Global Economic Overview and Indian Economic Conditions
Given fragile economic conditions, any new adverse development such as
higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence
of the COVID-19 pandemic, or escalating geopolitical tensions could push the global
economy into recession. This would mark the first time in more than 80 years that two
global recessions have occurred within the same decade. Although global inflation is
expected to moderate, it will remain above pre-pandemic levels. Global headline inflation
in the baseline is set to fall from 8.7 percent in 2022 to 7.0 percent in 2023 on the back
of lower commodity prices but underlying (core) inflation is likely to decline more
slowly. Inflations return to target is unlikely before 2025 in most cases. The natural
rate of interest is important for both monetary and fiscal policy as it is a reference
level to gauge the stance of monetary policy and a key determinant of the sustainability
of public debt. Public debt as a ratio to GDP soared across the world during COVID-19 and
is expected to remain elevated. Supply-chain disruptions and rising geopolitical tensions
have brought the risks and potential benefits and costs of geo economic fragmentation to
the centre of the policy debate. While the Western world becomes the epicentre of global
tensions, Emerging and Developing Economies (EMDEs) are expected to outpace them by
growing at 3.9% in 2023 and 4.2% in 2024. Developing economies like South-East Asia and
Latin America are poised to perform well and benefit from strong job markets and ambitious
investment plans by governments in many countries. Emerging Asian economies led by China
and India are bound to grow by 5.3% in 2023 and 5.1% in 2024 respectively.
India, meanwhile, enjoys a Goldilocks moment as it sees its economic activity gaining
momentum amid continuing global uncertainties. The last quarters GDP data was pleasantly
surprising but not completely unexpected. The GDP growth in the fourth quarter has pushed
up the full-year GDP growth of FY2022 23 to 7.2%, 200 basis points (bps) higher than the
earlier estimate. The recently released Annual Economic Review for the month of May 2023
highlighted that the post pandemic quarterly trajectories of consumption and investment
have crossed pre pandemic levels.
Evidently, economists and analysts are bullish about the Indian economy. Our growth
forecasts for FY2023 24 remain similar to our April forecast, although
higher-than-expected growth in FY2022 23 has raised our base for comparison. That said, we
have raised our lower limit of the range given the buoyancy of the economy. We expect
India to grow between 6% and 6.3% in FY2023 24 and have a stronger outlook thereafter. In
fact, if global uncertainties recede, we expect growth to surpass 7% over the next two
years.
Industry Structure, Development & Size of Market:
The textile and apparel exports in 2022 grew to US $44.4 billion in FY22 compared to
US $29.9 billion in FY21, marking an increase of 41% YoY. Recent trends in textile
industry, significant government reforms and increased consumer demand primarily drive
revenue growth. The Indian textile industry has its own limitations such as access to the
latest technology and failures to meet global standards in the highly competitive export
market. Countries like China, Bangladesh, and Sri Lanka gives fierce competition in low
price garment market. The industry has earned a unique place in the economy due to its
strong future outlook, numerous employment opportunities have been generated, and the
strong export numbers can be seen in the upcoming time. While the overall economy is
relatively strong and is outperforming major economies, the textile sector is a notable
exception and orders suggest the downturn will continue well into 2023, raising the risk
of layoffs in an industry that employs more than 45 million people.
Exports, which constitute about 22% of the industry, have fallen for five months in a
row - declining over 15% year-on-year in November to $3.1 billion. Domestic sales are
sluggish despite strong growth in the overall economy because of high costs and cheap
imported garments, manufacturers say.
Opportunities & Threats
Opportunities:
Economic and political instabilities in China, Sri Lanka, Myanmar, Bangladesh, and
Pakistan has played out in favour of India as the major economies are again looking at
India as stable & reliable supplier for their requirement.
Free Trade Agreements with various Countries has opened up New Markets for Textile
Industry.
Comprehensive Economic Partnership Agreement (CEPA) with UAE and expected favourable
trade agreements with UK / Europe present an opportunity for textile manufacturers to
expand into new markets and diversify their customer base.
Sustainability & Environment Security Governance awareness in Indian Industry has
opened up supplies of Sustainable and eco-friendly products. This offers an opportunity
for textile manufacturers to develop new products that are made from recyclable &
renewable materials and produced using sustainable & Green manufacturing processes.
Threats:
The biggest threat & Challenge before the industry is to manufacture low cost but
quality products. There has been regular increase in low cost garments due to increase in
inflation in various developed economies. There is cut throat competition with other
countries to manufacture low cost cotton products in terms of availability of low-cost
man-made fibres. Consumers are shifting their focus to low-cost products which has led to
intense competition and pricing pressure in the global textile industry.
