been appreciated and approved by the customers. We are also initiating the launch of own brand for home textile products in USA in time to come. With the above and focus on cost optimization, we expect the outlook to be satisfactory.

This year has been marked by several historic economic policy developments. On the domestic side, a constitutional amendment paved the way for the long-awaited transformational Goods and Services Tax (GST) while demonetization of the larger currency notes signaled a regime shift. The transformational GST law, which will create a common Indian market, improve tax compliance, boost investment growth. In addition, the Government also overhauled the bankruptcy law.

Adequacy of Internal Control System

The Company has adequate internal control systems for the business processes in respect of all operations, financial reporting, compliance with laws and regulations etc. The management information system forms an effective and sound tool for monitoring and controlling all operating parameters. Regular internal audits ensure that responsibilities are executed effectively. The Audit Committee reviews the adequacy of internal controls on regular basis.

Human Resources Development/Industrial Relations

Human resources are valuable assets for any organization. The employees of the Company have extended a very productive cooperation in the efforts of the management to carry the Company to greater heights. The Company is giving emphasis to upgrade the skills of its human resources and continuous training down the line is a normal feature in the Company to upgrade the skills and knowledge of the employees of the Company.

Cautionary Statement

The Statement in this Management Discussion and Analysis report, describing the Companys outlook, projections, estimates, expectations or predictions may be "Forward looking Statements" within the meaning of applicable securities laws or regulations. Actual results could differ materially from those expressed or implied.

FOR, AKM CREATIONS LIMITED

(Formerly known as AKM Lace and Embrotex Limited) Sd/-

SHALVI SAGAR PATWA

MANAGING DIRECTOR

DIN: 08869050

Date: 07th September 2023