Sunrise Asian Ltd Management Discussions

BUSINESS PERFORMANCE AND OVERVIEW

The Management Discussion and Analysis Report is being included as part of the Directors Report, in compliance to the Corporate Governance norms as suggested by the Listing Agreements with stock exchanges and as approved by the Securities and Exchange Board of India (SEBI). The Management Discussion and Analysis Report comprises of discussions on following matters:

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company is in the business of manufacturing textiles and garments. During the financial year 2014-15, Indian economy went too many changes in every aspect, be it financial, economical or political. All these changes have majorly effected the corporate environment in India. The duty free entitlement for import of trimmings and embellishments used by the readymade textile garment sector for manufacture of garments for exports is being increased from 3% to 5%. Specified goods imported for use in the manufacture of textile garments for export are exempted from Basic Customs Duty (BCD) and Countervailing Duty (CVD) subject to some conditions.

The Textile Sector in India ranks next to Agriculture. Textile is one of Indias oldest industries and has a formidable presence in the national economy in as much as it contributes to about 14 per cent of manufacturing value-addition, accounts for around one-third of our gross export earnings and provides gainful employment to millions of people. The textile industry occupies a unique place in our country. One of the earliest to come into existence in India, it accounts for 14% of the total Industrial production, contributes to nearly 30% of the total exports and is the second largest employment generator after agriculture.

Indias textile industry is one of the economys largest. In 2000/01, the textile and garment industries accounted for about 4 percent of GDP, 14 percent of industrial output, 18 percent of industrial employment, and 27 percent of export earnings (Hashim). Indias textile industry is also significant in a global context, ranking second to China in the production of both cotton yarn and fabric and fifth in the production of synthetic fibers and yarns.

Opportunities:

Global sentiment towards the Indian market has seen substantial improvement following the reforms initiated in Policy and Regulatory norms by the Indian Government. Recent Government measures intended structural reforms in the Indian economy are in the right direction to make India as a new manufacturing hub to the World. In order to reduce the import bill, the Government planned to support the manufacturing capabilities in India.

The unique structure of the Indian textile industry is due to the legacy of tax, labor, and other regulatory policies that have favored small-scale, labor-intensive enterprises, while discriminating against larger scale, more capital-intensive operations. The structure is also due to the historical orientation towards meeting the needs of Indias predominately low-income domestic consumers, rather than the world market. Policy reforms, which began in the 1980s and continued into the 1990s, have led to significant gains in technical efficiency and international competitiveness, particularly in the spinning sector. However, broad scope remains for additional reforms that could enhance the efficiency and competitiveness of Indias weaving, fabric finishing, and apparel sectors.

RISK AND CONCERNS

The Company is exposed to a variety of operational, business and market risks including but not limited to technological changes, decrease in product prices, customer defaults, foreign exchange currency fluctuation, interest rates risk and inventory carrying risk. The Company continuously monitors these risks. The objective of Companys risk management system is to prepare and maintain a proper strategy to ensure that risk exposure arising out of business does not result in any financial crisis. The prevailing uncertainty in some legal disputes/demands etc. raised against the Company, arbitrary disallowances in certain tax proceedings and untenable disputes raised are the additional areas of concern perceived by your Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequately adopted the procedures to ensure the proper internal control, suitable policies and guidelines as required under various provisions of the Companies Act, 2013 and the Listing Agreement are in place. These policies, e.g. Vigil Mechanism policies/ Whistle Blower Policies, Risk Management Policy are meant to comply with the requirement of the law, to reduce the possible threats of fraud and to ensure the orderly and efficient conduct of the business of the Company. These policies and guidelines are adequately monitored by the designated Committees of the Board. The Company apart from the above has also in place a system of internal audit adequate in respect to the size and operations of the Company. M/s Rahul Lodha & Associates, Chartered accountants had been the Internal Auditor of the Company for the financial year 201415. No material discrepancies have been reported by them during the period of the Audit. The Company prepares the financial information/Reporting as per the requisite requirements of the Companies Act, 2013 and the Listing Agreement, and place it to the Audit Committee and Board for the approval, once approved the said financial results are submitted to the stock exchange and also placed on the website of the Company.

