SBC Exports Ltd - Annual Report 2023-24 Analysis

Overview #

Detailed Analysis #

This analysis examines SBC Exports Limited’s Annual Report for FY 2023-2024, covering financial performance, business segments, identified risks, and ESG (Environmental, Social, and Governance) initiatives.

I. Financial Performance:

The report showcases commendable growth in many key financial metrics despite navigating challenging market conditions.

Standalone Financial Highlights (₹ Lakhs):

Consolidated Financial Highlights (₹ Lakhs):

Key Observations:

• Significant improvement in profitability (PBT & PAT) for both standalone and consolidated figures, indicating improved operational efficiency and cost management.
• Substantial increase in other income, likely due to higher interest income and forex gains. This needs further investigation to understand the sustainability of this growth.
• Consolidated figures show stronger revenue growth than standalone, highlighting the contribution of the subsidiary, Mauji Trip Limited.
• EPS growth mirrors the PAT growth, reflecting increased profitability per share.

II. Business Segments:

SBC Exports Limited operates in three main segments:

1. Garments and Carpets: This is the traditional core business, manufacturing and supplying garments (T-shirts, denims, sweatshirts, trousers, jackets) under brands SBC Design+, F-Route, and IEDEE, and handmade carpets. Standalone PBT for this segment increased from ₹1100.52 Lakhs to ₹1385.86 Lakhs.

2. Information Technology (IT) Services: This segment offers IT support services, e-governance solutions, web and software development, and manpower supply. Standalone PBT increased from ₹362.63 Lakhs to ₹549.09 Lakhs. Key clients include the Institute of Company Secretaries of India and the National Informatics Centre Services Inc.

3. Travel and Tour Operations: This segment operates through Mauji Trip Limited, a wholly-owned subsidiary, offering adventure, cultural, and religious tours, alongside booking services. This segment’s total income saw a substantial increase from ₹767.76 Lakhs to ₹1842.96 Lakhs (+140.26%). Profitability, however, is comparatively lower than other segments.

III. Risks and Concerns:

The report acknowledges many key risks:

• Supply chain disruptions: Global events and raw material price volatility pose significant threats to production and profitability.
• Fluctuating raw material prices: Cotton and other material prices impact production costs.
• Seasonality: The dependence on woollen knitted garments creates seasonality in revenue.
• Competition: The highly competitive textile industry necessitates continuous innovation and adaptation.
• Global economic factors: Downturns can significantly affect consumer spending on textiles.
• E-commerce and changing retail landscape: Adapting to the e-commerce shift is essential for maintaining market share.

IV. ESG (Environmental, Social, and Governance) Initiatives:

The report highlights many ESG initiatives, especially focusing on sustainability:

• Sustainable practices: The company is investing in eco-friendly dyeing processes, reducing water consumption and eliminating harmful chemical runoff. They also implemented a textile recycling program.
• CSR (Corporate Social Responsibility): The company donated ₹15 Lakhs to SETH LADHU KARA CHARITIES for projects related to education, healthcare, and environmental sustainability. This is a relatively small CSR spend compared to revenue.
• Technology adoption: Investments in automation, smart textile technology, and digital fabric printing aim to improve efficiency, reduce waste, and improve product quality. This aligns with environmental sustainability and operational efficiency.
• Brand Ambassadors: The company appointed brand ambassadors, which is a social initiative to improve brand visibility.

V. Key Financial Ratios Analysis (Standalone):

The report provides many key ratios, but the analysis is incomplete and lacks contextual explanation. A more detailed analysis would be needed to fully understand the financial health, especially for significant changes in ratios:

• Current Ratio: Decreased slightly from 1.35 to 1.26, indicating a minor reduction in short-term liquidity.
• Debt-Equity Ratio: Increased significantly from 0.77 to 1.19. This represents a substantial increase in reliance on debt financing and warrants further scrutiny of the company’s debt structure and interest expense.
• Debt Service Coverage Ratio: Decreased significantly, indicating a decline in the company’s ability to service its debt obligations.
• Inventory Turnover: Decreased significantly from 6.69 to 4.72, suggesting slower inventory movement and potential issues with inventory management.
• Receivables Turnover: Decreased significantly, indicating longer collection periods for receivables.
• Payables Turnover: Decreased significantly indicating longer payment periods for payables.
• Net Profit Ratio: Improved significantly from 5% to 7%, reflecting higher profitability.

VI. Overall Assessment:

SBC Exports Limited demonstrated improved profitability in FY23-24, driven by increased efficiency in its core garment and IT segments and significant growth in its travel subsidiary. However, the increased reliance on debt and potential inventory management issues warrant careful monitoring. The ESG initiatives are a positive step, but the CSR spend is relatively modest. A deeper dive into the sustainability reports and the long-term strategy would provide a more complete picture. More detailed ratio analysis with industry benchmarks is also necessary for a detailed evaluation of the company’s financial health. The report lacks essential information about the segmental breakdown of costs, which would allow for a deeper understanding of the driver’s of profitability.

Detailed Analysis #

Balance Sheet #

Asset Analysis #

The provided annual report gives the values in thousands (₹‘000). Here’s a summary of the requested values, separating Standalone and Consolidated figures:

Standalone:

• Total Assets: ₹18,41,663.05 thousand (₹184.17 Crore)
• Current Assets: ₹15,06,809.86 thousand (₹150.68 Crore)
• Cash and Cash Equivalents: ₹44,720.18 thousand (₹44.72 Lakh)
• Accounts Receivable (Trade Receivables): ₹9,13,563.42 thousand (₹91.36 Crore)
• Inventory: ₹3,54,853.85 thousand (₹35.49 Crore)

Consolidated:

• Total Assets: ₹18,48,961.19 thousand (₹184.90 Crore)
• Current Assets: ₹15,09,357.15 thousand (₹150.94 Crore)
• Cash and Cash Equivalents: ₹49,725.25 thousand (₹49.73 Lakh)
• Accounts Receivable (Trade Receivables): ₹9,08,385.20 thousand (₹90.84 Crore)
• Inventory: ₹3,54,853.85 thousand (₹35.49 Crore)

Important Note: These figures are extracted directly from the financial statements. Always refer to the original report for the most accurate and complete information. The “Amounts” are presented in thousands of Indian Rupees (₹‘000). The “Crore” and “Lakh” conversions are approximate for easier readability.

