MANAGEMENT DISCUSSION INDUSTRY SCENARIO
The global economy remains in a slow and sluggish mode mainly due to the continuingreversionary conditions in the USA. Aiso, many countries in the EC are also coming underthe slowdown blanket This has impacted the demand for textiles and clothing in the USA andthe Europe and, the textile industry in both India and China has fallen into the slowgrowth phase despite good post-quota period performance over 2005-06. Both Indian andChinese textile exports have come down in last 9 months.
With a view to finding new markets for the textile industry and reducing dependence onthe US and the European Union (EU), India has begun promoting itself in Japan. Moreover,the imposition of caps on certain import segments from China by European Union & UShas opened up the opportunities in India.
India's total textile exports for the year ending March 2009 is expected to be flatcompared with the previous year, as a falling rupee offset losses in the first six months,
OUTLOOK
Embroidery serves as the major value addition factor for manufacturing garments andmade ups and the main emphasis of the company is to concentrate on orders from embroideryexporters. But due to the global recession in the market, increased fuel prices.inflationary pressure the company will not be able to maintain the sales targets achievedduring the last two -three years.
The company is also looking at alternative avenues and has ventured into undertakingassignments as contractors for civil and other works including alternations andbeatification of premises. This could yield substantial gains to the company in the comingyears.
THREATS. RISK AND CONCERNS
Like any other industries the textile embroidery business is exposed to competitionfrom other developing countries to deliver goods at competitive price at low cost. Therupee appreciation will also effect the business of the company and if the rupeeappreciated any further the exporters will be adversely effected which indirectly effectsthe profit margins of the company.
Research & Development (R&D)
Research & development of our new services ,designs,process and methodologiescontinue to be of importance to us. This allows us to enhance quality,productivity andcustomer satisfaction through continuous innovation.