Global economy and Outlook
With a staggered global recovery, F.Y. 2021-22 witnessed the consumer demand coming
back. Although a part of the year was affected by the pandemic, immunisation and
collective action saw a gradual uptake in the West, which was mirrored in the rest of the
world leading to the economies regaining lost ground. Global GDP grew by 5.8% and the
economic growth returned on the back of a sustained consumer demand across the board
leading to a significant spike in inflation. While the initial pick-up in inflation was
led by demand recovery on the previous years low base, persistent disruptions in the
global supply chain network have caused inflationary pressures to be more broad-based,
running at multi-decade highs in almost all the major economies. Almost all the central
banks are now taking policy measures to taper down the extraordinary liquidity that was
pumped in to support the economy during the pandemic and tightening the monetary policy to
rein in their runaway inflation. The escalation of the Russia-Ukraine crisis has also had
a detrimental effect on the prices of crude oil, gas and other commodities leading to
further pressure on the fragile economies.
Indian Economy
A positive business environment, robust industrial output and rapid vaccination
coverage have provided a strong momentum for the growth of Indias economy, with an
estimated GDP growth of 9.2% for F.Y. 2022.
(Sources: https://home.kpmg/in/en/home/insights/2021/04/indian-economy-insights.html )
Various indicators, including enhanced Goods and Services Tax (GST) receipts, increased
acceptance of transactions based on Unified Payments Interface (UPI), positive growth in
Index of Industrial Production (IIP) and rising private spending, all point to a promising
economic rebound. While several macroeconomic parameters indicate sustained growth,
geopolitical tensions such as the Russia-Ukraine conflict have resulted in a spike in
inflation rates, driven by higher oil prices, increased input costs, and supply chain
disruptions. The Reserve Bank of Indias (RBIs) Monetary Policy Committee (MPC) has
maintained an accommodative stance to promote economic growth while keeping inflation
under control. Despite a variety of challenges such as climate-related concerns, new
Covid-19 variants, persistent unemployment and healthcare infrastructure issues, Indias
strong economic fundamentals have provided the essential cushion to keep up the growth
momentum. The RBIs monetary policies, as well as government programmes such as Product
Linked Incentives (PLIs), the National Monetisation Plan (NMP) and PM Gati Shakti -
National Master Plan, are all intended to improve the domestic economy.
(Sources:
https://assets.kpmg/content/dam/kpmg/uk/pdf/2022/04/global-economic-outlook-april-2022-brochure.pdf
)
Outlook
India is expected to become the third largest economy by 2031. There are forecasts of
Indias GDP growth rate in FY 2023, ranging from 7.5% (the Prime Ministers advisory
council) to 8.5% (IMF) and 9.1% (Goldman Sachs). In addition, GDP growth in FY 2023 is
predicted to be between 7.5% and 8.0%, and between 6.7% and 7.1% in FY 2024. According to
the central bank, inflation will be approximately 4.5% in 2023. With the geopolitical
scenario expected to improve in the near future, businesses and investors will likely
focus on the economys fundamentals and chances for growth.
(Sources:
https://www2.deloitte.com/us/en/insights/economy/asia-pacific/india-economic-outlook.html
)
THE TEXTILE AND APPAREL MARKET:
GLOBAL AND INDIAN OUTLOOK
The global apparel market shrunk from US$ 1.6 trillion in 2019 to US$ 1.3 trillion in
2020, reflecting a decline of about 22%. However, in 2021, the market recovered by
approximately 16% to reach US$ 1.5 trillion and is expected to reach approximately to US$
2 trillion in 2025, growing at a CAGR of 4% from 2019.
Cotton prices in India increased significantly in 2021. The Cotlook-A index started the
year around 77 and peaked at approximately 120 in November 2021, an increase of 55%.
Prices of all other major fibers also increased in the range of 35-45%. All year long, the
industry suffered immensely from global container shortage resulting in unprecedented
increase in vessel shipping costs, thereby adding to increase in costs.
The Indian domestic textile and apparel market was estimated at US$ 99 billion in
2021-22 and has seen a 30% recovery since 202021. The market is expected to grow at 10%
CAGR from 2019-20 to reach US$ 190 billion by 2025-26.
