The Management Discussion and Analysis Report has been prepared in accordance with the
provisions of Regulation 34(2)(e) of Listing Regulations, read with Schedule V(B) thereto,
with a view to provide an analysis of the business and Financial Statements of the Company
for FY 2022-23 and should be read in conjunction with the Companys financial statements,
the schedules and notes thereto and other information included elsewhere in the Integrated
Report.
The objective of this report is to convey the Managements perspective on the external
environment and our industry, as well as strategy, operating and financial performance,
material developments in human resources and industrial relations, risks and opportunities
and internal control systems and their adequacy in the Company during the FY 2022-23.
Industry Structure & Development:
Textile Industry is one of the largest contributors to the countrys exports valuing
nearly USD 35.5.5 billion. India is the third largest exporter of Textiles & Apparel
in the world. Indias textiles and clothing industry is one of the mainstays of the
national economy. In terms of employment, Indian textile industry is the second largest
employer after agriculture, providing direct and indirect employment to nearly 100 million
people in India. In keeping with goal of making Indias development inclusive and
participative, the Governments central focus has been on increasing textile manufacturing
by building the best-in-class manufacturing infrastructure, upgradation of technology
fostering innovation, enhancing skills and traditional strengths in the textile sector.
The Ministry of Textiles has undertaken several initiatives to support the textile
industry in India and strengthen its position in the global market, empowering
economically disadvantaged people and improving infrastructure, plans to encourage
sustainable fashion and promote advanced manufacturing facilities within India are also
underway. The steps like Incubation centres for apparel manufacturing for start ups,
Production linked incentive (PLI) scheme, PM-Mega Integrated Textiles and Apparel Park (PM
MITRA), Capacity building scheme (SAMARTH) for textile industry are great intitiative
taken by the Ministry of textile for creating opportunities and growth in the sector.
In June 2023, Government has approved R&D projects worth US$ 7.4 million (Rs. 61.09
crore) in textile sector and Huge funds in schemes such as Rs. 900 crore (US$ 109.99
million) for Amended Technology Upgradation Fund Scheme (ATUFS) have been released by the
Government in the union budget of 2023-24 to encourage more private equity investments and
provide employment.
Opportunities & Threats
The fashion industry has historically demonstrated tremendous resilience and
adaptability. Over the years, industry players have successfully navigated challenges and
emerged stronger with new and innovative methods. The global apparel market expanded at a
compound annual growth rate (CAGR) of 7.0% between 2022 and 2023, from US$ 610 bn to US$
653 bn. The apparel market is anticipated to expand at a 6.2% CAGR to US$830.69bn by 2027.
Global apparel retail industry is expected to increase at 7% CAGR in the period between
2020 and 2025 with China and USA continuing to be the largest markets in terms of the
sales forecast. Besides, trade agreements with United Kingdom, other countries in the
European Union and Canada are expected to drive robust growth, leading to an increase in
Indias stake in the global readymade garment trade.
Sustainable fashion, Gen-Z propelling gender-fluid fashion, development of E-commerce
portals, customisation, personalisation, of digital technology in textile products, 3D
modelling and other technologies will be key to driving growth and profitability in the
long run. China plus one policy adopted by USA / Europe will give a boost to Indian
Textile Sector. Economic volatility in Srilanka, Pakistan, Bangladesh and Vietnam has
played out in favour of India as the world has started looking at India as reliable
partner for their requirement.
The textile industry is highly sensitive to global economic conditions and can be
significantly impacted by global demand and pricing. Rising competition in the market both
on the domestic & export front, duty free access to competing countries in US &
European markets, Rise of demand for low-cost products having sustainable and environment
- friendly production processes, sustained inflationary pressure, cost of raw material and
its availability, slowdown in demand & change in fashion trends, the geopolitical
conflict in Europe, interest rate hikes by Central Banks across the world, lower demand in
Europe, the UK and USA, extra inventories with traders are some of the challenges. Besides
this the Company is also exposed to factors such as the change in government policies,
duties & taxes, availability of power from the grid, availability of labour etc.
Performance:
In spite of the continued disturbance due to the economic and market conditions in the
prevailing situation, the company has maintained the sales business in line with the
previous year. However, the performance could have been more visible if there were profits
from the performance for the year 2022-23 in the backdrop of losses reported in the
previous year. The company had to account for substantial loss on the sale of accumulated
inventory of retail division stocks and because of these the company reported substantial
losses for the financial year.
