Management's Discussion and Analysis Industrial Scenario Indian Textile Industry -An Engine for growth and one of largest employment creators in Indian Economy • India continued to hold a crucial position in global textile industry, owing to its advantages of adequate availability of raw materials, relatively lower conversion costs, skilled manpower and favourable demographics. Cotton and polyester accounted for around 92 per cent of the total fibre requirements of Indian textile mills. • Indian textile industry has shown a strong growth, sustained by strong domestic consumption. Availability of raw materials such as cotton, wool, silk and j ute in huge quantity and skilled workforce has made India an important player in the textile industry. • Textile exports are expected to grow by more than 15% during FY15. The Indian textiles and clothing industry is one of the largest contributors to the country's exports. Exports of textiles have increased steadily over the last few years, particularly after 2004, when textiles exports quota stood discontinued. • During FY14, exports were estimated to increase to US$ 29,596.46 million - registering a growth of 12.27%. Further, in FY15, the exports are expected to grow by 15.75%. Given the growth in textile exports due to the investment inflows to this sector to expand the capacity in the entire value chain, the working group constituted by the Planning Commission has estimated the overall growth for exports at 15% with an export target of US $ 65 bn by end of Twelfth Five Year Plan (FY17). • The industry provides direct employment to over 35 million people and is the second largest provider of employment after agriculture. • 1.5million trainees are expected to be benefitted from the ISDS scheme during Twelfth Five Year Plan as the sector is one of the largest employment provider, the major concern that would hamper the growth of the industry is the non-availability of the quality and skilled labour and also inadequate training facilities in the country. • The Textile Ministry has recommended continuation of the Technology Upgradation Funds Scheme (TUFS) over the 12th Five Year Plan (2012-13 to 2017-18). • Government has allowed 100% Foreign Direct Investment (FDI) in Textiles under the automatic route. • The Government of India has announced a package of US$ 604.56 million to waive of overdue loans in the handloom sector. • The Indian Government has given approval to 40 new Textile Parks to be set up to execute over a period of 36 months. • The potential size of the Indian Textiles industries is expected to reach US$ 220 billion by 2020. • The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. • India has the potential to increase its textile and apparel share in world trade. The Indian textiles industry produces a wide variety of fibres, from cotton to manmade, wool, silk, jute, and multiple blends catering to different demands and needs of companies. India has become a popular destination for many big global retailers due to its strength of vertical and horizontal integration. The quality of the country's products is seen in the repeat orders from these global companies and the significant growth in their outsourcing from India. Source: The Indian Textile Journal & fibre2fashion.com Strengths • Indian Textile Industry is an Independent & Self-Reliant industry. • India has availability of abundant raw material which helps to control the costs and reduces the lead time. • Availability of Low Cost and Skilled Manpower provides competitive advantage to industry. • Availability of large varieties of fibre and has a fast growing synthetic fibre industry. • Industry has large and diversified segments that provide wide variety of products. • Indian textile industry is a self reliant industry which has complete value chain from the procurement of raw materials to the production of finished goods. • The Company's own quality control department equipped with latest computerised machines and personnel also adds to the strength of the Company. • The Company owns land measuring 25909 sq. yards at Muradnagar, District Ghaziabad, Uttar Pradesh, India, which is also sufficient to meet future expansion plans of the Company. Weakness • Indian Textile Industry is highly Fragmented Industry. • Industry is highly dependent on Cotton. • Rigid & unfavorable labor Laws. • Lack of Trade Membership, which restrict to tap other potential market. • Lacking to generate Economies of Scale. • Use of outdated technology resulted in low productivity & production capacities as compared to China. • Comparatively high expenses like indirect taxes, power & interest. Opportunities • A number of initiatives have been announced to support the handloom and powerloom industries. • Anumber of e-marketing platforms have been developed to simplify marketing issue. • Greater Investment and FDI opportunities are available. • Large, Potential Domestic and International Market. • Product development and Diversification to cater global needs. • Elimination of Quota Restriction leads to greater Market Development. • Market is gradually shifting towards Branded Readymade Garment. Threats • China is the biggest threat to the Indian textile industry alongwith low cost producing countries like Pakistan & Bangladesh. • Polyester manufacturers struggled to pass on high raw material costs due to sluggish demand and declining cotton prices. • Continuous Quality Improvement is need of the hour as there are different demand patterns all over the world. • Threat for Traditional Market for Powerloom and Handloom Products and forcing them for product diversification. • Geographical Disadvantages relating to Export & Import of goods. • To make balance between price and quality in order to compete with cheaper imports. Financial Outlook • The Company wishes to capture the growth in Textiles & plans to grow by investing mainly in blended Textiles & to intend to be a leader in the segment. Business Segment: Segment-wise Performance During the year 2014-15 Company's major activity remained confined to Manufacturing of Polyester Yarn and trading in fabrics. Company Outlook It is the endeavor of the Company to improve its performance by adopting new techniques of production, improve product acceptability and cutting/reducing costs wherever possible. Your Company has already initiated steps in this regard. Risks Although the yarn market is very competitive in respect of its margins, still there is plenty of demand for polyester yarn all over India as well as in abroad. There is a normal risk of competition as in other businesses. Internal Control System The Company has developed an internal control system and procedures to ensure efficient conduct of business and security of its assets. Management Information System has been developed through which production performance and financial dealings are monitored by management on regular basis. Human Resources The Company believes that the workers are the backbone of the Company. It is providing an opportunity to all the employees to utilize their full potential and grow in the Organization. There was no strike or labour unrest during the last financial year. As on 31.03.2015 the total numbers of employees were 68. Risk Management Pursuant to Section 134(3)(n) of the Companies Act, 2013, the Company has developed and implement the Risk Management Policy for the Company including identification therein of elements of risk, if any, which is in the opinion of the Board may threaten the existence of the Company. These are discussed at the meeting of the Audit Committee and the Board of Directors of the Company. At brsent the Company has not identified any element of risk which may threaten the existence of the Company. The assets of the Company are adequately insured and Board reviews the same from time to time. Registered Office: Pawan Puri, Muradnagar. Distt. Ghaziabad (U.P.)-201206 by Order of the Board For Sybly Industries Limited Sd/- (Mahesh Chand Mittal) Managing Director DIN : 00284866 Sd/- (Nishant Mittal) Whole Time Director & CFO DIN : 02766556 Place: Muradnagar Date : 7thAugust, 2015 Residential Add.: Flat No.603, OC-2, Orange County, Ahinsa Khand-1, Indirapuram, Ghaziabad, 201014 |