INDIAN ECONOMY
The Leather industry in India holds a significant place in the Indian economy. This
sector is known for its consistency in high export earnings and it is among the top ten
foreign exchange earners for the Country. The leather industry is bestowed with an
affluence of raw materials. Added to this are the strengths of skilled manpower,
innovative technology, increasing industry compliance to international environmental
standards, and the dedicated support of the allied industries.
The leather industry is an employment intensive sector, providing job to about 4.42
million peoples, mostly from the weaker sections of the society. Women employment is
predominant in leather products sector with about 30% share. The Indian economy passed
through one of the most volatile periods in living memory in 2020-21 and 2021-22, during
Covid-19 pandemic. The overall performance of the Company during the year under review,
has been adversely affected due to the unfavorable economic and market conditions
prevailing throughout the year in all the business segments on account of disruptions
caused by the COVID-19 and other adverse situation. However, we expect no major changes in
the economic activity. The Council for Leather Exports has been playing an active role in
the overall growth and development of the leather industry.
THE COMPANY HAS 3 DIVISIONS VIZ.
1. 100% EOU at Nanjangud, Karnataka - Manufacturing High Quality Silk and
Velvet Fabrics.
2. Exports Division at Kolkata - Exporting Industrial Leather Hand Gloves,
Silk & Cotton Fabrics and made- ups manufactured on Handloom etc.
3. A yarn division at Sarandi, Ahmedabad - The yarn unit which had suspended its
operations since December, 2015, due to steep competition and unfavorable market situation
has started business of trading of Cotton with effect from January, 2019.
1. EOU UNIT AT NANJANGUD
The Company was manufacturing high quality 100% silk fabric at the unit situated at
Nunjangud, Karnataka. Demands of the Silk & silk blends remained under pressure due to
high value of fabrics and less demand of expensive fabric in European and American
Markets. Due to this, company has changed its product mix and now less expensive qualities
are being offered in the market and response is good.
A. INDUSTRY STRUCTURE AND DEVELOPMENT
The Textile Industry is the oldest industry in the country dating back several
centuries. It is a major contributor to the Indian economy in terms of foreign exchange
earnings and employment. India ranks second in the production of textiles and garments
worldwide. The textile industry is instrumental in the development of Indian economy as it
contributes 2% to Indias GDP and 7% of industry output by value. The Indian textile
industry is set for growth, buoyed by both strong domestic consumption as well as export
demand. Favorable demographic, rising per capital income and a shift in customer
preference to branded products is expected to revive the textile industry which has been
severely impacted by the Covid-19 pandemic.
B. OPPORTUNITIES AND THREATS
At present the biggest threat is a second wave of pandemic Covid-19. It all depends how
fast it can be controlled to help in boosting confidence and reducing uncertainties.
Further abnormal increase in input cost and non-clarity on rates of export benefits are
creating uncertainty among the manufacturers and exporters.
As expected, some customers in USA and Europe have started shifting textile business
from China to India, Bangladesh, Vietnam, etc. Further brands focus has changed to
sustainable product lines which can satisfy fashion needs also. We are preparing ourselves
to take the advantage of both these changing trends. But at the same time, company has to
compete with big mills within India. Company is also developing new fabric using
anti-microbial inherent properties and anti-Covid finishes expanding its product offerings
and capturing new clients. Company is in better position to enter into low priced items as
trade relation between China and America is affected due to increase in import duties by
USA. Robust fabric demand and quality of Indian fabrics and the growth momentum in India,
despite rising inflation, may be taken as an opportunity for Indian exports.
C. OUTLOOK
The financial year 2022-23 witnessed a once in a lifetime situation. Covid-19 plunged
all the industries around the world into unprecedented times. Due to Covid-19, Textile
industry and export market has been badly affected. In the coming year financial year
2023-24, we are foreseeing increase in demand since few export customers have started
shifting their orders from China to India. However, the Global market outlook is still not
clear because of the new strain of Corona virus, world-wide. Vaccination drive has started
and there is hope to cover most of the population by second quarter across the globe. Our
Product mix are more focused on sustainability having innovative finishes and accordingly
new fabrics with anti-microbial properties are being developed and offered to our clients.
Also, new finishing techniques (anti Covid finishes) are also being explored to
reinvigorate sales and take advantage of the changing market conditions. Product mix is
being expanded to include outdoor fabrics and contract fabrics. The Company is expecting
better results in future.