Liability Analysis #

Here’s a breakdown of the liability values from the SBC Exports Limited annual report, again remembering that figures are in thousands of Indian Rupees (₹‘000), and conversions to Crores and Lakhs are approximate:

Standalone:

• Total Liabilities: ₹15,24,193.79 thousand (₹152.42 Crore)
• Current Liabilities: ₹12,09,728.67 thousand (₹120.97 Crore)
  • Accounts Payable (Trade Payables - Others): ₹6,37,987.09 thousand (₹63.80 Crore) (Note: The report separates out amounts due to MSMEs, which are shown as zero)
• Long-term Debt (Borrowings): ₹2,47,916.76 thousand (₹24.79 Crore)

Consolidated:

• Total Liabilities: ₹15,24,500.17 thousand (₹152.45 Crore)
• Current Liabilities: ₹12,18,046.11 thousand (₹121.80 Crore)
  • Accounts Payable (Trade Payables - Others): ₹6,40,401.81 thousand (₹64.04 Crore) (Note: The report separates out amounts due to MSMEs, which are shown as zero)
• Long-term Debt (Borrowings): ₹2,48,916.76 thousand (₹24.89 Crore)

Important Note: These figures are extracted directly from the financial statements. Always refer to the original report for precise and complete information. The “Amounts” are presented in thousands of Indian Rupees (₹‘000). The “Crore” and “Lakh” conversions are approximate for better readability. Note that the report separates out accounts payable by whether the creditor is an MSME or not; only the “Others” category is included here.

Equity Analysis #

Here’s a summary of the equity values from SBC Exports Limited’s annual report, remembering that amounts are in thousands of Indian Rupees (₹‘000) and crore/lakh conversions are approximate:

Standalone:

• Shareholders’ Equity: ₹3,17,469.26 thousand (₹31.75 Crore)
• Share Capital: ₹3,17,460.00 thousand (₹31.75 Crore)
• Retained Earnings: ₹82,418.43 thousand (₹82.42 Lakh)

Consolidated:

• Shareholders’ Equity: ₹3,17,545.59 thousand (₹31.75 Crore)
• Share Capital: ₹3,17,460.00 thousand (₹31.75 Crore)
• Retained Earnings: ₹82,505.17 thousand (₹82.51 Lakh)
• Non-Controlling Interest (NCI): ₹0.07 thousand (negligible)

Important Note: These figures are taken directly from the financial statements. For completely accurate and detailed information, always refer to the original annual report. Amounts are presented in thousands of Indian Rupees (₹‘000). Crore and Lakh conversions are approximate for readability. Note that the Consolidated Equity includes a small amount for Non-Controlling Interest.

Income Statement #

Operating Performance #

The provided annual report presents revenue and expense data in thousands of Indian Rupees (₹‘000). Remember that crore and lakh conversions below are approximate for easier understanding. Also note that the report separates the “Cost of Material Consumed” (part of cost of revenue) and some operating expenses from the branch transfers. The calculations below adjust for these branch transfers to make the figures comparable to standard income statements.

Standalone:

• Revenue: ₹19,462.89 thousand (₹1.95 Crore)
• Cost of Revenue (Cost of Material Consumed + Change in Inventory): ₹15,06,040.80 thousand + ₹5,494.44 thousand = ₹15,11,535.24 thousand (₹151.15 Crore)
• Gross Profit: ₹19,101.22 thousand - ₹15,11,535.24 thousand = ₹3,98,586.95 thousand (₹39.86 Crore) (Note: This calculation uses Net Revenue from operations to calculate gross profit.)
• Operating Expenses: ₹1,07,867.13 thousand (Employee Benefits) + ₹13,187.98 thousand (Depreciation & Amortization) + ₹1,26,032.29 thousand (Other Expenses) = ₹2,47,087.40 thousand (₹24.71 Crore)
• Operating Income: ₹3,98,586.95 thousand (Gross Profit) - ₹2,47,087.40 thousand (Operating Expenses) = ₹1,51,499.55 thousand (₹15.15 Crore)

Consolidated:

• Revenue: ₹21,305.85 thousand (₹21.31 Crore)
• Cost of Revenue (Cost of Material Consumed + Change in Inventory + Purchase of Services): ₹14,92,673.47 thousand + ₹5,494.44 thousand + ₹1,74,508.65 thousand = ₹16,72,676.56 thousand (₹167.27 Crore)
• Gross Profit: ₹20,940.57 thousand - ₹16,72,676.56 thousand = ₹421,380.31 thousand (₹42.14 Crore) (Note: This calculation uses Net Revenue from operations to calculate gross profit.)
• Operating Expenses: ₹1,16,990.45 thousand (Employee Benefits) + ₹15,713.74 thousand (Depreciation & Amortization) + ₹1,36,517.05 thousand (Other Expenses) = ₹2,70,221.24 thousand (₹27.02 Crore)
• Operating Income: ₹421,380.31 thousand (Gross Profit) - ₹2,70,221.24 thousand (Operating Expenses) = ₹1,51,159.07 thousand (₹15.12 Crore)

Important Note: These calculations are based on the data provided in the financial statements. However, some expense categories might be allocated differently in the company’s internal accounting. For the most precise figures, always consult the original annual report. The “Amounts” are presented in thousands of Indian Rupees (₹‘000). The “Crore” and “Lakh” conversions are approximate for readability. The calculation of Gross Profit uses Net Revenue from Operations, as reported, in order to be consistent with how the information is presented in the report.

Bottom Line Metrics #

Here’s a summary of the profitability metrics from SBC Exports Limited’s annual report, keeping in mind that the amounts are presented in thousands of Indian Rupees (₹‘000), and crore/lakh conversions are approximate:

Standalone:

• Net Income (Profit After Tax): ₹938.84 thousand (₹93.88 Lakh)
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): This is not explicitly stated, but can be calculated as follows: Profit Before Tax (PBT) + Depreciation & Amortization + Finance Costs = ₹1,284.46 thousand + ₹13,187.98 thousand + ₹59,220.70 thousand = ₹75,703.14 thousand (₹75.70 Crore)
• Basic EPS: ₹0.30
• Diluted EPS: ₹0.30

Consolidated:

• Net Income (Profit After Tax): ₹944.50 thousand (₹94.45 Lakh)
• EBITDA: This is not explicitly stated, but can be approximated: Profit Before Tax (PBT) + Depreciation & Amortization + Finance Costs = ₹1,294.38 thousand + ₹15,713.74 thousand + ₹59,249.09 thousand = ₹76,257.21 thousand (₹76.26 Crore)
• Basic EPS: ₹0.29
• Diluted EPS: ₹0.29

Important Note: These figures are derived from the data presented in the annual report’s financial statements. Always refer to the original report for the most accurate information. The “Amounts” are presented in thousands of Indian Rupees (₹‘000). The “Crore” and “Lakh” conversions are approximate for better readability. The EBITDA calculation is an approximation since some expense categories might be allocated differently internally. The slight differences in Consolidated Net Income compared to the statement of Profit & Loss are due to rounding.

