MANAGEMENT DISCUSSION AND ANALYSIS 1. INDUSTRY STRUCTURE AND DEVELOPMENTS: India is the one of the world's largest producers of textiles and garments. Abundant availability of raw materials such as cotton, wool, silk and jute as well as skilled workforce have made the country a sourcing hub. It is the world's second largest producer of textiles and garments. The Indian textiles industry accounts for about 24 per cent of the world's spindle capacity and 8 per cent of global rotor capacity. The potential size of the Indian textiles and apparel industry is expected to reach US$ 223 billion by 2021, according to a report. The textiles industry has made a major contribution to the national economy in terms of direct and indirect employment generation and net foreign exchange earnings. The sector contributes about 14 per cent to industrial production, 4 per cent to the gross domestic product (GDP), and 27 per cent to the country's foreign exchange inflows. It provides direct employment to over 45 million people. The textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the India's economy. 2. OPPORTUNITIES AND THREATS: The Country's domestic market offers much potential for growth and numerous business opportunities as demand for Textile Products are expected to keep pace with increased purchasing power augering well for the Industry. Allowing FDI in retail will also help in expansion of this channel. The key threat to business continues from low cost of imports from China as well as aggressive pricing by newer entrants in the market. With Large Format Stores becoming key shopping destinations and growth drivers, the balance is also tilting against manufacturers, which could erode the margins. Cotton prices which have been highly volatile are of major concern for textile manufacturers along with ever increasing energy prices 3. SEGMENT -WISE /PRODUCT -WISE: The company doesn't have any other segment or products and it is mainly involved in trading of textiles and garments. 4. RISKS AND CONCERNS: Indians have well understood the importance of staying one step ahead of developments in the world economic environment. The industry is now brparing itself to take share of opportunities expected to arise out of the market freed from quota restrictions and other trade barriers. Industry operators are increasingly moving towards modernization and expansion as encouraged by the so-designated Textile Up gradation Fund Scheme implemented by Government. The local textile sector is now at a critical stage where it should brpare itself to rise and grab the opportunities that are available through liberalization of the international market. Manufacturers however, were caught in inadvertence as new players started to creep on the market at a time when most operators had attention on imminent opportunities coming from a quota-free market. Strategies and policies were mainly targeted towards expansion and modernization leaving more space to domestic players. Now it obviously appear that the latter have had ample freedom to strengthen them and they are now more brpared than export oriented companies 5. INDUSTRY OUTLOOK: Though the company has achieved higher amount of net profit when compared to the last financial year. The board of directors of the company feels that textile sector is fast growing in India, hence due to increasing scope and demand for exports in India, the company at the same parallel will put all the efforts to improve the quality and productive to get more order at competitive rates and try to maintain high quality and productivity in the manufactured goods. Barring unforeseen circumstances the company is confident of achieving better results in the current year. 6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has proper and adequate systems of internal controls in order to ensure that all assets are safeguarded against loss from unauthorized use or disposition and that all transactions are authorized recorded and reported correctly. The Board of Directors has been entrusted with the responsibility of reviewing the findings and to investigate and take necessary actions wherever required 7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE: During the financial year under review the difficulties which were faced in the last year is not effected much in the financial position of the company and the Company is able to achieve high turnover as Compared to last financial year and due to HIGH turnover and high expenditure the Company has recorded reasonable profits in the current financial year The Company is hopeful that this fiscal the Company will achieve good turnover as the economy will witness upward trend and good business despite of huge competition in wholesale prices and doing trading with fewer margins to sustain in the market. 8. HUMAN RESOURCES/ INDUSTRIAL RELATIONS: The Company firmly believes that motivated and empowered employees are the cornerstone of competitive advantage. The Company's employee value proposition is based on a strong focus on employee development, providing a satisfying work environment, performance appraisal and counseling and appropriate empowerment. The Company continues to maintain and enjoy a cordial relationship with its employees, providing positive environment to improve efficiency with regular investments in upgrading the knowledge and skills of the employees. BY ORDER OF THE BOARD OF DIRECTORS PEETI SECURITIES LIMITED Sd/- SANDEEP PEETI CHAIRMAN & MANAGING DIRECTOR Place: Hyderabad Date: 14.08.2015 |