Scoobee Day Garments (India) Limited is primarily involved in the
business of Garments and Aluminium/ Galvanized Iron roofing sheet and accessories.
IDUSTRY OVERVIEW
APPAREL MARKET -GLOBAL & INDIAN
The global apparel market grew from $610.12 billion in 2022 to $652.94
billion in 2023 at a compound annual growth rate (CAGR) of 7.0%. The Russia-Ukraine war
disrupted the chances of global economic recovery from the COVID-19 pandemic, at least in
the short term. The war between these two countries has led to economic sanctions on
multiple countries, a surge in commodity prices, and supply chain disruptions, causing
inflation across goods and services and affecting many markets across the globe. The
apparel market is expected to grow to $830.69 billion in 2027 at a CAGR of 6.2%.
The Indian textile and apparel market size reached US$ 172.3 Billion in
2022. Looking forward, I MARC Group expects the market to reach US$ 387.3 Billion by 2028,
exhibiting a growth rate (CAGR) of 14.59% during 2023- 2028. The increasing demand for
premium quality clothing and footwear items, rising number of schemes launched by the
Government of India to empower weavers, and the growing ethically sourced sustainable
materials represent some of the
key factors driving the market. The Textile and Apparel market is
poised to grow, led by boost in demand and the government support in form of attractive
schemes such as Production Linked Incentive (PLI), Mega Investment Textile Parks (MITRA)
will further drive the way for the US$ 250 billion target. Another step taken by the
Ministry of Textiles towards positioning India as a global leader in technical textiles
manufacturing is the invitation of Research proposals for Funding for Design, Development
and Manufacturing of Machinery, Tools, Equipment, and Testing Instruments under NTTM.
The COVID-19 pandemic has acted as a massive restrain to the Textile
manufacturing market in 2022 as supply chains were disrupted due to trade restrictions and
consumption declined due to lockdowns imposed by governments globally. However, it is
expected that the textile manufacturing market will recover from the shock across the
forecast period as it is a Black Swan event and not related to ongoing or fundamental
weaknesses in the market or the global economy. The Russia - Ukraine war had challenged
the textile industry drastically which is now on a recovery stage. Increasing demand for
apparel from the fashion industry coupled with the growth of e- commerce platforms is
expected to drive the market growth over the next few years.
ROOFING SHEETS - GLOBAL AND INDIAN
Global demand for roofing materials is expected to increase at a CAGR
of 5.5% from 2023 to 2033. The Global roofing market is
valued at US$ 82.2 billion in 2023 and is this expected to reach
US$140.4 billion by the end of 2023. Shifting consumer preferences in a projected economic
downturn scenario, amendments to industrial policies to align with growing environmental
concerns, huge fluctuations in raw material costs triggered by prevailing geo-political
tensions, and expected economic turbulences are noted as key challenges to be addressed by
the Roofing Materials industry players during the short and medium term forecast. In India
market is estimated to witness a healthy growth in the forecast period of 2023-2028 to
reach USD 9.7 billion by 2026.
INTERNAL CONTROL
Internal Control comprises of the plan of organization and all the
coordinate methods and measures adopted within a business to safeguard its assets; check
the accuracy and reliability of its accounting data and completeness of accounting
records; promote operational efficiency; to encourage adherence to the prescribed
managerial policies, to assist in achieving the orderly and efficient conduct of business;
prevention and detection of fraud and errors and timely preparation of financial
statements.
Our Internal Control System is fully equipped with necessary checks and
balances ensuring that the transactions are adequately authorized and reported correctly.
The Internal Auditor conducts regular Audits of various departments and Units to ensure
that necessary controls are in place. The Audit Committee while reviewing the system and
the Internal Audit Report, call for comments of Auditors on internal control systems and
discuss any related issues with the Auditors and the Management of the company before
submission to the Board. The Independent Directors also satisfy themselves on the
integrity of financial information and ensure financial controls.