2. TRADING DIVISION (LEATHER HAND GLOVES & SILK FABRICS MANUFACTURED ON
HANDLOOM)
A. INDUSTRY STRUCTURE AND DEVELOPMENT
The Indian Leather Industry plays a significant role in the Indian Economy in view of
its substantial export earnings, employment generation and growth opportunities. The
export of leather and leather products has increased over past few years. The industry is
known for its consistency in high export earnings and it is among the top ten foreign
exchange earners for the country. The Company is striving to capture over Global Market
and taking various steps to promote companys products all over the world and it is being
done in line with global trends to enhance scale, global competitiveness and financial
flexibility and also to contribute towards achievement of companys objective and to
increase revenue, production volume and market shares.
B. OPPORTUNITIES AND THREATS
The Company is extremely enthusiastic about the opportunities in financial year 2022-23
and beyond. The company is fully aware of the factors dictating competition and has been
investing with the ups and downs through its various effective measures like cost
optimization, competitive pricing, improved production process and enhanced customer
satisfaction. To exist in the competitive market company is consistently considering all
the significant factors, which provide sharp edges that enable company to enhance the
margin. Indias share in global market for industrial gloves is very minimal and hence,
there exists big scope for future growth.
In silk fabrics following COVID-19 pandemic and other adverse situation, the turnover
is expected to increase in financial year 2022-23 as the demand is expected to grow due to
an increasing demand from sports, apparel and home furnishing textile products.
C. OUTLOOK
The future outlook appears to be better.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The company has appropriate internal control system for business process across various
divisions with regard to efficiency of operations, financial reporting, compliance with
applicable laws and regulations. The company has kept highly skilled technical and
administrative people at our mill, due to which the internal control systems are strictly
maintained i.e. increasing productivity and cutting cost at every stage. Under the
supervision of highly experienced technical people, we are able to produce highest quality
of products for export market. Regular internal audits and checks ensure that
responsibility is executed effectively. The Audit Committee of the Board of Directors
actively reviews the adequacy and effectiveness of internal control systems and suggests
improvements for strengthening them.
FINANCIAL PERFORMANCE WITH RESPECT TO OPERATION
During the financial year ended March 31, 2023, your Company has achieved a turnover of
Rs. 6225.35 Lakhs as compared to the turnover of Rs. 9054.38 Lakhs recorded during the
previous financial year ended March 31, 2022.The Company has earned profit before tax for
the financial year ended March 31, 2023 of Rs. 200.03 Lakhs compared to previous financial
year profit of Rs. 135.32 Lakhs. The net profit after tax for the financial year ended
March 31, 2023 stood to Rs. 157.78 Lakhs as compared to profit of Rs. 101.78 Lakhs over
the last financial year.
SEGMENTWISE PERFORMANCE
|
|
(In Lakhs) |
|
2022-23 |
2021-22 |
| TRADING DIVISION |
|
|
| Sales |
4876.00 |
5974.00 |
| Net Profit |
270.00 |
328.00 |
| WEAVING DIVISION |
|
|
| Sales |
1230.00 |
1141.00 |
| Net Profit/(loss) |
(40.00) |
(47.00) |
| SPINNING DIVISION |
|
|
| Sales |
120.00 |
1940.00 |
| Net Profit/(loss) |
71.00 |
(18.00) |
MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT/ HEALTH, SAFETY
MEASURES, INCLUDING NUMBER OF PEOPLE EMPLOYED
Human resource continues to be one of the biggest assets and plays important role in
the success of the Company. The optimum utilization of the skill, knowledge and attitude
they possess are instrumental to the growth of the Company. Efforts have been made to
induct fresh talent inducing more and more professionalism. The management is paying
special attention to various aspects like training, welfare and safety and thereby further
strengthening the human resources.
Further, to prevent the spread of pandemic Covid-19, the Company has taken all
precautionary measures required, such as social distancing, use of masks and sanitizers
etc., at all its factory units and office spaces. Your Company is in full compliance of
all Government directives issued in this behalf. The Company has always considered safety
as one of its key focus areas and strives to make continuous improvement on this front.
The Company had very harmonious relationship with the employees/workers throughout the
year.
CAUTIONARY STATEMENT
Certain Statements which have been made in the Management Discussion and Analysis
Report describing the estimates, expectations or predictions, may be read as
‘forward-looking statements within the meaning of applicable laws and regulations.
The actual results may differ materially from those expressed or implied. The important
factors that would make a difference to the Companys operations include demand-supply
conditions, raw material prices, changes in Government Policies, Governing Laws, Tax
regimes, global economic developments and other factors such as litigation and labour
negotiations.
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