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Indias textile and apparel sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to Indias exports with approximately 13 per cent of total exports. The textiles industry is labour intensive and is the second largest employer in India, after Agriculture, employing about 52 million people directly and 68 million people indirectly. India has an abundant supply of raw material like wool, cotton, silk, jute and manmade fibre. India has a strong spinning, weaving, knitting and apparel manufacturing capacities. The textile industry will have to constantaly innovate and research for growth and to tap new markets. Based on Make in India, the textile industry is being infused with the matters of "skills, scale, speed" and "Zero-defect, Zero-effect". As per the data, maximum investment of around 475 crore came during the financial year 2016-17. In that year, as many as 51 new units were set up across Gujarat, especially in Ahmedabad and Surat regions considered as major textile hubs in the country. During the recently-concluded fiscal 2018-19, 32 new technical textile units were set up in the state with an approximate investment of 370 crore.
Indias textiles sector is one of the oldest industries in Indian economy dating back several centuries. Indias overall textile exports during FY 2017-18 stood at US$ 39.2 billion in FY18 and is expected to increase to US$ 82.00 billion by 2021 from US$ 31.65 billion in FY19 These are the advantages of textile industries.
The Indian textiles industry, currently estimated at around US$ 150 billion, is expected to reach US$ 250 billion by 2019. Indias textiles industry contributed seven per cent of the industry output (in value terms) of India in 2017-18.It contributed two per cent to the GDP of India and employs more than 45 million people in 2017-18.The sector contributed 15 per cent to the export earnings of India in 2017-18. The production of raw cotton in India is estimated to have reached 36.1 million bales in FY19.
The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route. Initiatives taken by Government of India are:
? The Directorate General of Foreign Trade (DGFT) has revised rates for incentives under the Merchandise Exports from India Scheme (MEIS) for two subsectors of Textiles Industry - Readymade garments and Made ups - from 2 per cent to 4 per cent.
? As of August 2018, the Government of India has increased the basic custom duty to 20 per cent from 10 per cent on 501 textile products, to boost Make in India and indigenous production.
? The Government of India announced a Special Package to boost exports by US$ 31 billion, create one crore job opportunity and attract investments worth Rs 80,000 crore (US$ 11.93 billion) during 2018-2020. As of August 2018 it generated additional investments worth Rs 25,345 crore (US$ 3.78 billion) and exports worth Rs 57.28 billion (US$ 854.42 million).
? The Government of India has taken several measures including Amended Technology Up-gradation Fund Scheme (A-TUFS), scheme is estimated to create employment for 35 lakh people and enable investments worth Rs 95,000 crore (US$ 14.17 billion) by 2022.
? Integrated Wool Development Programme (IWDP) approved by Government of India to provide support to the wool sector starting from wool rearer to end consumer which aims to enhance the quality and increase the production during 2017-18 and 2019-20.
? The Cabinet Committee on Economic Affairs (CCEA), Government of India has approved a new skill development scheme named Scheme for Capacity Building in Textile Sector (SCBTS) with an outlay of Rs 1,300 crore (US$ 202.9 million) from 2017-18 to 2019- 20.
Following are the achievements of the government in the past four years: ? I-ATUFS, a web-based claims monitoring and tracking mechanism was launched on April 21, 2016.
? 381 new block level clusters were sanctioned.
? 20 new textile parks were sanctioned
? Employment increased to 8.62 million in FY18 from 8.03 in FY15.
The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market. High economic growth has resulted in higher disposable income. This has led to rise in demand for products creating a huge domestic market. Exchange Rate Used: INR 1 = US$ 0.0159 in FY19.
