REPORT ON MANAGEMENT DISCUSSION AND ANALYSIS The Company is today in a transformation stage where it needs to determine its future course of action. Historically the company was involved in manufacturing and processing of Polyester Filament Yarn. It was forced to stop operations due to financial losses arising from a number of factors including location disadvantage. Industry Structure and Development:- The industry segment in which your company was operating is primarily located in Silvaasa and Daman, Union Territories, enjoying exceptional Tax Incentives and low Power Tariff. It is difficult to overcome the inherent locational disadvantage in absence of other factors, strong enough to counter the same. Of late some yarn consuming centers have grown significantly and could be considered as possible locations due to logistical advantage. Opportunity and Threat:» Opportunity: The company sees a possible opportunity of entering new businesses and is examining various business opportunities like, Granite cutting and polishing, PET Bottle recycling, polypropylene recycling and manufacturing of other plastics or synthetic products to utilize the existing land and building at Abu Road, gainfully. The Commercial Taxes changes have been made by Government of Rajasthan in its budget brsented in July 2014. The changes have now made consumption of PTY manufactured in state competitive vis-a-vis yarn procured from outside of state. The same has opened a window for reviving the business activity of text rising of polyester yarn (part of existing business) at either at the existing location or a new location identified by the management which has become a major center for consumption of textured yarn and where demand is being brsently met from supplies coming from Silvaasa is still under consideration but is being deferred till GST regime become applicable. Was till await the GST regime being ushered in, hope fully at an early date. In the meanwhile we are considering the options of commencing activity of processing brcious and semi-brcious stones. The promoters enjoy generations of experience in the field. Threat: Apart from slow down in overall economy of the world in general and of India in particular entering new business at this stage is risky and in absence of definitive introduction of GST regime, the viability of yarn manufacturing business shall depend on the Companies capacity to procure raw material at competitive cost.. Segment-wise or product wise performance:- D ue to suspens ion of operations there is nothing to report on segment wise performance. Outlook:- The outlook of the company shall depend on it's ability to raise finances for its future planning. We are hopeful of starting a profitable activity and gainfully utilize available assets of the company during the period ahead- Risk and concerns:- The risk shall be duly evaluated before finalizing business activity. Internal Control systems and their adequacy;- The company has adequate control systems commensurate with its size of business activity. Discussion on financial performance with respect to operational performance: The company has now been able to pay off its secured lenders. The company having discontinued its earlier operations now look forward to utilize its assets gainfully and is examining various options to do so. Material Development in Human Resources/Industrial front:- Company continues to have good record of industrial relation. |