Management Discussions & Analysis MACRO ECONOMIC ENVIRONMENT India's economy will grow at a rate of more than 8 per cent in the 2015-16 fiscal year, while consumer inflation will drop to between 5 and 5.5 per cent, according to the Economic Survey report, which was tabled today at Parliament by Finance Minister Arun Jaitley, a day before Prime Minister Narendra Modi government's first full Union Budget. The survey, a report on the state of Indian economy, forecast the economy would grow by 8.1-8.5 per cent under a new calculation method that makes India the world's top-growing big economy. The report also indicated that India can increase public investments and still hit its borrowing targets, while saying the country needed to adhere to its medium-term fiscal deficit target of 3 percent of gross domestic product. Noting India had hit an economic sweet spot, the report added the country had room for big bang reforms. It said a return to the heady days of double-digit economic growth was expected. "India has reached a sweet spot and that there is a scope for Big Bang reforms now," the report said. The survey also indicated that economic growth during 2014-15 may touch 8 per cent on better farm output. The CSO had projected growth at 7.4 per cent for current fiscal. REVIEW OF OPERATIONS Gross revenue for the year was Rs. 2548.12 Lac in comparison to last years' figure of Rs. 1319.78 Lac. Further, the Company has earned gross profit of Rs. 44.10 Lac in comparison to last year's figure of Rs. 28.98 Lac. In term of Net Profit, the same was of Rs. 30.24 Lac in comparison to last years' net Profit of Rs. 20.02 Lac. Contributor to the Gross Profit was of Rs. 5.06 Lac from textile business activities and Rs. 39.03 Lac was gain from investment activities in shares & securities. The Company is into the Business of trading in Textile Products and deploying the surplus funds if any, in the treasury operations as well as doing trading / investment activities in Shares & Securities, both in Cash & F&O Segment of BSE and NSE. BUSINESS SEGMENT During the year, the Company was operating into following Business segments - • Trading of Grey & Synthetic Fabric • Trading / Investment in Shares & Securities in both Cash & F&O Segment • Deploying the surplus funds in Treasury Operations OPPORTUNITIES Textile Industry India is the second largest producer of textiles and garments in the world. The Indian textiles and apparel industry is expected to grow to a size of US$ 223 billion by 2021, according to a report by Technopak Advisors. This industry accounts for almost 24% of the world's spindle capacity and 8% of global rotor capacity. Abundant availability of raw materials such as cotton, wool, silk and jute as well as skilled workforce have made the country a sourcing hub 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, growth and all round development of this industry has a direct bearing on the improvement of the India's economy. Financial Activities Non-Banking Financial Companies (NBFCs) have rapidly emerged as an important segment of the Indian financial system. Moreover, NBFCs assume significance in the small business segment as they primarily cater to the credit requirements of the un-organised sector such as wholesale & retail traders, small-scale industries and small borrowers at the local level. NBFC is a heterogeneous group of financial institutions, performing a wide range of activities like hire-purchase finance, vehicle financing, equipment lease finance, personal loans, working capital loans, consumer loans, housing loans, loans against shares and investment, etc. NBFCs are broadly divided into three categories namely (i) NBFCs accepting deposits from public (NBFC-D); (ii) NBFCs not accepting/ holding public deposits (NBFC-ND); and (iii) core investment companies (i.e. those acquiring share/securities of their group/holding/subsidiary companies to the extent of not less than 90% of total assets and which do not accept public deposits.) Capital Market Activities The capital markets have continued to scale record levels as euphoria has built up on the possible trajectory of the Indian economy. The markets seem to have priced in a favourable policy environment and a consequent increase in corporate performance in the coming years. As is the case whenever there is a turn in the economy, capital markets take the lead as they price in future improvement in the macroeconomic fundamentals of the economy. The clear mandate given to the central government and the business friendly reforms expected as a result of this has raised the expectation of both domestic and foreign investors. Further, factors such as rising growth prospects, contraction in Current Account Deficit (CAD) as well as the recent stabilization of the rupee have all contributed to this positive sentiment. Investors have been betting heavily on the economy which has led to high growth of the capital markets. The SENSEX has witnessed a consistent rise in 2014 with a growth of around 40%, reaching record highs and