Sarup Industries Management Discussions


The recent growth in Indian footwear industry has been fueled by advent of new technologies, growth of ecommerce channels and an inflow of fresh investment coupled with changing consumer perceptions whereinfootwear has come to be reckoned as an expression of ones personality.

Increasing consumer preference for brands and a bent towards premium products will be facilitating growthin the forecast period for Indian footwear market. Coupled with a dynamic lifestyle, evolving purchase habitsand impact of social media, rapid changes have come about in fashion trends, influencing footwear industryas well. Going forward as the situation improves, increasing demand and supply of footwear products fromIndia and other exporting countries is expected to restore the momentum.


• Research and Development. • Environmental problems.
• Growing international & domestic market.Outsourcing • Dependence on imported machines andcomponents
• Government support in various subsidyschemes • Dependency on footwear sale.

• Marketing and Campaigns

• Use of e-commerce indirect marketing. • Entry of multinational in domestic market.
• Increase quality, innovation, competition &brand building. • Increasing trend of E-commerce.
• Stricter international standards.
• Growing fashion consciousness globally aswell as domestic market

CHALLENGES: A large section of the footwear industry still remains unorganized in nature and offers a strongprice competition to those dealing in branded products, forcing them to rely on innovation and technologyenabled marketing solutions. Sourcing skilled workforce in wake of increasing demand poses a real challengeacross manufacturing processes. The industry operates in a complex regulatory environment. Any change inthe laws and regulations governing the footwear industry may affect the business and financial performanceof the industry.


Overall, despite the challenging environment, the growth-story of India remains intact. India remains apreferred investment destination for FDI amidst global asset shifts towards emerging economies. Proactiveand decisive measures taken by governments and policy makers will certainly help kick-off the growthbandwagon again and put economic recovery back on rails.

With footwear evolving from a functional requirement in day-today life to a symbol of fashion and style, it isnecessary for the players to align their strategies to come up to the expectations of the modern consumer.


Indian consumers are also evolving with the market - habits, lifestyles, tastes and preferences. The advent oforganized retailing malls and multiplexes has transformed the shopping habits and purchase behavior of theIndian consumer. There are significant changes that can be seen in the purchasing behavior of Indianconsumer. The modern consumer wants his purchases to reflect his lifestyle aspiration. With rise in income &increased awareness about products and proliferation of choices, consumers have become pickier withpurchases.


The companys sales have been increased from Rs.9.41 Cr to Rs. 11.56 Crore registering an increase of22.85%in the financial year 2023-24 as compared to previous year 2022-23. This also results into decrease ofnet loss from Rs. 2.41 cr to Rs1.59 cr in said the financial year as compare to previous year.

The company has reduced its borrowings from banks/financial institutions from Rs. 13.46 cr to Rs 7.72 cr inthe financial year 2023-24. By the impact, the borrowing cost has been reduced from Rs.2.23 cr to Rs. 1.96 cr.In the said financial year.


S. No. Particulars Year






Change Reason ofChange
a) Current Ratio ( Number of Times) 1.65 1.08 53% Due to increasein current Assets
Curren Assets/ Current Liabilities
b) Debt Equity Ratio ( number of times) NA NA Due to negativeequity
(Total Debt/Shareholderss Equity)

Debt Service Coverage Ratio ( number of times)

-0.35 -1.72 -80% Due to decreasein losses
(Earning available for Debt Service/ Debt Service)

Return on Equity Ratio( number of times)

-0.25 -0.43 -41% Due to decreasein losses
(Net profit after tax / Average ShareholdingEquity)

Inventory Turnover Ratio( number of time)

0.16 0.20 -18% Due to decreasein Raw MaterialConsumed
( Raw Material consumed/Average Inventory)

Trade Receivable Turnover ( number of time)

1.21 0.99 23%
( Net Sales excluding export incentive / AverageTrade Receivables)

Trade Payable Turnover( number of times)

0.51 0.00 51% Due to increasein Net Purchases
( Net purchases/ Average trade payable)
h) Net Capital Turnover ( number of times) 0.51 2.90 -82% Due to increase
( Revenue from operation/ working capital) in WorkingCapital

Net Profit Ratio(%)

-14.68% -25.65% 43% Due to decreasein sales
( Net profit after tax/ Revenue from Operation)

Return on Capital Employed ( Number of times)

