bala techno industries ltd Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENT

The fabric industry comprises of power looms, mills and hosiery (knitting units).It can be divided into organized sectors. The mills make up the organized sector, while the unorganized sector includes the decentralized power loom segment and the hosiery segment.

Special Narrow Woven Fabric is part of the power loom industry and it caters to various segments of the knit industry and the end use comprises garments which are manufactured domestically and ultimately exported to various countries including USA, Europe and Middle East.

1. RAW MATERIALS

The raw materials used in manufacturing of fabrics, special fabrics, elastic tapes are cotton yarn, polyester yarn, synthetics yarn and rubber thread.

Cotton yarn and polyester yarn are abundantly available throughout the country and the capacity of spinning mills which manufacture such cotton and synthetic yarn have increased manifold in recent years.

Rubber thread is also manufactured and produced within the country.

2. OUTLOOK

The fabrics and the products produced by the company are used for the garment industry and garment industry of India has increased manifold.

On account of the decrease in costs in the country and gradual increase of cotton crop on an annual basis, scope for fabrics and garments export are progressively improving.

3. OPPORTUNITY & THREATS

Opportunities are that, being part of the Textile Industry, the TUF subsidy is available for the industry which helps to compete with competing countries.

Opportunities are arising out of the increasing demand of garments from USA & Europe. The threats would be from other competitive countries like Vietnam, china and Bangladesh.

4. SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Company is mainly engaged in the business in the manufacture of fabric and narrow elastic tape.

5. 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 and that transactions are authorized, recorded and reported correctly. The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of assets.

6. FINANCIAL AND OPERATIONAL PERFORMANCE

Please refer Boards Report on performance review.

7. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company recognized the importance and contribution of its human resources for its growth and development and is committed to the development of its people. The company has been adopting methods and practices for Human Resources Development. With utmost respect to human values, company served its human resources with integrity, through a variety of services by using appropriate training, motivation, techniques and employee welfare activities. Industrial relations were cordial and satisfactory.

8. CAUTIONERY STATEMENT

Factors which would make a significant difference to the companys Operations include availability of quality yarn, and rubber thread, and market prices in the domestic and overseas market, changes in govt. regulations and tax laws, economic conditions affecting demand/ supplies and other environmental factor over which the company does not have any control.