SEGMENT WISE OR PRODUCT-WISE PERFORMANCE
To refer Product Wise Performance, kindly review Note of Profit and Loss Statement: Revenue from Operations forming part of this Annual Report.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
(Amount in Rs.)
|Particulars||F.Y. 2018-19||F.Y. 2017-18|
|Income from Operations||1,63,21,31,432||1,04,26,91,653|
|Less: Total Expenses (excluding Depreciation & Interest)||1,41,33,82,650||90,34,86,087|
|Operating Profits (PBDIT)||22,27,63,562||14,35,47,805|
|Less: Finance Cost||8,15,49,053||2,92,97,666|
|Profit Before Tax||3,09,61,588||1,95,84,124|
|Net Profit after Tax||1,90,58,930||1,33,81,885|
REVIEW OF BUSINESS OPERATION Financial performance:
During the year there were new developments happened in the company by which the company may reach to a new height soon. During the year under review, Company has earned total income of Rs. 1,63,61,46,212 as against the total income of Rs. 1,04,70,33,892 for previous year. The total income of the company was increased by 56.26% over previous year. Further, Profit before Tax in the financial year 2018-19 stood at Rs. 3,09,61,588 as compared to Rs. 1,95,84,124 of last year and Net Profit after Tax stood at Rs. 1,90,58,930 compared to profit of Rs. 1,33,81,885 for previous year. The Profit before tax and Net profit After Tax was increased by 58.10% and 42.42% respectively over previous year. The increase in revenue from operation led the Company to generate higher profit compared to previous year.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Internal Control system and adequacy Internal Control measures and systems are established to ensure the correctness of the transactions and safe guarding of the assets. Thus, internal control is an integral component of risk management. The Internal control checks and internal audit programmes adopted by the Company plays an important role in the risk management feedback loop, in which the information generated in the internal control process is reported back to the Board and Management. The internal control systems are modified continuously to meet the dynamic change. Further the Audit Committee of the Board of Directors reviews the internal audit reports and the adequacy and effectiveness of internal controls.
HUMAN RESOURCES DEVELOPMENT / INDUSTRIAL RELATION
"Creating peaceful industrial relation is one of the factors that boost productivity and increase job opportunities that operating in a business friendly environment helps firms to successfully produce first class goods and services, increasing jobs and developing new technologies. "Employment relations in textile and garment industry should be improved to ensure decent work and enduring industrial peace". We think its time for businesses to start conducting themselves in a more honest, ethical and sustainable way. Were passionate about, and completely committed to conducting our business in a way that has a positive impact on the people and our environment. Environmental sustainability and being Green is so much more than just a condescending consumer add-on. Our world and the people who call it home are worthy of much more. As at March 31, 2019, the Company had 50 employees.
At industrial level, the project is expected to encourage the labour administrations capacity for labour inspection and dispute settlement; and employers, workers and their organizations organizational capacity by boosting sound industrial relations and social dialogue practices.
RISK AND CONCERN
Key factors affecting the results of operation:
Our Companys future results of operations could be affected potentially by the following factors:
? Political Stability of the Country.
? World Economy.
? Government policies for the capital markets.
? Investment Flow in the country from the other countries.
? Government policy for textile sector
? Competition from existing players
? Companys ability to successfully implement our growth strategy
? The loss of shutdown of operations of our Company at any time due to strike or labour unrest or any other reasons, ? Loss due to delay in execution of projects in time
To conclude, the performance of the company during the year 2018-19 was improved in all parameters as compared to previous years. In spite of lots of challenges, the performance of the company was satisfactory. By implementing cost effective measures and aggressive marketing strategies the company will achieve further improvement in its performance and serve the stakeholders in a way ahead.
DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
|Particulars||F.Y. 2018-19||F.Y. 2017-18||Reason|
|Debtors Turnover||5.72 times||9.11 times||Due to reduction in collection period|
|Inventory Turnover||14.87 times||14.92 times||The Company is maintaining high level of inventory to meet market demand|
|Interest Coverage Ratio||1.40 times||0.55 times||Due to increase in operating profitability|
|Current Ratio||1.63 : 1.00||2.18 : 1.00||Due to increase in current liabilities|
|Debt Equity Ratio||2.80 : 1.00||3.44 : 1.00||Due to increase in Share Capital and Securities Premium|
|Operating Profit Margin (%)||6.65%||4.22%||Higher turnover resulted into higher operating profit margin|
|Net Profit Margin (%)||1.17%||1.25%||Due to increase in finance cost|
|Return on Net Worth||4.49%||4.34%||Higher turnover resulted into higher profitability|
Statement in the Management Discussion and Analysis, describing the Companys objective, projections and estimates are forward looking statements and progressive within the meaning of applicable security Laws and Regulations. Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental factors.