OPPORTUNITIES
The Indian textile industry is in a much stronger place than it was at
any point of time in the last half a dozen decades. The floating economy, quota removal
and a supportive environment provided by the Government, have contributed to ensure and
hang onto the industry on the path of rapid development. The raise in productivity,
increase in exports, replication of investment during few years, clearly put forward that
the Indian textile manufacturing industry has capability in facing the challenges of
modern economic system. Its the time, to strengthen the industry through fuller
exploiting of available opportunities in both the domestic and worldwide markets. The
domestic textiles and apparel market in India is one of the emerging markets in the world.
Rising income levels of consumers and rapid urbanisation are key factors for the increase
in demand in the domestic market.
Indian Aluminium Industry is one of the leading industries in the
Indian economy. Aluminium Industry in India is a highly concentrated industry with the top
5 companies constituting the majority of the countrys production. With the growing demand
of aluminium in India, the Indian aluminium industry is also growing at an enviable pace.
In fact, the production of aluminium in India is currently outpacing the demand.
The major opportunity for the Company is demand and usage of garments
has increasing and it will create huge the opportunity for the company. Aluminium, the
"Metal of Future" is the fastest growing metal,
Production and Consumption of Aluminium in India has increased during
the year.
SEGMENT- WISE PERFORMANCE
Roofing sheet division has contributed Rs. 5.64 crores compared to Rs.
6.60 crores in the previous year. The garment division of the company has contributed Rs.
45.26 Crores compared to Rs. 35.90 Crores in the previous year. Both the sectors are
growing with all the possible amenities and resources.
RISKS & THREATS
Infrastructural blocks are one of the major problems faced by the
industry. One of the major kerbs to the rapid development of the industry is a lengthy
transaction processing and transportation time. Indian textile industry has been made poor
attention towards product design and development. A significant attention is required in
the Indian textile trade. Research and Development is still far away from the actual
requirement most of the companies do not have product development and innovation centres.
The average contribution of Indian Textile firms towards R&D is very low.
The Indian textile industry has been facing a competition from other
nations like China, Germany, Bangladesh, Sri Lanka, Turkey, Vietnam, Italy, etc. Monetary
value of inputs in India is indicating the huge cost increase, which in yield would be a
problem of increased production cost. It requires immediate attention by the regime. All
sectors in the textile industry are affecting adversely due to faster hike in raw material
costs.
Industry Risk:
The calamities such as Ukraine war and the pandemic pose a grave risk
to the
world economy. The world economic growth has slowed and accordingly
International fashion retailers have reported rise in inventory and pressure on their
margins since summer. This is also reflected in the slump in their off take from supplying
countries. However, as we are in the basic segment, its impact is expected to be less. It
is hoped that with the unstinted support from all the Stakeholders SDGIL would be able to
manage such risk.
Disaster Risks:
The Company has a well-designed safety management policy that
eliminates / reduces the risk of workplace incidents, injuries, and fatalities through
adoption of various well defined safety measures and devices. Its proper implementation
and updation enable effective prevention besides equipping the employees to handle any
incident that may occur. The properties of the Company are insured against natural risks
like fire, earthquakes, etc. with periodical review of adequacy, rates and risks covered.
Financial Risks:
The Company has a well- managed risk management framework, anchored to
policies and procedures and internal financial controls aimed at ensuring early
identification, evaluation and management of key financial risks (such as liquidity risk,
market risk, credit risk and foreign currency risk) that may arise as a consequence of its
business operations as well as its investing and financing activities.
Accordingly, the Companys risk management framework has the objective
of ensuring that such risks are managed within acceptable risk parameters in a disciplined
and consistent manner and in compliance with applicable regulation.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter due to
difficulty in raising funds to meet commitments associated with financial instruments that
are settled by delivering cash or another financial asset. Liquidity risk may result from
an inability to sell a financial asset quickly at close to its fair value.
Market Risk
The exposure to interest rate risk from the perspective of Financial
Liabilities is negligible. Further, treasury activities, focused on managing investments
in debt instruments, are administered under a set of approved policies and procedures
guided by the tenets of liquidity, safety and returns. This ensures that investments are
only made within acceptable risk parameters after due evaluation. The Companys
investments are predominantly held in fixed deposits. Fixed deposits are held with highly
rated banks and have a short tenure and are not subject to interest rate volatility.