The Union Budget 2022-23 presented various incentives to help the textile sector cover
losses incurred during the pandemic and grow as a global player. The Pradhan Mantri Mega
Integrated Textile Region and Apparel (PMMITRA) Parks were two flagship schemes announced
by the Ministry of Textiles, Government of India. These schemes aimed to support
establishment of 7 world- class mega textile parks, while Production-linked incentive
(PLI) scheme focused on encouraging large scale projects in manmade and technical textile
segments.
(Source: Ministry of Finance and Wazir Analysis)
According to the Ministry of Textiles, Government of India, the Indian textile industry
is one of the largest in the world with a large unmatched raw material base and
manufacturing strength across the value chain. India is the 6th largest exporter of
textiles and apparel in the world and the textiles and clothing industry is one of the
mainstays of national economy. The share of textile and apparel (T&A) including
handicrafts in Indias total exports stands at a significant 11.4% in 2020-21. India has a
share of 4% of the global trade in textiles and apparel. The uniqueness of the industry
lies in its strength both in the hand-woven sector as well as in the capital-intensive
mill sector which is the second largest in the world. Traditional sectors like handloom,
handicrafts and small-scale power loom units are the biggest source of employment for
millions of people in rural and semi urban area. It provides direct and indirect
employment and is a source of livelihood for millions of women and rural population. The
sector is aligned to the Governments key initiatives of Make in India, Skill India, Women
Empowerment and Rural Youth Employment.
(Source: Ministry of Textiles)
Our Business Overview
Betex India Limited is mainly engaged in job processing work on grey fabrics through
its dying and printing units. It has two Dyeing & Printing processing units namely:-
1. Sumeet Silk Mills (Unit-1)
2. Sumeet Silk Mills (Unit 2)
Such units have total output capacity to process 55000 thousand meters fabrics per day
which comes to 295 million meters fabric per annum. In the year 2007, Company has also
installed 1.25 MW Wind Mill Project at Kutch, Gujarat. The company has shown outstanding
performance in the year under review due to business re-engineering work undertaken in the
previous year, diversification in product portfolio in value added products. It has
restrained its position in the industry due to proactive planning, efficient use of
resources, capitalizing on emerging opportunity and striving on cutting edge technology.
The Company is recognised as a Dyeing and Printing mills providing job work on different
types of Polyester Fabrics.
However, our approach is to stay close to our customers, understand their challenges,
The Company has accelerated its cost optimisation drive across the value chain to further
improve its operational efficiency. The execution excellence initiatives pursued to
optimise efficiencies, reduce cost and eliminate wastage has been adopted across functions
and processes.
Financial Results overview
(Rs in Lakhs)
| Particulars |
2021-22 |
2020-21 |
change |
% change |
| Sales & Income from operations |
5738.04 |
4868.03 |
870.01 |
17.87 |
| Other Income |
98.99 |
13.48 |
85.51 |
634.3 |
| Profit before Interest, Depreciation & Tax |
134.03 |
376.75 |
242.72 |
64.42 |
| Less: Finance Cost |
7.76 |
18.20 |
10.44 |
57.36 |
| Profit before Depreciation and Tax |
126.27 |
358.55 |
232.28 |
64.78 |
| Depreciation |
67.89 |
70.45 |
-2.56 |
3.63 |
| Profit before Tax |
58.37 |
288.10 |
229.73 |
79.74 |
| Current tax |
9.11 |
48.09 |
38.98 |
81.06 |
| Mat Credit |
10.13 |
34.48 |
24.35 |
70.62 |
| Deferred Tax |
- 1.77 |
-0.90 |
0.87 |
96.67 |
| Profit after Tax |
40.92 |
206.43 |
165.51 |
80.18 |
Turnover: Betex India Limited has increased a turnover of ^ 5738.04 Lacs in the year
2021-22 as compare to ^ 4868.03 Lacs during the previous year. Increase in sales was noted
due to increase in volume of processing of fabrics and realization of decrease prices on
printing of fabrics.
