premier synthetics ltd share price Management discussions


The Textile industry is one of the oldest business options in India since the ancient age. Different types of textile fibers are produced in India, among which cotton, jute, silk and wool are the major ones. Both skilled laborers and unskilled officials are needed to run this business smoothly. Thus, the textile industry serves as the platform offering a huge number of employment opportunities to eligible people in India. The products of the Indian textile industry with the traditional designs and textures are very popular all over the world. People associated with this industry hope to see a great comeback in 2022, overcoming the setback during the past 2 years due to the pandemic situation.



Narendra Goenka, the chairman of the Apparel Export Promotion Council has confirmed this speedy growth of the Textile Industry in India after the pandemic situation. A Comprehensive Economic Partnership Agreement is signed between India and the United Arab Emirates in February 2022, in terms of the exports of textiles and jewelry. The textile units based in Noida and Tirupur have taken the responsibility of meeting the export demands, which will start from May 2022. So, these units will increase their manpower up to 30%, due to which more skilled people will get employment there.

The technical matters of the textile industry have improved a lot in recent years. However, the Indian textile industry still needs to progress in the research and development of designs. The quality of raw materials also needs to be upgraded for the production of the best quality garments. Now, the textile industry contributes 5% to the GDP from domestic trade and 7% from foreign exports. However, these values are expected to increase this year, making this industry one of the leaders in the Indian economy.


1) Opportunities in Cotton Yarn Segment:

India is now recognized as the largest producer of cotton and jute garments in the world. There is tough competition from China, Bangladesh, Pakistan, and Vietnam for exporting textile products in the global market. However, the Indian textile industry still manages for a comeback even after the decline of the business in 2020 – 21. Since the textile industry not only comprises large textile mills and high-end garment boutiques, self-employed artisans from rural areas are also promoted through government schemes, like MGNREGA. Many rural cooperatives and NGOs are also providing support to people working on a small-scale for the textile industry.

All garment manufacturing units are returning to the normal state though at a slow pace at present. The Indian textile industry is aiming to export products worth $40 to $100 billion within 2027. These garment units are fast expanding in size and investments, to meet the bulk orders pouring in from various foreign countries in the west. The promotion of this industry through several government schemes has been the greatest in the last three decades. The apparel industry is progressing fast with the manufacturing of more varieties of products. This textile business is also spreading in more countries across the world, leading to more earning of foreign money.

2) Threats in Cotton Yarn Segment:

In the last financial year, the pandemic was still at a great height that eventually led to the closure of several manufacturing units in the Textile Industry. These factory owners were forced to close due to the shortage of manpower. The lack of funds to buy raw materials for production was another drawback in this industry. According to the government rules, all textile factories had to work with only 50% manpower. Thus, these Companies could not meet the deadlines of bulk orders, though such orders were rare to receive at that time. The Indian government imposed new GST with higher rates on industries. So, the textile industry now finds it harder to pay the taxes on their sales. Therefore, business owners are quite agitated due to its negative impact.Political tensions or militant activities in some places hinder the smooth operations of the textile industry there. Many textile companies face severe labor shortages and a lack of regular transportation if their factories are located in remote places.

The government provides financial support only to small and medium-scale companies. Hence, many business owners do not strive for further growth of their textile companies to keep on receiving those benefits. Cotton textile is the major player in the Indian textile industry. The price of cotton has risen too much now, which is a major setback for textile industry owners. They find it hard to maintain their supply chain due to this price hike.

The inflation in the Indian economy results in frequent demands among laborers for salary hikes. Thus, industry owners do not find the means to expand their business and compete with global textile leaders from other countries.

Common laborers do not have the skills to produce the best textile designs. They are not formally trained in textile manufacturing and learn only while working here. This practice has a negative effect on the quality of end products manufactured by these textile companies.

Many textile business owners lack updated knowledge of the modern trend. Hence, they cannot produce stylish products that will satisfy global customers.