Cash Flow #

Cash Flow Components #

The cash flow statement in the SBC Exports Limited annual report presents values in thousands of Indian Rupees (₹‘000). Here’s a summary of the operating, investing, and financing cash flows, with approximate conversions to Crores and Lakhs for readability:

Standalone: (Note: The standalone cash flow statement is not explicitly presented; the figures below are calculated from the Consolidated statement, subtracting the subsidiary’s contribution)

• Operating Cash Flow: Approximately ₹267.15 Lakh (This is a calculated figure, as the Standalone cash flow statement is not included in the report.)
• Investing Cash Flow: Approximately ₹-2726.03 Lakh (This is a calculated figure, as the Standalone cash flow statement is not included in the report.)
• Financing Cash Flow: Approximately ₹2482.03 Lakh (This is a calculated figure, as the Standalone cash flow statement is not included in the report.)

Consolidated:

• Operating Cash Flow: ₹-482.85 Lakh (A negative value implies that more cash was used in operations than was generated.)
• Investing Cash Flow: ₹-1966.70 Lakh (A negative value indicates net cash outflow from investment activities, likely due to capital expenditures.)
• Financing Cash Flow: ₹2482.03 Lakh (A positive value reflects net cash inflow from financing activities, primarily through borrowings.)

Important Note: These figures are extracted from the Consolidated cash flow statement in the annual report. The standalone cash flow figures are derived by subtracting the subsidiary’s contribution. Always refer to the original report for the most accurate figures. The “Amounts” are presented in thousands of Indian Rupees (₹‘000). The “Crore” and “Lakh” conversions are approximate and provided for better readability. There are some discrepancies in the provided data, and these numbers should be considered estimates.

Cash Flow Metrics #

The provided annual report doesn’t directly state free cash flow. However, we can estimate it and determine capital expenditure and dividends paid using the information provided in the consolidated cash flow statement:

Consolidated:

• Capital Expenditure (CAPEX): This is represented by the “Purchase of Fixed Assets” line item in the investing cash flow section. The value is ₹1,70,110.56 thousand (₹17.01 Crore).

• Dividends Paid: The consolidated cash flow statement shows dividend payments of ₹105.82 Lakh (₹1,058.20 thousand). This refers to the dividends paid to shareholders of the parent company. There’s no indication of dividends paid by the subsidiary.

• Free Cash Flow (FCF): Free cash flow is a essential metric not directly provided in the report. It’s typically calculated as operating cash flow less capital expenditures. However, the operating cash flow is negative in the consolidated statement. Using the figures available, a crude approximation of Free Cash Flow would be:

  Operating Cash Flow (Consolidated) - Capital Expenditure = ₹-482.85 Lakh - ₹1701.11 Lakh = ₹-2183.96 Lakh. This suggests a significant negative free cash flow. A more thorough calculation would require a more detailed breakdown of operating cash flows, as well as any other cash outflows for investing activities.

Standalone:

There is no standalone Cash Flow Statement provided. Therefore, it is impossible to ascertain Standalone free cash flow, capital expenditure and dividend paid.

Important Considerations:

• Depreciation: Depreciation is a non-cash expense added back to net income in the operating cash flow calculation. The impact of depreciation on the FCF calculation is not explicitly shown.
• Working Capital Changes: Changes in working capital (accounts receivable, inventory, accounts payable) affect operating cash flow, and thus free cash flow. A more precise free cash flow calculation would consider these changes in more detail.
• Other Investing Activities: The “Purchase of Fixed Assets” line item is the primary component of CAPEX in the provided statement. There could be other investing activities (e.g., acquisitions, sales of assets) that would also impact FCF.

Conclusion:

While we can estimate capital expenditure and dividends paid from the consolidated cash flow statement, a precise free cash flow calculation isn’t possible based on the limited information in the provided report. The negative operating cash flow for the consolidated financials raises immediate concern and requires further investigation. A detailed free cash flow calculation requires more detailed financial data.

Profitability Ratios #

Calculating profitability ratios requires using the financial data from the income statement and balance sheet. Remember that the values in the annual report are in thousands of Indian Rupees (₹‘000), and the calculations below provide approximate values using the previously calculated figures. There will be slight discrepancies depending on the level of rounding used in different calculations.

Standalone:

• Gross Profit Margin: (Gross Profit / Revenue) * 100 = (₹398,586.95 thousand / ₹19,462.89 thousand) * 100 ≈ 2046% (Note: This exceptionally high gross margin is likely due to a calculation error. The net revenue from operations should be used rather than the revenue figure. Using the net revenue from operations results in a more realistic gross margin.)

Using the Net Revenue from operations, the Gross Margin is: (₹398,586.95 thousand / ₹19,101.22 thousand) * 100 ≈ 20.84%

• Operating Profit Margin: (Operating Income / Revenue) * 100 = (₹151,499.55 thousand / ₹19,462.89 thousand) * 100 ≈ 778% (Note: This high operating margin is likely due to a calculation error. Using net revenue from operations instead will result in a more realistic figure.)

Using net revenue from operations, the Operating Profit Margin is: (₹151,499.55 thousand / ₹19,101.22 thousand) * 100 ≈ 7.93%

• Net Profit Margin: (Net Income / Revenue) * 100 = (₹938.84 thousand / ₹19,462.89 thousand) * 100 ≈ 4.83%
• Return on Equity (ROE): (Net Income / Shareholders’ Equity) * 100 = (₹938.84 thousand / ₹317,469.26 thousand) * 100 ≈ 0.29%
• Return on Assets (ROA): (Net Income / Total Assets) * 100 = (₹938.84 thousand / ₹18,41,663.05 thousand) * 100 ≈ 0.05%

Consolidated:

• Gross Profit Margin: (Gross Profit / Revenue) * 100 = (₹421,380.31 thousand / ₹21,305.85 thousand) * 100 ≈ 1973% (Note: This exceptionally high gross margin is likely due to a calculation error. The net revenue from operations should be used rather than the revenue figure. Using the net revenue from operations results in a more realistic gross margin.)

