WORLD ECONOMY
Global growth is projected to fall from an estimated 3.5 percent in
2022 to 3.0 percent in both 2023 and 2024. While the forecast for 2023 is modestly higher
than predicted in the April 2023 World Economic Outlook (WEO), it remains weak by
historical standards. The rise in central bank policy rates to fight inflation continues
to weigh on economic activity. Global headline inflation is expected to fall from 8.7
percent in 2022 to 6.8 percent in 2023 and 5.2 percent in 2024. Underlying (core)
inflation is projected to decline more gradually, and forecasts for inflation in 2024 have
been revised upward.
The recent resolution of the US debt ceiling standoff and, earlier this
year, strong action by authorities to contain turbulence in US and Swiss banking reduced
the immediate risks of financial sector turmoil. This moderated adverse risks to the
outlook. However, the balance of risks to global growth remains tilted to the downside.
Inflation could remain high and even rise if further shocks occur, including those from an
intensification of the war in Ukraine and extreme weather-related events, triggering more
restrictive monetary policy. Financial sector turbulence could resume as markets adjust to
further policy tightening by central banks. Chinas recovery could slow, in part as a
result of unresolved real estate problems, with negative cross-border spillovers.
Sovereign debt distress could spread to a wider group of economies. On the upside,
inflation could fall faster than expected, reducing the need for tight monetary policy,
and domestic demand could again prove more resilient.
In most economies, the priority remains achieving sustained
disinflation while ensuring financial stability. Therefore, central banks should remain
focused on restoring price stability and strengthen financial supervision and risk
monitoring. Should market strains materialize, countries should provide liquidity promptly
while mitigating the possibility of moral hazard. They should also build fiscal buffers,
with the composition of fiscal adjustment ensuring targeted support for the most
vulnerable. Improvements to the supply side of the economy would facilitate fiscal
consolidation and a smoother decline of inflation toward target levels.
INDIAN ECONOMY
The Indian economy performed well in the financial year 2020-23,
despite the challenges posed by the COVID-19 pandemic and the Russia-Ukraine war. The
economy has faced downfall in the current financial year with 8.7% in 2021-22, the fastest
pace of growth in two decades to 7% in the current financial year.
The Indian economy is expected to continue to grow in the coming years,
but at a slower pace than in the past few years. The challenges posed by the COVID-19
pandemic and the Russia-Ukraine war
will continue to weigh on the economy, but the governments policies
are aimed at mitigating these challenges and ensuring a sustainable growth trajectory.
However the government has implemented specific policies to support the
economy, The government has;
Increased public spending on infrastructure and social programs.
Provided tax relief to businesses and individuals.
T aken steps to improve the ease of doing business in India.
Signed free trade agreements with other countries.
GLOBAL TEXTILE INDUSTRY
The global textile market grew from about $573 billion in 2022 to about
US$ 610 billion in 2023 at a compound annual growth rate (CAGR) of 6.6%. The Russia-
Ukraine war has led to an increase in commodity prices and supply chain disruptions,
causing inflation across goods and services impacting economies across the globe. The
textile market is however expected to grow to about US$ 755 billion in 2027 at a CAGR of
5.5%.
The COVID-19 pandemic and the Russia - Ukraine war had challenged the
textile industry drastically which is now on a recovery stage. Increasing demand for
apparel from the fashion industry coupled with the growth of e-commerce platforms is
expected to drive the market growth over the next few years.
The textile industry is an ever-growing market, with key competitors
being China, the European Union, the United States, and India. China is the worlds
leading producer and exporter of both raw textiles and garments. India is among the top
five textile manufacturing country and is responsible for more than 6% of the total
textile production, globally. The rapid industrialization in the developed and developing
countries and the evolving technology are helping the textile industry to have modern
installations which are capable of high-efficient fabric production.
INDIAN TEXTILE INDUSTRY
India is the worlds second-largest producer of textiles and
garments the industry grew at a healthy pace of 14.59%, making it the second-fastest
growing textile industry in the world.
The contribution of technical textiles to the Indian and world economy
is significant. In India, technical textiles accounted for 17% of the total textile market
in 2023. The industry is expected to grow at a CAGR of 10% from 2023 to 2028.
The world market for technical textiles is also growing rapidly. The
market was valued at $227.5 billion in 2023 and is expected to reach $350 billion by 2028.
In FY 2022-23, exports of readymade garments cotton including
accessories stood at US$ 7.68 billion till January 2023. It is expected to surpass US$ 30
billion by 2027, with an estimated 4.64.9% share globally.
The technical textile market is expected to continue to grow in the
coming years. The growth of the global economy, increasing demand for safety and security
textiles, and growing demand for filtration and separation textiles are all expected to
drive the market. The Indian technical textile market is also expected to grow rapidly,
due to the growing domestic demand, government support, and availability of skilled labor.
