Shri Lakshmi Cotsyn Ltd Management Discussions.
Shri Lakshmi Cotsyn Limited (SLCL) was engaged in the manufacturing of technical textile , denim, terry towels, bottom weights, home furnishing, high margin technical and safety textiles (Water Repellent Bed Linen, Vi amin E bed Linen, Fire Retardant Fabrics, Organic Bedspread, Breathable Fabrics, NBC (Nucle r Bio-Chemical) Fabrics, MSCN (Multispectral Camouflage Nets) Fabric, Flex Fabric, Blackout and ECW (Extreme Cold Weather) Fabric., among others. The Company had 6 state-of-the-art manufacturing facilities located across India but since February 2019, all the units of the Company were closed. During the year 2 18-19, Company faced lot of problems on account of financial stress hence operations of the units were restricted between 5% to 10% of its installed capacity on job work basis due to the non-payment of salary to the workers and staff.
Global textile industry
The global textile mills market is forecast to reach $842.6 billion in value in 2020, an increase of 26.2% since 2015. The compound annual growth rate of the market in the period 201520 is predicted to be 4. %. [Data source: Market Line (2017)]
Indian textile industry Overview
Indias textiles sector is one of the oldest industries in Indian economy and is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum.
India is among the worlds largest producers of Textiles and Apparel. Domestic Textile and apparel industry contributes 2.3% to Indias GDP an accounts for 13% of industrial production, and 12% of the countrys export earnings.
The Textiles & garments industry in India is second largest employer in the country in the country providing employment 45 million people. It is expected that the number will increase from 45 million in FY2017-18 to 55 million by 2020.
FDI in the Textiles & Apparel industry has reached up to $ 3.1 bn during 2018-19
Exports in the Textiles & Apparel industry are expected to reach $ 300 bn by 2024-25 resulting in a tripling of Indian market share from 5% to 15%
Since the Company is under Corporate Insolvency Resolution Process (CIRP) and undergoing with the moratorium period, hence all the manufacturing facilities of the company are closed due to lack of working capital and Workers. The he Company had Strong infrastructure with state-o -the-art large man facturing facilities at 6 locations which are presently non-operational.
Weakness all the manufacturing facilities of the company are closed due to lack of working capital and Workers. High liquidity constraints during the year adversely affected Companys financial performance during the year.
The existing promoters/management has submitted a settlement plan with NCLT under Section 12A of IBC which is under consideration as yet. If the settlement plan is approved by the Honble NCLT, the company may get the opportunity for the revival.
The Company is under NCLT and presently non-operational.
Accounts prepared on a historical cost basis, based on accrual method of accounting in accordance with applicable accounting standards issued by The Institute of Chartered Accountants of India.
The Company had stringent quality checks at every stage of the production and had adapted advanced TQM methodologies to deliver consistency through across pre-set parameters.
Human Resources & Industrial Relations
On account on non-payment of wages and salaries to the workers and staff during the CIRP period, there occurred various disturbances among the workers which affected the Companys performance during the year.
The Companys risk management framework identifies the risks including unfavourable industry slowdown, increasing competitive pressures from the Indian peers and neighbouring countries, adverse currency movements and poor quality and weaker distribution strategy amongst others.
Internal control system
The large size and nature of the business demands the Company to maintain a proper internal control system. Constant efforts are made by the management to maintain a sound financial and commercial practice capable of improving the efficiency of the operations and sustainability of the business.
Corporate Social Responsibilities
The Company continues to extend to include an acknowledgement of the companys responsibility to a broad range of stakeholders, as well as employees, customers, communities and the environment. The Company has followed "Green Initiative in Corporate Governance" by allowing paperless compliances through electronic mode to contribute to the Corporate Social Responsibility.
On the back of the changing macro-economic scenario, the Company is still trying to explore possibilities of bouncing back and leveraging the favourable external scenario.
|For and on behalf of the Board|
|Dr M P Agarwal||Pawan Kumar Agarwal|
|(Chairman and Managing Director)||(Joint Managing Director)|