Anjani Synthetics Ltd Management Discussions.

Your Directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2020.

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. 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 is continuously trying to accomplish the desired results. Steps have been taken for cost diminution and manufacturing quality products by various installed machineries of the Company. Various aspects of 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. However, steps by RBI to stabilize the exchange rate by reducing liquidity support to the banking system will create a challenging environment for investments.

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:

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 various risks that are particular to its business, interest rate volatility, economic cycle, market risk and credit risk. However, The Board of Directors have developed & implemented a robust risk management policy which identifies the key elements of risks that threatens the existence of the Company. The Audit Committee reviews the Companys financial and risk management policies and steps taken by the Company to mitigate such risks at regular intervals.

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 internal control systems of the company have been commensurate with the size and nature of its business activities. The company keeps on strengthening the system based on its requirement in terms of changes in its financial and marketing policies. There are adequate internal controls to safeguard the assets and protect them against losses from unauthorized use or disposition and the transactions are authorized, recorded and reported correctly The Audit Committee periodically reviews the internal controls systems and reports their observations to the Board of Directors.

The Directors have appointed M/s. Monika Bhandari & Co, Chartered Accountants as the Internal Auditors of the Company for the FY 2020-21.

8. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During the year, the Company has recorded a turnover of Rs. 32628.30 Lacs as compared to Rs. 30779.20 Lacs in the previous year. The Company has made net profit of Rs. 356.72 Lacs as compared to Rs. 300.10 Lacs of the previous year after providing depreciation, tax, etc. for the year ended 31st March, 2020.

9. HUMAN RESOURCE DEVELOPMENT:

The Company believes that the human resources are vital in giving the Company a Competitive edge in the current business environment. Human resources are the backbone and centre-stage in terms of companys philosophy. The company considers the manpower as a key variable in achieving its deliverables and ensures that safe and comfortable working conditions as well as motivating and conducive environment is always maintained to provide the essential platform for them to perform. Regarding environmental impact of its operations, the company is always vigilant and more than complies with all stipulated norms. As in the past, the Company has enjoyed cordial relations with the employees at all levels.

The Company continues to run an in-house training programme held at regular intervals and aimed at updating their knowledge about issues.

10. CAUTIONERY STATEMENT:

Statements in the Boards Report and the management discussion and analysis containing the objectives, expectations or predictions of the company may be forward-looking within the meaning of securities laws and regulations. Actual results may differ materially from those expressed in the statement. The operations of the Company could be influenced by various factors such as domestic and global demand and supply conditions affecting sales volumes and selling prices of finished goods, input availability and cost, government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

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 (in months)

Interest Coverage Ratio

2019-20 4.02 months 2019-20 2.20
2018-19 3.26 months 2018-19 2.30

 

Current Ratio

Debt Equity Ratio

2019-20 1.33 2019-20 0.06
2018-19 1.27 2018-19 0.06

 

Return on Net Worth
2019-20 5.56%
2018-19 4.94%

 

For and on behalf of the Board
For, ANJANI SYNTHETICS LIMITED
Place: Ahmedabad
Date: 25th August, 2020 VASUDEV S. AGARWAL
(DIN: 01491403)
CHAIRMAN & MD