1. MANAGEMENT DISCUSSION:-
i. INDUSTRY STRUCTURE AND DEVELOPMENTS.
As per report of INDIA BRAND EQUITY FOUNDATION Cotton production in India is projected
to reach 7.2 million tonnes (43 million bales of 170 kg each) by 2030, driven by
increasing demand from consumers. India enjoys a comparative advantage in terms of skilled
manpower and in cost of production, relative to major textile producers.
Indias textiles industry has around 4.5 crore employed workers including 35.22 lakh
handloom workers across the country.
Indias textiles sector is one of the oldest industries in Indian economy dating back
several centuries. Even today, textiles sector is one of the largest contributors to
Indias exports with approximately 13-15 per cent of total exports. The textiles industry
is also labour intensive and is one of the largest employers. The textile industry has two
broad segments. First, the un-organised sector consists of handloom, handicrafts and
sericulture, which are operated on a small scale and through traditional tools and
methods. The second is the organized sector consisting of spinning, apparel and garments
segment which apply modern machinery and techniques such as economies of scale.
The Indian textiles industry is extremely varied, with the hand-spun and hand-woven
textiles sectors at one end of the spectrum, while the capital intensive sophisticated
mills sector at the other end of the spectrum. The decentralized power looms/ hosiery and
knitting sector form the largest component of the textiles sector. The close linkage of
the textile industry to agriculture (for raw materials such as cotton) and the ancient
culture and traditions of the country in terms of textiles make the Indian textiles sector
unique in comparison to the industries of other countries. The Indian textile industry has
the capacity to produce a wide variety of products suitable to different market segments,
both within India and across the world.
ii. OPPORTUNITIES AND THREATS:
However, international slow-down may have adverse impact on the growth the textile
industry. The Indian cotton textile industry is expected to showcase a stable growth in FY
2023-24, supported by stable input prices, healthy capacity utilization and steady
domestic demand. Government is providing various incentives under TUFs. The Customers also
growing rapidly. At the same time, there is intense price pressure from the competitors
and international financial crisis. Major threat is from international market and mainly
from china. GST will impact most to the textile industry as the same is in most
unorganized sector and implementation of GST will be seen as game changer to this
industry. However, international slow-down may have adverse impact on the growth the
textile industry.
Government is providing various incentives under TUFs. Further, the government approved
the Production-Linked Incentive (PLI) Scheme for Textiles focusing on manmade fiber (MMF)
apparel, MMF fabrics, and products of technical textiles to enhance Indias manufacturing
capabilities and exports The Customers also growing rapidly. At the same time, there is
intense price pressure from the competitors and international financial crisis. Major
threat is from international market and mainly from china. GST will impact most to the
textile industry as the same is in most unorganized sector and implementation of GST will
be seen as game changer to this industry.
iii. SEGMENT WISE OR PRODUCT-WISE PERFORMANCE
Company is having only one segment and that is textile companys main products are yarn
and grey falling in one category thus segment wise reporting is not given as the same is
evident from financial figures.
iv. OUTLOOK
The future for the Indian textile industry looks promising, buoyed by both strong
domestic consumption as well as export demand. With consumerism and disposable income on
the rise, the retail sector has experienced a rapid growth in the past decade with the
entry of several international players into the Indian market. As a long term planning
strategy, company is planning to develop cotton based technology. Company intend to launch
new project in the field of textile particularly embroidery based production.
v. RISKS AND CONCERNS:
Now a day due to industrial slow down and change in market purchasing pattern Indian
Textile Industry witness setback and down trade. Major fluctuations Rupee v/s dollar price
corresponding to fluctuation in the raw material price and stringent market conditions can
affect the companys performance. Goods and Service Tax Act will have major impact on the
industry and the same cannot be assessed at this point of time. Overall supply chain is
affected internationally, that may pose a sincere concern for the entire economy.
vi. INTERNAL CONTROL SYSTEM:
The Company has an adequate internal audit system commensurate with its size and the
nature of its business towards achieving efficiency in the operation, optimum utilization
of resources and effective monitoring thereof and compliance with applicable laws.
vii. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL
PERFORMANCE.
Financial performance for the year 2022-23 has been declined and revenue of the company
decreased from Rs. 2,97,019,739toRs. 2,86,558,567i.e approx. 0.036 % decrease from
previous year revenue. Operational margins of company were decreased as compare to
previous year. In future company expected to provide better financial performance.
viii. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT,
INCLUDING NUMBER OF PEOPLE EMPLOYED.