Other Income: Other income consisting receipt of Interest on Fixed Deposits and Profit
on sales of Shares & Mutual Funds. Other income for the year 2021-22 is amounting to
Rs 99.00 Lacs against Rs 13.48 Lacs in the previous year.
Consumption of Raw material: Consumption of raw materials increased from Rs 1950.78
Lacs to Rs 2653.54 Lacs due to increase in total dying & processing fabric meters.
Employee Cost: Employees costs were decrease from Rs 1889.62 Lacs to Rs 1708.60 Lacs.
This is mainly due to low percentage of increments given to employees and no further
recruitment of employees.
Interest Cost: Interest costs were decreased from Rs 18.20 Lacs to Rs 07.76 Lacs.
The Company delivered good performance despite of headwinds and made consistent
progress in strengthening the established business segments through high value products
and also reported positive contributions in the F.Y. 2021-22.
Internal control systems and their adequacy:
The Company has a well-established framework of internal controls in all areas of its
operations, including suitable monitoring procedures and competent personnel. Its audit
system is continuously monitored and updated to ensure that assets are safeguarded,
established regulations are complied with and pending issues are addressed promptly.
The Audit Committee is headed by an Independent Director and this ensures independence
of functions and transparency of the process of supervision. The committee makes note of
the audit observations and takes corrective actions, if necessary. It maintains constant
dialogue with statutory auditors to ensure that internal control systems are operating
effectively. Based on its evaluation (as provided under Section 177 of the Companies Act,
2013 and Clause 18 of SEBI Listing Regulations), the Audit Committee has concluded that as
of March 31, 2022, the Internal Financial Controls were adequate and operating
effectively. The Company conducts its business with integrity and high standards of
ethical behaviour and in compliance with the all applicable laws and regulations that
govern its business.
Energy Conservation:
The Conservation of energy in all the possible areas is undertaken as an important
means of achieving cost reduction. Saving in electricity, fuel and power consumption
receive due attention of the management on a continuous basis. Various measures have been
taken to reduce fuel consumption, reducing leakages, improving power factor optimizing
process controls etc. resulting in energy savings.
Risk Management Framework
As a diversified enterprise, The Company believes that, periodic review of various
risks which have a bearing on the business and operations is vital to proactively manage
uncertainty and changes in the internal and external environment so that it can limit
negative impacts and capitalize on opportunities.
Risk management framework enables a systematic approach to risk identification,
leverage on any opportunities and provides strategies to manage, transfer and avoid or
minimize the impact of the risks and helps to ensure sustainable business growth with
stability of affairs and operations of the Company. The risks and concerns associated with
each segment of our companys busi ness are discussed while reviewing segment-wise
Management and Discussion Analysis. The other risks that the management reviews also
include:
a) Industry & Services Risk: This includes Economic risks like demand and supply
chain, Profitability, Gestation period etc.; Services risk like infrastructure facilities;
Market risk like consumer preferences and distribution channel etc.; Business dynamics
like inflation/deflation etc.; Competition risks like cost effectiveness.
b) Management and Operational Risk: This includes Risks to Property; Clear and
well-defined work process; Changes in technology / up gradation; R&D Risks; Agency
network Risks; Personnel & labour turnover Risk; Environmental and Pollution Control
Regulations etc.; Locational benefits near metros.
c) Market Risk: This includes Raw Material rates; Quantities, quality, suppliers, lead
time, interest rate risk and forex risk.
d) Liquidity Risk: This includes risks like financial solvency and liquidity; Borrowing
limits, delays; Cash/Reserve management risks and Tax risks.
e) Disaster Risk: This includes Natural calamities like fires, floods, earthquakes
etc.; Manmade risk factors arising under the Factories Act, Mines Act etc.; Risk of
failure of effective disaster Management plans formulated by the Company.
f) Government Policy: This includes Exemptions, import licenses, income tax and sales
tax holidays, subsidies, tax benefits etc. Further your Board has constituted a Risk
Management Committee, inter-alia, to monitor and review the risk management framework.
g) Competition Risk: We face competition from existing players and potential entrants
in the Indian textile industry. The Indian textile industry is highly competitive both in
the Dying & Printing Process. Domestic production is dominated by few organized
players who have integrated facilities and large economies of scale and the unorganized
sector is virtually absent.
