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Vardhman Textiles Ltd.

BSE: 502986 Sector: Industrials
NSE: VTL ISIN Code: INE825A01012
BSE 00:00 | 20 Jan 2817.50 94.70
(3.48%)
OPEN

2733.50

HIGH

2835.00

LOW

2733.45

NSE 00:00 | 20 Jan 2813.40 91.15
(3.35%)
OPEN

2722.25

HIGH

2839.00

LOW

2722.25

OPEN 2733.50
PREVIOUS CLOSE 2722.80
VOLUME 17223
52-Week high 2835.00
52-Week low 971.00
P/E 14.76
Mkt Cap.(Rs cr) 16,277
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2733.50
CLOSE 2722.80
VOLUME 17223
52-Week high 2835.00
52-Week low 971.00
P/E 14.76
Mkt Cap.(Rs cr) 16,277
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Vardhman Textiles Ltd. (VTL) - Chairman Speech

Company chairman speech

Dear Shareholders

With great pride and privilege I present to you the annual report of Vardhman Textilesfor FY 2019-20. The year was indeed a challenging year in terms of business volatilitiescaused by geopolitical developments leading to lack of confidence about global trade itsdirection and growing protectionism among leading importing countries. During the yearseveral macroeconomic factors such as an escalation of the trade war between the U.S. andChina uncertainties around BREXIT and natural disasters in some countries impactedbusiness performance.

Though we were able to come out without serious damage the business's bottom line wasadversely affected.

With increasing per capita income which is presently at about USD 10000 in Ciina itwas opined that cost competitiveness of China in textile and apparel manufacturing may godown and textile manufacturing may shift to India. Along with this growing tensionbetween China and USA is also likely to accelerate the process of moving out of China.However no substantial shifting of textile manufacturing out of China is seen so far.Nevertheless countries like Bangladesh and Vietnam have registered excellent growth inapparel exports and are exporting about USD 33-35 bn apparel exports driven by costcompetitiveness and preferential treatment in leading importing markets. As a result ofthese factors India's textile and clothing exports are not growing and are almoststagnant for last couple of years. Though the domestic market has been growingorganically but the textile and clothing imports have started leaving its adverse impact.

The recent COVID-19 pandemic has emerged as one of the biggest threat to the globaleconomy and Indian Industry could also not remain immune to the adverse businessconditions.

Your Company being engaged in textile business has also observed the impact of thisglobal slow down in terms of declining demand both exports and domestic coupled withlower prices of products. Some of the Orders were also cancelled/ deferred resulting ininventory build-up and slower realization of receivables. In this scenario of low demandof yarn and fabric the global demand of cotton also witnessed sluggishness leading tofall in its prices having adverse impact on the inventory of cotton carried by thecompany.

However more recently the Yarn Business has started showing signs of recovery in viewof increased demand from the exports market. Accordingly despite the sluggish demand inthe domestic market the company is able to utilize about 80% of the yarn capacity as ofnow. The fabric business is picking up gradually based on increase in the exports offabric and garments and we hope to recover to a large extent before the end of currentfinancial year. We are hopeful that the crisis will pass and economic activities will cometo the normal over a period of time.

The ongoing period is tough but your company has sufficient financial strength to sailthrough the period though business is definitely adversely affected due to presentsituation.

At Vardhman we have always relied upon fundamental strengths of Indian textileindustry and hopeful for its bright future. Nevertheless the issue of globalcompetitiveness need to be addressed at organisation and national level. At company levelwe have believed in agile operations building scales and upgrading technology followed byconsolidation process which have benefitted us over the years. At National level thereis need to restore global competitiveness of the complete textile value chain. Amongothers refunding unadjusted taxes and levies across the value chain is one step whichneed to be taken.

At Vardhman we believe that giving back to the society is a prime responsibility. Werecognize our role in shaping a sustainable future and therefore continue to engage insocially productive endeavours. Our constant focus on empowering lives and makingmeaningful contributions to communities drives us to responsibly fulfil organizationalobjectives. Our corporate social responsibility initiatives aim to ensure well-being ofpeople while improving their quality of life. We continue to serve marginalized sectionsallowing them to realise their true potential and opening up opportunities for betterlivelihood.

At the start of another new fiscal year we are optimistic about our future endeavoursand aim to deliver enhanced value to all our stakeholders resting on our ability tofulfil customer requirements. I would like to express my gratitude towards the Board fortheir guidance and support as well as to our Management and our people for their hardwork and dedication to take the Company to greater heights of success. Lastly I amthankful to all our bankers and shareholders for their continued faith and trust in ourabilities.

Regards

Shri Paul Oswal

Chairman.

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