(Rs.in Lakhs)
| Particulars |
2022-23 |
2021-22 |
Percentage Change |
| Total Sales (Domestic) |
9242.53 |
9840.72 |
-6.08 |
| Other Income |
1373.87 |
68.24 |
1913.29 |
| Total: |
10616.40 |
9908.96 |
7.14 |
Key Ratios:
| Particulars |
2022-23 (Standalone) |
2021-22 (Standalone) |
2022-23 (Consolidated) |
2021-22 (Consolidated) |
| Debtors Turnover |
2.64 |
2.68 |
3.53 |
3.13 |
| Inventory Turnover |
6.84 |
3.43 |
5.48 |
3.14 |
| Interest coverage Ratio |
(236) |
(4.13) |
(4.11) |
(5.59) |
| Debt Equity Ratio |
0.03 |
(167) |
(0.04) |
(020) |
| Operating profit margin (%) |
(7.01) |
(18.41) |
(11.47) |
(24.27) |
| Net Profit margin (%) |
(0.11) |
(0.29) |
(0.15) |
(034) |
| Return on net worth (%) |
0.02 |
0.02 |
(0.01) |
(0.20) |
| Current Ratio |
1.09 |
0.80 |
0.73 |
0.70 |
Earnings per share:
The Companys earnings per share for 2022-23 are Rs. (3.95) as against Rs. (16.50)
during 2021-22. Detailed analysis of ratio are given separately in the notes to the
accounts.
Outlook:
The Company envisions a positive outlook for its future, aspiring to increase its
business. The focus is on establishing long term strategic partnerships that offer
enhanced visibility into the business and drive a consistent stream of revenue. This
enables the Company to transition from transactional orders to value-accretive businesses,
ultimately driving higher margins and improved return ratios in the long term. Adapting to
the dynamic economic and fashion landscape, the Company continues to evolve and build
resilience against market upheavals. While acknowledging the near-term challenges that may
impact growth, the Company anticipates a positive outlook. As a global platform, we remain
dedicated to strengthening our capabilities, accompanied by a gradual increase in
profitability. We, therefore, look at the future optimistically.
Risk and Concerns:
There are various risks and concerns associated with the textile and apparel industry
such as Regulations, Competition, Business risk, Technology Obsolescence, Retention of
talent, cyber security etc. Price fluctuation, interrupted availability of raw material,
high inventory and rising input cost remain the major concern for the industry. As
business passes on the rising cost due to rise in input prices, consumer sentiments are
getting affected and the demand is being further contracted.
Internal Controls & Systems:
Company has in place robust Internal Control system to maximize the effectiveness and
efficiency by including activities that are tailored to the nature, size and complexity of
the entity. The Company follows proper hierarchy for reporting of routine activities. The
company has set up adequate internal control and systems to ensure that all the functions
and procedures followed are effective and any major revenue leakage or wastage of
resources are timely checked and controlled. The Company implements and manages efficient
internal control systems to ensure that all assets are safeguarded and protected against
loss from unauthorized use or disposition, by maintaining proper records and reports in a
timely manner. There is regular evaluation of all the Internal Controls Systems and
procedures and it is also reviewed by Internal Auditors through checking, inspection and
verification. Apart from this the company has also adequate internal financial control
systems that include a risk based framework to ensure orderly and efficient conduct of its
business, safeguarding assets and accuracy and completeness of the accounting records, and
assurance on reliable financial information.
Internal Audit
Internal Audit at the Company is an independent and objective activity designed to
provide assurance to senior management and add value by identifying opportunities to
deliver business benefits and improvements to internal controls. It helps us accomplish
our objectives by bringing a systematic and disciplined approach to evaluating and
improving the effectiveness of processes, controls, and governance. The internal audit
function carries out a focused and risk-based annual internal audit plan approved by the
Audit Committee.
Human Resources
We take pride in fostering an inspiring workplace with an agile and high-performance
culture to attract, develop and retain the best talent. Human Resources are capital of the
Company. It could be invested through education and training which leads to an improvement
in the quality and level of production. The Company has always given importance for
developing individuals as well as teams. The system followed is transparent and
performance based and it endeavors to retain, develop and provide better working
environment to the employees by providing an atmosphere of trusteeship, competition and
challenge, thereby providing opportunities for personal and professional growth through
training and ample career enhancement opportunities. The Company organizes and provides
requisite training to its employees from time to time and periodical appraisal and
rewarding systems are in put well in place. The Company has shown full commitment towards
employees, investors, consultants and all related personnel by providing safe-working
conditions along with other welfare measures.
As on 31st March, 2023, the number of permanent employed is 154 (including
Executive Director). Cautionary Statement:
All the statements and observations stated in the Management Discussion and Analysis
& other reports, describing the Companys objectives, projections, data information
and estimates may be "forward looking" statements within the meaning of
applicable securities, laws, and regulations. Therefore, the actual results could differ
materially from those expressed or implied. Important factors that could make a difference
to your Companys operations include economic conditions affecting demand supply and price
conditions in the domestic and international markets, changes in the Government
regulations, tax laws, statutes, and other incidental national and international
factors. By their nature, forward-looking statements require the Company to make
assumptions and are subject to inherent risks and uncertainties. There is a significant
risk that the assumptions, predictions and other forward-looking statements will not prove
to be accurate. Readers are cautioned not to place undue reliance on forward looking
statements as a number of factors could cause assumptions, actual future results and
events to differ materially from those expressed in the forward-looking statements.
By Order of the Board of Directors of Suditi Industries Limited
|
Sd- |
| Date: August 14, 2023 |
Mr. Rajagopal Raja Chinraj |
| Place: Navi Mumbai |
Whole time Director & CEO |
|
DIN: 00158832 |
+91-9892691696
