Jagjanani Textiles Ltd Management Discussions

A. Indian Economic Overview:

Annexure - D

The results of growth-enhancing policies and schemes (such as production-linked incentives and governments push toward self-reliance) and increased infrastructure spending will start kicking in from 2023, leading to a stronger multiplier effect on jobs and income, higher productivity, and more efficiency—all leading to accelerated economic growth. Also, several spillover effects of geopolitical conflicts could enhance Indias status as a preferred alternate investment destination. RBI estimates the GDP growth rate for FY 2023-24 at 8.4%. The annual inflation rate in India edged down to 5.3% in October 2023-February 2024. The projection of CPI inflation for 2023-24 was retained at 5.4 per cent as the spurt in vegetable prices was expected to be transitory. The real GDP growth projection for 2023-24 was retained at 6.5 per cent. The RBI has already taken measures to contain inflation by tightening the policy rates. The next few quarters will be critical for Indias economy as the Government and the RBI work at balancing the stress on inflation, currency and fiscal deficit.

B. Outlook:

In the last decade, India has been one of the fastest-growing economies, with annual growth rate averaging 7-8%. The increase in GDP can be attributed to a variety of reasons, including favorable demographics, influx of investment capital and technological efficiency and productivity gains. As the new financial year begins, there is greater uncertainty on this question, not just because of difference in assessment of the economic situation at hand but also due to the ongoing geopolitical crisis which is fuelling a surge in global commodity prices, especially crude oil. Textiles remain a significant contributor to Indias GDP and employment, particularly in rural areas.

C. Industry structure and development:

India is the worlds second-largest producer of textiles and garments. It is also the fifth largest exporter of textiles spanning apparel, home and technical products. The textiles and apparel industry contribute 2.9% to the countrys GDP, 14% to industrial production and 15% to exports. Indian textile players have undertaken various initiatives to boost textile sales viz. investment to expand production capacity, using technology to optimize the value chain, leveraging strategic partnerships and strengthen sustainable textiles business. Textile industry has been steadily recovering post pandemic amid increased raw material prices and container shortages. Production-linked Incentive scheme is expected to be a major boost for the textile manufacturers. The scheme proposes to incentivise MMF (man-made fibre) apparel and MMF fabrics.

D. Opportunities and Threats:

Opportunities: Going ahead, there could be a positive side for textile business as festival season will start from mid-3^rd Quarter till end of March, which majorly includes Diwali, Christmas and Holi. Threats: The company is concerned about the various threats that it is exposed to which includes factors such as rising competition in the market both on the domestic & export front, duty free access to competing countries in US & European markets, uncertain business environment, fluctuating rupee, cost of raw material and its availability, slowdown in demand & change in fashion trends, possibility of increase in interest rates, etc. Besides this the Company is also exposed to factors such as the change in government policies, duties & taxes, availability of power from the grid, availability of labour etc.

E. Segment–wise or product-wise performance:

The Company is operating in only one segment i.e. trading of clothes. Therefore,there is no requirement of Segment wise reporting.

F. Risks and concerns:

Management recognizes the following principal risks that may influence decisions made by investors given their significant impact on business conditions as stated in the securities report, and among matters pertaining to accounting status, consolidated companies financial status and business performance, as well as cash flows. Our risk management system addresses the increasingly complex risks that we face in our day-to-day operations. The risk management system conducts risk analysis of economic and social changes and implements preventive measures that are best suit for the Company.

G. Internal control systems and their adequacy:

The Company has its Internal Financial Control systems commensurate with operations of the Company. The management regularly monitors the safeguarding of its assets, prevention and detection of frauds and errors, and the accuracy and completeness of the accounting records including timely preparation of reliable financial information. The Head of Internal Audit together with External Audit consults and reviews the effectiveness and efficiency of these systems and procedures to ensure that all assets are protected against loss and that the financial and operational information is accurate and complete in all respects.

H. Discussion on financial performance with respect to operational performance:

During the year, the textile industry has shown a notable increase in financial performance compared to the previous year. Key indicators such as revenue have risen, driven primarily by expanded market presence and increased demand for our diversified product offerings. Our strategic focus on cost management initiatives has enhanced profitability margins, with increase in operating profit during the year. The financial performance of the Company for the Financial Year 2023-24 is described in the report of Board of Directors of the Company.

I. Material developments in Human Resources / Industrial Relations front including number of people employed:

The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources. Investments in training programs have been pivotal in upskilling the workforce, particularly in areas such as advanced manufacturing techniques, quality control, and workplace safety. The industry has experienced a moderate increase in the number of people employed, reflecting both seasonal fluctuations and strategic expansions in production capacities.

By Order of the Board

ForJagjanani Textiles Limited

Avanishkumar Manojkumar Patel

Chairman & Managing Director

DIN: 02724940

Date: 03.09.2024

Place: Ahmedabad