0.043 0.020 113% Due to decreasein losses
(Profit before Interest & Tax/ Capital Employed)

1 Return on Investments ( number of times)

0.01 0.01 0%
Return on Fixed Deposits


1 Equity =Equity Share capital + Other Equity

2 Raw Mareial Consumed includes cost of Material consumed and change in inventories of finished goods andwork in progress

3 Inventory Includes Raw Materials and Components, Work in Progress , Finished Stock, Store and spares

4 Working capital = Current assets lesss current liabilities

5 Capital Employed includes shareholders equity , non current and current borrowings


The footwear industry aims to achieve environmental protection objectives such as waste reduction, recyclingand recuperation of secondary raw materials. Environment protection is integral part for any industry. YourCompany has adopted various measures in order to achieve the desired environmental level not only tocomply with the Environmental Laws but also taking into consideration the Eco friendly atmosphere.


The Company operates in single segment i.e manufacturing of shoe and shoe upper. There has been nochange during the year under review in the nature of business pursued by the Company. The Company aimsto create sustainable vision to grow the business and make long-term strategic investments in various newventures promoted by the Company.

The companys sales have been increased from Rs.9.41 Cr to Rs. 11.56 Crore registering an increase of22.85%in the financial year 2023-24 as compared to previous year 2022-23.

The company has reduced its borrowings from banks/financial institutions from Rs. 13.46 cr to Rs 7.72 cr inthe financial year 2023-24. By the impact, the borrowing cost has been reduced from Rs.2.23 cr to Rs. 1.96 cr.In the said financial year.

Regarding development of Multiplex cum shopping Mall, the company has signed and registered anagreement with Shalimar Corp. Lukhnow to complete the under-constructed shopping. The Shalimar isapproaching the financial institutions to arrange the funds to complete the said Mall as early as possible. Thecompany has converted the under-constructed Mall having book value of Rs. 16.19 cr. from Capital work inprogress to stock in trade in accordance with laws during the year 2023-24.


The present risks and anticipated future risks are reviewed by the management of company at regularintervals. Based on its past experiences, the management tries to remain vigilant about all prospective risksand takes suitable preventive measures to adequately safeguard its resources like men, machine & money,sothat the business continues as usual even during difficult situations. Todays business environmentdemands that wholesalers and retailers focus more attention on minimizing risks—from closer examination ofinternal controls, tax positions and financial reporting practices to corporate governance, image marketing,and human resources policies and procedures.


The internal control and risk management system is structured and applied in accordance with the principlesand criteria established in the Corporate Governance. As such this process is aimed at pursuing the values ofboth procedural and substantial fairness, transparency and accountability, which are considered key factorsfor managing the business. The Audit Committee of its Board of Directors, comprising of IndependentDirectors, also reviews the systems at regular intervals. Moreover, the Company has appointed M/s SanjivManav Jain & Associates, Chartered Accountants, as its Internal Auditors and they periodically test theefficacy of the prevailing internal control systems.


One of the key pillars of the Companys business is its people. The Companys HR policies and practices arebuilt on core values of Integrity, Passion, Speed, Commitment and Seamlessness. The Companys focus is onrecruitment of good talent and retention of the talent pool. The Company is into a continuous process ofproviding a safe work environment for our employees and stakeholders. As on March 31, 2024.


Statements in this management discussion and analysis describing the Companys views about the industry,objectives, projections, estimates and expectations may be forward looking statements within the meaningof applicable laws and regulations. The Company undertakes no obligations to publicly update or revise anyforward-looking statements, whether as a result of new information, future events, or otherwise. Actualresults, performances or achievements could differ materially from those expressed or implied in suchstatements. Readers are cautioned as not to place undue reliance on the forward-looking statements as theyspeak only as of their dates. Actual results might differ substantially or materially from those expressed orimplied.


Your Board acknowledges, appreciates and values the unwavering efforts by the employees, workmen andstaff including the Management headed by the Directors who have all worked together as a team despite thepandemic and overall challenging business environment. Your Board also appreciates the IndependentDirectors and the Non-Executive Directors of the Company for their contribution by way of strategic guidance,sharing of knowledge, experience and wisdom, which helps your Company to take the right decisions inachieving its business goals. Your Board also wishes to place on record their deep appreciation to theCompanys employees, suppliers, customers and Government authorities for their selfless efforts in helpingyour Company to operate whenever permissible during the pandemic.