The second and third wave of COVID-19 pandemic had impacted the normal business
operations of the Company by way of interruption in production, supply chain disruption,
unavailability of personnel, etc. However, the company was well geared with set processes
and precautionary measures as a result there was not much impact on production and supply
of goods.
The situation relating to pandemic is, however, dynamic and changing rapidly giving
rise to uncertainty around the extent and timing of the potential future impact of the
pandemic which may be different from that estimate made by the Company. We have clearly
seen the impact of second wave of the pandemic in the first quarter of FY 2021-22. The
Company has made detailed assessment of its business scenario for the current year (FY
2022-23) and do not foresee any major challenges on this account. The Company is closely
monitoring and would account for any material changes arising out of future economic
conditions and impact on its business.
Outlook
With completion of necessary capital expenditure to rampup the plants, the operations
of the company are gradually increasing. The human resources required to cope-up with the
growth requirements of the company are also gradually being put in place. The company is
progressively improving its capacity utilization and regaining its market share. It is
also generating adequate cash-flows to meet its obligations. We, therefore, look at the
future optimistically.
Opportunities & Threats
Your Company sees enormous opportunity in Product and Design innovations to address
the changing tastes of young vibrant India. The sector continues to be influenced by
fluctuations in commodity prices and constant inflow of cheaper alternatives from
unorganised sector. India has an enormous market potential, with per capita consumption of
all fibres at approximately 50% of global per capita consumption.
Waste Management
We have adopted various methods and practices for solid and hazardous waste management.
Solid waste like Drums, Ashes, and Waste Cloth are sold to authorized parties for re-use.
Hazardous wastes are handled through registered recyclers, who are authorized by the
concerned Pollution Control Boards.
ENVIRONMENT, HEALTH AND SAFETY (EHS)
The Company is conscious of the importance of environmentally clean and safe
operations. The Companys policy requires conduct of operations in such a manner so as to
ensure safety of all concerned, compliances of guidelines in force by local authorities,
environmental regulations and preservation of natural resources.
In keeping with the environment-conscious tenure of the times, your company has taken
effective steps in creating an aesthetic, environment-friendly industrial habitat in its
factory units, mobilizing support and generating interest among staffs and labours for
maintaining hygienic and green surroundings. Being providing continual efforts and stress
on fire and safety, no major incident was noted in the year 2021-22.
The Company is aware of its responsibilities as a good corporate citizen, in health,
safety and environmental management. To achieve the environment, health & safety
visions, various objectives have been set forth.
These are as follows:-
• Compliance with environment, health & safety laws and regular assessment of
the compliance of operations against the requirement.
• Ensuring safety related practices to enable employees and others to eliminate
work related injury and illness.
• First Aid training camps organized.
• State-of-the-art fire and safety installations to meet emergencies within the
company, as well as nearby areas.
• Training and counselling of employees, contractors, sub-contractors and
transporters to ensure effects of environment, health and safety.
• Imparting firefighting training to personnel and mock drills to ensure safety
preparedness.
• Toilets and drinking water facility provided and they are being regularly
inspected for cleanness.
• Proactive measures to increase usage of recycled water.
• To abide by all statutory compliance as per Factories Act, 1948.
Moreover, the Company has in place the "Conviction for Safety" policy, which
provides for substantial compensation to the per sonnel (Employees as well as Contractors)
and their families, who are adversely affected by accidents and creating more awareness at
the work place about safety and compliance so as to avoid accidents at the work place.
HUMAN RESOURCES
Your Company treats its Human Resources as an essential asset and believes in its
contribution to the overall growth of your Company. Your Company takes steps, from time to
time, to upgrade and enhance the quality of this asset and strives to maintain it in an
agile and responsive form. Your Company is an equal opportunity employer and practices
fair employment policies. Your Company is confident that its Human Capital will
effectively contribute to the long-term value enhancement of the organization. Your
Directors further state that during the year under review, no cases were filed pursuant to
the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013.
A) Recruitment Policy
The Company has been able to attract a team of dedicated professionals with appropriate
expertise and experience, leaders who are passionate, eager to learn and succeed.
