GLOBAL ECONOMY
The year 2022-23 started with cautious optimism. Restrictions due to the pandemic were
lifted, and the economy was on a slow recovery path. However, the escalation of
Russia-Ukraine conflict led to a sharp increase in commodity prices, further contributing
to global inflation.
Global inflation is set to fall from 8.7 percent in 2022 to 7.0 percent in 2023 on the
back of lower commodity prices, but underlying (core) inflation is likely to decline more
slowly. Inflations return to target is unlikely before 2025 in most cases.
The most recent projections from the World Economic Outlook of the International
Monetary Fund indicate that the global economy is not likely to enter a recession in the
current or the following year. However, with two consecutive quarters of negative GDP
growth, there could be a technical recession in Europe and possibly even in the United
States. However, according to the IMF Projections, the US economy will unlikely experience
a GDP contraction in the current or the following year.
INDIAN ECONOMY
In its flagship World Economic Outlook report, the International Monetary Fund (IMF)
projected that India would be the fastest-growing economy in the world, despite
confronting considerable challenges such as financial sector turmoil, inflationary
pressures, effects of the Russia-Ukraine war, and the persistent impact of the Covid-19
pandemic over the past three years.
The Indian economy will grow by 5.9 per cent in the current fiscal year, making it the
fastest-growing economy in the world. Nevertheless, the IMF also warned that disruption in
the financial system could have a detrimental effect on the overall global growth. Indias
growth trajectory continues to be strong and promising; India and China will contribute to
half of the worlds growth in 2023.
Additionally, Indias share of global gross domestic product growth is expected to
surpass that of
European giants France and the United Kingdom through 2028, making India a key player
in driving global economic growth. With 20 nations driving 75 percent of global growth,
India remains among the top contributors, along with China, the US, and Indonesia, further
cementing its position as a leading economic power.
INDIAN TEXTILE INDUSTRY
Indias textile industry plays a vital role in the countrys economy and export sector.
It encompasses a wide range of activities, from traditional hand weaving to modern textile
mills, and is anticipated to experience Significant growth in the foreseeable future.
India has earned a reputation as a prominent manufacturing hub for textiles and apparel
due to its rich textile heritage, skilled craftsmanship, and cost-effective labour. As the
sixth-largest exporter of textiles and apparels worldwide, Indias technical textiles
segment alone is valued at approximately USD 16 Billion, constituting around 6% of the
global market.
Notably, India is the second-largest producer of man-made fibre (MMF) globally,
trailing only behind China. Key export destinations for Indian textiles and apparel
include the United States, European Union (EU-27), and the United Kingdom, accounting for
roughly 50% of Indias exports in this sector. In terms of global trade in textiles and
apparel, India holds a 4.6% share. The industry also offers significant employment
opportunities, directly employing over 45 million people and providing jobs for
approximately 100 million individuals in related industries. Projections indicate that the
Indian textile industrys market size is estimated to reach USD 190 Billion by 2025-26, a
substantial increase from USD 99 Billion in 2021-22.
POLYESTER INDUSTRY OUTLOOK
Polyester has become the most preferred fiber in the global textiles industry due to
its better physical properties, lower price, versatility, and recyclability, which offer a
completely unique set of benefits unmatched by any other natural or synthetic fibers.
Polyester filaments has been segmented into apparel, home furnishing, automotive,
construction, filtration, and personal care and hygiene applications.
The Indian polyester industry, for last six years, had been at a distinct cost
disadvantage in global competitiveness on account of Anti-Dumping Duty on key raw material
i.e. PTA. Man Made Fiber industry associations and users of PTA had been vigorously
representing and following up the Government authorities to remove this punitive duty and
address the structural anomalies like
"Inverted Duty" structure which are hampering the growth. Polyester industry
continues to suffer on account of inverted GST structure higher rate of 18% on raw
material & 12% on finished products like yarn & fiber and going forward 5% on
fabrics and garments.
GOVERNMENT INITIATIVES
The Indian Government is proactively engaged in promoting the expansion and progress of
the textile sector in the country through the implementation of various impactful schemes.
