highland industries ltd Management discussions

HIGHLAND INDUSTRIES LIMITED ANNUAL REPORT 2010-2011 MANAGEMENT DISCUSSION AND ANALYSIS Company is mainly operating into the Trading of Textiles and chemicals. The key issues of the Management Discussion and Analysis are given below. (a) Industry Structure and Developments The Textile sector is showing excellent potential on back-up of increased purchasing capacity of middle income group and rural population. Even though poor monsoon hit agricultural income, increased social schemes and other activities supported the rural income and in turn supported the textile sector in general. General slump down in chemical industry during last year continues and the same may persist for few more years. (b) Strength Qualified professionals under an efficient Board of directors gives the company an edge over the competitors and a team of executives is the major strength of the Company. Company is known from its reputation which the company has earned due to its quality business and cordial relation with its clients and presently the company is trying to expand its business into other areas. (c) Comment on Current years performance Receipts : The current year turnover is 175.7 Crore. Operating Expenses : The operating Expenses are well under control. Profit before tax : Company Earned a profit before tax of Rs.1.00 Crore/ Taxation : Rs.33.00 Lacs is Provided for taxation. Debtor/Sales : Debtors are reasonable and realization period has decreased due to the policy of the Company. d) Opportunities and Threats: We operate in a market characterized by swift changes and convergence. We face formidable competition in every aspect of our business; particularly from companies that seek to connect people across geographies over IP based communication and collaboration on multiple platforms. We do face competition from other traders domestically and internationally. Your company however, has a well-integrated platform that will ensure we stay ahead of the curve. We are augmenting features and products to our existing products and own the complete value chain of products and services we address. (e) Segment wise performance The business of the Company falls under a single segment i.e. Trading on textile and chemicals for the purpose of Accounting Standard AS-17. (f) Outlook The Company is making all efforts to accelerate growth of its business. It expects to improve its position in the market by focusing on technologically advanced and more profitable products/market segments and working aggressively in the areas of productivity, efficiency and cost reductions. (g) Risk and concerns The market penetration by new entrants in the Companys business area and the strong hold of existing Big players in the market places hurdles in the growth path of the Company. However the company is aggressively using well talented employees and personal to establish new business areas and to develop existing market. (h) Internal control system Internal audit and other controls have been found to be adequate. These are reviewed periodically by the Audit Committee and found satisfactory.