MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Company is engaged in the manufacture of Texturized Twisted Polyester Dyed Yarn and Nylon Dyed Yarn. It has also significant brsence in the trading of various textile products.

One of the major finished products of the Company Polyester Dyed Yarn is used in the manufacturing of Dress Materials, Sarees, Shirting, Suiting and Furnishing Fabrics. Another product Nylon Dyed Yarn is used in the manufacture of Socks, Sports Gear etc.,

The industry offers significant leverage to the Company for scaling up its operations both in terms of the higher volumes of the existing products as well as the scope for setting up new and enhanced facilities which can facilitate back ward integration for the brsent product line of the Company. Because of the products application and utility across the wide spectrum of the users segment, offers significant opportunities for growth.

REVIEW OF OPERATIONS:

Company during the period processed materials to the tune of 84.94 MT's which was mainly the job works undertaken for Reliance Industries Limited. Though the markets have been upright the Company could not match up owing to production operational difficulties which have adversely affected the Company operations.

FINANCIAL REVIEW:

The Company during the year has achieved a turnover of Rs.46 Lakhs.

The Company incurred a Loss (Earnings before Interest, Debrcation, Taxes & Extraordinary items) of (Rs.30.10 Lakhs).

The paid up Equity Share Capital as at 31st March '2015 stood at Rs.10,168.59 Lakhs. Earning per share for the period was at Rs.(0.39).

The Company's contribution to the national exchequer in the form of various taxes and duties amounts to Rs.0.54 Lakhs.

OPPORTUNITIES:

The nature of the Products Company brsently operates in, provides for excellent and good opportunities to venture into backward integration in manufacturing the required raw materials. The Company product portfolio is also encouraging for adding value added products. The outlook as well as the demand for the Company products being manufactured is very encouraging in the long run.

CHALLENGES:

Presently the majority of the Company revenues are derived from the sale of Texturizied Twisted Polyester Dyed Yarn in the domestic market. The enhanced product mix producing a wide range of quality products would enable the Company to perform better. The Company's proposal of development of the land at Patancheru, Hyderabad offers the Company to consolidate its cash flows once revenue commences from development.

 OUTLOOK:

Presently the Company's majority of the revenues are derived from the sale of Texturizied Twisted Polyester Dyed Yarn in the domestic market. The success of the Nylon Dyed Yarn which the Company has earlier exported and kept on hold due the dollar fluctuation, will on resumption after the stabilization of the dollar rates will give the Company wide market base and flexibility. The Company's proposal of development of the land at Patancheru, Hyderabad after shifting of the facilities to Silvassa and Vapi gives the Company the leverage to enlarge it business operations over the next 3 - 5 years.

RISKS AND CONCERNS:

The domestic and regional macroeconomic environment directly influences the spending habits of the population. Any perceived economic slowdown could have an impact on the demand and supply dynamics.

One of the areas of concern in the brsent line of business for the Company is the fluctuations in the prices of the basic raw material used in the production i.e Partially Oriented Yarn (POY) whose cost is directly proportional to the fluctuations in the international prices of petroleum products which has been witnessing frequent fluctuations in the prices.

The Company is in the process of diversifying into other related business segments and also the real estate development of the land belonging to it. The progress of these depends on the various market conditions which are not directly under control of the Company.

ADEQUACY OF INTERNAL CONTROLS:

LNIIL has a proper and adequate system of internal controls to ensure that all the assets are safe guarded and protected against loss or misuse or disposition and the transaction are authorized, recorded and reported correctly.

Majority of the critical production operations are automated providing systems based check and control at every critical point.

The internal control system is designed to ensure that the financial and other records are reliable for brparing financial statements, other data on timely basis and also in maintaining accountability of assets.

QUALITY:

"Consistency in the Qualify of the product & high level of after sales follow up" are the hall marks of the Company Products.

HUMAN RESOURCE DEVELOPMENT AND INDSUTRIAL REALATIONS:

LNIIL employs 12 people, on full time employment basis.

LNIIL recognizes the contribution of its people in creating a Company which products are ranked amongst the best Dyed Yarn in the Country.

LNIIL provides continuous learning and personal development programs by conducing training and evaluation. The relations with the workmen have been cordial during the period.