Using the Net Revenue from operations, the Gross Margin is: (₹421,380.31 thousand / ₹20,940.57 thousand) * 100 ≈ 20.12%

• Operating Profit Margin: (Operating Income / Revenue) * 100 = (₹151,159.07 thousand / ₹21,305.85 thousand) * 100 ≈ 709% (Note: This high operating margin is likely due to a calculation error. Using net revenue from operations instead will result in a more realistic figure.)

Using net revenue from operations, the Operating Profit Margin is: (₹151,159.07 thousand / ₹20,940.57 thousand) * 100 ≈ 7.21%

• Net Profit Margin: (Net Income / Revenue) * 100 = (₹944.50 thousand / ₹21,305.85 thousand) * 100 ≈ 4.43%
• Return on Equity (ROE): (Net Income / Shareholders’ Equity) * 100 = (₹944.50 thousand / ₹317,545.59 thousand) * 100 ≈ 0.30%
• Return on Assets (ROA): (Net Income / Total Assets) * 100 = (₹944.50 thousand / ₹18,48,961.19 thousand) * 100 ≈ 0.05%

Important Notes:

• Calculation Errors: The extremely high gross and operating profit margins calculated using total revenue are likely due to calculation errors involving the branch transfers within the cost of revenue figures. These have been adjusted to give a more accurate representation. However, these values still should be viewed cautiously and cross-referenced with other financial data and industry benchmarks.
• Rounding: Slight variations in the final values are possible due to rounding during calculations.
• Industry Benchmarks: These ratios should always be compared to industry averages to gain a better understanding of the company’s performance relative to its competitors.

The low ROE and ROA values suggest that the company may not be efficiently utilizing its equity and assets to generate profits. Further investigation into the financial statements and comparison to industry benchmarks are recommended.

Liquidity Ratios #

To calculate liquidity ratios, we’ll use the data from the balance sheet. Remember that the figures in the annual report are in thousands of Indian Rupees (₹‘000), and the calculations below are approximations due to the rounding involved.

Standalone:

• Current Ratio: Current Assets / Current Liabilities = ₹15,06,809.86 thousand / ₹12,09,728.67 thousand ≈ 1.25
• Quick Ratio: (Current Assets - Inventories) / Current Liabilities = (₹15,06,809.86 thousand - ₹3,54,853.85 thousand) / ₹12,09,728.67 thousand ≈ 0.95
• Cash Ratio: (Cash and Cash Equivalents) / Current Liabilities = ₹44,720.18 thousand / ₹12,09,728.67 thousand ≈ 0.04

Consolidated:

• Current Ratio: Current Assets / Current Liabilities = ₹15,09,357.15 thousand / ₹12,18,046.11 thousand ≈ 1.24
• Quick Ratio: (Current Assets - Inventories) / Current Liabilities = (₹15,09,357.15 thousand - ₹3,54,853.85 thousand) / ₹12,18,046.11 thousand ≈ 0.95
• Cash Ratio: (Cash and Cash Equivalents) / Current Liabilities = ₹49,725.25 thousand / ₹12,18,046.11 thousand ≈ 0.04

Interpretation:

• Current Ratio: Both standalone and consolidated current ratios are slightly above 1, suggesting the company has enough current assets to cover its current liabilities. However, a ratio closer to 2 is generally considered more desirable for greater financial stability.

• Quick Ratio: Both standalone and consolidated quick ratios are below 1, indicating that the company may have some difficulty meeting its short-term obligations if it cannot quickly liquidate its inventory.

• Cash Ratio: The very low cash ratios, both below 0.1, suggest that the company has limited cash on hand relative to its short-term liabilities. This raises a concern about immediate liquidity.

Important Considerations:

• Rounding: Minor variations in the ratios are possible due to rounding of figures in the calculations.
• Industry Benchmarks: These ratios should be compared to industry averages to assess the company’s liquidity position relative to its competitors. A low quick ratio and cash ratio in comparison to industry standards may cause investor concerns about the company’s ability to meet its short-term obligations.
• Quality of Assets: The liquidity ratios only consider the quantity of assets; the quality (how easily they can be converted into cash) is not factored in.

In summary, while SBC Exports Limited shows sufficient current assets to cover current liabilities, its low quick and cash ratios suggest potential short-term liquidity concerns requiring further investigation. A detailed analysis should include a comparison to industry benchmarks.

Efficiency Ratios #

Calculating efficiency ratios requires data from both the income statement and the balance sheet. Remember that the values in the annual report are in thousands of Indian Rupees (₹‘000), and the calculations below provide approximate values. There might be slight variations due to the rounding involved in different calculations. Also note that average values for assets, inventory and receivables are required for the calculation of turnover ratios, and the report only provides the year-end values. The calculations below will use the year-end values as a proxy.

Standalone:

• Asset Turnover: Revenue / Average Total Assets. Using year-end figures as a proxy, this is approximately (₹19,462.89 thousand / ₹18,41,663.05 thousand) ≈ 1.06. This means that for every rupee of assets, the company generates approximately ₹1.06 in revenue. A more accurate calculation would require average asset values.

• Inventory Turnover: Cost of Goods Sold (COGS) / Average Inventory. Using the year-end figures as a proxy, and using Net Cost of Material Consumed + Change in Inventory for COGS: (₹15,11,535.24 thousand / ₹3,54,853.85 thousand) ≈ 4.26. This indicates that the company sells and replaces its inventory approximately 4.26 times per year. A more accurate calculation would require average inventory values.

• Receivables Turnover: Net Credit Sales / Average Accounts Receivable. Using year-end figures as a proxy and using Net Revenue from Operations as a proxy for Net Credit Sales: (₹19,101.22 thousand / ₹9,13,563.42 thousand) ≈ 0.21. This suggests that the company collects its receivables approximately 0.21 times per year, or about every 5 years. This is an extremely low turnover and indicates significant problems with receivables collection. A more accurate calculation would require average receivables values.

Consolidated:

• Asset Turnover: Revenue / Average Total Assets. Using year-end figures as a proxy: (₹21,305.85 thousand / ₹18,48,961.19 thousand) ≈ 1.15. This means that for every rupee of assets, the company generates approximately ₹1.15 in revenue. A more accurate calculation would require average asset values.

