Creative Merchants Ltd Management Discussions

I. Economy

"It was absolutely clear that the economy is in recovery mode" so said by Finance Minister Mr. Arun Jaitley in his speech on 30th May 2015 after data showed that the economy grew at 7.3 per cent in 2014-15. The country posted a 7.5 per cent growth in the January to March quarter of the fiscal, outpacing Chinas GDP of 7 per cent in that quarter.

India is the second largest producer of textiles and garments in the World. The Indian textiles and apparel industry is expected to grow to a size of US $ 100 Billion by 2016-17 as per Government statistics. With availability of sufficient raw materials like wool, silk and jute as well as skilled work force have made the country Textile Hub.

The Textiles industry has made a major contribution to the national economy in terms of direct and indirect employment generation and net foreign exchange earnings. The sector contributes about 14% to industrial production, 4% to the gross domestic product and 27% to the country’s foreign exchange inflows. It provides direct employment to over 45 million people. Thus the growth and all round development of this industry has a direct bearing on the improvement of the India’s economy.

The Ministry of Textiles, Government of India plans to enter into an agreement with flipkart to provide an online platform to handloom weavers to sell their products. Detailed arrangement for purchase of cotton from the farmers by the Cotton Corporation of India Ltd under the minimum support price operation was monitored. 343 purchase centers were finalized in consultation with State Governments after meetings with officers of CCI and the Cotton producing states, resulting in streamlining of operations.

Over view of Companys Business during the year

During the year company has geared up its business in to textile industry with annual turnover of Rs. 209.55 lakhs which is lower by 2149.66 lakhs compared to previous year 2016-17. However due to competitive market condition, Company was unable to gain expected level of profit.

II. Risks and concerns:

- Presence of number of traders in the market creates a healthy competition in the market.

- Inferior quality of textile material restricts the progress of Company.

- Certain macro risks such as economic slowdown and uncertainty in demand may impact the performance of Company.

III. Internal Control System

The Company has an adequate system of Internal Controls aimed at achieving efficiency in operations, optimum utilization of resources and compliance with all applicable laws and regulations. The observations and recommendations following such audit, for improvement of the business operations and their implementation are reviewed by the Audit Committee.

IV. CAUTIONARY STATEMENT:

Certain statements in Management Discussion and Analysis Report describing the Companys analysis and interpretations are forward looking and may vary from those expressed or implied. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent development or events.