Recruitment based on merit by following well defined and systematic selection
procedures eliminating discrimination, sustain motivated and quality work force through
appropriate and fair performance evaluation to retain the best talent. Various training
programs, with internal and external experts are organized regularly for skill up
gradation. The sincere efforts of the employees have resulted in major administrative
expense savings.
B) Performance Appraisal System
A competency based performance appraisal system has been devised and implemented the
same across the organization. The best performers get recognized and rewarded by the
management with the objective of motivating them for further improved performance.
Employees are promoted to higher positions on the basis of their performance, attitude and
potential to motivate them for further improvement in their work.
C) Personnel Training
The company from time to time fosters a culture of training, people development and
meritocracy to ensure that the maximum efficiencies are derived from its human capital.
The newly recruited employees undergo a comprehensive induction program. The employees
underwent both functional/technical and behavioural training that would eventually result
in improved productivity. Safety training is given on regular basis to all employees
including temporary employees.
D) Labour Relations
On the labour front, during the year, there were no incidents of labour unrest or
stoppage of work on account of labour issues and relationship with them continues to be
cordial. To increase team spirit inter department tournaments are organized and various
festivals are celebrated in the company.
Back to Office
Betex India limited lays emphasis on the mental health and wellbeing of its employees
and as per the guidelines issued by the Government, all Offices and Manufacturing &
Operations resumed work with necessary with safety protocols and precautions such as
social distancing, workplace sanitisation including individual workstations, regular
temperature checks of employees, to name a few. We also distribute masks periodically to
all employees.
Industrial relations
The Industrial relations remained cordial throughout the year and the Board records its
appreciation for the contribution of all employees towards the growth of the company
without which the achievements made, would not have been possible. As of 31 March 2022,
the Company has 775 employees on roll.
STATUTORY COMPLIANCE
The Whole-time Directors and CFO makes a declaration in the Board Meetings from time to
time regarding the compliance with the provisions of various statutes, after obtaining
confirmation from all the units of the Company. The Company Secretary ensures compliance
accordance to SEBI regulations and provisions of the Listing Agreement.
CORPORATE SOCIAL SERVICE
The company is committed to its corporate social responsibility and undertakes programs
that are sustainable and relevant to local needs. The Company works for sustainable
development by achieving excellence in its key functional areas including safety, business
operations, process management, business results, climate change, carbon footprint
reduction, energy and water
management, Medical Aid, community development, customer promise and engagement,
governance and compliance, human capital, and innovation under its CSR program.
The Company contributes to the development of its community near the plant at G.I.D.C.,
Pandesara as well as through employee volunteerism as a part of its Corporate Social
Responsibility in the areas of education, training, health care and self-employment.
CAUTIONARY STATEMENT
Certain information outlined in this report contains "forward-looking
information", including "future oriented financial information" and
"financial outlook", under applicable securities laws (collectively referred to
herein as forward-looking statements). Except for statements of historical fact, the
information contained herein may constitute some forward-looking statements. Such
statements are provided to allow potential investors to understand Managements beliefs
and opinions in respect of the future so that they may use such beliefs and opinions as
one factor in evaluating an investment.
These statements are not guaranteed future performance, and undue reliance should not
be placed on them. Such forward looking statements necessarily involve known and unknown
risks and uncertainties, which may cause actual performance and financial results in
future periods to differ materially from any future performance projections or results
expressed or implied by such forwardlooking statements.
Although forward-looking statements in this report are based upon what Management of
the Company believes are reasonable assumptions, there can be no assurance that
forward-looking statements will prove accurate, as actual results and future events could
differ materially from those anticipated in such statements. The Company undertakes no
obligation to update forward-looking statements if circumstances or Managements estimates
or opinions should change except as required by applicable securities l aws. The reader is
cautioned not to place undue reliance on forward-looking statements.
|
Identified as having been approved by the Board of Directors |
|
BETEX INDIA LIMITED |
|
Ritesh Somani |
|
(Director) |
| Place: Surat |
DIN: 01402114 |
| Date: 25th August, 2022 |
|
+91-9892691696
