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Anjani Synthetics Ltd Management Discussions

Jul 18, 2024|03:40:00 PM

Anjani Synthetics Ltd Share Price Management Discussions

Your Directors have pleasure in presenting the management discussion and analysis report tor the year ended on March 31, 2023.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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
Place: Ahmedabad
Date: 14th August, 2023 VASUDEV S. AGARWAL

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