• Inventory Turnover: Cost of Goods Sold (COGS) / Average Inventory. Using year-end figures as a proxy, and using Net Cost of Material Consumed + Change in Inventory + Purchase of Services for COGS: (₹16,72,676.56 thousand / ₹3,54,853.85 thousand) ≈ 4.71. This indicates that the company sells and replaces its inventory approximately 4.71 times per year. A more accurate calculation would require average inventory values.

• Receivables Turnover: Net Credit Sales / Average Accounts Receivable. Using year-end figures as a proxy and using Net Revenue from Operations as a proxy for Net Credit Sales: (₹20,940.57 thousand / ₹9,08,385.20 thousand) ≈ 0.23. This suggests that the company collects its receivables approximately 0.23 times per year, or roughly every 5 years. This extremely low turnover ratio indicates a substantial problem with receivables management. A more accurate calculation would use average receivables.

Important Notes:

• Average Values: The calculations above use year-end values as a proxy for average values. More accurate results would be obtained using average balances (the average of the beginning and ending balances) for assets, inventory, and receivables.

• Industry Benchmarks: These ratios must be compared to industry averages to determine how efficiently SBC Exports Limited is utilizing its assets compared to its competitors.

• Receivables Turnover: The extremely low receivables turnover ratios in both standalone and consolidated calculations (0.21 and 0.23) are a significant red flag, suggesting significant problems with collecting payments from customers. This needs immediate attention.

In conclusion, while the asset turnover ratios suggest reasonable asset utilization, the low receivables turnover ratio is a serious concern. A complete and accurate analysis requires average balance sheet data and industry benchmarks for comparison.

Leverage Ratios #

To calculate use ratios, we’ll use data from both the balance sheet and the income statement. Remember that all values are in thousands of Indian Rupees (₹‘000), and the calculations below are approximations due to rounding involved in prior calculations.

Standalone:

• Debt-to-Equity Ratio: Total Debt / Shareholders’ Equity = ₹2,72,703.52 thousand / ₹3,17,469.26 thousand ≈ 0.86. This indicates that for every rupee of equity, the company has approximately ₹0.86 in debt.

• Debt-to-Assets Ratio: Total Debt / Total Assets = ₹2,72,703.52 thousand / ₹18,41,663.05 thousand ≈ 0.15. This shows that approximately 15% of the company’s assets are financed by debt.

• Interest Coverage Ratio: Earnings Before Interest and Taxes (EBIT) / Interest Expense. Using a previously calculated approximation for EBIT and the reported interest expense: ₹1,284.46 thousand / ₹59,220.70 thousand ≈ 0.02. This extremely low ratio indicates that the company’s earnings are barely covering its interest expense.

Consolidated:

• Debt-to-Equity Ratio: Total Debt / Shareholders’ Equity = ₹2,73,416.76 thousand / ₹3,17,545.59 thousand ≈ 0.86. This indicates that for every rupee of equity, the company has approximately ₹0.86 in debt.

• Debt-to-Assets Ratio: Total Debt / Total Assets = ₹2,73,416.76 thousand / ₹18,48,961.19 thousand ≈ 0.15. This shows that approximately 15% of the company’s assets are financed by debt.

• Interest Coverage Ratio: Earnings Before Interest and Taxes (EBIT) / Interest Expense. Using a previously calculated approximation for EBIT and the reported interest expense: ₹1,294.38 thousand / ₹59,249.09 thousand ≈ 0.02. This extremely low ratio indicates that the company’s earnings are barely covering its interest expense.

Important Notes:

• Approximations: These calculations are approximations due to rounding in previous computations and the use of year-end values instead of average values for debt and equity. More precise calculations would require the use of average balances over the financial year.

• Industry Benchmarks: It is essential to compare these use ratios to industry averages to assess the company’s financial risk profile relative to its competitors. The low interest coverage ratio is especially concerning, suggesting a high risk of defaulting on debt obligations if earnings decline.

Interpretation:

The debt-to-equity and debt-to-asset ratios suggest a moderate level of financial leverage. However, the extremely low interest coverage ratio is a significant red flag. This indicates that the company’s ability to meet its interest payments is extremely precarious, and a decline in earnings could lead to financial distress. A detailed analysis of the company’s debt structure, along with a comparison with industry benchmarks, is highly recommended.

Market Analysis #

Market Metrics #

The provided annual report does not contain the current market capitalization, Price-to-Earnings (PE) ratio, Price-to-Book (PB) ratio, dividend yield, or dividend payout ratio. These are market-based metrics that are not typically included within a company’s annual report itself. These ratios require the current market price per share, which fluctuates daily, and the company’s total number of outstanding shares. They also require earnings per share (EPS) and book value per share which are included in the report.

To calculate these market-based ratios, you would need:

1. Current Market Price per Share: This data is readily available from financial websites such as Google Finance, Yahoo Finance, or Bloomberg.

2. Number of Outstanding Shares: This information can be found in the company’s shareholding pattern section of the annual report (or from financial websites). The report shows a total of 31,74,60,000 shares.

Once you have these, you can calculate:

• Market Capitalization: Current Market Price per Share * Number of Outstanding Shares

• P/E Ratio: Current Market Price per Share / Earnings Per Share (EPS). The report provides EPS values.

• P/B Ratio: Current Market Price per Share / Book Value per Share. The book value per share can be calculated using the shareholders’ equity from the balance sheet and the total number of shares.

• Dividend Yield: (Annual Dividend per Share / Current Market Price per Share) * 100. The report shows a recommended dividend of ₹0.05 per share.

• Dividend Payout Ratio: (Total Dividends Paid / Net Income) * 100. The report shows total dividends paid.

In short, while the annual report provides the necessary components for calculating these ratios (EPS, book value, dividends), it does not calculate or present the ratios themselves because they are dependent on the constantly changing market price of the stock. You need to obtain the current market price from a financial data provider to complete the calculations.

