Shiva Texyarn Ltd Management Discussions.

COMPANYS BUSINESS

The Company engaged in the business of manufacturing and marketing of Cotton Yarn and other value-added textiles products viz. Coated and Laminated fabrics, Home Textiles and Back bags. The Company have a spinning unit near Coimbatore with an installed capacity of 52416 spindles, Lamination, Coating, Bag and Garment units near Coimbatore, Processing unit at SIPCOT, Perundurai for dyeing/printing activities and 58 Windmills with an installed capacity of 18.145 MW of power.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian textile industry, is estimated at around USD 150 billion as of July 2017, is expected to reach USD 250 billion by 2020. The Indian textile industry contributes approximately 4% to Indias Gross Domestic Products(GDP), 10% of manufacturing production and 14% to overall index of industrial Production(IIP). India has second largest textiles manufacturing capacity globally accounting for 18% of world spindles 9% has a share of 5% in global textiles and apparent trade the textile industry. Is the second largest source of employment generation source in the country employing about 51 million people directory and 68 million people indirectly. Globally, the technical textiles contributes to about 27% of the world textile industry in some of the western countries it share is even 50% while in India its 11%. Thus the growth and all round development in this industry as a direct bearing on the improvement of the economy of the country.

OPPORTUNITIES

India is more cost competitive than China and Brazil across a range of materials. India also has a diverse supply of raw materials, 23 varieties of cotton and all four varieties of silk. This Inherent strength in availability of raw materials insulates the market from any supply - Side shocks. Labor costs in India continue to be significantly low as compared to other countries. This factor provides a significant advantage a textile industry in India, in terms of increased productivity at lower cost. With government support and new technological advancement there is huge scope for exports in the ever increasing demand of technical textile industry globally.

Strong raw material base, economized cost of production, supporting government policies like TUF scheme, Scheme for integrated textile parks, integrated processing development scheme for sanctioning processing parts and integrated skill development scheme and recognition Indian goods of international markets provide excellent opportunity for India to increase its share in world trade.

OUTLOOK

Indias textile industry is an attractive sector that is poised for growth. The industry enjoys significant strengths and advantages, such as availability of raw material, labor, domestic market and supportive government policies. The industry is also under growing transformation, with an increasing no of MNCs establishing their presents to leverage Indias potential. The outlook for Indian textile industry remains optimistic, as demand is expected to pick up on account of improving economic sentiments in both domestic and exports markets.

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 and Government policy on export of Cotton.

Availability of Labor, competition from countries having preferential trade agreement with developed economies 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 at length in Directors Report to the Members. Material Developments in Human Resources / Industrial Relations front, including number of people employed

Details of significant changes (i.e change of 25% or more as compared to the immediately previous financial year) in key financial ratios and networth.

S. No. Ratio 2018-19 2017-2018 Change (%) exceeding 25% Reasons for Change
1 Debtor Turnover 14% 11.38% NA
2 Inventory Turnover 23% 18.60% NA
3 Interest coverage ratio 1.99 2.39 NA
4 Current Ratio 0.99 0.89 NA
5 Debt Equity Ratio 0.69 0.67 NA
6 Operating Profit Margin % 12% 12.82% NA
7 Net profit Margin % 1.81% 3.18% 43% Due to high raw material cost and operating costs
8 Net worth (Rs. Lakhs) 11199.73 10810.42 NA

 

By Order of the Board
Coimbatore S V ALAGAPPAN
29th May, 2019 MANAGING DIRECTOR