INDUSTRY STRUCTURE, DEVELOPMENTS AND PERFORMANCE:
The furnishing industry has made rapid strides, undergone transformation, come of age,
and grown, in size and stature, largely influenced by changing consumer tastes and mass
appeal. Impact of growth of housing and infrastructure sectors has played a stellar role
in shaping this industry into an organized one. These sectors indeed play catalyst role in
providing impetus to growth of this industry. In global scenario this industry has shown
significant growth. Several economic changes coupled with increase in general spending
power has propelled the consumers to splurge more money on furnishing and in decorating
their homes and offices. Current trends do support further growth potential of this
segment and the Company is making concerted efforts to capitalize on the same.
The Company, taking a cue from all round growth witnessed by the furnishing industry,
has successfully cemented its place as a large player in the domestic arena. The Companys
core strength has been its well-established pan India dealer network for wholesale
business, 4 world class large format retail stores strategically located in the twin
cities of Hyderabad and Secunderabad with a fine blend of infrastructure to navigate new
markets for business development. The major clientele consists of NRIs, reputed
institutes, corporate customers, and people from all the strata of the society.
To add to its strength, the Company lays highest emphasis on innovation thus bringing
out latest designs of different hues and colors coupled with splendid range to choose
from. The Company strives to cater to all the segments that matter, mainly on the strength
of its world class quality products with wider range and price choices.
The Company has a state of the art and most modern Embroidery Unit within its factory
premises initially set up in the year 2009-2010, which has 40 fully automatic embroidery
machines imported from Japan. In-house embroidery unit lends an edge to the Company in
adding value to its increasingly popular products creating a place for increased demand
for embroidered fabric. Embroidered furnishing fabric and bed linen have together enabled
the Company to increase its stronghold and thus seize a sizeable market share too. State
of the art embroidery on fabrics is a strong value addition to the products that the
Company manufactures.
During the period of COVID 19 Pandemic, which was very trying and most difficult
period, the Company had resorted to taking up job work orders from TSCO (State Govt.
Undertaking) and other top customers for sustenance.
OPPORTUNITIES AND THREATS:
The furnishing fabric market is considered as ever growing one, yet it has witnessed a
radical change in consumer tastes and liking due to changing lifestyles in line with
changing times. The economic changes and liberalization have played a big role in
elevating the living standards and is also instrumental, to a large extent, in adding up
to general spending power. The boom witnessed in the housing sector has indeed added spice
to peoples tastes and their zest for sophistication. The Company operates in a highly
competitive environment, where its competence and core experience has helped it in keeping
pace with the developments around and face challenges as well as such.
The Company does not foresee any immediate threat to its domain merely on the strength
of the size of its operations. Being a manufacturer, a wholesaler and its retail
operations all skewed together under one umbrella are in fact the key factors and
hallmarks that other competitors find it difficult to dislodge it from its leadership
position. Constant innovation has helped the Company too in retaining the edge in the
contemporary markets to sustain growth.
The furnishing industry has by and large been able to withstand the market slow down at
times and fluctuation in prices of essential raw materials to a considerable extent. The
Company has kept pace with the advancements around and forged its synergies in innovating
techniques and competes well in design and development of its range of products to beat
the competition, persistent with constant improvisation, astute pricing policy and highest
quality standards.
Pertinently, with the outbreak of COVID-19 Pandemic in March, 2020 there has been a sea
change in performance of the company. Imposition of lockdowns for prolonged durations had
made a telling impact on the working as factory premises and showrooms had to be closed
for operations during the period, resulting in considerable revenue loss and severely
impacting the business overall. Resurgence of second wave during March 2021 has only
compounded the miseries of the business and industry alike and the company has not been
any exception to this turmoil.
SEGMENT -WISE OR PRODUCT WISE PERFORMANCE:
Segments are identified having regard to the dominant source and nature of risks and
returns and internal organization and management structure. The Company has considered
business segments as the primary segments for disclosure.
The Company does not have any geographical segment.
OUTLOOK:
The industry is witnessing all-round growth in the global scenario, which is coupled
with rise in demand in the housing and infrastructure. Changing lifestyles and peoples
acumen to spend more on this luxury and necessity alike are the key factors in its growth
pattern too. These factors will help the Company to achieve its projected growth outlined
for the future. General and persistent economic slowdown due to various external factors
affecting the markets, is in fact a disheartening factor, as it has not allowed the
contemporary markets to swing back into revival mode, yet the Company through its
aggressive marketing strategy is trying to overcome it to a good measure. With increased
focus on enhancing its product portfolio and introduction of new range of embroidered
fabrics, your Company is striving to grow at the expected pace and show consistent
results.
The Company plans to continue its thrust in retail segment aimed at further ensuring a
horizontal & organic growth and to extend its reach to the untapped segments that will
help in achieving its long-term goals besides ultimately allowing the Company to the stage
of consolidation.
