first winner industries ltd Management discussions

Overall review of the economy

The past year has been a challenging year for the Textile Industry with lots of ups and downs. Inspite of the above, the industry has been able to maintain its steady performance during the year under review. Textile Industry has played a key role in the countrys progress over the years and the situation is likely to gain momentum in the times ahead. The Industry continues to hold a dominant position in countrys economic structure because of its huge contribution towards employment generation.

No industry is free from normal business risk and concerns. Indian Textile Industry continues to face stiff competition from China, Bangladesh, Sri Lanka and other emerging economies. The relative competitiveness of Industry is dependent upon the raw cotton prices, exchange rates and prevalent interest rates regime.

Industry Structure and Developments

Raw material costs have been increasing globally, coupled with a shortage of skilled workers. While a shift is taking place of textiles industries from China and Bangladesh to India, the industrial climate in India has also become adverse due to regular increases in input costs. Any further appreciation of the Rupee will adversely affect exports from India. Though the spinning industry has fared somewhat better those with a presence in weaving, processing or even composite businesses are facing the heat due to increases in input cost without being able to pass on such higher costs to customers as the market is simply unable to absorb the same.

Opportunities and Threats

The company mainly deals in trading and manufacturing of Textile Fabric. The company uses its consolidated resources for committing capital for its future business activities. Increasing operational efficiency and improvement in asset resolution has been the companys objective. The company will continue to search and pursue all new opportunities of growth. Improvement in capital adequacy and debt equity ratios, also raising new financial resources at competitive cost on a regular basis is extremely important for the company to be able to fully utilize the opportunities which come in future. Although, risk is an inevitable part of any business, your companys efforts are always directed towards earning maximum returns with minimum possible risk involved.

Opportunities:-

• Indian companies need to focus on Product Development.

• Increased use of CAD to develop designing capabilities.

• Government policy is favorable for textile Industries.

• The branded companies of the overseas market have entered Indian market.

• Investing in Trend forecasting to enable the growth of industry.

Threats:-

• Competition in the Domestic Market.

• Need to revamp consumer consciousness.

• Natural calamities beyond control.

• Under the new patent regime Indian Companies cannot duplicate the MNCs processes and procedures.

• General market competition especially from established Indian Companies and MNCs.

• Tackle Chinese Aggression over the International Market.

Segment wise Performance

Trading and manufacturing of Textile Fabric is the main business activity of your Company. Segment reporting as required under Accounting Standards-17 is not applicable as all the revenue income comes from a single segment.

Internal Control

The Company maintains a system of internal control, including suitable monitoring procedures and the adequacy of the same has been reported by its auditors in their report as required under the Companies (Auditors Report) Order, 2015. The Internal Audit Department regularly conducts a review to assess the financial and operating controls of the Company. Any significant required to be brought to the attention of the audit Committee of the board.

Human Resources/ Industrial Relations Front

The Company continues to have the cordial and harmonious relations with its employees and there has been no material development on the Human Resource/ Industrial Relations front during the year. The Company considers the quality of its human resources to be most important asset and constantly endeavors to attract and recruit best possible talent.

Cautionary Statement

Statements in the Management Discussion Analysis Report describing the Companys objectives and predictions may be forward looking within the meaning of applicable rules and regulations. Actual results may differ materially from those either expressed or implied in the statement depending on circumstances.