Today's Top Gainer
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We submit herewith the "Management Discussion and Analysis Report" on the business of the Company as applicable to the extent relevant.
TEXTILE INDUSTRY IN INDIA- STRUCTURE AND DEVELOPMENT
Indias textile sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to Indias exports. The textile industry is also labor intensive and is one of the largest employer. The textile industry has two broad segments. First, the unorganized sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organized sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale.
India accounts for good percentage of the worlds production of textile fibres& yarns. Fabric production in the country rose to millions. The industry is the second largest employer after agriculture, providing employment to over millionsof people directly and indirectly. The Indian Textile Industry contributes a good percentage to Indias Gross Domestic Product (GDP), and overall Index of Industrial Production (IIP).
The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a vital role through its contribution to industrial output, employment generation, and the export earnings of the Country.
The most significant change in the Indian textile industry has been the advent of man-made fibres (MMF). India has successfully placed its innovative range of MMF textiles in almost all the countries across the globe. The future outlook for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade.
Opportunities available to the Company in the present scenario, which can be seized for the benefit of the Company and ultimately to the stakeholders, can be summarized as under:
1. The government had extended the duty drawback facility on all textile products & increased the rates in some cases to boost exports in the sector.
2. In the Union budget, a good amount has been allocated to the Ministry of Textiles in order to support various schemes covering the textile industry.
3. Capacity built over years has led to low cost of production per unit in Indias textile industry; this has lent a strong competitive advantage to the countrys textile exporters relative to key global peers.
4. Indias growing population has been a key driver of textile consumption growth in the country.
5. The Indian textile industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand
6. Urbanization is expected to support higher growth due to change in fashion & trends.
Based on review of the textile market situation and level of rivalry present in the domestic market, following threats might be present in the market, which can hinder growth of the revenue of the Company:
1. Intense competition between established brands and private label brands.
2. Low cost substitute products from other countries
3. Significant presence of small suppliers has reduced the bargaining power.
4. Major clothing brands have better bargaining power over textile manufacturers, as the product differentiation is low and number of players are high and fragmented.
DISSCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The financial statements have been prepared in accordance with the requirements of the Companies Act, 2013 and applicable accounting standards issued by the Institute of Chartered Accountants of India. The details of the financial performance of the Company are appearing in the Balance Sheet, Profit & Loss Accounts and other financial statements forming part of this annual report.
INTERNAL CONTROL SYSTEM
Given the magnitude and nature of itsbusiness, the Company has maintainedsound andcommercial practice withan effective internal control system.The system ensures that all transactionsare authorized, recorded and reportedcorrectly to safeguard the assets of theCompany and protect them from any lossdue to unauthorized use or disposition. Theadequate internal information system is in place to ensure proper information flow for thedecision-making process. The Company alsohas well-established processes and clearlydefinedroles and responsibilities for peopleat various levels. The control mechanismalso involves welldocumented policies,authorization guidelines commensuratewith the level of responsibility and standardoperating procedures specific to therespective businesses, adherence to whichis strictly ensured. Internal audit is carriedout frequently to create awareness and totake corrective actions on the respectiveunits or areas, which need rectification.These reports are then reviewed bythe management team and the AuditCommittee for follow-up action.
HUMAN RESOURCE DEVELOPMENT
The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognizes the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation.
Your Company believes in trust, transparency & teamwork to improve employees productivity at all levels.
The management discussion and analysisreport containing your Companysobjectives,projections, estimates andexpectation may constitute certainstatements, which are forward lookingwithin the meaning of applicable lawsand regulations. The statements in thismanagement discussion and analysisreport could differ materially from thoseexpressed or implied. Important factorsthat could make a difference to theCompanys operation include raw materialavailability and prices, cyclical demandand pricing in the Companys principalmarkets, changes in the governmentalregulations, tax regimes, forex markets,economic developments within India andthe countries with which theCompanyconducts business and other incidentalfactors.
|On behalf of the Board of Directors|
|For Paras Petrofils Limited|
|Date: 12.07.2019||Whole Time Director & CFO|