MANAGEMENT DISCUSSION AND ANALYSIS REPORT Pursuant to Clause 49 (IV) (F) of the Listing Agreement, your Directors report as follows : MACRO ECONOMIC OVERVIEW : The Indian Textiles Industry is headed for strong growth, buoyed by strong domestic Consumption as well as export demand.The Indian Textiles is expected to grow to a Size of US $ 223 billion by 2021, At 5.2% share of Global Trade, The Indian Textiles Industry ranks second in world, behind China. Recent policy Reforms and improved business confidence have given a fillip to Economic Activity. India's Growth Rate is expected to improve from 7.2 percent in last fiscal to 7.5 percnt this year. India is the bright spot on Global Horizon and Asia's Third largest Economy. The drastic fall in Global crude Prices is a big boost for India as it can bring down the Company's Annual Oil Import Bill by about US $ 50 Billion. This welcome development enhances disposable Income which will increase consumer demand for other goods and sevices, reduce input cost of businesses which will increase margins and help enthuse investment demand. This will also aid Government finances by reducing the energy subsidy burden. Industry Scenario and the Company's performance. The new government has undertaken a Number of New reform measures whose cumulative effect could be substantial. India's Home textiles and technical Textiles segments are expected to double thair Market size. The Company became a Debt free Company last year. Rajkamal Synthetics Limited continued Trading in Textiles, Synthetics and allied Businesses. The Company has also been engaged during the Current Year in Marketing of Textiles, Synthetics and allied products. Opportunities, Threats and Challenges. Reduction in Crude Oil prices, a strong and consistent rupee and consequent impact on raw material and polyester prices will help in growth. Capacity additions by new and existing players may have a temporary effect on youe Compay's margins. The Company is confident that with a better Mix of products and activities and with Infusion of capital and better working capital Management, the Company would be able to generate better Cash flows and pay back to its Investors in very near future. Risk Management The Company mitigates the impact of price rise on finished goods with the Company's reputation for quality, product differentiation and service to the customers with better marketing network. Capacity addition by New and Existing players may have a temporary effect on your Company's margins. The Company is exposed to risk from Market fluctuation of Foreign Exchange, Interest rates, Commodity prices, Business risks, Compliance risks and People risks. The Company's Risk mitigating initiatives is a result of its detailed risk management framework that comprises prudent norms, structured reporting and control. The risk management approach conforms to the Compay's strategic direction, in line with Shareholders desired returns and its desired risk appetite. Internal Control Systems and its adequacy The Company has adequate internal Control procedures commensurate with the size of operations and the nature of business. These controls ensure efficient use and protection of Company's financial and non-financial resources. Regular Internal Audit and checks ensure that responsibilities are executed effectively. The Audit Committee of the Board of Directors reviews the adequacy and effectivness of internal control systems and suggest improvement for strengthening them, from time to time. Development of Human Resources The Company endeavors to keep work place and working environment cheerful by having good HR practices, implementation of various welfare schemes, celebration of certain events by having active participation of all employees, developing leadership qualities amongst them etc. The Company aims to retain deserving employees who can also be nurtured to take leadership roles. The Company has been aiming to have behavioral as well as technology related traning programs to improve the general attitude and also to upgrade the competency of the employees. Corporate Social Responsibility The Company is flagship organization of Rajkamal Group of Companies. The Group is alive to and collectively undertake its Corporate Resonsibility towards society. The Group has continued to carry out socially beneficial activities. Cautionary Statements Certain statements in the Management Discussion and Analysis Report relating to the Company's objectives, projections, outlook, expectations estimates etc may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections etc whether exbrss or implied. Several factors could make significant difference to the Company's operations. These include climatic conditions, economic conditions affecting demand and supply, government regulations and taxation, natural calamities and other force majeure conditions etc. over which the company has no control. |