HKG Ltd Management Discussions.

INDUSTRY OVERVIEW

The Computer Hardware and Steel Market has grown steadily over the last few years while it slowed down during the global economic recession but is likely to grow at a faster rate compared to the growth rate of past three years. The value of worlds computer hardware wholesale market is expected to grow at a faster rate compared to the growth rate of past three years.

The Global fabrics industry overview suggests drastic technological changes resulting in increased quantity and quality of fabrics and a decrease in overhead and labor costs. New innovations in fabric manufacturing are fast changing the face of the industry. Due to globalization and liberalization, the fabric makers in one country face competition not only from domestic but also from international manufacturers. China has come to dominate the global textile scenario, followed by Turkey, India, US, and other countries.

OVERVIEW OF THE INDIAN TEXTILE AND APPAREL INDUSTRY

Indias textiles 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 with approximately 13 per cent of total exports. The textiles industry is also labour intensive and is one of the largest employers. The textile industry has two broad segments. First, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale.

The textile industry employs about 105 million people directly and indirectly. Indias overall textile exports during FY 2017-18 stood at US$ 37.74 billion.

The Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world.

OPPORTUNITIES&THREATS

Opportunities

Just as past advances provided opportunities to the IT hardware industry, new advances in computer technology continue to provide new opportunities for savvy small business entrepreneurs. The rise of tablet PCs and smartphones, for example, creates the potential to serve new markets, increasing the revenue. The textile industry records an annual growth of around 6-8%. More number of emerging malls and retail industries are providing opportunities to industrys segments like handicrafts and apparels.

Yogya Enterprises Limited creates opportunities for small businesses to secure long-term, high- volume sale contracts with company who view their service reliability as a major competitive advantage.

Threats

The Biggest Challenge before the Company is that it is facing stiff competition both in computer hardware business and fabric business segments. In the computer trading segment, there are a number of well established players in the market. The Company faces competition from both the organized and unorganized sector in the segment, e-retail as well as from already established branded e-retailers. In fabric segment Company face the competition from other existing traders and manufacturers of fabrics. Many of Our Competitor has substantially large capital base and resource and offer broader range products.

COMPANY OUTLOOK

Future outlook for the company is good.

RISK MANAGEMENT

The Risk Management policies of the Company ensure that all the moveable and immoveable assets of the Company are adequately covered. The same are renewed by the Board from time to time. Besides the Company is prone to usual risks of the business like change in demand, any change in export policy of the Government, international agreements on trade and tariffs etc.

INTERNAL CONTROL SYSTEM

The Company has developed an internal control system and procedures to ensure efficient conduct of business and security of its assets. Management Information system has been developed through which production performance and financial dealings are monitored by management on regular basis.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Total Standalone Revenue for the year has increased to Rs. 7.21 Cr from Rs. 5.24 Cr. The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 and relevant Accounting Standards.

PROFITS

The Companys profit after tax is reduced from profit of Rs. 22.17 Lacs in the previous year to loss of Rs. 90.40 Lacs in the current year.

EARNING PER SHARE (EPS)

The Company recorded an EPS of Rs. 2.58 (negative) in Financial Year 2018-19 as compared to 0.63 in Financial Year 2017-18.

DIVIDEND

Since there is loss during the year, No Dividend has been declared.

HUMAN RESOURCES

The Company believes that the workers are the backbone of the Company. It is providing an opportunity to all the employees to utilize their full potential and grow in the organization. The Company always considers its human resources as valuable asset and is committed towards their development for continuous growth. Focus on training to enhance the skill-sets of employees in line with the business and market requirements continued throughout the year. The employee relations have continued to be harmonious throughout the year. As on 31.03.2019, the total number of employees was Three (03).