Your Directors have pleasure in presenting the management discussion and analysis
report tor the year ended on March 31, 2023.
DISCLAIMER
Statements in the Directors Report & Management Discussion and Analysis describing
the Companys objectives, projections, estimates, expectations or predictions may be
"forward-looking statements" within the meaning of applicable securities laws
and regulations. Actual results could differ materially from those expressed or implied.
Important factors that could make difference to the Companys operations include raw
material availability and its prices, cyclical demand and pricing in the Companys
principle markets, changes in Government regulations, tax regimes, economic developments
within India and the countries in which the Company conducts business and other ancillary
factors.
1. INDUSTRY STRUCTURE, DEVELOPMENT
During the period under the review, the Company had been operating in Textile
activities i.e. cloth processing. The textile sector has always been an important part of
peoples lives in India. The textile industry in India is one of the oldest manufacturing
sectors in the country and is currently its largest. Textile machinery and accessories
have been identified as core sectors under Make In India campaign there has not been any
measures for this sector either today, 45% of textile machine accessories requirement is
met by domestic producers & 55% through imports. The government has been pushing for
indigenous production through ‘Make in India campaign to bring down imports.
India is the worlds second-largest exporter of textiles and apparels, with a massive
raw material and manufacturing base. The textile industry is a significant contributor to
the economy, both in terms of its domestic share and exports. It contributes about seven
per cent to industry output, two per cent to the GDP and 15 per cent to the countrys
total exports earnings. 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. With over 45 Million
people employed directly, the textile industry is one of the largest sources of employment
generation in the country. The growth of textile sector is largely depends on consumer
spending and multiple factors like actual and perceived economic condition, disposable
income and employment. Industry faces a non-level playing field in many markets due to
tariff barriers, however industry needs to improve its productivity levels, economies of
scale and organize itself better for large production at competitive prices.
2. REVIEW & FUTURE OUTLOOK OF THE COMPANY
The Company has reported improvement in its operational financial performance during
the year under review. Economic slowdown has hit the company hard in terms of its business
volumes and as a result its divisions have witnessed considerable reduction in production
and sales volumes. At the same time, the company has continued its efforts on enhancing
its product profile and customer segments which have helped it improve upon the margins.
Over last few years, the company has invested into its operational capabilities targeted
towards value-added products and has taken various initiatives to strengthen its
manufacturing facilities and marketing setup. These steps have helped the company off-set
the adverse impact of lower volumes to some extent. Moreover, the companys focus
continues to remain on better controls over the operational costs as a continuing mission
and its results are visible in terms of reduced costs across most expense heads.
Various aspects like working conditions of workers, health related issues, minimizing
risk of accidents at work place etc. are being taken care of by the Company. The Company
will achieve more turnovers by various marketing strategies, offering more quality
products, launching new products etc. in coming years followed by increase in profit
margin by way of various cost cutting techniques and optimum utilization of various
resources of the Company. The company has found export opportunities for the same line of
textile products which they were doing Job work presently. Till yet company was involved
in Job work but now with the view of export opportunities, company taken the lead towards
the export in simultaneous with Job Work.
3. OPPORTUNITIES & THREATS
The Government is committed to encourage the healthy growth of Capital Market for
development of the Economy. While the government seems committed to reforms to address the
challenges, political compromises and high populist spending in an election year will mean
that tough decisions are more likely to be deferred. Financial health of the textile
sector will play a major role going forward. The current uncertain business environment
can pose an enhanced risk in terms of timely liquidity and financial soundness of the
business partners.
4. SEGMENT-WISE PERFORMANCE:
The Companys main business activity is textile and its related activities which fall
under single reportable segment i.e. Textiles. The Company has majorly focused on
quality, production and export.
5. OUTLOOK:
Outbreak of the Second wave of Covid-19 pandemic during the later part of the year is
likely to alter the business scenario significantly going forward. The lockdown in various
parts of India and continuous restrictions on movements have already disrupted
manufacturing operations and adversely affected operational performance of the company,
which would be more profoundly reflected in financials of next year.
Management has already taken measures to contain the adverse impact by way of
optimizing plant operations, cash flow and liquidity management and effective cost
management. The business situation is likely to remain very challenging in times to come.
The focus will also shift to ensure adequate risk management in light of volatile and
uncertain economic scenario. Further, the Company continues to explore the possibilities
of expansion and will make the necessary investments when attractive opportunities arise.
6. RISK & CONCERNS:
The Company is exposed to specific risks that are particular to its business and
environment within which it operates, including Foreign Exchange Risk, Interest Rate Risk,
Commodity Price Risk, Risk of Product Concentration and other Business Risk. While risk is
an inherent aspect of any business, the Company is conscious of the need to have an
effective monitoring mechanism and has put in place appropriate measure for its mitigation
including business portfolio risk, financial risk and legal risk and internal process
risk.
7. INTERNAL CONTROL SYSTEMS & THEIR ADEQUEACY:
The Companys operating and business control procedures ensure efficient use of
resources and comply with the procedures and regulatory requirements. The Company has
appropriate internal control systems for business processes, with regard to efficiency of
operations, financial reporting, compliance with applicable laws and regulations etc. All
operating parameters are monitored and controlled. Regular internal audits and checks
ensure that responsibilities are executed effectively. The system is improved and modified
continuously to meet with changes in business conditions, statutory and accounting
requirements. The Audit Committee of the Board of Directors actively reviews the adequacy
and effectiveness of internal control systems and suggests improvement for strengthening
them, from time to time.
The Directors have appointed M/s. ACM & Associates., Chartered Accountants as the
Internal Auditors of the Company for the FY 2023-24.
8. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONALPERFORMANCE:
During the year, the Company has recorded a turnover of Rs. 32818.54 Lacs as compared
to Rs. 30471.23 Lacs in the previous year. The Company has made net profit of Rs. 348.21
Lacs as compared to Rs. 400.27 Lacs of the previous year after providing depreciation,
tax, etc. for the year ended 31st March, 2023.
9. HEALTH, SAFETY AND ENVIRONMENT:
The Company believes that the human resources are vital in giving the Company a
Competitive edge in the current business environment. The Company rely that the health and
safety of the workers and the persons residing in the vicinity of its plants is
fundamental to the business. Commitment to the identification and elimination or control
of the workplace hazards for protection of all is utmost importance. Regarding
environmental impact of its operations, the company is always vigilant and more than
complies with all stipulated norms. The manufacturing operations are conducted to ensure
sensitivity towards the environment and minimize waste by encouraging "Green"
practices.
As in the past, the Company has enjoyed cordial relations with the employees at all
levels. Also, the Company continues to run an in-house training program held at regular
intervals and aimed at updating their knowledge about issues.
11. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE
IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS:
| Debtors Turnover |
|
Interest Coverage Ratio |
|
| 2022-23 |
3.13 |
2022-23 |
2.02 |
| 2021-22 |
2.66 |
2021-22 |
2.07 |
| Current Ratio |
|
Debt Equity Ratio |
|
| 2022-23 |
1.54 |
2022-23 |
0.64 |
| 2021-22 |
1.46 |
2021-22 |
0.87 |
| Return on Net Worth |
|
|
|
| 2022-23 |
4.53 |
|
|
| 2021-22 |
5.54 |
|
|
|
For and on behalf of the Board |
|
For, ANJANI SYNTHETICS LIMITED |
| Place: Ahmedabad |
|
| Date: 14th August, 2023 |
VASUDEV S. AGARWAL |
|
(DIN:01491403) |
|
CHAIRMAN & MD |
+91-9892691696
