MANAGEMENT DISCUSSION AND ANALYSIS REPORT
INDUSTRY STRUCTURE AND DEVELOPMENT:
Carpet weaving is a tradition which goes back by more than 700 years and the traditionof weaving has been passed on to each successive generation. The Indian carpet industry isthe true expression of the worker's philosophy and their insight into the nature'schanging moods in the form of designs on carpets. The designs, composition, color, size,finish, methods have been influenced by the incidents in Indian history, culture, myths,life style, and geographical conditions prevailing in the country.
Each region is engaged in making different types of carpets with variations in material(silk, wool, etc.), designs, color and quality. On the basis of quality of wool used inthe production, the feel of carpets differs. While Northern region carpets are soft andshiny, those of southern region are rough and opaque. The leading carpet manufacturingworkshops are located in Kashmir, Rajasthan, Punjab, Utttar Pradesh, Andhra Pradesh andHimachal Pradesh.
Indian carpet industry with a strong base of improved infrastructure, quality andtechnology is primarily export-oriented, accounting for about 20% of the total exports,next only to Iran and China. Europe and America are the chief importers accounting foralmost 95 percent of total carpet imports. The Indian Carpet Industry is governed by theregulations of National Textile Policy, 2000.
Golden Carpets Limited, with its modern technology like computerized electronicJacquard, skilled personnel manufactures carpets which are exquisitely designed, elegant,attractive catering to the different needs of the customers.
Indian Carpets are famous the world over. After dealing with China for some time, manyplayers think that India provides a better option and flexibility. The Indian carpetindustry, with the evolution of modern design, is in a vibrant mood, offering considerablepotential for growth to the Company as it is getting many orders from Hotels as well assoftware companies in India and abroad.
Our Company with its magnificent designs and the heart winning workmanship has beenable to capture the export market and has made a remarkable progress in export market.With use of modern technology and organized operations we enhance the image of theCompany. There is an opportunity for providing stocking and warehousing services tovarious players also.
Due to the economic meltdown, the carpet industry, which has survived through the worstperiods in the last two decades, is facing the kind of challenges never witnessed before.The famous carpets woven industry which has a ready made clientele across the globe, isnow in a state of disarray, brought about by the Tsunami like economic crisis which hasengulfed worldwide economies. Experts warn of troubled times for the sector in the currentyear and expect overseas exports of carpets to fall by as much as 70 percent in thecurrent financial year. The industry is also suffering a lot due to unhealthy competitionexisting within it. If not handled properly, current rebound in the industry may not besustainable. Social evil such as Child labor has strong bonding with the industry. Hence,the industry invites risk of possible backlash on itself. The carpet exporters andmanufacturers lack marketing channels. Indian suppliers suffer due to poor infrastructureand internal competition, and lack professional approach and Intellectual Property Rights.
Segment Wise Performance:
As the Company is dealing in only one product, the same is not applicable.
As the industry is moving towards the emergence of new market with use of moderntechniques, Low-end carpets manufactured in modern designs like hand-tufted carpets arehighly preferred by new customer base. Thus, innovative products range with lower volumecould be a success mantra for Indian Carpet Industry. Your Company has already takeninitiatives to increase the productivity and value of business by implementing qualitystandards, cost reduction, better development of products and their on-time delivery.
Discussion on Financial performance with respect to operational performance
During the Year the Company has achieved a turnover of Rs.63.46-lacs as against 145.09lacs. Although/the Company has suffered a net loss of Rs.56.93 lacs in the year underreview ,the same is lower as compared to the loss of Rs.66.53 lacs in the previous year.The company has not achieved the expected performance due to financial recession inIndigenous market and adverse market for export. On account of these extraneous factors,there has been a reduction in the turnover of the Company. Nevertheless, the Company withall efforts and concentration hopes to maintain a good performance in the future.
Internal Control Systems and their Adequacy
The Company is having adequate Internal Control System with respect to effectivelyhanding the operations and maintaining the accounts. The Audit Committee reviews theaccounting systems and procedures and suggest remedial actions where required.
Material Development In Human Resources/Industrial Relations:
The Company recognizes the importance and contribution made by its employees to thegrowth and development of the Company The Company has cordial relations with employees andstaff.
Statements in the Management and Discussion Analysis which seek to describe theCompany's objective, projections, estimates, expectations or predictions may be consideredto be forward looking statements within the meaning of the applicable securities laws andregulations. Actual results could differ materially from those expressed or implied.Important factors that could make a difference to the Company's operations include Indiandemand and supply conditions, availability of working capital, raw material prices,changes in government regulations, tax regime, economic developments within India andglobally.