MANAGEMENT DISCUSSION AND ANALYSIS A. INDUSTRY STRUCTURE AND DEVELOPMENTS Textile Industry is the largest employer of world force after agriculture; it plays a crucial role in the Indian economy. Its importance to the Indian economy is recognized for its significant contribution to industrial production and export earnings. The Indian spinning sector is largely organized and continues to be a brdominant supplier of cotton yarn in the world. The cotton yarn manufactured by the Indian spinning mills is said to be one among the best in the world. The Cotton Industry faced major challenges during the year. Yarn prices remained less due to lower demand both in domestic and international market, cotton prices were less when compared to the brvious years. The Chinese government policy on usage of their cotton reserves and reduction of import of cotton made an impact on cotton yarn price and exports. CCI procured cotton at the minimum support price in large quantity during the brvious year. Hence the cotton price in India remained high as compared to international cotton prices . Thus Indian cotton yarn was not competitive. B. OPPORTUNITIES, THREATS, RISKS AND CONCERNS The formation of a stable government in the centre is expected to boost the demand for textile goods . Due to excess production and significant erosion in margins due to servers competition have had a negative impact on the profitability of the industries. The operating margins are also high due to input cost like electricity and manpower. C. SEGMENT –WISE OR PRODUCT-WISE PERFORMANCE At brsent the segmental reporting is not applicable to the company as it operates only in single reportable business i.e. “Textiles” D. OUTLOOK Cotton supply is expected to decline since farmers may shift to alternate crops. Even then cotton availability will be comfortable due to higher carry forward stocks and decline in export of cotton to china. The policy of stocking by CCI will continue to have an impact on the cotton price and the competitiveness of cotton yarn in the global market. The target of new government to improve industrial production is expected to improve the demand for cotton yarn in the second half of the current year. The Company has taken measures to cut cost and rationalize its operations wherever possible to yield better results. E. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The company has a proper and adequate internal control system to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition. All the transactions are authorized, recorded and reported correctly. F. FINANCIAL AND OPERATIONAL PERFORMANCE Please refer Board Report on financial and operational performance review. G. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT The company has been conducting training & motivational programmes for both the management staff and the workers. The purpose is to increase the competency levels in the organization. The company recognizes the importance and contribution of its human resources for its growth and development and is committed to the development and is committed to the development of its people. H. CAUTIONARY STATEMENT Certain statements made in the Management Analysis and Report relating to company’s outlook expectations etc may constitute forward, looking statements within the meaning of the applicable laws and regulations. Actual results may vary from outlook expectations etc. whether exbrss or implied several factors could make a significant difference to the company’s operations which may include climate conditions economic conditions affecting demand and supply Government regulations natural calamity, etc over which the company does not have any control. |