Shiva Mills Ltd Management Discussions

The Companys principal line of business is manufacturing and marketing of Cotton Yarn. The Company has a spinning unit near Dindigul, Tamil Nadu with an installed capacity of 39072 spindles and 22 Windmills with an installed capacity of 10.65 MW.

Overview of the Industry

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.

Textile Industry is providing one of the most basic needs of people. It has a unique position as a self-reliant industry, from the production of raw materials to the delivery of finished products, with substantial value-addition at each stage of processing; it is a major contribution to the countrys economy.

The Indian Textile industry witnessed major challenges in 2023 due to fluctuating cotton prices, diminishing demand, capacity under-utilization and dumping of imported fabrics and garments from China and Bangladesh.

The future of the Indian textiles industry looks promising, buoyed by strong domestic consumption as well as export demand.

OPPORTUNITIES

The textile industry in India is a booming sector with a lot of potential for growth. There are many reasons for this, including the cheap labor, vast land resources, and growing demand from both domestic and international markets.

The Textile and Apparel Industry is an integral part of Indias economy contributing approximately 2.3% to the GDP, 13% to industrial production and 12% to exports, according to Invest India. It is also the second largest employer in the country offering employment to 45 million people and 100 million in allied industries. The future of the textile industry in India looks bright and it is expected to continue to grow in the years to come.

SEGMENT-WISE OR PRODUCT - WISE PERFORMANCE

The Company has only one business segment in operation i.e., Textile Business. The performance of the operation of textile business is given under the heading "Review of Operations” of Directors Report.

OUTLOOK

High Volatility in cotton price both in domestic and international markets over last few months have hampered the textile sector business. Now that the prices are reverting to normal, with a good new cotton crop, things should get better.

RISKS AND CONCERNS

Availability of Cotton, the main raw material for manufacture of Cotton Yarn, is subject to the vagaries of nature and the prices also fluctuate wildly based on supply/demand in the World market. Availability of skilled labour, competition from low cost producing Countries having preferential trade agreement with developed economies, fluctuations in foreign exchange markets are some of the risks faced by the textile Industry.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate internal control procedures and systems commensurate with its size and nature of its business for purchase of raw materials, plant and machinery, components and other items and sale of goods. The checks and controls are reviewed by the Audit Committee for improvement in each of these areas on a periodical basis. The internal control systems are improved and modified continuously to meet with changes in business conditions, statutory and accounting requirements.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial performance of the Company has been discussed in Directors Report to the Members.

HUMAN RESOURCES

The workforce strength of the company as on 31.3.2024 stood at 773 including administrative and management staff. The Company maintained harmonious industrial relations across its spinning and windmill unit during the Financial Year 2023-2024.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS FOR THE FINANCIAL YEAR 2023-24 AND 2022-23

Comparative key financial ratios are furnished below. The ratios for the financial year 2023-24 comparing with previous financial year 2022-23.

S.No Type of Ratio	Parameter	2023-24	2022-23	%	Explanation , if any
				variance
1 Debtors Turnover Ratio	Times	9.25	10.80	(0.14)	Not Applicable
2 Inventory Turnover	Times	5.24	4.37	19.91	Not Applicable
3 Interest Coverage Ratio	Times	(4.16)	(6.85)	(39.00)	Company earned cash profit during the year
4 Current Ratio	Times	2.27	3.46	(34.36)	Effective use of working capital
5 Debt Equity Ratio	Times	0.11	-	-	Not Applicable
6 Operating Profit Margin (%)	%	(2.01)	(4.10)	(51.05)	Company earned cash profit during the year
7 Net Profit Margin (%)	%	(2.06)	(4.50)	(54.28)	Company earned cash profit during the year

DETAILS OF ANY CHANGE IN RETURN ON NETWORTH AS COMPARED TO IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

Return on net worth ratio for the FY 2023-24 at (-) 3.29% & FY 2022-23 at (-) 6.53 % due to loss as explained in the Directors Report.

MEDIUM TERM AND LONG TERM STRATEGIES

Striving to improve quality continuously keeping in pace with technological developments. Giving priority to the requirement of customers, creating new business opportunities and to focus on value maximisation.

	By Order of the Board
	S V ALAGAPPAN
Coimbatore	CHAIRMAN & MANAGING DIRECTOR
28th June, 2024	DIN 00002450