navketan merchants ltd Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS & OPPORTUNITIES AND THREATS

The textile industry is one of the largest organized industries in the country in terms of employment and number of units. Besides, there are a large number of supplementary industries dependent on this sector, such as those manufacturing machinery, accessories, stores, ancillaries, dyes and chemicals. The textile industry is one of the oldest and the most widespread industries in the country and it is mainly engaged in the activities of yarn production, weaving, processing as well as embroidery. This industry has grown considerably over time. As per recent figures, textile production has grown in the last 5 years. One of the main reasons behind the growth of the textile industry is the peoples ability to adapt to the latest trends and strong entrepreneurial skills of the industrialists. The Saree market is huge, unorganized and growing at an incredible rate. The 5000 year old apparel has seen rise and fall of regimes and has dominated the apparel market in the toughest of economic downturns (recession).

The Board is positive about industry outlook and endeavors to continuously look for opportunities and identify and mitigate any risks involved. The Company wishes to expand in the near future.

OUTLOOK

Indian economy is adversely affected by persistent inflation over the last few years. The rising incomes propped the purchasing power of the population, driving consumption demand in sectors, where supply lagged particularly, in textile industry.

Since the companys performance largely depends on the Textile market, it is concentrating at streamlining its current business activities which will allow for greater operational efficiency in future. Providing quality products at a great value has always been its endeavor. The Company will take this endeavor a notch upwards by enhancing its business activities. The Company is in process to continuously employ resources in best possible manner.

The following are the key motives of the Company:

• Leveraging resources to deliver innovative and successful product portfolio

• To bring in efficiency through consistent and continuous improvement process throughout all the levels in the Organization

To develop a Customer Centric approach

• To develop a Strong Marketing Network

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has proper and adequate internal control systems commensurate with its size and nature of business. Conforming to the requirements of the regulatory authorities such as the SEBI and consistent with the requirements of the Listing Agreements with the Stock Exchanges, the company has framed an elaborate system of control process designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, reliability of financial controls and compliance with applicable laws and regulations. The management information system forms an effective and sound tool for monitoring and controlling all operating parameters. Regular internal audits by the Audit Committee ensure that responsibilities are executed effectively and the adequate internal control systems for the business processes are adhered to in all required respect.

RISKS AND CONCERNS

The results of operations, business prospects and the financial position of the Company are subject to a number of risks and uncertainties and are affected by a number of factors beyond its control. Given the volatile trend in fabrics and demand for fabrics for competing applications, the pressure on costs can be expected to fluctuate.

FINANCIAL REVIEW

During the year under review, the Companys Gross Turnover has been Rs 14.71 Lakhs.

HUMAN RESOURCES

The Company has few permanent employees who focus on realizing the goals and objectives of the Company. All the appointments of the Board members and Key Managerial Personnel were in accordance with the Companys Nomination and remuneration policy. The company during the year under review has also taken contractual service to maintain its records & documents.

CAUTIONARY STATEMENT

The statements in the report may be "forward looking statements" within the meaning of applicable laws or regulations. These statements are made on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Important factors that could make a significant difference to the Companys operations availability and prices of goods procured, cyclical demand and pricing in the Companys principal markets, changes in government regulations, tax regimes, economic conditions affecting demand/supplies, and other environmental factors over which the Company does not have any control. The financial statements are prepared under historical cost convention on accrual basis of accounting and in accordance with the provisions of the Companies Act, 2013 and applicable Accounting Standards.