These initiatives include the Production Linked Incentive (PLI) Scheme, the Remission of
Duties and Taxes on Exported Products (RoDTEP) Scheme, Make in India, Mega Textile Parks
Development, and the National Technical Textiles Mission, among others. These schemes are
designed to facilitate and incentivize investments in the textile industry. Moreover, the
Governments ongoing efforts to enhance the ease of doing business by reducing compliance
burdens and costs will attract foreign investments, thereby further benefiting the textile
sector.
? The Scheme for Capacity Building in Textile Sector (SAMARTH) was created to
meet the proficient workforce needs of the textile industry. The scheme was developed in
line with the Skill India initiative and aligned with the Ministry of Skill Development
and Entrepreneurships skilling programme framework. The implementation of SAMARTH has
been approved until March 2024.
? The Amended Technology Upgradation Fund Scheme (ATUFS) was launched in January
2016 to promote ease of doing business in India, generate employment, and encourage
exports through the Make in India initiative. The scheme provides a credit-linked Capital
Investment Subsidy (CIS) to units in the textile sector (excluding spinning) for the
purchase of benchmarked machinery. The goal is to achieve ‘Zero effect and zero
defectin manufacturing.
? The Pradhan Mantri Mega Integrated Textile Region and Apparel (PM MITRA)
Scheme was approved by the Indian Government to establish seven textile parks in
greenfield and brownfield sites with an outlay of 44.45 Billion over a period of seven
years, up to 2027-28. The goal of PM MITRA is to enhance the competitiveness of the Indian
textile industry, attract significant investment, and boost employment generation. The
most recent edition of the scheme aims to build a total of 65 textile parks in India.
? The Production Linked Incentive (PLI) Scheme has been introduced to promote
the production of MMF apparel, MMF fabrics, and technical textile products in India. The
goal of the scheme is to create 60-70 global players, attract fresh investment of
approximately 190 Billion, and generate almost 750,000 new employment opportunities in the
country.
? The Rebate of State and Central Taxes and Levies (RoSCTL) has been approved by
the Indian Government for the extension of its implementation until March 31, 2024. The
rates applicable to apparel/garments, and made-up exports will remain unchanged, as issued
by the Ministry of Textiles. This decision aims to provide a tax rebate on outbound
shipments to garment exporters, thereby boosting the competitiveness of the
labour-intensive textile industry ? Free Trade Agreement: The IndAUS ECTA is
expected to boost Indias textile and apparel exports significantly, with projections
indicating an increase to USD 1100 Million within the next three years. This agreement is
poised to positively impact the Indian textile industry by facilitating increased trade
between India and Australia.
INDUSTRY OUTLOOK
? The outlook for the Indian textile industry seems promising, with strong growth
prospects in both domestic consumption and export demand. The industry is anticipated to
experience robust growth, driven by robust domestic consumption, growing export demand,
and the rapid digitisation of consumers and brands post-Covid-19 pandemic. Over the past
decade, the retail sector has undergone rapid progress due to increasing consumerism and
disposable income. This growth has been further fuelled by the entry of various
international players into the Indian market.
? The China+1 strategy presents a significant opportunity for the Indian textile
industry to regain its position as a top exporting economy. With the domestic economy
improving and exports increasing, the industry is expected to experience substantial
growth in domestic production to meet the rising demand. As a result, capital expenditures
and investments in the sector are projected to increase, leading to an improvement in
productivity and industry competitiveness. Indias favourable demographics and industry
dynamics further enable the country to establish itself as a global textile hub.
OUR BUSINESS OVERVIEW
The Company is in the business of yarn trading/Authorized dealer of various companies.
It is a leading company offering various types of yarn to national markets. However,
Competition in the industry is continuously increasing, but overall Performance of the
Company is good.
Financial Performance of Company:
Turnover: Company has achieved a turnover of Rs. 33650.08 Lacs in the year 2022-23
as against Rs. 33405.17 Lacs during the previous year.
Other Income: Other income for the year 2022-23 is amounting to Rs. 10.43 Lacs
against Rs. 7.48 Lacs in the previous year.
Consumption of Raw material: Consumption of raw materials increased from Rs.
32117.74 Lacs to Rs. 32441.20 Lacs due to increase in price of yarn fabrics.
Employee Cost: Employee costs were increased from Rs. 115.70 Lacs to Rs. 127.13
Lacs due to increase in expenditure for employee benefits.
