Anand Rayons Ltd Management Discussions

GLOBAL ECONOMY

The Global economy journey has been eventful, starting with supply-chain disruptions in the aftermath of the pandemic, an energy and food crisis triggered by Russias war on Ukraine, a considerable surge in inflation, followed by a globally synchronized monetary policy tightening. Despite gloomy predictions, the global economy remains remarkably resilient, with steady growth and inflation slowing almost as quickly as it rose. Many large emerging market economies are performing strongly, increasing their footprint on the global economy. Despite these welcome developments, numerous challenges remain, and decisive actions are needed.

Apart from the ongoing Russia-Ukraine war, the intensifying conflict between Israel and Gaza has become an additional source of concern for the global economy. Furthermore, the trade disruption caused by the crisis in the Red Sea route, responsible for 12-15% of the global trade flow and 20% of the container trade, is leading to delays and heightened logistic costs. The trade flow between the European and Asian counterparts has been impacted majorly by the significant hike in logistics costs. This has kept the commodity prices volatile in Q4 CY2023 and in Q1 CY2024. The IMF forecasts global real GDP growth of 3.2% for 2024 and 2025 - the same rate as in 2023.

INDIAN ECONOMY

Indian economy came out as a top performer in FY 2023-24 despite the domestic challenges of high inflation and subsequent monetary tightening, and setbacks in the export market due to the global slowdown. As per the second advance estimates released by the National Statistical Office (NSO), real GDP is expected to grow by 7.6% in FY 2023-24 as against 7.0% in FY 2022-23, driven by robust domestic demand, moderate inflation, a stable interest rate environment, and strong investment activities. Furthermore, India also concluded a successful presidency of G20, showcasing Indias capability to cater to global needs and providing a platform to address global concerns.

Globally, high inflation and interest rates, coupled with supply surplus, have exerted significant pressure on demand. However, Indias robust government spending on infrastructure development and positive consumer sentiments have not only provided a cushion but also boosted economic growth. Despite the persistent monetary tightening by the RBI, the domestic demand has remained resilient and supportive.

The Global Textile market is anticipated to rise at a considerable rate due to factors such as the continued increase in global population and urbanization, the rapid expansion of e-commerce, heightened expenditure on leisure activities, the growing retail penetration, increased internet accessibility and smartphone usage, and a rising preference for contactless delivery solutions. Notable trends expected in the forecast period include a shift towards adopting digital textile printing, focus on utilizing nonwoven fabrics, an emphasis on the use of organic fibers, a spotlight on sustainable fibers, adoption of digital platforms for textile supply chain management.

INDIAN TEXTILE INDUSTRY

Adverse economic conditions prevailed in major importing Countries, coupled with the Red Sea crisis are impacting the export of Indian textile products, including ready-made garments, to foreign destinations. However, with the US market showing signs of revival, experts believe exports to improve in the upcoming months. The domestic market, which accounts for around three-fourths of the overall demand, continues to witness a steady growth. Demand ahead of the spring-summer season in the West is likely to boost the off take of garments from India, thereby supporting the growth of the entire value chain. With better consumer demand big retailers in the overseas markets will inherent properties of flexibility, elasticity and breathability are ideally suited for the production of casual wear and athletic garments. Its ability to conform to body movements while providing excellent comfort levels is particularly appealing to consumers. The market is also influenced by the growing focus on sustainability. Consumers and businesses alike are increasingly attentive to the environmental impact of textiles. Knitted fabrics, which can be produced with less waste and energy than woven fabrics, are therefore appealing to the environmentally conscious consumers. There is also a rising inclination towards the adoption of more sustainable and ethical production practices. This includes the use of organic and recycled fibers, and fair-trade and transparent supply chains.

The Global cotton yarn market size has grown strongly in recent years due to the growth of the textile industry, the preference for natural fibers, trends in global cotton production, innovations in cotton yarn, and the increased affordability and accessibility of textile materials. However, the year under review has witnessed an unprecedented lower margin due to drop in yarn prices on account of fluctuation in cotton prices and lesser demand. The surge in the power cost has also impacted its margin.

The FY 2023-24 has been a challenging year for the industry as a whole due to fluctuating cotton prices, dent in yarn margin, diminishing demand, capacity underutilization and dumping of imported fabrics and garments from China and Bangladesh.

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. 34425.54 Lacs in the year 2023-24 as against Rs. 33650.08 Lacs during the previous year.

Other Income: Other income for the year 2023-24 is amounting to Rs. 7.75 Lacs against Rs. 11.41 Lacs in the previous year.

Consumption of Raw material: Consumption of raw materials increased from Rs. 32441.23 Lacs to Rs. 33086.37 Lacs due to increase in price of yarn fabrics.

Employee Cost: Employee costs were increased from Rs. 127.14 Lacs to Rs. 193.13 Lacs due to increase in expenditure for employee benefits.

Interest Cost: Interest costs were decreased from Rs. 289.89 Lacs to Rs. 288.80 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.

Further, the technology element plays a crucial role in the growth of the Indian textile industry. Technology has reshaped the textile industry to meet the rising demands and trends by providing data-driven customer operations. The Advanced Technology machinery with high quality cotton enables the company to manufacture superior quality yarn.

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 2023-24 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, 2024, 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, 2024 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 03, 2024	Managing Director	Whole time Director
	(DIN: 01942639)	(DIN: 07986896)