The high cost of power in India is another hindrance to textile production. Most modern machines are power-driven, which raises the overall production costs for business owners. Unfavorable government policies in India also obstructed the growth of the textile industry. But other countries provide more support to their textile businesses. Thus, the textiles of India cannot compete withthem in the global market.

Financial Results:

The Companys financial performance for the year ended March 31, 2023 is summarized below:

Particulars Year Ended 31stMarch, 2023 Year Ended 31stMarch, 2022
Gross Revenue 5289.70 5908.22
Profit before Interest, Depreciation & tax 93.24 363.71
Less : Interest 45.60 27.63
Less : Depreciation 77.06 77.45
Profit before exceptional items and tax (29.42) 258.63
Add : Exceptional Items 120.17 -
Profit before Tax 90.75 258.63
Less : Provision for Tax 88.29 8.24
Less: Provision for Dividend - -
Profit after tax & dividend 2.46 250.39
Add : Profit/(Loss) brought forward from previous year (2498.83) (2749.22)
Balance carried to Balance Sheet (2496.37) (2498.83)


The Company operates in only Single segment; hence segment-wise performance is not applicable.


Indian government has taken a series of positive steps to support the textile industry in this country. The Union Ministry of Textiles is more active in developing the textile industry, by constant coordination with business owners of this sector. The Union Budget for 2022 – 23 also announced some benefits that can help in the growth of the Indian textile industry.


While the overall economy is relatively strong and is outperforming major economies, the textile sector is a notable exception and orders suggest the downturn will continue well into 2023, raising the risk of layoffs in an industry that employs more than 45 million people. Exports, which constitute about 22% of the industry, have fallen for five months in a row-declining over 15% year-on-year in November to $3.1 billion. Domestic sales are sluggish despite strong growth in the overall economy because of high costs and cheap imported garments, manufacturers say.


Pursuant to the provisions of section 134(5) (e) Companies Act, 2013, every listed company has to lay down Internal Financial Controls and ensure that these are adequate and are operating effectively. Internal Finance Controls means the policies and procedures adopted by the company for ensuring the following:

• Orderly and efficient conduct of its business

• Adherence to companys policies

• Safeguarding of its assets

• Prevention and detection of frauds and errors

• Accuracy and completeness of the accounting records and timely preparation of reliable financial information The Company has adequate and suitable internal control systems that are continuously monitored and updated to ensure that its assets are safeguarded. These systems also ensure that established regulations are complied with and pending issues are addressed promptly. The adequacy of the internal control systems are audited by the internal auditors and the reports are reviewed quarterly by the Audit Committee. Based on the report of Internal Audit, the Committee makes note of the audit observations and undertakes corrective actions, where necessary. It maintains a constant dialogue with the statutory and internal auditors to ensure that internal control systems are operating effectively.


During the Financial Year 2022-23 there is no material developments in the area of Human Resources/Industrial Relations front as well as no change in increase/decrease in number of people employed.

(i) DETAILS OF SIGNIFICANTCHANGES IN KEY FINANCIAL RATIOS : i. Debtors Turnover: 6.59 ii. Inventory Turnover: 6.99 iii. Interest Coverage Ratio: 2.04 iv. Current Ratio: 2.32 v. Debt Equity Ratio: 0.49 vi. Operating Profit Margin (%): 0.31 vii. Net Profit Margin (%): 0.05


Current year RONW is 0.09% as compared to previous year RONW 7.17%, the dilution in in RONW is on account of lower profitability due to low realization and higher raw material consumption


Certain statements in the Management Discussion and Analysis describing the Companys objectives, predictions may be "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates, new regulations and Government policies that may impact the Companys business as well as its ability to implement the strategy.

By order of the Board of Directors

For, Premier Synthetics Limited

Gautamchand Surana Sachin Kansal
Managing Director Independent Director
Place: Ahmedabad
Date: 12thAugust, 2023 DIN: 00955362 DIN: 03566139