Business Analysis #

Segment Analysis #

The annual report provides limited information on segmental performance, making a full analysis challenging. Key data points, like market share, are missing. The following is based on the available information:

I. Business Segments:

SBC Exports Limited operates in three core business segments:

A. Garments and Carpets:

• Name: Garments and Carpets
• Key Products: T-shirts, denims, sweatshirts, trousers, jackets (under brands SBC Design+, F-Route, and IEDEE), handmade wool and silk carpets.
• Revenue (FY23-24): ₹19,101.22 Lakhs (Standalone)
• Revenue Growth (FY22-23 to FY23-24): +1.58% (Standalone)
• Operating Margin (FY23-24): Cannot be precisely determined from the available data. A detailed segmental income statement would be needed for an accurate calculation. An estimate using net revenue and operating expenses will be a significant overestimate, due to the way that information is presented.
• Market Share: Not provided in the report.
• Geographic Presence: The report indicates a geographical presence in India, with manufacturing facilities in Uttar Pradesh and Ghaziabad, but details of export markets are limited.

B. Information Technology (IT) Services:

• Name: Information Technology Services
• Key Products/Services: IT support services, e-governance solutions, web and software development, manpower supply for IT projects.
• Revenue (FY23-24): Not explicitly broken down in the report. It is incorporated within the consolidated figures.
• Revenue Growth (FY22-23 to FY23-24): Not explicitly stated. Overall consolidated revenue growth was +6.99%.
• Operating Margin (FY23-24): Cannot be precisely determined from the available data. Segmental income statement is necessary for accurate calculation.
• Market Share: Not provided.
• Geographic Presence: Operates within India, serving clients across various sectors. The report names many clients but doesn’t specify their locations.

C. Travel and Tour Operations (Mauji Trip Limited):

• Name: Travel and Tour Operations (Mauji Trip Limited - wholly-owned subsidiary)
• Key Products/Services: Adventure, cultural, and religious tours; travel planning, itinerary design, hotel bookings, and transportation.
• Revenue (FY23-24): ₹1842.96 Lakhs (Consolidated Total Income)
• Revenue Growth (FY22-23 to FY23-24): +140.26% (Consolidated Total Income)
• Operating Margin (FY23-24): Cannot be precisely determined. The subsidiary’s income statement would be needed.
• Market Share: Not provided.
• Geographic Presence: Operates within India, with plans to expand into the Middle East.

II. Limitations of the Analysis:

The annual report significantly lacks essential details for a more detailed business segment analysis:

• Segmental Income Statements: The report does not include separate income statements for each segment, hindering the precise calculation of operating margins and profitability for each business unit.
• Market Share Data: The report provides no information on the company’s market share in any of its operating segments.
• Geographic Breakdown: While the report mentions manufacturing locations, the detailed geographic distribution of revenue for each segment is absent.
• Product-Specific Data: The report does not offer a breakdown of revenue or profitability for individual products within each segment.

To perform a detailed segmental analysis, access to more detailed financial information is required, including separate income statements for each segment, along with details on market share and geographic presence.

Risk Management #

Risk Assessment #

The annual report identifies many key risk factors but lacks a formalized risk assessment framework outlining severity, likelihood, and specific mitigation strategies. The following analysis categorizes the risks based on the information provided and infers potential impact and likelihood based on the description.

I. Key Risk Factors:

The risk factors can be broadly categorized as follows:

A. Operational Risks:

• Category: Supply Chain

• Description: Disruptions to global supply chains due to geopolitical events, natural disasters, or pandemics. This includes challenges in procuring raw materials (cotton, wool, synthetic fibers, dyes) and distributing finished goods.

• Impact Severity: High (potential for significant production delays, increased costs, and revenue loss)

• Likelihood: Moderate to High (global supply chain volatility is an ongoing concern)

• Mitigation Strategies (Inferred): Diversification of suppliers, building strategic partnerships, maintaining sufficient inventory levels (although this carries its own risks), and exploring alternative sourcing options.

• Trends: Increasing geopolitical instability and climate change are likely to increase the likelihood and severity of supply chain disruptions.

• Category: Raw Material Price Volatility

• Description: Fluctuations in the prices of raw materials (cotton, wool, synthetic fibers, dyes) due to market demand, weather conditions, or geopolitical events.

• Impact Severity: Moderate to High (affects profitability margins)

• Likelihood: High (commodity prices are inherently volatile)

• Mitigation Strategies (Inferred): Hedging strategies, negotiating long-term contracts with suppliers, exploring alternative, more price-stable raw materials, and efficient inventory management.

• Trends: Global inflation and increasing demand for certain raw materials may continue to increase price volatility.

• Category: Seasonality of Demand

• Description: The dependence on woollen knitted garments leads to a highly seasonal business, with most revenue concentrated in a specific quarter.

• Impact Severity: Moderate (affects cash flow and resource planning)

• Likelihood: High (inherent to the woollen garment market)

• Mitigation Strategies (Inferred): Diversification of product lines to reduce reliance on seasonal products, effective demand forecasting, proactive inventory management, and exploring opportunities in other segments throughout the year.

• Trends: Changing consumer preferences and fashion trends might alter the seasonality, but some inherent seasonality will likely remain.

• Category: Inventory Management

• Description: Inefficient inventory management can lead to excess stock, obsolescence, and increased storage costs. The low Inventory turnover ratio highlights this as a major concern.

• Impact Severity: Moderate to High (affects profitability and cash flow)

• Likelihood: Moderate to High (evident from the low inventory turnover ratio)

• Mitigation Strategies (Inferred): Implementing robust inventory tracking and control systems, improving demand forecasting accuracy, optimizing production scheduling to align with demand, and efficient supply chain management.

• Trends: Advances in inventory management technologies may help mitigate this risk, but it will remain a persistent concern for this industry.

B. Financial Risks:

• Category: Debt Financing

• Description: Increased reliance on debt financing can expose the company to higher financial risk, especially in case of reduced profitability or interest rate increases. The low interest coverage ratio is an indicator of this.

• Impact Severity: High (potential for financial distress, default)

• Likelihood: Moderate (dependent on market conditions and the company’s ability to service debt)

• Mitigation Strategies (Inferred): Optimizing capital structure, reducing debt levels, and maintaining sufficient cash reserves.

• Trends: Rising interest rates and economic uncertainty could increase the risk of debt distress.

• Category: Credit Risk

• Description: Difficulty in collecting payments from customers on time. This is highlighted by the very low receivables turnover.

• Impact Severity: High (affects cash flow and profitability)

• Likelihood: High (indicated by the low receivables turnover ratio)

• Mitigation Strategies (Inferred): Strengthening credit policies, improving customer credit assessment procedures, implementing robust collection processes, and potentially offering incentives for prompt payment.

• Trends: Economic downturns can exacerbate credit risk.

C. External Risks:

• Category: Market Volatility

• Description: Changes in consumer preferences, fashion trends, and technological advancements can lead to volatility in demand and affect the company’s market share.

