girnar fibres ltd Management discussions
GIRNAR FIBRES LIMITED
ANNUAL REPORT 2006-2007
MANAGEMENT DISCUSSION AND ANALYSIS
A. INDUSTRY STRUCTURE:
The textile industry in India has an important place, account for 14% of
total industrial production and contribute 30% of the total exports and is
a largest employment generator. Providing one of the most basic needs of
people and holds importance maintaining sustained growth for improving
quality of life. It is a major contribution to the countrys economy. Post
lifting up of the import restriction of the multi-fiber arrangement,the
market has become competitive and the data released by the OTEXA, USA shows
that the first year of the non-quota regime for textiles has been Indian
export to the US grow by 27 percent year on year to US$ 4.6 billion.
Besides that the Govt. has also taken steps for the development of the
textile Industry by framing textile policy for achieving target export.
Inspite the performance of the Indian textile lndusty suffered from the
second quarter onward of the current year because of strengthening of rupee
as compared to dollars resulted in decline of export and increase in
pressure on the domestic market and decline in nest sales realization, But,
the global textile industry is growing faster due to ever increasing demand
for cotton fibre consumption in worldwide and as a result, the Indian
textile industry is also bound to grow in the international and domestic
market. Secondly, the increase in per capital income is reason of
increasing consumption of cotton fibres in India. Your Company is striving
and making all its efforts for its revival and the CDR cell a voluntary
organization under the aegis of the RBI has taken some effective steps and
ordered for the re-working of its debts restructuring as per presentcash
flow, so that the Company may able to derive the maximum benefit of the
present scenario of open economy. Your Company has also to cope with the
problem of shortage of working capital limits and increasing price of
cotton the major raw material has converted the unit no.2 into
Polyester/Cotton Yarn (PC).
B. FINANCIAL PERFORMANCE:
The turnover of the Company for the current year is Rs. 4119.81 Lacs as
compared to Rs.4037.25 Lacs in the previous year and ended the year with
cash profit of Rs. 14.55 Lacs as compared to cash loss of Rs. 6.98 Lacs in
the previous year.
C. FUTURE PROSPECTS:
Your Company during the current year has taken effective steps in revival
of its financial and operational strength and as above said, the CDR cell
has allowed and ordered for the re-working of the debts restructuring as
per the present cash flow. Although, the modernization of plant was
envisaged in the earlier approved CDR package and that could not be
implemented due non-availability of financial support from the
Institutions. Now, therefore, the Company is stressing more on the
maintenance of its old plant and machinery to achieve optimum level of
production, maintaining high quality standard and working on to reduce
power and other, costs. As already said the demand for the cotton fibres is
growing faster in international and domestic market and your Company is
manufacturer of cotton yam and with the re-working of the debt
restructuring as per present cash flow the Company will start delivering
improved and better results in the year to come.
D. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Commensurate with the size and operations, your Company has adequate
internal control systems, which are in place. The Company regularly gets
its internal control report and its suggestions are implemented as and when
required.
E. HUMAN RESOURCES/INDUSTRIAL RELATIONS:
The Company has good industrial relations with its employees. The company
has taken adequate steps to harmonize the relations with its employees and
workers and also taken steps for the welfare of employees.
DISCLOSURE:
The disclosures are as mentioned in Clause 8 under Section of Corporate
Governance.