Business Review From Design to Delivery
Industry Structure and Development
The Company does not have any income from operations. The company is looking forward to approval of its Rehabilitation Scheme by the Board of Industrial and Financial Reconstruction (BIFR) for resumption of its operations. The company has implemented necessary steps to reduce the operating and administrative expenses to curtail the cost.
Textile Industry
The Textile Industry is one of the most important sectors in the Indian Economy and the second largest generator of employment after agriculture. It contributes more than 4% to the GDP and 17% to the countrys export earnings. The Textile sector provides employment to over 3.5 crore people.
Opportunities and Threats
India has big advantages in terms of being globally the second largest cotton growing country, second largest producer of cotton yarn, third largest exporter of cotton fabric and fourth largest exporter of synthetic fabric. It also has a large pool of available manpower which is a key resource for our Industry.
Indias product design and development capability, integrated supply chain and higher level of social compliance scores above some of the other apparel manufacturing countries. The Company has formulated strategies and identified key focus areas to improve performance in the current environment. Growing market share with existing customers while seeking to increase the proportion of value added products, working towards acquiring new customers with complementary product portfolio, improvement in efficiencies through Lean manufacturing initiatives, and sustained focus on financial management, will help us come out of financial difficulties we faced during the financial year 2015-16.
Risks and Concerns
The Company focuses on exports to the US and European markets with revenues being denominated in USD/EURO. The Company is exposed to risk of currency fluctuations. The Company mitigates this risk through robust foreign currency management practices. Inflationary conditions and rise in wage costs in the country may have impact on the profitability of the Company.
Internal control systems and their adequacies
Your Company believes in formulating adequate and effective internal control systems and implementing the same, to ensure that assets and interest of the company are safeguarded, and reliability of accounting data and accuracy are ensured with proper checks and balances. The internal control system is improved and modified continuously to meet the changes in business conditions, statutory and accounting requirements.
The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control system and suggests improvements for strengthening them .The Company has a robust Management Information system which is an integral part of the control mechanism.
The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings, and corrective actions taken.
Discussion on financial performance Income:
The Company has suffered huge losses of Rs 12992.09 Lakhs during this year, entire net worth of the company has been eroded and company is registered with the Board for Industrial and Financial Reconstruction.
Risk Management
The Company is exposed to risk from market fluctuations of foreign exchanges, interest rates, commodity price, business risk, compliance risks and people risks.
Foreign Exchange Risk
The Companys policy is to actively manage its long term foreign exchange risk within the framework laid down by the companys forex policy approved by the Board.
Interest Rate Risk
Given the interest rate fluctuations, the company has adopted a prudent and conservative risk mitigating strategy to minimize the interest cost.
Commodity price risk
The Company is exposed to the risk of price fluctuation on raw material as well as finished goods in all of its product. The Company proactively manages these risks in inputs through forward booking, inventory management, proactive management of vendor development and relationships. The Companys strong reputation for quality, product differentiation and service, the existence of a powerful brand image and a robust marketing network mitigates the impact of price risk on finished goods.
Risk Element in Individual Businesses
Apart from the risks on account of interest rate, foreign exchange and regulatory changes , various businesses of the company are exposed to certain operating business risk, which are managed by regular monitoring and corrective actions .
Compliance Risks
The Company is exposed to risk attached to various statutes and regulations including the competition Act 2002. The Company is mitigating these risks through regular reviews of legal compliances, through internal as well as external compliances audits.
People Risks
Retaining the existing talent pool and attracting new manpower are major risks. The Company has initiated various measures such as rollout of strategic talent management system, training and integration of learning activities.
Environment and safety
Your Company is conscious of the importance of environmentally clean and safe operations. Your Company s Policy requires the conduct of all operations in such manner so as to ensure safety of all concerned , compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible .
Human Resources and Industrial Relations
The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Various HR initiatives are taken to align the HR policies to the growing requirements of the business. The Company continues to lay emphasis on people development, especially identifying and nurturing leadership talent in the organization.
Cautionary Statement
Statements in this report describing the Companys objectives, projections, estimates, expectations or predications may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors.
Date : 14th August 2016
Place : Bangalore
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