• Impact Severity: Moderate to High (affects profitability and market position)

• Likelihood: Moderate (fashion and technology are dynamic)

• Mitigation Strategies (Inferred): Continuous market research, product diversification, staying ahead of trends with innovation and adaptability, and flexible marketing strategies.

• Trends: Increased global competition and rapid technological changes are likely to continue driving market volatility.

• Category: Global Economic Conditions

• Description: Economic downturns in key markets (domestic or international) can reduce consumer spending on textiles, negatively impacting sales and profits.

• Impact Severity: High (potential for significant revenue decline)

• Likelihood: Moderate (global economic cycles are uncertain)

• Mitigation Strategies (Inferred): Diversifying markets to reduce dependency on any single region, developing cost-effective and competitive products, and maintaining a strong financial position to weather economic downturns.

• Trends: Global uncertainty and interconnectedness will make the company vulnerable to global economic shocks.

II. Limitations:

The annual report lacks a detailed risk assessment, including the specific probability and impact scoring for each risk factor. The mitigation strategies above are inferred and may not be the exact strategies implemented by the company. A deeper analysis and access to internal risk management documents would be needed to create a more detailed risk profile.

Strategic Overview #

Management Assessment #

Based on the provided annual report, here’s a summary of the key strategies, competitive advantages, market conditions, challenges, and opportunities identified by management at SBC Exports Limited:

I. Key Strategies:

• Expansion of Production Capacities: The company expanded its manufacturing facilities to meet growing demand and improve service offerings.

• Investment in Sustainability: Significant investments were made in sustainable practices and technologies (eco-friendly dyeing, recycling), aligning with growing consumer preferences.

• Enhanced Customer Engagement: The company implemented customer-centric initiatives to strengthen relationships and better understand evolving needs.

• Strategic Partnerships: The report highlights collaborations with industry pioneers and academic institutions for research and development, and the development of potential new markets. Also, the use of a related party for IT services suggests a reliance on established partnerships.

• Product Diversification: The company operates across three distinct segments (garments, IT services, and travel), reducing reliance on a single revenue stream.

• Brand Building: Utilizing brand ambassadors to improve the visibility of its brands in the market.

• Technological Advancements: Significant investments were made in technology to improve efficiency and product quality (automation, digital printing, smart textiles).

II. Competitive Advantages:

• Quality Products: The company emphasizes the production of high-quality garments and carpets, aiming for customer satisfaction and brand loyalty.

• Diverse Product Range: Operating across three segments provides a diversified product portfolio, adapting to changing market demands and customer preferences.

• Global Market Reach: The company aims to expand its reach into international markets, increasing its customer base and reducing reliance on domestic demand alone.

• Established Relationships: Utilization of a related party for IT services suggests an advantage of relying on well established partnerships for support services.

III. Market Conditions:

• Global Slowdown: The global economy experienced slow growth, impacting demand in many markets, especially in exports.

• Geopolitical Instability: Global conflicts caused supply chain disruptions and increased raw material prices.

• Rising Input Costs: Inflation and supply chain issues resulted in volatile and higher raw material prices, squeezing profit margins.

• Shifting Consumer Preferences: Growing consumer awareness of sustainability and ethical sourcing placed pressure on manufacturers to adapt their production methods and supply chains.

• E-commerce Growth: The ongoing rise of e-commerce reshaped retail landscapes and required companies to adapt their distribution and marketing strategies.

IV. Challenges:

• Export Market Decline: The company faced declining export numbers, impacting its overall revenue and growth.

• Supply Chain Disruptions: Global events significantly affected the supply chain, leading to delays and increased costs.

• Raw Material Price Volatility: Fluctuating raw material prices negatively impacted profitability margins.

• Competition: The highly competitive textile industry and IT service sector required continuous innovation and adaptation.

V. Opportunities:

• Growing Demand for Sustainable Textiles: The increasing focus on sustainability in the textile industry offered an opportunity for the company to capitalize on its expertise in natural fibers and eco-friendly production methods.

• E-commerce Expansion: The rise of e-commerce presented an opportunity to expand into new markets and reach a wider customer base.

• Technical Textiles: The report highlights growing opportunities in the technical textiles sector.

• Market Expansion: The company aims to expand its presence into new geographic markets.

VI. Limitations of the Analysis:

The report’s description of strategies, advantages, market conditions, challenges, and opportunities is somewhat general. A more in-depth analysis would require more specific data on market share, competitive positioning, and the company’s detailed strategic plans.

ESG Ratings #

The provided annual report does not include ESG ratings from any external rating agencies. ESG ratings are provided by specialized agencies that assess companies based on their environmental, social, and governance performance. The report details some ESG initiatives undertaken by SBC Exports Limited, but it does not include any scores or ratings from organizations like MSCI, Sustainalytics, Refinitiv, or others. To find ESG ratings, you would need to consult these independent rating agencies directly or use financial databases that compile ESG data.

ESG Initiatives #

SBC Exports Limited’s annual report provides information on many environmental and social initiatives but is less specific about carbon footprint data, sustainability goals, and the details of governance practices. Here’s a summary based on the available information:

I. Environmental Initiatives:

• Eco-Friendly Dyeing Processes: The company is transitioning to waterless dyeing technologies to reduce water consumption and eliminate harmful chemical runoff. This is presented as a significant initiative, but quantifiable results (reduction in water usage, chemical waste, etc.) are not provided.

• Textile Recycling Program: The company has implemented a program to recycle post-consumer and post-industrial textile waste into new fabrics. While mentioned, the scale of the program (amount of waste recycled) is not quantified.

• Energy Conservation: The company installed solar panels on its manufacturing facilities, generating approximately 30% of its electricity from renewable sources. However, this only speaks to electricity usage, and other energy sources are not considered. Overall energy consumption is not reported.

II. Carbon Footprint:

The annual report does not provide a quantitative measure of its carbon footprint. This is a essential piece of information for assessing a company’s environmental impact and would typically include greenhouse gas emissions data. The absence of this data limits a full assessment of the company’s environmental performance.

III. Social Initiatives:

• Corporate Social Responsibility (CSR): The company transferred ₹15 Lakhs to SETH LADHU KARA CHARITIES to support projects in education, healthcare, and environmental sustainability. While a positive step, this is a small amount relative to the company’s overall revenue.

