Standard Industries Ltd Management Discussions

TRADING DIVISION

For the Financial Year April, 2024 to March, 2025 under review, the Company has achieved a textile trading turnover of 2207.98 lakhs in comparison with 1881.48 for the previous Financial Year.

The Company has introduced few new product range. Orders have been received from Institutions for supply of shirts/trousers etc. The school uniform business is performing well. All these factors will help the Company to get better performance in coming years.

The Standard Mills Company Limited was incorporated in India in the year 1892 under the Indian Companies Act, 1882. In line with the diverse nature of its business, it had changed its name from The Standard Mills Company Limited to Standard Industries Limited, (‘the Company) in October 1989. The Company also has a Property Division which comprises assets which are in excess of business needs, which the Company would liquidate based on market conditions.

The Indian economy continues to be on a strong footing and is expected to grow. The real estate sector has witnessed a strong performance across segments during the year.

Indias real estate sector is experiencing growth, fuelled by various factors including increased job creation, wealth accumulation, urbanization and supportive government policies. The sectors expansion is closely linked with the corporate world, boosting demand for office spaces as well as residential properties in urban and semi-urban areas. Real estate is a vital source of employment in India, second only to agriculture, attracting substantial non-resident Indians (NRIs) investment.

According to CREDAI, the Indian real estate market is valued at around USD 300 billion, with a composition of 80% residential and 20% commercial segments.

The Company is optimistic in Textile trading, as our main strength is brand image. India continues to outperform in a challenging economic environment, retaining its status as the worlds fifth-largest and fastest-growing major economy.

The Textile Industry has been adversely affected because of the worldwide pandemic situation.

The real estate industry is subject to extensive regulation and any negative adjustments in governmental policies or the regulatory framework can negatively influence the sectors performance.

The Company largely benefits from its strong brand name. Our Textiles brand sees enormous opportunities in product and design innovations to address the changing performances of customers.

Indian real estate has seen diverging trends as compared to global peers. India witnessed surge in housing demand, accompanied by recovery in office leasing despite global slowdown in IT/ITes spending. Retail real estate continues to perform well driven by upbeat consumer spending.

Few challenges may arise which could impact the industry in the near term :

Reversal of gains achieved in containing inflation;

• Escalation of geo-political tensions exposing vulnerabilities of supply chain;

• Disruption in job creation with rapid advancement in

Artificial Intelligence;

Economic slowdown in India;

Sharp increase in home prices impacting affordability; and

• Over regulated environment.

Segment-wise performance together with discussion on financial performance with reference to the operational performance has been dealt with in the Directors Report which should be treated as forming part of the Management Discussion and Analysis.

The Company has proper and adequate system of internal control to ensure that all assets are safeguarded and protected against loss from unauthorized use on disposition and transactions are authorized, recorded and reported correctly.

Internal control systems are supplemented by Internal Audit Reviews, coupled with guidelines and procedures updated from time to time by the Management.

Internal control systems are established to ensure that the financial and other records are reliable for preparing financial statements.

Internal Audit System is engaged in evaluation of internal control systems. Internal audit findings and recommendations are reviewed by the Management and Audit Committee of the Board of Directors.

As on 31^st March, 2025, the employees strength (on permanent roll) of the Company was 14.

In accordance with SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2015, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector-specific financial ratios.

1. Return on Equity Ratio : Net profit after tax divided by average equity. Average equity represents the average of opening and closing total equity. The ratio decreases from (0.01) in FY 23-24 to (0.08) in FY 24-25 mainly on account of increase in losses as compared to previous year.

2. Trade Receivables Turnover Ratio: Credit Sales divided by average trade receivables. Credit sales includes sale of products, services and scrap sales. Trade receivables is included gross of ECL and net of customer advances. Average Trade receivables represents the average of opening and closing trade receivables. The ratio improves from 0.44 in FY 23-24 to 0.50 in FY 24-25 mainly on account of improved realisation of trade receivables during the year ended March 31, 2025.

3. Net Profit Ratio : Net profit before tax divided Sales. The ratio decreases from (40%) in FY 23-24 to (62%) in FY 24-25 mainly due to exceptional gain in previous year on account of disposal of Property, Plant and Equipments.

4. Debt Service Coverage Ratio : Earnings available for debt services divided by total interest and principal repayment. The ratio decreases from 0.29 in FY 23-24 to at 0.92 in FY 24-25 mainly on account of repayment of borrowings and exceptional gain in previous year on account of disposal of Property, Plant and Equipments.

5. T rade Payable Turnover Ratio : Credit purchases divided by average trade payables. As there are no direct purchases, credit purchases is equivalent to Cost of material consumed which comprises cost of lease land and related cost, purchases of stock-in-trade and changes in inventories of stock-in-trade. Average Inventory represents the average of opening and closing Inventory. The ratio decreases from 5.49 in FY 23-24 to 4.73 in FY 24-25.

6. Return on Capital Employed (Pre-Tax) : Earnings before interest and taxes (EBIT) divided by average capital employed. The ratio decreases from (4%) in FY 23-24 to (7%) in FY 24-25 mainly due to exceptional gain in previous year on account of disposal of Property, Plant and Equipments.

7. Debt Equity Ratio : Long term debt divided by average equity. The ratio improves from 0.11 in FY 23-24 to 0.07 in FY 24-25 mainly on account of repayment of borrowings.

8. Current Ratio : Current assets divided by Current liabilities. Current assets includes total current assets other than asset held for sale. The ratio decreases from 8.61% in FY 23-24 to 6.74% in FY 24-25 mainly on account of disposal of current investments.

9. Net Capital Turnover Ratio : Sales divided by Net Working Capital. The ratio improves from 0.21 in FY 23-24 to 0.32 in FY 24-25 due to increase in sales.