"Overcoming all obstacles Trident Texofab has recently in June2021 commissioned its 3rd Phase of CAPEX towards Manufacturingoperations."
I am pleased to present you the Annual Report for FY21; my letter toall the shareholders is particularly important this year as I write to update you aboutFY21 - one of the most challenging years that the Company has witnessed since itsinception. The year gone by was full of challenges and obstacles induced by COVID-19disruptions. While last year the effects of COVID-19 were limited to the last fifteen daysof March 2020 FY21 has been the year we have observed the full impact of COVID-19.
Given the fact that textiles & apparel were not part of essentialindustries that were allowed to function during the first wave of lockdowns we witnesseda complete standstill in operations for almost 60 days. As a result Q1FY21 was observedas a complete washout quarter wherein the Company recorded almost no sales. Thusessentially FY21 has been a year of only nine months. Operations slowly started revivingJuly onwards and progressed as we moved towards the festival seasons; although this periodhad its fair share of challenges the Company witnessed a great Q4FY21 where Revenue fromOperations stood much closer to pre-COVID levels.
On an annual basis the Company recorded Revenue from Operations of4993 lakhs in FY21 compared to 9096 lakhs in the previous year a 45% drop Y-o-Y basis.While Revenue from Operations witnessed a decline the Company has been able to protectits profitability with a steadfast focus on manufacturing operations. As a resultoperating profit margins stood at 5.9% in FY21 compared to 5.3% registering an increaseof 57 basis points; to do so has not been an easy task but team Trident Texofab hasmanaged to accomplish this. Contributions from the Manufacturing business vertical stoodat 44% in FY21 as compared to 25% an all-time high although one of the reasons forhigher contributions from manufacturing remained lesser sales on the Trading side. ForFY21 the Company focused on generating relatively higher sales from the Manufacturingside to minimize the impact on profitability. Profit after Taxes stood at 35 lakhs in FY21compared to 90 lakhs in the previous year a 61% decline on Y-o-Y basis. The decrease inprofits has been primarily due to two reasons
a) significant decrease in Revenue from Operations and
b) an increase in depreciation and finance cost due to increased levelof borrowed funds used to support the manufacturing expansions of the Company.
After a certain base of operations we believe this anomaly will startcorrecting itself and the results will be visible on our bottom line as well.
"Contributions from the Manufacturing business vertical stood at44% in FY21 an all-time high."
NOT LOSING SIGHT OF WHAT'S IMPORTANT.
In a year full of challenges and difficulties it is easy to lose sightof long-term goals to recuperate from short-term difficulties. I'm glad to share thatteam Trident Texofab didn't lose sight of what is important. It's been threeyears since we first communicated our intentions to transform into an integratedmanufacturing textiles Company. While early results of our Shifting Gears strategy havereaped good benefits to the Company it was an equally difficult decision to double downon our bet in such a challenging year. Overcoming all obstacles Trident Texofab hasrecently in June 2021 commissioned its 3rd Phase of CAPEX towards Manufacturingoperations. In this leg of investments the Company expanded its Waterjet manufacturingcapacity to roughly 250 lakh meters annually up from an earlier capacity of ~78 lakhmeters annually. It is pertinent to mention that this CAPEX has been commissioned on timein such a challenging year. The full benefits of this investment will be visible fromQ2FY22 onwards.
Going ahead the COVID-19 pandemic may have some extended impact as ithas been observed during the 2nd wave of COVID-19 the effects of which willalso be visible on the Company's Q1FY22 performance. The Company will continue itsfocus on expanding its manufacturing footprint while remaining agile and adaptable tochanging realities.
Through its engagement with the management the board will guide theCompany in pursuing its growth & expansion strategies to seek its vision. Before Iconclude I wish to thank all my Board Members regulatory authorities managementemployees bankers and shareholders for guidance and support.
|MR. HARDIK DESAI |
|Chairman & Managing Director |