INDUSTRY STRUCTURE & DEVELOPMENT
The recent growth in Indian footwear industry has been fueled by advent of new
technologies, growth of e commerce channels and an inflow of fresh investment coupled with
changing consumer perceptions wherein footwear 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 growth in the forecast period for Indian footwear market. Coupled with a
dynamic lifestyle, evolving purchase habits and impact of social media, rapid changes have
come about in fashion trends, influencing footwear industry as well. Going forward as the
situation improves, increasing demand and supply of footwear products from India and other
exporting countries is expected to restore the momentum.
OPPORTUNITIES AND CHALLENGES
OPPORTUNITIES Presently about 90% of the footwear produced in India isconsumed
by the domestic market and the rest is exported. Footwear demand is expected to pick up
momentum with favorable government initiatives & policy framework for the industry,
growth in organized retail, increasing urban population and changing consumption patterns.
Footwear, being a labor intensive industry, also presentsa unique social opportunity
with a potential to generate significant employment over next few years
CHALLENGES: A large section of the footwear industry still remains unorganized
in nature and offers a strong price competition to those deal ingin branded products,
forcing them to rely on innovation and technology enabled marketing solutions. Sourcing
skilled workforce in wake of increasing demand poses a real challenge across manufacturing
processes. The industry operates in a complex regulatory environment. Any change in the
laws and regulations governing the footwear industry may affect the business and financial
performance of the industry.
OUTLOOK
Overall, despite the challenging environment, the growth-story of India remains intact.
India remains a preferred investment destination for FDI amidst global asset shifts
towards emerging economies. Proactive and decisive measures taken bygovernments and policy
makers will certainly help kick-off the growth bandwagon again and put economic recovery
back on rails.
With footwear evolving from a functional requirement in day-to day life to a symbol of
fashion and style, it is necessary for the players to align their strategies to come up to
the expectations of the modern consumer.
THE CHANGING CONSUMER BEHAVIOUR
Indian consumers are also evolving with the market - habits, lifestyles, tastes and
preferences. The advent of organized retailing malls and multiplexes has transformed the
shopping habits and purchase behavior of the Indian consumer. There are significant
changes that can be seen in the purchasing behavior of Indian consumer. 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 with purchases.
ANALYSIS OF FINANCIAL CONDITION & RESULTS AND DISCUSSION ON FINANCIAL PERFORMANCE
AND DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
Sale as well as revenue of your Company is decreased this year from 1218.08 Lakh to
914.02 Lakh.
Further our Company putting more efforts to increase the sale as well as revenues of
the Company.
RATIOS
S. No. Particulars |
Year Ended 31.03.2023 |
Year Ended 31.03.2022 |
Change |
Reason of Change |
| a) Current Ratio ( Number of Times) |
1.09 |
1.13 |
-4% |
|
| Current Assets/ Current Liabilities |
|
|
|
|
| b) Debt Equity Ratio ( number of times) |
NA |
NA |
|
Due to negative equity |
| (Total Debt/Shareholderss Equity) |
|
|
|
|
| c) Debt Service Coverage Ratio ( number of times) |
-1.72 |
-1.01 |
70% |
Due to decrease in earning |
| (Earning available for Debt Service/ Debt Service) |
|
|
|
|
| d) Return on Equity Ratio( number of times) |
-0.43 |
-0.67 |
-35% |
Due to decrease in net equity |
| (Net profit after tax / Average Shareholding Equity) |
|
|
|
|
| e) Inventory Turnover Ratio( number of time) |
0.20 |
0.60 |
-66% |
Due to decrease in Raw Material Consumed |
| ( Raw Material consumed/Average Inventory) |
|
|
|
|
| f) Trade Receivable Turnover ( number of time) |
0.99 |
1.32 |
-26% |
Due to decrease in sale |
| ( Net Sales excluding export incentive / Average Trade Receivables) |
|
|
|
|
| g) Trade Payable Turnover( number of times) |
0.27 |
0.30 |
-8% |
|
| ( Net purchases/ Average trade payable) |
|
|
|
|
| h) Net Capital Turnover ( number of times) |
2.90 |
2.61 |
11% |
|
| ( Revenue from operation/ working capital) |
|
|
|
|
| i) Net Profit Ratio(%) |
-25.75% |
-17.60% |