Credit Risk
Credit risk refers to risk that counterparty will default on its
contractual obligations resulting in financial loss to the Company Credit risk arises
primarily from financial assets such as trade receivables, other balances with banks and
other receivables. The Company has adopted a policy of only dealing with counterparties
that have sufficiently high credit rating. The Companys exposure and credit ratings of
its counterparties are continuously monitored and the aggregate value of transactions is
reasonably spread amongst the counterparties. Credit risk arising from other balances with
banks is limited because the counterparties are banks with high credit ratings.
Foreign Currency Risk
The Company undertakes transactions denominated in foreign currency
(mainly US Dollar) which are subject to the risk of exchange rate fluctuations. Financial
assets and liabilities denominated in foreign currency, are also subject to reinstatement
risks. Company has entered into forward contract for 1,00,000.00 US Dollars to hedge the
risk associated with foreign exchange transactions.
Labour Shortage:
The scarcity of skilled workforce is a matter of concern for the Labour
Intensive Indian culture. The Government is trying to curb the skilling gap in the textile
segment with the help of schemes like PMKVY (Pradhan Mantri Kushal Vikas Yojana). However,
SDG1L doesnt face this issue because of its best HR practices. Higher productivity,
ability to source required work force is the fruits of its strategic HR policies and if
there is any shortage in Labours we are handling the issues quickly by our associated
agencies.
OUTLOOK
The whole world has fallen into economic recession consequent to the
COVID pandemic and Roofing and garments industry is also not going to be an exception from
the effects. Textile is one of the majorly affected industry world over and being a
Company catering to this segment; it could be a real challenge for the company to maintain
the growth in the periods to come.
The new financial year has started with a country wide lock down due to
the pandemic resulting loss of production and sales. Though production has resumed after
the lock down was lifted there are challenges in the market due to continuing uncertainty
on regional restrictions
of movement etc. With new markets for exports being explored, the
company is hopeful of utilising the whole capacity and make up for the lost time
FINANCIAL PERFORMANCE AND OPERATIONAL EFFICIENCY
The standalone financial statements of Scoobee Day Garments (India)
Limited ("the Company"), comprise the balance sheet as at 31st March 2023, and
the statement of Profit and Loss, (statement of changes in equity) and statement of cash
flows for the year then ended, and notes to the financial statements, including a summary
of significant accounting policies and other explanatory information give a true and fair
view in conformity with the accounting principles generally accepted in India, of the
state of affairs of the Company as at 31 March, 2023, and profit/loss, (changes in equity)
and its cash flows for the year ended on that date.
The overall performance of the Company has witnessed a healthy growth
in profit during the year 2022-2023 while comparing to that of previous year. Company has
generated total income of 527.94 Million as against 434.49 Million in the previous year.
The net profit after tax amounted to 78.38 Million as against 35.28 million in the
previous year. This amounts almost double of the profit generated in the previous year.
Your Company has constantly trying to increase its sales as well as
profitability. The detail of financial and operational
performance is provided in the Boards Report.
LONG TERM AND SHORT TERMSTRATERGY
The Company sells its products directly
to the customers and its strategy is to work closely with its major
customers and align its business operations and investment decisions according to their
requirements. The Company will also make continuous efforts to explore other growth
opportunities
DEVELOPMENT IN HUMAN RESOURCE / INDUSTRIAL RELATIONS
The company places high importance on the development of its human
resources. It imparts regular training to its employees to make them more focused to adapt
to the constant change in the business environment. The Company is giving direct
employment to 461 employees Industrial relation in the units was satisfactory.
CAUTIONARY STATEMENT
Estimates and expectations stated in this Management Discussion and
Analysis may be "forward-looking statement" within the meaning of applicable
laws and regulations. Actual results could differ materially from those expressed or
implied. Important factors that could make a difference to your Companys operations
include economic conditions affecting demand / supply and price conditions in the domestic
and international markets, changes in the Government regulations, tax laws, other statutes
and other incidental factors.
By order of the Board For Scoobee Day Garments (India) Limited Formerly
known as Victory Paper and Boards (India)Limited
Sd/- |
Sd/- |
K L V
Narayanan |
Dony Dominic |
Managing
Director |
Director |
DIN:01273573 |
DIN:03588411 |
Place: Kizhakkambalam Date: 11.08.2023
+91-9892691696
