lakhani india ltd Management discussions

LAKHANI INDIA LIMITED ANNUAL REPORT 2010-2011 MANAGEMENT DISCUSSION AND ANALYSIS ECONOMIC - OVERVIEW: The Indian economy plays a major role in the world. Last year the GDP growth rate was registered at 8%. With over 8% growth rate in last three quarters, it is estimated that the GDP growth rate will continue between 8% to 10%. The Indian markets have been strong and supported by its domestic demand and growing population. Besides this, there have been other factors for the growth of Indian markets such as consumer habits, investment in infrastructure and friendly government policies. The manufacturing sector has recorded growth. Despite the steady growth in the economy, inflation and increasing interest rates have been obstructions in the industrial growth and consumer spending. On the one hand, economic growth provides the opportunities for investment and expansion in manufacturing sector and development in infrastructure. On the other hand, inflation and rising interest rates turn into obstructions in growth of manufacturing sector. INDUSTRY STRUCTURE, OPPORTUNITIES AND THREATS: India is the one of the biggest producer of footwear. In India, footwear is manufactured both in organized and unorganized sector. The unorganized sector accounts almost half of total production. The Indian consumer has become more quality conscious and trendy. The organized sector which is equipped with advanced technological infrastructure and Research & Development can meet out the demand of consumer preferences, quality and modern trends. This has provided more opportunities to the organized sector for growth in its size and product range. The footwear industry has been contributory to the economic growth. On the one hand, it provides employment to a large number of people and on the other hand it develops the market and product and contributes in industrial output. However, the competitive environment, economic slowdown and financial crisis have been concern for footwear industry. SEGMENTWISE OR PRODUCTWISE PERFORMANCE: The Company is mainly engaged in the business of manufacturing of Footwear, so the Management considers Footwear as the only business segment of the Company. FINANCIAL PERFORMANCE: The Management Discussion and Analysis Segment constitute the part of Directors Report and Financial Performance and Review of Operations have been fully disclosed in Directors Report. OUTLOOK & KEY CHALLENGES: Lakhani India Ltd. is an established name in footwear market for its high quality products. The company manufactures footwear and a diversified range of shoe products with the help of technological advancement and built up infrastructure. The company has developed and established its brands and retail network. It has been the prime responsibility to meet the consumer demand and to provide high quality products at lowest possible price in competitive environment and to ensure the sustainable growth. INTERNAL CONTROL SYSTEM: The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition, and to ensure that all transactions are authorized, recorded and reported correctly and adequately. The Companys internal controls are supplemented by an extensive program of internal audits, review by management and documented policies, guidelines and procedures. The internal control is designed to ensure that financial and other records are reliable for preparing financial information. All financial and audit control systems are also reviewed by the Audit Committee of the Board of Directors of the Company. ENVIRONMENT AND SAFETY: The Company continued to strive toward its commitment to protect and promote the environment. On environmental matters, all plants of the Company continue to perform well beyond the stringent operational norms prescribed by the Haryana Pollution Control Board. The Company had planted number of trees around the factory premises on road. Adequate measures for safe guarding the safety and health of employees and labourers are installed at the plants of Company. The Workers and staff are regularly trained to handle the fire fighting equipments at all manufacturing plants in case of need. HUMAN RESOURCES & INDUSTRIAL RELATIONS: We firmly believe that it is our people who are most important valuable assets and resources. The Company strives to ensure best working conditions for its people and that there are no compromises on the health and safety of its employees. The Company has a healthy work culture built around strong corporate value. The Company also encourages and supports its employees to upgrade their skills on a continual basis through organizing skill development programs. The employees are provided training and also encouraged to participate in skill development courses. The devotion and commitment of our employees has enabled the Company to fulfill its targets and deadlines in time. Employer - Employee relations continued to remain cordial during the year. CAUTIONARY STATEMENT: Statements in the Management discussion and analysis report describing the Companys estimates, expectations or predictions 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 would make a difference to the Companys operations include demand-supply conditions, raw material prices, changes in Government regulations, tax regimes, economic developments within the country and other factors For and on behalf of Board of Directors Place: Faridabad P. D. Lakhani Dated: 15th November, 2011 Chairman & Managing Director