MANAGEMENT DISCUSSION ANALYSIS REPORTANNEXURE B
TEXTILE INDUSTRY OVERVIEW:
Since ancient times Indian Textile industry has been well known for her textile goodsduring the colonial regime the traditional textile industry of India was virtuallydecayed. However, in the early nineteenth century the modern textile industry took birthin India when the first textile mill was established at Fort Gloster near Calcutta in1818. Next to Agriculture India mainly is into the Textile Sector. Indian Textile Industryis one of India's oldest industries and has a formidable presence in the national economyas it contributes to about 14% of manufacturing value-addition, accounts for aroundone-third of our gross export earnings and provides gainful employment to millions ofpeople.
Indian Textile Industry has earned a unique place in our country. It is among one ofthe industries which were earliest to come into existence in India. It accounted for 14%of the total Industrial production, contributes to nearly 30% of the total exports and isthe second largest employment generator after agriculture. This industry provides one ofthe most basic needs of people and holds importance; maintaining sustained growth forimproving quality of life. It has an image of self-reliant industry, from the productionof raw materials to the delivery of finished products, with substantial value-addition ateach stage of processing which forms a major contribution to the country's economy. Indiatextile industry is one of the leading in the world. Currently the Indian Textile Industryis estimated to be around US$ 52 billion and is also projected to be around US$ 115billion by the year 2012. The current Indian domestic market of textile is expected to beincreased to US$ 60 billion by 2012 from the current US$ 34.6 billion
INFRASTRUCTURE OVERVIEW
The Infrastructure sector in India is set to boom as the country enters a high growthphase. With a growing economy and double digit growth expected over the next four years,the infrastructure sector would witness exponential growth and enormous investments. Withthe expected average annual compounded growth rate of 8.5%, India's GDP is expected to beUSD 1.4 trillion by 2017 and USD 2.8 trillion by 2027.
GOVERNMENT INITIATIVES:
The Infrastructure sector in India is attracting more funds not only from the domesticfunds but also from the international arena, even in the form of Public PrivatePartnership. Other factors including political intent, liquidity position, commodity andcrude prices, structural and procedural reforms at various government body levels (likeNHAI) are also well-placed to rollout the Indian infrastructure growth story ahead.Moreover, companies in the infrastructure space are backed with strong orders which showstrong revenue visibility in coming future. Therefore, looking at the current scenario andfuture growth potential experts expect Indian Infrastructure Sector to outperform thetrends in long term thereby providing excellent investment opportunities in the sector.
Introduction of Public Private Partnerships (PPP): Government has introduced theconcept of public-private partnerships in India, to combine the best practices of publicand private sectors to efficiently develop and maintain infrastructure facilities.
The construction industry everywhere faces problems and challenges. However, indeveloping countries like India, these difficulties and challenges are present alongside ageneral situation of socio-economic stress, chronic resource shortages, institutionalweaknesses and a general inability to deal with the key issues. There is also evidencethat the problems have become greater in extent and severity in recent years. One of thecharges leveled at the construction industry, as at the beginning of the 21st century, isthat it has a poor record on innovation, when compared with manufacturing industries suchas aerospace or electronics.
INDUSTRY OUTLOOK:
Infrastructure remains a vital sector for India's growth story. But, lack of adequateinfrastructure is a major constraint in India's growth. Infrastructure, which was thegolden sector a few years ago, is battling regulatory bottlenecks, land acquisition delaysand credit crunch. Without any dichotomy -the future growth prospects of the Indianeconomy lingers primarily on the infrastructure investment and timely execution of theprojects. The infrastructure sector was one of the thrust areas in Union Budget 2012-13 asa string of measures were announced in the budget.
Manufacturing sector projected to grow at 4.5 per cent. Electricity, automotive, steeland cement sector have shown improvement in the period of April-June. Because of thebenefits of the low base, manufacturing sector will show improved performance in thesecond half of this year.
Construction expected to show some improvement compared to last year as evidenced bythe recent increase in the output of steel and cement.
Opportunities & Threats
The Infrastructure sector in India is attracting more funds not only from the domesticfunds but also from the international arena, even in the form of Public PrivatePartnership. Other factors including political intent, liquidity position, commodity andcrude prices, structural and procedural reforms at various government body levels (likeNHAI) are also well-placed to rollout the Indian infrastructure growth story ahead.Moreover, companies in the infrastructure space are backed with strong orders which showstrong revenue visibility in coming future. Therefore, looking at the current scenario andfuture growth potential experts expect Indian Infrastructure Sector to outperform thetrends in long term thereby providing excellent investment opportunities in the sector.Introduction of Public Private Partnerships (PPP): Government has introduced the conceptof public-private partnerships in India, to combine the best practices of public andprivate sectors to efficiently develop and maintain infrastructure facilities.
The construction industry everywhere faces problems and challenges. However, indeveloping countries like India, these difficulties and challenges are present alongside ageneral situation of socio-economic stress, chronic resource shortages, institutionalweaknesses and a general inability to deal with the key issues. There is also evidencethat the problems have become greater in extent and severity in recent years. One of thecharges leveled at the construction industry, as at the beginning of the 21st century, isthat it has a poor record on innovation, when compared with manufacturing industries suchas aerospace or electronics.
Internal Control Systems and their adequacy
The control system of the Company consists of standard practices and processes,appropriate audit program and risk monitoring system. The various initiatives taken by theCompany has led to further improvement in the control systems of the Company.
The Board of Directors has been entrusted with the responsibility of reviewing thefindings and to take necessary actions wherever required.
FUTURE OUTLOOK
As members are aware that the Company has entered in the infrastructure andconstruction segment recently and the performance of the Company was satisfactory for theFY 2011-2012