COMPANY OVERVIEW
Established in 1980, KG Petrochem Limited (hereafter referred to as the
Company). Founded by Mr Gauri Shanker Kandoi, Whole Time Director & Chairman;
first-generation entrepreneur which is headquartered in Jaipur Rajasthan.
Your company is engaged in the business of manufacturing and services
as under:-
i. Manufacturing and marketing of Terry Towel, Made-ups & Garments
etc. in the international market as well as domestic - Textile Division.
ii. Manufacturing and marketing of Garments Products i.e. Bath Robe,
Pillow, Cushion Cover and Quilts etc. - Garment Division.
iii. Consignment Stockiest of GAIL (I) LTD. for marketing and
distribution of polymers in Rajasthan- Agency Division.
iv. Technical Textiles - Manufacturing of Artificial leather through
technical textile OPPORTUNITIES & THREATS
The Company is exposed to risk from market interest rates and increase
of raw material prices, compliance risk, people risk, currency movements, change in Indian
government policies and competition. The Company proactively manages these risks through
forward booking and Inventory Management, proactive management of vendor development and
relationships, and Companys strong reputation for quality, product, differentiation
and services. The Company is mitigating the compliance risk through regular review of
legal compliances through internal as well as external compliance. Companys strategy
of providing end-to-end solutions and innovative products, hedges significant portion of
its export revenues expected for the following year, The Company continuously monitors
govt policies and take measures to minimize any adverse impact and maintaining strong
relationship with clients helps in reducing competitive risks. Rising of Rupees against
USD will be a big loss to the company along with few changes made in GST regime
BUSINESS OUTLOOK
With the efficient management and employee strength to boast of, the
Company constantly endeavors to keep with the trend of increase in the turnover and
reduction in expenses. We therefore hope to keep this trend going with ongoing efforts to
increase the domestic as well as new
foreign markets, adequately training the manpower to effect the
reduction in costs and increase in productivity and efficiency. International as well as
domestic competitive market environment continues to put pressure on the companys selling
price of the product.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Companys robust internal control systems for financial reporting
are commensurate with the size and industries in which it operates. These systems ensure
efficiency and productivity at all levels as well as safeguards its assets. Stringent
procedures are in place to ascertain high accuracy in recording and providing consistent
financial and operational support. Business operations are closely monitored by the
internal team and an Audit Committee. The Management Board is promptly notified in case of
any deviations. To ensure seamless growth, risk identification and assessment, as well as
mitigation strategies are designed basis these findings.
The corporate audit division headed by Chief Financial Officer
continuously monitors the effectiveness of the internal controls with an objective to
provide to the Audit Committee and the Board of Directors, an independent, objective and
reasonable assurance of the adequacy and effectiveness of the organizations risk
management, control and governance processes. The division also assesses opportunities for
improvement in business processes, systems & controls; provides recommendations,
designed to add value to the organization and follows up on the implementation of
corrective actions and improvements in business processes after review by the Audit
Committee of the Board of Directors.
RISK & CONCERNS
The Company is exposed to risk from market interest rates and increase
of raw material prices, compliance risk, people risk, currency movements, change in Indian
government policies and competition. The Company is impacted by the change in the business
environment both within the Country and globally and this necessitates continues
evaluation. The Company proactively manages these risks through forward booking and
Inventory Management, proactive management of vendor development and relationships, and
Companys strong reputation for quality, product, differentiation and services. The
Company is mitigating the compliance risk through regular review of legal compliances
through internal as well as external compliance. Companys strategy of providing
end-to-end solutions and innovative products, hedges significant portion of its export
revenues expected for the following year, The Company continuously monitors govt policies
and take measures to minimize any adverse impact and maintaining strong relationship with
clients helps in reducing competitive risks. Rising of Rupees against USD will be a big
loss to the company along with few changes made in GST regime.
STATUTORY COMPLIANCE
On obtaining confirmation of having complied with all the statutory
requirements, a declaration regarding compliance of the provisions of various statutes is
made elsewhere in this report.
INDUSTRIAL RELATIONS
As in the past, Industrial relations continued to remain cordial at the
manufacturing units of the company.
MATERIAL DEVELOPMENT IN HUMAN RESOURCES /
INDUSTRIAL RELATIONS
We look our employees as our most valuable assets and have been working
towards keeping them motivated and enthused. The employees of the company are working in a
healthy atmosphere. The Company is constantly endeavoring to source and develop skilled
manpower at all levels. Lack of skilled manpower availability is a challenge of today. But
the Company is constantly recruiting fresher and trains them to become suitably skilled.
CAUTIONARY STATEMENT
The Management Discussion and Analysis Report containing your
Companys objectives, projections, estimates and expectations may incorporate certain
statements, which are forwardlooking within the meaning of applicable laws and
regulations. The statements in this Management Discussion and Analysis Report could differ
materially from those expressed or implied elsewhere. 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
governmental regulations, tax regimes, forex markets, economic developments within India
and the countries within which the Company conducts business besides other incidental
factors.
+91-9892691696
