> INDIA TEXTILE INDUSTRY OVERVIEW/ INDUSTRY STRUCTURE AND DEVELOPMENTS*
Indias textiles sector is one of the oldest industries in the Indian economy, dating
back to several centuries. The industry is extremely varied, with hand-spun and hand-woven
textiles sectors at one end of the spectrum, while the capitalintensive sophisticated
mills sector on the other end. The decentralised power looms/ hosiery and knitting sector
forms the largest component in the textiles sector. The close linkage of textiles industry
to agriculture (for raw materials such as cotton) and the ancient culture and traditions
of the country in terms of textiles makes it unique in comparison to other industries in
the country. Indias textiles industry has a capacity to produce wide variety of products
suitable for different market segments, both within India and across the world. The
textiles sector has witnessed a spurt in investment during the last five years.
Exports have been a core feature of Indias textile sector. Exports of both man-made
textile and readymade garments have seen a major boost. A major factor behind the
robustness of Indias textile industry is its strong production base with a wide range of
fibres and yarns. India is among the top producers of jute and silk, and beyond its
natural fibres such as cotton, jute, silk and wool; and synthetic, its manmade fibres such
as polyester, viscose, nylon and acrylic have also created a niche for themselves in the
market.
> OPPORTUNITY*
Indian government has come up with a number of export promotion policies for the
textiles sector. It has also allowed 100 per cent FDI in the sector under the automatic
route. Union Budget 2020-21, a National Technical Textiles Mission is proposed for a
period from 2020-21 to 2023-24 at an estimated outlay of Rs.1,480 crore (US$ 211.76
million). In Union Budget 2021-22, the announcement on setting up of seven mega textiles
parks, will directly impacting the textile industry. With the concept of these mega parks
with a plug and play model, Indian textile and apparel sector, particularly SMEs, can work
on scale and build competitiveness in manufacturing. The Production Linked Incentive (PLI)
scheme for man-made fibres and technical textiles with a total outlay of Rs.10,683 crore
will help the textile industry to become globally competitive, attract large investments
and boost employment generation. Further, reduction in customs duty on caprolactam, nylon
chips and nylon fibre & yarn to 5 per cent is step in the right direction, as it will
bring nylon chain on par with polyester and other man-made fibres. Accordingly, the
increase in customs duty on cotton from nil to 10 per cent and on raw silk and silk yarn
from 10 per cent to 15 per cent will benefit domestic cotton and silk growers. Custom duty
policy announced has dual objectives of promoting domestic manufacturing and helping India
get on to global value chain and export better as the domestic textile industry will get
easy access to raw materials and exports of value-added products, which will make textile
industry globally competitive. The Budget allocates Rs.700 crore for Amended Technology
Upgradation Scheme (ATUFs) which will help to clear the pending capital subsidy.
* The Company undertakes no obligations to publicly update or revise any of the
opinions of statements expressed in this report. Readers are hence cautioned not to place
undue reliance on these statements and are advised to conduct their own investigation and
analysis of the information contained or referred to this statement before taking any
action with regard to specific objectives.
> REVIEW AND 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 turnover by various marketing strategies,
offering more quality 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 the Company was involved in
job work but now with the view of export opportunities, the Company taken the lead towards
the export in simultaneous with Job Work.
> THREATS/RISK AND CONCERN
1) Cotton is pre-dominantly used as raw material in textile sector. Consequently,
unavailability of raw material or price fluctuations may impact production.
Companys proposed step - Strong and long-term relationships with vendors to help
ensure timely availability of raw materials.
2) The Companys business may be impacted by introduction of new policies or changes in
existing policies.
Companys proposed step - The Companys management team keeps a close eye on policy
regulations and formulates company plans appropriately.
3) Low-cost imports due to favourable government policies in other countries may pose
significant risk to business and impact pricing strategy.
Companys proposed step - The Companys competitive advantage comes from leveraging
economies of scale, cutting-edge technology and strategic partnerships with all
stakeholders to offer competitive rates globally.
> INTERNAL CONTROL SYSTEM AND THEIR ADEQUECY
The Company has proper and adequate system of internal control, commensurate with the
size and nature of its business. Regular internal audits and checks carried out and also
management reviews the internal control system and procedures to ensure orderly and
efficient conduct of business and to ensure that all assets are safeguarded and protected
against loss from unauthorised use or disposition and that transactions are authorised,
recorded and reported correctly. The Company has well defined internal control system.
Internal audit in the organization is an independent appraisal activity and it measures
the efficiency, adequacy and effectiveness of other controls in the organization. The
Audit Committee, comprising Independent Directors, regularly reviews audit plans,
significant audit findings, adequacy of internal controls, and compliance with Accounting
Standards, among others.
> HUMAN RESOURCES
The Company believes that its people are its most important asset and thus continuously
strives to scale up its employee engagement through well-structured systems and a
visionary HR philosophy. The Company continues to lays emphasis on building and sustaining
the excellent organization climate based on human performance. Performance management is
the key word for the Company. Pursuit of proactive policies for industrial relations has
resulted in a peaceful and harmonious situation in the Company. We are highly focused on
developing our employees to perform with the same excellence for the challenges and huge
business opportunities that are envisaged in future. The Company firmly believes that
intellectual capital and human resources is the backbone of the Companys success.
> DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The Companys financial performance (including Consolidated financial performance) with
respect to operational performance are as under:
(Rs. in Lakhs)
Particulars |
Standalone |
Consolidated |
|
For the year ended on 31st March, 2023 |
For the year ended on 31st March, 2022 |
For the year ended on 31st March, 2023 |
For the year ended on 31st March, 2022 |
Net Total Income |
9599.39 |
21857.48 |
9602.31 |
21857.48 |
Less: Operating and Administrative Expenses |
10063.5 |
20955.66 |
10067.79 |
20956.29 |
Profit/ (Loss) before Depreciation and Taxes |
(464.11) |
901.82 |
(465.48) |
901.19 |
Less: Depreciation and Amortization |
665.16 |
489.93 |
665.16 |
489.93 |
Less: Extraordinary/Exceptional Items |
0 |
0 |
0 |
0 |
Profit/ (Loss) before Tax (PBT) |
(1129.27) |
411.89 |
(1130.64) |
411.26 |
Less: Taxes (including deferred tax) |
(147.45) |
70.89 |
(147.44) |
70.89 |
Profit/ (Loss) after Tax (PAT) |
(981.82) |
341.00 |
(983.20) |
340.37 |
Other Comprehensive Income: Items that will not be reclassified to
Profit or Loss-
Remeasurement of defined Benefit |
8.01 |
4.03 |
8.01 |
4.03 |
Plans
Tax relating to Remeasurement of the defined Benefit Plans |
(2.23) |
(1.12) |
(2.23) |
(1.12) |
Total other Comprehensive Income, net of Tax |
5.78 |
2.91 |
5.78 |
2.91 |
Total Comprehensive Income for the Year |
(976.04) |
343.91 |
(977.42) |
343.28 |
Profit/ (Loss) for the Year Attributable to: |
NA |
NA |
(982.52) |
340.68 |
Owners of the Parent Non-controlling Interest |
NA |
NA |
(0.68) |
(0.31) |
Earnings Per Equity Share Basic |
(2.53) |
0.88 |
(2.54) |
0.88 |
Diluted |
(2.53) |
0.88 |
(2.54) |
0.88 |
Note: Figures of previous year have been regrouped whenever necessary, to confirm to
current years presentation.
During the year under review, the Company has earned Total Income of Rs.9599.39 Lakhs
as compared to Rs.21857.48 Lakhs in the previous year and incurred Loss of Rs.981.82 Lakhs
as compared to the profit of Rs.341 Lakhs in the previous year.
Further, during the year under review, your Company has installed a Zero Liquid
Discharge (ZLD) Plant to treat 100% water effluent in the factory. This installation is a
permanent solution for waste water with zero liquid discharge. Resulting, the production
of the Company was re-commenced w.e.f. 26th September, 2022 which was
discontinued due to disconnection of all units discharging water effluent in the sewage
lines of Ahmedabad Municipal Corporation (AMC).
Due to above disconnection, the manufacturing operations of the Company have come to a
standstill and this affected the revenue and profit of the Company during the year under
review. However, the Company remained resolute and relentless in our quest for
strengthening our cost-competiveness, better management of working capital and operational
excellence across our business and trying to overcome with above losses with higher income
& profit.
> DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25 % OR MORE AS COMPARED TO THE
IMMEDIATE PREVIOUS
FINANCIAL YEAR) IN KEY FINANCIAL RATIOS
Ratios |
2022-23 |
2021-22 |
CHANGE (%) |
Debtors Turnover Ratio |
52.03 |
90.37 |
-42.43% |
Inventory Turnover Ratio |
6.36 |
15.86 |
-59.90% |
Interest Coverage Ratio |
-4.66 |
12.10 |
-139.00% |
Current Ratio |
0.68 |
1.15 |
-40.87% |
Debt Equity Ratio |
1.79 |
0.54 |
213.48% |
Operating Profit Margin % |
2.98 |
7.33 |
-59.00% |
Net Profit Margin % |
-11.00 |
2.00 |
-650.00% |
Return on Net Worth% |
-37.24 |
11.56 |
-422.2% |
> CAUTIONARY STATEMENT
This Management Discussion and Analysis statement of the Annual Report has been
included in adherence to the spirit enunciated in the code of corporate governance
approved by the Securities and Exchange Board of India. Statement in the Management
Discussion and Analysis describing Companys objectives, projections, estimates,
expectation may be forward-looking statements within the meaning of applicable securities
laws and regulations. Actual result could differ materially from those expressed or
implied. Important factors that could make a difference to the Companys operation include
economic conditions affecting demand/supply and price conditions in the Government
regulations, tax laws, other rules & regulation applicable to company and other
incidental factors. Further, the discussion following herein reflects the perceptions on
major issues as on date and the opinion expressed here are subject to change without
notice. The Company undertakes no obligations to publicly update or revise any of the
opinions of forward looking statements expressed in this report, consequent to new
information future events, or otherwise. Readers are hence cautioned not to place undue
reliance on these statements and are advised to conduct their own investigation and
analysis of the information contained or referred to this statement before taking any
action with regard to specific objectives.
> SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE
The Company is having only one segment, details and performance of the same are
provided hereinabove and in the respective heads of this Annual Report.
|
For and on behalf of the Board of Directors |
|
For, Raghuvir Synthetics Limited |
Date: 31/08/2023 |
|
Place: Ahmedabad |
|
Sunil Raghubirprasad Agarwal (Chairman & Managing Director) DIN:00265303
+91-9892691696
