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Industry Structure & Development
The textile industry has two broad segments. First, the unorganized sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. India is the worlds second-largest exporter of textiles and apparels, with a massive raw material and manufacturing base. The textile industry is a significant contributor to the economy, both in terms of its domestic share and exports. This sector is one of the largest sources of job creation in the country, employing about 45 mn people directly. In the year 2019, the textile industry contributes approximately 15% of the countrys total exports and is one of the largest employers of labour in the Country. The Indian Textile Industry approximately contributes to 15% to the Overall Index of Industrial Production and 2% to the GDP.
Opportunities & Threats:
The textile industry in India traditionally, after agriculture, is the only industry that has generated huge employment for both skilled and unskilled labor in textiles. The textile industry continues to be the second largest employment generating sector in India. Further, Indian exports of locally made retail and lifestyle products has gone up.
The main threat to the industry is Competition from low cost neighboring countries like Bangladesh, Vietnam, Indonesia and Pakistan.
Segment-wise or product-wise performance:
Your Company has made sale of Readymade Garments to the service sector and of fabrics to various traders.
Total turnover of the Company during the year was Rs. 218.73 Lakhs as against Rs. 184.21 Lakhs in the previous year. Net profit after Tax was Rs. 0.88 Lakh as compared to loss after tax of Rs. 8.20 Lakhs in the previous year.
Risks & Concerns
The primary risk for the Company is with the unorganized low cost sector. Having to compete with low cost, low quality manufacturers is always a concern. Secondly, import of fabrics is always a direct competitor to the Company.
There are currently no significant borrowings and as such the Company is well isolated from financial risks & concerns, especially with the increasing interest rates.
Internal Control Systems
The Company has suitable internal control systems which ensure safeguarding the Companys assets, promote efficiency and ensure compliance with legal and regulatory provisions. The audit committee is headed by a businessman with over 40 years of financial expertise. The statutory auditors also discuss their comments and findings with the management as well as with the audit committee.
The Company has 5-6 employees on its payroll.
For and on behalf of the Board of Directors,
Of SUBHASH SILK MILLS LIMITED
Sumeet S. Mehra
Chairman & Director
Date: August 28, 2019