-46% |
Due to decrease in sales |
| ( Net profit after tax/ Revenue from Operation) |
|
|
|
|
| j) Return on Capital Employed ( Number of times) |
0.020 |
0.026 |
-22% |
Due to decrease in earnings |
| (Profit before Interest & Tax/ Capital Employed) |
|
|
|
|
| k) Return on Investments ( number of times) |
0.01 |
0.01 |
0% |
|
| Return on Fixed Deposits |
|
|
|
|
Notes 1 Equity =Equity Share capital + Other Equity |
|
|
|
|
| 2 Raw Mareial Consumed includes cost of Material consumed and change in
inventories of finished goods and work 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 |
|
|
|
|
ENVIORNMENT PROTECTION
The footwear industry aims to achieve environmental protection objectives such as waste
reduction, recycling and recuperation of secondary raw materials. Environment protection
is integral part for any industry. Your Company has adopted various measures in order to
achieve the desired environmental level not only to comply with the Environmental Laws but
also taking into consideration the Eco friendly atmosphere.
PERFORMANCE
The Company operates in single segment i.e manufacturing of shoe and shoe upper. There
has been no change during the year under review in the nature of business pursued by the
Company. The Company aims to create sustainable vision to grow the business and make
long-term strategic investments in various new ventures promoted by the Company.
RISK MANAGEMENT
The present risks and anticipated future risks are reviewed by the management of
company at regular intervals. Based on its past experiences, the management tries to
remain vigilant about all prospective risks and 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 environment demands
that wholesalers and retailers focus more attention on minimizing risks—from closer
examination of internal controls, tax positions and financial reporting practices to
corporate governance, image marketing, and human resources policies and procedures.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
The internal control and risk management system is structured and applied in accordance
with the principles and criteria established in the Corporate Governance. As such this
process is aimed at pursuing the values of both procedural and substantial fairness,
transparency and accountability, which are considered key factors for managing the
business. The Audit Committee of its Board of Directors, comprising of Independent
Directors, also reviews the systems at regular intervals. Moreover, the Company has
appointed M/s Sanjiv Manav Jain & Associates, Chartered Accountants, as its Internal
Auditors and they periodically test the efficacy of the prevailing internal control
systems.
HUMAN RESOURCES
One of the key pillars of the Companys business is its people. The Companys HR
policies and practices are built on core values of Integrity, Passion, Speed, Commitment
and Seamlessness. The Companys focus is on recruitment of good talent and retention of
the talent pool. The Company is into a continuous process of providing a safe work
environment for our employees and stakeholders. As on March 31, 2023.
CAUTIONARY STATEMENT
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 meaning of applicable laws and regulations. The Company
undertakes no obligations to publicly update or revise any forward-looking statements,
whether as a result of new information, future events, or otherwise. Actual results,
performances or achievements could differ materially from those expressed or implied in
such statements. Readers are cautioned as not to place undue reliance on the
forward-looking statements as they speak only as of their dates. Actual results might
differ substantially or materially from those expressed or implied.
ACKNOWLEDGEMENTS
Your Board acknowledges, appreciates and values the unwavering efforts by the
employees, workmen and staff including the Management headed by the Directors who have all
worked together as a team despite the pandemic and overall challenging business
environment. Your Board also appreciates the Independent Directors 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 in
achieving its business goals.Your Board also wishes to place on record their deep
appreciation to the Companys employees, suppliers, customers and Government authorities
for their selfless efforts in helping your Company to operate whenever permissible during
the pandemic.
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