Shree Shaleen Textiles Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

Indian Textile Industry has an overwhelming presence in the economic life of the country. I he Indian textile industry is extremely diverse encompassing hand-spun and hand woven sector at one end of the spectrum, and capital intensive, sophisticated mill sector at the other. Decentralized power looms hosiery and knitting sector form the largest section of the sector. The close linkage of the Industry to agriculture and the ancient culture, and traditions of the country make the Indian textiles sector unique in comparison with the textiles industry of other countries. This also provides the industry with the capacity to produce a variety of products suitable to the different market segments, both within and outside the country.

During the year 2015-16. the industry witnessed a significant slowdown in textiles production due to a combination of factors such as slowdown in demand, high raw material prices, piling up of stocks, etc. However, the company has been able to survive the situation.

BUSINESS OVERVIEW

The Company has adequate internal control systems and is in process of further strengthening the existing internal control systems. The financial statements are reviewed periodically by the management. The Company has set up an Internal Audit trail whereby deviations, if any. can be brought to the notice of the management quickly and remedial actions are initiated immediately.

OPPORTUNITIES AND THREATS

The Companys ability to foresee and manage business risks is crucial in achieving favorable results. While management is positive about Companys long term outlook, we are subject to few risks and uncertainties as given below.

Pricing Pressure due to competition / competitive bidding

Business opportunities also bring competition. The Company is operating in a highly competitive environment. During the previous year, the Company has observed that; (I) relatively smaller companies have been dominating the bidding (2) competition has increased significantly in comparison to earlier rounds of bidding.

Raw material

The Prices of Raw Material increased during the year thereby causing increase in cost of production. Manpower

The timely availability of skilled and technical personnel is one of the key challenges. The Company maintains healthy and motivating work environment through various measures.

FINANCIAL AND OPERATING PERFORMANCE:

The total income of the Company for the year 2015-16 was at Rs. 1379.22 lacs compared to Rs.716.47 lacs during the previous year. The Company has incurred profit of Rs. 15.20 lacs during the year as against Net Profit of Rs. 16.18 lacs for the previous year. The Company expects to earn increased revenues in the near future.

RISKS, INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control procedure commensurate with its size and nature of the business. The Company continuously upgrades these systems in line with best accounting practices.

ABILITY TO HIRE,TRAIN AND RETAIN PEOPLE

Our Ability to hire, train and retain people will determine the ability of our company to achieve desired objectives.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be "forward looking statements" within the meaning of applicable securities, iaws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments within the country, demand and supply conditions in the industry, input prices, changes in Government regulations, tax laws and other factors such as litigation and industrial relations.