crossing the 29,000 mark in January 2015. THREATS & CONCERNS In CRISIL's rated universe of 32 Textile Companies, the ratings are sbrad over a wide spectrum from AA+ to D, with no particular concentration in any single rating category. While in India, the Cotton textile industry is considered as carrying moderate risk levels, internationally, the sector is recognized as having higher than average risk. Domestically, diversity of product portfolio and established export brsence coupled with sound capital structure, which is required to mitigate the volatile profitability, are the common factors across companies having ratings in high safety category. Banking & Capital Markets CEOs are more upbeat about the prospects for the global economy than any other sector (56% believing it will improve over the next 12 months). Their confidence is evident in the fact that more than half are planning to increase headcounts over the next 12 months, most by at least 5%. However, Banking & Capital Markets CEOs see over-regulation as the biggest policy threat to growth. They would brfer regulations that are clear and designed for the long-term. On other front, more than 70% of Banking & Capital Markets CEOs see cyber insecurity as a threat to growth, more than any other sector. Success in this market demands leaders who can manage through uncertainty and complexity as they seek to deal with regulatory change while brparing for the future. This in turn demands a clear sense of who their key customers and markets are going to be in five years' time and what investments and changes will be needed to respond. It also requires a forward looking view on how regulation will interact with the other transformational trends in areas such as cost, returns and the ability to meet customer expectations. HUMAN RESOURCES The Company recognizes that its success is deeply embedded in the success of its human capital. During 2014-2015, the Company continued to strengthen its HR processes in line with its objective of creating an inspired workforce. The employee engagement initiatives included placing greater emphasis on learning and development, launching leadership development programme, introducing internal communication, providing opportunities to staff to seek inspirational roles through internal job postings, streamlining the Performance Management System, making the compensation structure more competitive and streamlining the performance-link rewards and incentives. CORPORATE SUSTAINABILITY AND SOCIAL RESPONSIBILITY The Company constantly strives to meet and exceed expectations in terms of the quality of its business and services. The Company commits itself to ethical and sustainable operation and development of all business activities according to responsible care and its own code of conduct. Corporate Social Responsibility is an integral part of the Company's philosophy and participates in activities in the area of education and health. CAUTIONARY STATEMENT Certain statements under "Management Discussion & Analysis" describing the Company's objectives, projections, estimates, expectations or brdictions may be forward looking statement within the meaning of applicable securities laws and regulations. Although the expectations are based on reasonable assumptions, the actual results could materially differ from those exbrssed or implied, since the Company's operations are influenced by many external and internal factors beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events. COMPLIANCE The Compliance function of the Company is responsible for independently ensuring that operating and business units comply with regulatory and internal guidelines. The Compliance Department of the Company is continued to play a pivotal role in ensuring implementation of compliance functions in accordance with the directives issued by regulators, the Company's Board of Directors and the Company's Compliance Policy. The Audit Committee of the Board reviews the performance of the Compliance Department and the status of compliance with regulatory/internal guidelines on a periodic basis. New Instructions/Guidelines issued by the regulatory authorities were disseminated across the Company to ensure that the business and functional units operate within the boundaries set by regulators and that compliance risks are suitably monitored and mitigated in course of their activities and processes. New products and process launched during the year were subjected to scrutiny from the Compliance Standpoint and proposals of financial services were screened from risk control prospective. The Company has complied with all requirements of regulatory authorities. No penalties/strictures were imposed on the Company by stock exchanges or SEBI or any statutory authority on any matter related to capital market during the last three years. By order of the Board For Jackson Investments Limited Nand Kishore Fogla (DIN:00465112) Managing Director Kolkata, May 29, 2015 Registered Office : 1st Floor, 4, Netaji Subhash Road Kolkata-700 001 |