The Company has responded well to the challenges that have come in the way so far and
engaged well in defining its strategies to counter the effects that may be in offing
further. The lockdowns tested the agility, resilience, and adaptability of our operational
model. The Company has responded to the challenge with agility and tried to emerge
stronger. Though resurgence of second wave has a compounding effect, still the company had
been able to withstand the pressure and continued its recovery trail to a good extent.
When we emerge out of this crisis, the world will be a very different place. We are
witnessing many of those changes already. The experience gained during this unprecedented
and unforeseen circumstances due to outbreak of pandemic, people are discovering new
synergies at work and culture that existed in the pre-COVID era.
RISKS AND CONCERNS:
The Company remains apprehensive of the market environment and the conditions of
general economic slowdown and downturn, which is not allowing the contemporary markets to
go into revival mode. Market buoyancy and fluctuating & rising prices of raw materials
are the key concerns, which are to be addressed appropriately to ensure projected growth.
The Company is hopeful that by constantly bringing in new products through innovation and
employing new marketing strategies will greatly help it in mitigating the adverse impacts
that the pandemic induced effects have brought in. Industry by and large continues to
witness a general economic slowdown which is in fact a dominating factor impairing growth.
Recent events have highlighted the importance of building organizational resilience,
agility, and adaptability. At the heart of any organizations resilience is its people,
supported by enabling processes and technologies. The Company too has outlined its
strategies well to bring out the best out of its work force in the trying circumstances
and looks ahead for better results.
The Companys track record of navigating multiple economic cycles and technology
changes over the past three decades can be traced to its culture of empowerment and its
purpose-driven view.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an adequate internal control system which commensurate with the size
and nature of its business. The internal control system is being supported by internal
audits, regular reviews by management to ensure reliability of financial and all other
records to prepare financial statements and other data. Further the Audit Committee of the
Board review the findings and recommendations of the internal audit and suitable
implementations are affected.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
The Company achieved a gross turnover of Rs.2626.53 Lakhs during the year and net loss
of Rs. 642.35 Lakhs during the year under review. Notwithstanding adverse trends prevalent
and stressful environment that continues to persist, the companys results, though bely
expectations, are rated as satisfactory.
The Company looks ahead with hopes to continue its good run and sustained growth in the
current financial year and years to follow. The Company is pushing up its marketing
synergies to gain access to newer markets with its product innovation strategies,
improvement in overall operations and introduction of new range of products in line with
prevalent trends that will help it to sail well in the ensuing financial year.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER
OF PEOPLE EMPLOYED:
There are no material developments in the Human Resources area. The Industrial
relations have been satisfactory. The Company constantly reviews the manpower requirements
and effective steps are being taken to meet the requirements. The total number of people
directly and indirectly employed by the Company is 271.
DETAILS OF SIGNIFICANT CHANGES (I.E CHANGES OF 25% OR MORE AS COMPARED TO THE
IMMEDIATELY PREVIOUS FINANCIAL YEAR) ON KEY FINANCIAL RATIOS ALONG WITH DETAILED
EXPLANATIONS THERE FOR:
The Company has not carried out any treatment different from that prescribed in
Accounting Standards.
The key financial ratios are as under:
| Particulars |
F.Y2022-23 |
F.Y 2021-22 |
| Debtors Turnover |
0.08 |
0.08 |
| Inventory Turnover |
0.24 |
0.23 |
| Interest Coverage Ratio |
(0.17) |
(0.12) |
| Current Ratio |
2.20 |
2.30 |
| Debt Equity Ratio |
3.07 |
2.81 |
| Operating Profit Margin (%) |
(25.17) |
(6.83) |
| Net Profit Margin (%) |
(25.36) |
(0.44) |
| Return on Net worth |
(8.96) |
(0.14) |
DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS
FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:
During the year under review, the Return on Net Worth is only (8.96) when compared to
the previous year of (0.14) the reason for the drastic downfall is due to lower turnover
on account of general downfall in the industry.
DISCLOSURE OF ACCOUNTING TREATMENT:
The Company has not carried out any treatment different from that prescribed in
Accounting Standards.
NOTE:
Readers are advised to kindly note that the above discussion contains statements about
risks, concerns, opportunities, etc., which are valid only at the time of making the
statements. A variety of factors known/unknown expected or otherwise may influence the
financial results. We do not expect these statements to be updated or revised to take care
of any changes in the underlying presumptions.
Readers may therefore appreciate the context in which these statements are made before
making use of the same. risks, concerns, opportunities, etc., which are valid only at the
time of making the statements. A variety of factors known/unknown expected or otherwise
may influence the financial results. We do not expect these statements to be updated or
revised to take care of any changes in the underlying presumptions.
Readers may therefore appreciate the context in which these statements are made before
making use of the same.
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