Interest Cost: Interest costs were decreased from Rs. 387.42 Lacs to Rs. 289.89
Lacs.
The Company delivered good performance despite of headwinds and made consistent
progress in strengthening the established business segments through high value products.
Opportunities & Threats
Synthetic Yarn has good share in total yarn production; Indias growing population has
been a key driver of textile consumption growth in the country. It has been complemented
by a young population which is growing and at the same time is exposed to changing tastes
and fashion. Rising incomes has been a key determinant of domestic demand for the sector;
with incomes rising in the rural economy as well, the upward push on demand from the
income side is set to continue.
Manpower: Company is in trading of Synthetic Yarn, company does not require any
technical personnel, other than marketing personnel.
High Competition and Law Profitability: The yarn Industry has entered into the
orbit of the high competition. Various brands and various quality yarn are available in
the market. Due to high competitions in market, we have to fluctuate the profit margin to
maintain the turnover of the company.
New Entrants: More and more new organized and unorganized players are entering into
market which will increase competition in our business sector also.
Risk and concerns:
Stiff competition from the organized and unorganized players as well as from the
imported yarns resulting in lower margins or losing out the customers. However, due to
strong and stable relationship with clients, the company has at its own penetrated markets
and maintained its offerings and sales revenues.
Internal Financial Control Systems and their adequacy:
The Company has aligned its current systems of internal financial control with the
requirement of Companies Act 2013. The Internal Control is intended to increase
transparency and accountability in an organizations process of designing and implementing
a system of internal control. The Company has successfully laid down the framework and
ensured its effectiveness. The Company has in place a well-defined system to record data
for accounting and management information purposes and connects to different locations for
efficient exchange of information.
Though the various risks associated with the business cannot be eliminated completely,
all efforts are made to minimize the impact of such risks on the operations of the
Company. Necessary internal checks and control systems are to be implemented by the
Company on various activities in the organization to ensure that business operations are
systemized in achieving the best performance.
M/s M. R. Bombaywala & Co., Chartered Accountants, the statutory auditors of the
Company has audited the financial statements included in this annual report for the year
2022-23 and has issued an attestation report on our internal control over financial
reporting (as defined in section 143 of Companies Act, 2013).
The audit committee meets the statutory auditors of the Company to ascertain, inter
alia, their views on the adequacy of internal control systems and keeps the board of
directors informed of its major- observations periodically. Based on its evaluation (as
defined in section 177 of Companies Act 2013), our audit committee has concluded that, as
of March 31, 2023, our internal financial controls were adequate and operating
effectively.
Material Developments in Business activities, Human Resources / Industrial Relations
Front, including number of people employed:
The Company always recognizes the importance of manpower. Company promotes employees
and encourages them to make contribution toward company, family and nation at large.
Company also encourages the employees to offer their creative suggestions for development
in their respective areas which are thoroughly discussed in periodical meetings. The
company enjoyed excellent relationship with staff during the last year as on March 31,
2023 the company has 35 employees at its Surat Office and administrative office. The
Company has been maintaining cordial and healthy Industrial Relations, which has helped to
a great extent in achieving the upper growth.
Environment, Health and Safety (EHS)
The Company is conscious of the importance of environmentally clean and safe
operations. The
Companys policy requires conduct of operations in such a manner so as to ensure safety
of all concerned, compliances of guidelines in force by local authorities, environmental
regulations and preservation of natural resources.
Human Resources
The Company believes that the quality of the employees is the key to its success and is
committed to equip them with skills, enabling them to seamlessly evolve with ongoing
technological advancements. During the year, the Company organized training programmes in
different areas such as technical skills, behavioural skills, business excellence, general
management, advanced management, leadership skills, customer orientation, safety, values
and code of conduct.
Cautionary Statement:
Statement in this Management and Discussion and Analysis Report describing the
Companys objectives, projections, estimates and expectations may be forward looking
statement and within the meaning of applicable laws and regulations. Actual results may or
might differ materially from those either expressed or implied.
|
For and on behalf of Board of Directors |
|
|
Anand Rayons Limited |
| Place: Surat |
Anand Bakshi |
Shilpa Bakshi |
| Date: August 24, 2023 |
Managing Director |
Whole time Director |
|
(DIN: 01942639) |
(DIN: 07986896) |
+91-9892691696
