TRADING DIVISION
For the Financial Year April, 2023 to March, 2024 under review, the Company has achieved a textile trading turnover of Rs.1881.48 lakhs in comparison with Rs.1567.65 lakhs for the previous financial year.
The School Uniform business is performing well and the Company proposes to reintroduce few products such as Bed Sheets, Towels, etc., along with some institutional business and we are hopeful of better performance in the coming year.
PROPERTY DIVISION & OUTLOOK
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.
INDUSTRY OVERVIEW
The real estate market in India continues its growth trajectory that started immediately after the first wave of Covid-19. Despite inflationary pressures, geopolitical tensions and rising interest rates, the real estate sector has maintained a cyclical upswing.
The premium residential segment continues to witness strong demand, well supported by tailwinds of demand drivers such as an increase in earning potential, a need for a better standard of living and the growing base of aspirational consumers.
With corporates encouraging employees to return to offices, interest in sustainable Grade-A offices continues to grow.
STRENGTHS
The Company is optimistic in Textile trading, as our main strength is brand image.
Mumbai, being the largest real estate market in the country is set for a major boom, which will further add to the overall surge. A new coastal road, a metro rail and a trans harbour link are among the many ongoing infrastructure projects that are meant to transform Indias commercial capital into a modern and efficient city. As these projects get completed over the next few years, new micro markets will open up in and around Mumbai, as commuting would become easier. That will boost real estate development further.
RISKS AND CONCERNS
The Textile Industry has been adversely affected because of the worldwide pandemic situation.
Post the pandemic, the economy is exposed to various risks such as weakened export demand, reduced investor confidence and non-availability of raw materials.
OPPORTUNITIES & CHALLENGES
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.
As India awaits policy reforms to pick up speed, the demand for Real Estate in a country like India should remain strong in the medium to long term.
While the management of your Company is confident of creating and exploiting the opportunities, it also finds the following challenges:
• Unanticipated delays in project approvals;
• Non-availability of accomplished and trained labour force;
• Increased cost of manpower;
• Rising cost of construction lead by increase in commodity prices;
• Growth in auxiliary infrastructure facilities; and
• Over regulated environment.
SEGMENT-WISE PERFORMANCE
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.
INTERNAL CONTROL SYSTEMS & ADEQUACIES
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.
HUMAN RESOURCES
As on 31st March, 2024, the employees strength (on permanent roll) of the Company was 12.
FINANCIAL STATEMENT ANALYSIS
In accordance with SEBI (Listing Obligation 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.
The Company has identified the following ratios as key financial ratios:
| Particulars | Note no. of Standalone Financial Results | Year ended March 31, 2024 | Year ended March 31, 2023 |
| Return on Equity Ratio | 42(b) | -0.01 | 0.10 |
| Trade Receivables Turnover Ratio | 42(d) | 0.44 | 0.73 |
| Net Profit Ratio (%) | 42(g) | -40% | 140% |
| Debt Service Coverage Ratio | 42(j) | 0.29 | 3.15 |
| Trade Payable Turnover Ratio | 42(e) | 5.49 | 2.82 |
| Return on Capital Employed (Pre-Tax) | 42(h) | -4% | 10% |
Ratios where there has been a significant change from year ended March 31, 2023 to year ended March 31, 2024.
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 0.10 in FY 22-23 to (0.01) in FY 23-24 mainly on account of revenue recognized on assignment of TDR entitlement during the year ended March 31, 2023.
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 0.73 in FY 22-23 to
0.44 in FY 23-24 mainly on account of improved realisation of trade receivables during the year ended March 31, 2024.
3. Net Profit Ratio : Net profit before tax divided by Sales. The ratio decreases from 140% in FY 22-23 to (40%) in FY 23-24 mainly on account of decrease in net profit, as revenue includes revenue recognized on assignment of TDR entitlement during the year ended March 31,2023.
4. Debt Service Coverage Ratio : Earnings available for debt services divided by total interest and principal repayment. The ratio increases from 3.15 in FY 22-23 to 0.29 in FY 23-24 mainly on account of revenue recognized on assignment of TDR entitlement during the year ended March 31,2023.
5. Trade 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 moves from 2.82 in FY 22-23 to 5.49 in FY 23-24 mainly due to improved realisation of trade receivables and corresponding payment to trade payables.
6. Return on Capital Employed (Pre-Tax) : Earnings before interest and taxes (EBIT) divided by average capital employed. The ratio changes from 10% in FY 22-23 to (4%) in FY 23-24 mainly on account of revenue recognized on assignment of TDR entitlement during the year March 31,2023.
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