nb footwear ltd Management discussions


<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS REPORT </dhhead>

ECONOMIC AND INDUSTRY OVERVIEW

GLOBAL ECONOMY

The World Economic Situation and Prospects as of mid 2023 for a robust economic recovery remain dim amid stubborn inflation, rising interest rates and heightened uncertainties. The world economy is going through the risk of prolonged period of low growth as the lingering effects of the Covid -19 pandemic, the ever worsening impact of climate change and macroeconomic structural challenges remain unaddressed. According to the report as released in May 2023 the world economy is projected to grow by 2.3 per cent in 2023 that is +0.4 percentage point from the January forecast and 2.5 percent in 2024, a slight uptick in global growth forecast for 2023. But a somber picture still remains. Despite this uptick, the growth rate is still well below the average growth rate in the two decades before the pandemic of 3.1 per cent. For many developing countries, growth prospects have deteriorated amid tightening credit conditions and rising costs of external financing.

INDIAN ECONOMY

The World Bank in its latest India Development Update, the World Bank Indias biannual flagship publication, has reported that the Indias growth continues to be resilient despite some signs of moderation in growth. The Update notes that although significant challenges remain in the global environment, India was one of the fastest growing economies in the world. The overall growth remains robust and is estimated to be 6.9 percent for the full year with real GDP growing 7.7 percent year-on-year during the first three quarters of Financial Year 2022-23. There were some signs of moderation in the second half of Financial Year 2022- 23. Growth was underpinned by strong investment activity bolstered by the governments capex push and buoyant private consumption, particularly among higher income earners. Inflation remained high, averaging around 6.7 percent in Financial Year 2022-23 but the current-account deficit narrowed in Q3 on the back of strong growth in service exports and easing global commodity prices.

The World Bank has revised its Financial Year 2023-24 GDP forecast to 6.3 percent from 6.6 percent (December 2022). Growth is expected to be constrained by slower consumption growth and challenging external conditions.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The footwear sector is a very significant segment of the leather industry in India; rather it is the engine of growth for the entire Indian leather industry. India is the second largest global producer of footwear after China. Keeping in view its past performance, current trends in global trade, the industrys inherent strengths and growth prospects, the footwear industry aims to augment production, thereby enhancing its exports from the current level.

However due to various reasons your Company was unable to carry on any business activity during the current year. Management is looking out for various options to revive the Company.

OPPORTUNITIES, THREATS, RISKS AND CONCERNS

Due to losses the capital of the Company has been eroded. The Company is looking for options to revive the Company.

OPERATIONAL PERFORMANCE

As the Company has no business activity for last so many years, it is incurring only essential expenses towards administration of the Company and payment of its legal obligations.

FINANCIAL PERFORMANCE

Since the Company did not have regular operations during the year ended March 31, 2023 and March 31, 2022, the operating ratios have not been computed.

INTERNAL CONTROL SYSTEMS

The Company has effectively and efficiently laid down policies, guidelines and procedures keeping in mind the nature, size and complexity of Companys business objectives. The Company maintains proper and adequate system of internal controls with well-defined policies, systems, process guidelines and operating procedures. The Company positively ensures strict adherence to various procedures, laws, rules and statutes. All transactions are recorded and reported in accordance with the applicable Accounting Standards and within the terms of accounting policies.

The Company has also ensured the periodical Internal Audit by an independent auditor.

The Audit Committee is responsible to ensure the monitoring of Internal Control System and oversees the various financial transactions on a regular basis and any deviations are promptly reported to the Senior Management to ensure normalcy is established at the earliest, though, no such deviations had been reported by the Audit Committee during the FY 2022-23.

CAUTIONARY STATEMENT

Statements made in the Management Discussion and Analysis describing the Companys projection, estimates and expectations may be interpreted as "forward looking statements" within the meaning of applicable securities, laws and regulations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent information or events.