The new challenge is to reduce costs while complying with Environmental and social
regulations.
The other major threat is to maintain the supply level in terms of Exports to European
Countries & US as these economies are facing the worst phase of Inflation. This has
badly affected the Global demand and pricing.
Shortage in supply of raw materials: Because of pollution issues some unit of China and
Europe has been shut down due to which rise in the prices of basic raw material has
resulted and there are many other factors like weather etc. which are influencing the raw
material supply.
Infrastructure bottlenecks: The low quality of Indias infrastructure continues to lag
behind that of many other Asian countries.
The Management of your company has proved itself and also committed to face all the
challenges and exploit the available opportunities and take your company to new heights.
SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2023
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies
(Appointment and Remuneration Personnel) Rules, 2014]
To, The Members,
STL GLOBAL LIMITED
UNIT NO-111 BLOCK NO-1, FIRST FLOOR TRIBHUWAN COMPLEX, ISHWAR NAGAR NEW DELHI
I have conducted the Secretarial Audit of the compliances of applicable statutory
provisions and the adherence to good corporate practices by M/s STL GLOBAL LIMITED (CIN:
L51909DL1997PLC088667) (hereinafter called the company). The secretarial audit was
conducted in a manner that provided us a reasonable basis for evaluating the corporate
conducts / statutory compliances and expressing our opinion thereon.
Based on my verification of the Companys books, papers, minute books, forms and
returns filed and other records maintained by the Company and also the information
provided by the Company, its officers, agents and authorized representatives during the
conduct of secretarial audit, I hereby report that in my opinion, the company has, during
the audit period covering the financial year ended on 31st March, 2023 complied
with the statutory provisions listed hereunder and also that the Company has proper
Board-processes and compliance- mechanism in place to the extent, in the manner and
subject to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other
records maintained by M/s. STL GLOBAL LIMITED for the financial year ended on 31st
March, 2023 according to the provisions of: (i) The Companies Act, 2013 (the Act) and the
rules made thereunder; (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA)
and the rules made thereunder; (iii) The following Regulations and Guidelines prescribed
under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act): a. The
Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011; b. The Securities and Exchange Board of India (Prohibition of Insider
Trading) Regulations, 2015; c. The Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations,2009 d. The Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 e. The
Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
And hereby certify that the Company has duly made compliance with all the applicable
provisions of the above said Acts & Regulations.
I have also examined compliance with the applicable clauses of the following: (i)
Secretarial Standards issued by The Institute of Company Secretaries of India (ii) The
Listing Agreement entered into by the Company with the Stock Exchanges.
(iii) The SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015
I further report that -
Keeping in view the nature of activities carried by the company during the period under
audit, the following Acts, Rules, Regulations, Guidelines, Standards etc. are not
applicable to the company during the audit period-
i) Foreign Exchange Management Act, 1999 and the rules and regulations made there under
to the extent of Foreign Direct Investment, Overseas Direct Investment and External
Borrowings; ii) The Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999; iii) The Securities and Exchange
Board of India (Issue and Listing of Debt Securities) Regulations, 2008; v) The Securities
and Exchange Board of India (Registrars to an Issue and Share Transfer Agents)
Regulations, 1993 regarding the Companies Act and dealing with client; vii) The Securities
and Exchange Board of India (Buyback of Securities) Regulations, 1998.
I further report that-
As informed by the Company, the board of Directors of the Company, the board was duly
constituted with proper balance of Executive Directors, Non-Executive Directors,
Independent Directors and Women Directors as on 31st March, 2023. The changes
in the composition of the Board of Directors that took place during the period under
review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and
detailed notes on agenda were generally sent at least seven days in advance and a system
exists for seeking and obtaining further information and clarifications on the agenda
items before the meeting and for meaningful participation at the meeting.
All decisions of the Board Meetings are carried out unanimously as recorded in the
Minutes of the Meetings of the Board of Directors.
I further report that during the audit period following are the specific event/actions
taken by the Company which have major bearing on the companys affairs in pursuance of the
act, rules, regulations, guidelines, standards etc. referred above:
For Vijay Mourya & Associates
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Sd/- |
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Vijay Bahadur |
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Proprietor |
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CP No. 13053 |
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UDIN: F010167E000752799 |
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P.R. No.: |
2169/2022 |
| Date: 08th August, 2023 |
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| Place: Faridabad |
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Note: This report is to be read with the notes of even date which is annexed as
‘Annexure A and forms an integral part of this report.
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