Dear Shareholders,
I am extremely delighted to present the Annual Report for the financial year 2020.
During the year, the company achieved a total revenue of Rs. 383 crore. We believe that
profitable companies do well in the current scenario of pandemic and any other volatile
markets. We have been continuously focusing on increasing our margins rather than
achieving higher sales volumes hence we have now shifted our focused more on revenue from
manufacturing business and lower in trading business. Our focus on increasing
profitability is paying off which is evident from the increase in EBIDTA margins to 8.05%
during the financial year ended 31st March, 2020 as against EBIDTA margin of 7.09% for
financial year ended 31st March, 2019. We are not an exception to the impact of pandemic
during the last quarter of the financial year 2020, which had not only impacted our
revenues but also our profitability.
Your company celebrates 36 glorious years in supplying yarns and fabrics (fashion,
shirting & suiting, furnishing, and technical fabrics) to leading trading houses,
garment exporters and fashion brands in India and across the world.
The demand for polyester yarn and fabric has been on the rise on account of increasing
demand pick up across the World and in India. The company has been proactively
capitalising on the Indian Textiles sector growth opportunities and increased its yarn and
fabric manufacturing capacities over the last three decades. The total installed capacity
for Fabric manufacturing is 40 million meters per annum while it is 22,200 tons per annum
for manufacturing Yarns.
The company strives to offer innovative, customized, and value-added products to its
customers through constant research and innovation. With all these, the company is
confident of tapping more potential markets with its products.
Our large customers are garment manufacturers in Delhi, Mumbai and Bengaluru who are
the garment manufactures of top brands like M&S, Matalan, H&M, Ann Taylor, Van
Heusen, Allen Solly , etc.
The offices were shut down during the lockdown phase, but the company adopted the work
from home policy for office related work during the entire lockdown duration. With the
lifting of the partial lockdown restrictions, the company has restarted its operations at
manufacturing plants and at Surat offices, in a gradual manner from April 27, 2020. At all
our manufacturing locations, necessary arrangements of sanitization, selfquarantine, and
screening have been made, and are continuing to ensure a safe environment for our
employees.
During the pandemic, the existing fabric manufacturing capacities were utilized for the
manufacturing of the fabric meant for manufacturing of Personal Protective Equipment (PPE)
kits. South India Textile Research Association, the nodal agency for approving fabric, had
approved the fabric. This fabric also caters to a wide range of protective apparel for the
medical, pharma, biotechnology, electronics, and food & beverage industry.
The performance in the first half of the current year had been subdued owing to the
lockdowns imposed by the government, but we are witnessing a very good revival in demand
in the second half.
The company is putting all efforts to convert this challenge into an opportunity by
rationalizing the manpower cost and downsizing the other cost centers, while also putting
its efforts to retain and add more customers for sustaining and increasing the demand.
There is a strong and steady flow of orders and we expect it to continue through the
entire second half of the year and further.
We are witnessing a strong recovery in sales because of the overall improvement in
retail and e-commerce sales. The Company is witnessing an improvement in demand as the
markets continue to recover from the slowdown caused by the pandemic. We are confident of
a pick-up in demand in both domestic and export markets, as the supply chain disturbances
and other constraints are expected to get normal.
The organized apparel industry has seen a shift from brick & mortar stores to a
combination of online & offline model which eventually lead to the rise of brick and
click model these days. E-commerce is where all action is and the women's wear segment is
one of the segments, which has been doing well. This would augur well for our domestic and
global branded clothes manufacturers, which in turn is going to benefit us.
Furthermore, Dilution of the non-core assets has enhanced cash flows of the company to
the tune of Rs. 18.50 crore, which has been used to reduce debt and other working capital
facilities.
At Shahlon, we ensure that the changing market conditions shouldn't negatively
influence the position of the company and hence take precautionary measures for the same
in anticipation. The financial position of the company remains stable with healthy cash
flows. We always believe in staying close to our core strengths and speak the same
language with regard to our commitment towards the stakeholders.
I would like to take this opportunity to thank all our stakeholders for the continued
dedication and belief they have shown in us as well as look forward to the long-lasting
journey ahead.
With best wishes,
Chairman