Textile segment mainly depend on labour and workmen, company always try to conserve the
workforce. Training to work men and skill improvement programs were held periodically to
improve the productivity. Details of employee are given above at ‘PARTICULARS OF
EMPLOYEES hence not reproduce here.
Employees relations continue to be cordial. Training and development activities are
identified, organizes and progress monitored as part of human resource development
activities.
ix. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE
IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED
EXPLANATIONS THEREFOR, INCLUDING
During the previous year 2021-22 company reported profit after tax of Rs. 11,128,639and
during the current financial year 2022-23 company attain profit after tax of Rs. 8,92,555.
Most of the financial ratios are not comparable to previous year but major improvement
shown to Inventory turnover ratio, current ration, debt service coverage ratio, return on
equity ratio etc. Main reason to improve margins is higher utilisation of resource and
increase in net revenue and decrease in financial cost and depreciation cost. Company had
made net profit of Rs. 8,92,555which is less than previous year net profit of Rs.
11,128,639and that is the main reason to decrease in the net worth of the company.
Following are the details of ratios:
PARTICULAS |
YEAR ENDED 31.03.2023 |
YEAR ENDED 31.03.2022 |
| Current Ratio |
2.33 |
3.29 |
| Debt Service Coverage Ratio |
1.18 |
2.08 |
| Return on Equity Ratio |
0.01 |
0.07 |
| lnventory Turnover Ratio |
3.39 |
9.93 |
| Trade payables Turnover Ratio |
33.63 |
23.79 |
| Net Capital Turnover Ratio |
2.90 |
2.28 |
| Return on Capital Employed |
0.10 |
0.18 |
During the year over review Company has made sizable recovery from debtors and other
current liabilities. Hence current ratio has reduced. Overall net profit after tax has
reduced drastically due to increase in maintenance cost, employee expense and financial
cost. This has resulted in reduction in Debt Service Coverage Ratio. Due to major increase
in maintenance cost, employee expense and financial cost, net profit for the year has
decreased. Due to major increase in maintenance cost, employee expense and financial cost,
net profit for the year has decreased. Ratios are specifically explained in Note no. 05 to
the Ind AS Financial Statements of Auditor report.
x. Details of any change in Return on Net Worth as compared to the immediately previous
financial year along with a detailed explanation thereof.:
Return on Net worth has decreased during the year to 3.43to 3.95 as compared to
previous year due to decrease in year on year profit and lower Inventory turnover and
increase in maintenance cost.
2. DISCLOSURE OF ACCOUNTING TREATMENT
Appropriate accounting standards were followed in preparation of annual accounts, there
is no treatment different from that prescribed in Accounting Standard.
INITIATIVES
The Indian government has come up with a number of export promotion policies for the
textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under
the automatic route. The initiatives are being taken by the Company too, for improving the
quality standards and reduction of costs at appropriate level. New machineries are
imported to provide better result and to cope up with changing requirement of the
industry. The employees at all levels are being made aware of the changing conditions and
the challenges of the open market conditions and to train the personnel to tackle the
difficult situations which will improve the overall productivity, profitability.
ANTI SEXUAL HARASSMENT POLICY
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements
of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition &
Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints
received regarding. All employees are covered under this policy. There were no complaints
or cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
CAUTIONARY STATEMENT
Statements in the Directors Report & Management Discussion and Analysis describing
the Companys objectives, projections,estimates, expectations or predictions may be
forward looking statements. Actual results could differ materially from those expressed or
implied. Important factors that could make difference to the Companys operations include
cyclical demand, changes in government regulations, tax regimes, economic development and
other ancillary factors.
ACKNOWLEDGMENT:
The Directors sincerely express their appreciation to the employees at all levels,
Bankers, customers, investors, Government of Gujarat and Ministry of Government for their
sustained support and co-operation and hope that the same will continue in future.
Your Directors also wish to place on record their deep appreciation for the dedication
and hard work put by the employees at all levels towards the growth of the Company. Last
but not the least, the Board of Directors wish to thank the Investor/ Shareholders for
their support, co-operation and faith in the Company.
Registered Office: |
For and on behalf of the Board of Directors of |
"Surbhi House", |
Surbhi Industries Ltd |
2nd Floor, FP NO 206, |
|
B/h Old Sub Jail, Ring Road, |
Sd/- |
Khatodara Surat 395002 |
Bipinbhai Patel |
|
Chairman |
|
DIN: 00023447 |
Date:25.05.2023 |
|
Place: Surat |
|
+91-9892691696