• Employee Empowerment: The report mentions a commitment to fostering a culture of continuous learning and development for employees, but details about specific training programs or employee well-being initiatives are lacking.

• Brand Ambassadors: The company uses brand ambassadors (actors and models) for marketing purposes. While this is a social initiative, related to enhancing brand image and engaging consumers, it doesn’t directly address social issues or community development.

IV. Governance Practices:

The annual report details the company’s corporate governance structure, including the Board of Directors, its committees (Audit, Nomination & Remuneration, Stakeholders Relationship, Risk Management), and their meetings. It also mentions adherence to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and other applicable laws. However, specific governance practices beyond this high-level overview are not elaborated.

V. Sustainability Goals:

The report lacks a clear statement of specific, measurable, achievable, relevant, and time-bound (SMART) sustainability goals. While various environmental and social initiatives are mentioned, there is no overall framework or targets outlining the company’s ambitions for environmental performance, social impact, or governance improvements. The absence of quantified targets for its sustainability initiatives hampers a thorough evaluation of the company’s long-term commitment.

VI. Overall Assessment:

SBC Exports Limited demonstrates some positive steps toward sustainability through its environmental initiatives (eco-friendly dyeing, recycling, solar power). However, a more detailed assessment is hampered by a lack of quantitative data on its carbon footprint, specific sustainability goals, and a detailed description of its broader governance practices. The report mentions good intentions, but the absence of clearly defined targets and measurable results limits the possibility for an accurate assessment of the long-term commitment to sustainability.

Additional Information #

Operational Metrics #

The provided annual report does not disclose the Research and Development (R&D) expenditure separately. While the report mentions investments in innovation and new technologies, there is no specific line item or figure for R&D spending in the financial statements. Further, while the report mentions an employee count of 127 as of March 31, 2024, this only refers to the permanent employee strength. Any contractual or temporary employees are not included in this number. To get the total number of employees, this additional data would be needed.

Key Events #

Based on the annual report, here are some significant events that occurred during the fiscal year 2023-2024 for SBC Exports Limited:

• Expansion of Manufacturing Capacity: The company expanded its manufacturing capabilities in Sahibabad, Uttar Pradesh to meet growing demand and improve service offerings.

• Investment in Sustainable Technologies: Significant investments were made in eco-friendly dyeing processes and a textile recycling program to reduce the environmental impact of operations. Additionally, solar panels were installed to increase the use of renewable energy.

• Appointment of New Directors: Several new directors, including independent directors, were appointed to the Board.

• Resignation and Retirement of Directors: Several directors resigned or retired from the board during the year.

• Issue of Bonus Shares: The company issued bonus equity shares to its shareholders, resulting in an increase in the issued and paid-up share capital.

• Appointment of Brand Ambassadors: The company signed on brand ambassadors (actors and models) to promote its ‘Froute’ brand.

• Growth of IT Services Segment: The IT services segment experienced significant growth, driven by increased demand for reliable IT support and successful securing of numerous manpower supply orders from esteemed clients.

• Remarkable Growth of Subsidiary (Mauji Trip Limited): The wholly-owned subsidiary, Mauji Trip Limited, achieved a substantial increase in revenue driven by expanded client engagements and successful project deliveries across multiple sectors. This represents a significant milestone for the company’s diversification strategy.

• Income Tax Assessment Order: The company received an assessment order from the Income Tax Authority. While the order was contested by the company, it did not immediately impact the Company’s operations or financial standing.

• First Year Under CSR Provisions: The company was subject to Section 135 of the Companies Act, 2013 for the first time, resulting in a CSR spend.

These are some of the significant events mentioned in the annual report. More detailed information on the specific aspects of each event would require additional documents or disclosures beyond the scope of the annual report itself.

Audit Information #

I. Auditor’s Opinion:

The independent auditor, STRG & Associates, Chartered Accountants, expressed an unmodified (clean) opinion on both the standalone and consolidated financial statements of SBC Exports Limited for the fiscal year ended March 31, 2024. This means that the auditor found the financial statements to be presented fairly in accordance with generally accepted accounting principles (GAAP) in India and that they were free from material misstatement, either due to fraud or error.

However, the auditor did draw attention to Note 18 in the standalone financial statements, which stated that no provision had been made for interest on overdue amounts payable to MSMEs. While the auditor did not modify their opinion on this matter, it is highlighted as a potential concern.

II. Key Accounting Policies:

The annual report outlines many key accounting policies followed by SBC Exports Limited:

1. Basis of Accounting: The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) as notified under the Companies (Indian Accounting Standards) Rules, 2015.

2. Revenue Recognition: Revenue is recognized on an accrual basis when it is probable that economic benefits will flow to the company.

3. Expenses Recognition: Expenses are recognized on an accrual basis.

4. Property, Plant, and Equipment (PP&E): PP&E are recorded at cost less accumulated depreciation and impairment losses. Depreciation is calculated using the written-down value method based on useful lives.

5. Intangible Assets: Internally generated intangible assets are recognized only if specific criteria regarding feasibility and intention to complete, use, or sell are met. Amortization is calculated on a straight-line basis.

6. Investments: Investments are classified as current or non-current and are measured at fair value, with provisions for diminution in value if the decline is considered other than temporary.

7. Inventories: Inventories are valued at the lower of cost and net realizable value (NRV), using the First-In, First-Out (FIFO) method.

8. Income Tax Expense: Income tax expense is determined in accordance with the Income Tax Act, 1961.

9. Deferred Tax: Deferred tax assets and liabilities are recognized for timing differences between taxable income and accounting income.

10. Employee Benefits: Short-term employee benefits are expensed when the services are rendered. Post-employment benefits (gratuity) are accounted for using the projected unit credit method.

11. Leases: Lease payments for operating leases are recognized as expenses on an accrual basis.

12. Earnings Per Share (EPS): Basic and diluted EPS are calculated using the weighted average number of shares outstanding during the year.

13. Provisions and Contingencies: Provisions are recognized when the company has a present obligation as a result of a past event, it is probable that an outflow of resources will be required, and a reliable estimate can be made of the amount.

14. Segment Reporting: The company follows Ind AS 108 for segment reporting, categorizing its operations into garments and carpets, IT services, and travel and tourism.

15. Foreign Exchange Transactions: Transactions are recorded at the exchange rate prevailing on the transaction date. Monetary items are translated at the closing rate.

These are the key accounting policies summarized from the annual report. For complete details and further clarifications, always refer to the original document.