ROLE OF INDIAN TEXTILE INDUSTRY IN THE ECONOMY

Textile industry plays a significant role in the economy. The Indian textile industry is one of the largest and most important sectors in the economy in terms of output, foreign exchange earnings and employment in India. It contributes 20 per cent of industrial production, 9 per cent of excise collections, 18 per cent of employment in industrial sector, nearly 20 per cent to the countrys total export earnings and 4 percent ton the GDP. The sector employs nearly 35 million people and is the second highest employer in the country. The textile sector also has a direct link with the rural economy and performance of major fiber crops and crafts such as cotton, wool, silk, handicrafts and handlooms, which employ millions of farmers and crafts persons in rural and semiurban areas. It has been estimated that one out of every six households in the country depends directly or indirectly on this sector.

India has several advantages in the textile sector, including abundant availability of raw material and labor. It is the second largest player in the world cotton trade. It has the largest cotton acreage, of about nine million hectares and is the third largest producer of cotton fiber in the world. It ranks fourth in terms of staple fiber production and fourth in polyester yarn production. The textile industry is also labor intensive, thus India has an advantage.

IN GLOBAL SCENARIO

Developed countries exports declined from 52.2% share in 1990 to 37.8 % in 2002. And that of developing countries increased from 47.8% to 62.2 % in the same period. In 2003 the exports figures in percentage of the world trade in Textiles Group (for select countries) were:

The above chart clearly shows that export of world trade in textile group. Among world textile group EU occupies 34.80% of export, next China at 15.90%, USA at 6.40%, Republic of Korea at 6.00% Taipei, Ch at 5.50%, India and Japan at 3.80% respectively, Pakistan at 3.40%, turkey at 3.10% and Mexico at 1.20%.

HUMAN RESOURCE DEVELOPMENT

The company has only limited administrative staffs with no business operation, Human Resources/Industrial Relations during the financial year have been dispute free and cordial. The company has a policy relating to the remuneration to the of Whole time Director/ Executive/ Managing Director, Key Managerial Personnel (KMP) and Senior Management Personnel, as required under the Companies, 2013 and the Clause 49 of the Listing Agreement. The same was adopted by the board and placed on record. The Company has been operating with 10 employees during the year.

CAUTIONARY STATEMENT

Investors are cautioned that statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations 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 could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas market in which the Company operates, risks inherent in the Companys growth strategy, change in Government regulations, tax laws and other statutes and other incidental factors.

FUTURE OUTLOOK

Sunrise Asian Limited, is a fast growing, profitable company that is involved in the core business of trading in textiles, chemicals, and precious metals in both the domestic as well as global markets. It is a cash rich, fast growing entity that is poised to fast track its growth.

In the fiercely competitive field of high volume, low margin international trade, Sunrise Asian has proven capabilities. While keeping our trajectory of the trading business intact, Sunrise Asian today is a transformed entity with the acquisition of five successful and profitable Indus Group companies. This consolidation will add to Sunrise Asians business potential and raise its operating margins, to the benefit of all stakeholders. The newly acquired companies will benefit from access to the cash rich Sunrise Asians coffers which has reserves close to Rs. 80 crores.

With rapid urbanization, the rise of an affluent and aspirational middle class, the market for real estate both residential as well as commercial is on a sustained high. Indus Realtors Builders Limited has land banks across different markets that were acquired at historical costs. It also has a well co ordinate team that designs, builds and delivers projects within deadlines with excellent quality.

Indus Cine Production Private Limited began its journey in the annals of Indian cinema with a Bhojpuri regional film - "Daamad Chahi Fokat Mein" (Want a son-in-law for free). Promoting a regional focus Indus Cine Production focuses on Regional films, which have a great potential considering the vast numbers of languages, cultures that form the Indian subcontinent. There are many new upcoming movies of the Production House. Indus Meditech Private Limited is one of the leading Indian Pharmaceutical products and service companies that offer a suite of varied products that help combat disease and sustain health. The company has a range of pharmaceutical products that include remedies for ailments related to ENT, Antibacterial, Typhoid and Para typhoid, Productive cough, Allergies, Acidity, Nutritional deficiencies, Digestive systems and Inflammation. The company is recently launching 5 new medicines which will be of Highest quality.