jindal cotex ltd Management discussions

The management discussion and analysis present the Industry overview, opportunities, threats and overall strategy of the company and its future outlook.

Industry structure & Outlook

The Indian Textile Industry is one of the largest in the World. The Textile Industry continues to play a vital role in the economic growth of the country. Its importance is evident from the fact that it is the largest contributor towards employment generation, Industrial output and Export earnings. The industry is sustaining livelihoods of 45 million people by providing them employment.

The textile industry has been adversely impacted due to COVID-19 pandemic and lockdown restrictions imposed by the Government. During the year under review, the performance of your company has been badly affected by slowdown in the production due to low capacity utilization, liquidity crunch, migration of labour and fluctuation in the prices of raw materials etc.

Financial Analysis

We wish to inform you that during the year under review, the company has achieved operational income of Rs. 243.70 lacs as against Rs. 1524.59 lacs during the previous year. The company has earned however reported a profit before tax of Rs. 1226.25 lacs due to exceptional income of Rs. 1036.37 lacs generated due to profit from sale of land of Rs. 29.64 Lacs, profit on sale of plant and machinery under SARFAESI ACT during the previous financial year amounting to Rs. 775 Lacs, income generated due to sale of scrap of Rs.0.15 Lacs, Rs.145.93 Lacs booked on the account of written back of provision for bad debts and Rs. 89.60 Lacs as Rebate & Discount and Rs. 3.94 lakhs as Prior Period Expenses.

There is no manufacturing activity in the company now. Windmill of the Company situated at Distt. Jaisalmer is also non-operational due to non-payment of maintenance charges to SUZLON.

Financial Analysis and Review of operations (On standalone basis):

Product wise performance

(Rs. in lacs)

Particulars	Year ended March 31, 2023			Year ended March 31, 2022
	Qty	Sales amount	As % to total sales	Qty	Sales amount	As % to total sales
Textiles
Yarn (in MT.)	0.00	0.00	0.00	401.82	801.72	52.59
Polyester Waste (in MT.)	0.00	0.00	0.00	16.85	4.32	0.28
Total (A)		0.00	0.00		806.04	52.87
Flex Sheet (in Sq. meter)	0.00	0.00	0.00	0.00	0.00	0.00
Chemicals (in MT.)	0.00	0.00	0.00	510.32	355.64	23.33
Fabric (in MT.)	0.00	0.00	0.00	0.00	0.00	0.00
Total (B)		0.00	0.00		355.64	23.33
Job work	0.00	199.17	81.73	0.00	362.91	23.80
Pet coke	0.00	44.53	18.27	0.00	0.00	0.00
Total (C)		243.70	100		362.91	23.80
Wind Mill
Elect. Sales	0.00	0.00	0.00	0.00	0.00	0.00
Total (D)	0.00	0.00	0.00	0.00	0.00	0.00
Totsl (A+B+C+D)	0.00	243.70	100		1524.59	100

Financial Analysis

Revenue Break-up:

Rs. In lacs)

Particulars	2022-23	% to total income	2021-22	%to total income
Sales	243.70	18.12	1524.59	60.35
Other Income	1101.15	81.88	1001.53	39.65
Total Income	1344.84	100	2526.12	100

The net turnover of the company has been decreased to Rs. 243.70 lacs in the year 2022-23 as against Rs.1524.59 lacs in the previous year.

• Profitability/Losses

(Rs. in lacs)

Particulars	2022-23	21-22
Profit Before Depreciation, Interest, Tax & Exceptional items (PBDIT)	312.32	(2078.54)
Interest and Financial Expenses	120.97	90.32
Profit Before Depreciation, Tax & Exceptional items (PBDT)	191.35	(2168.86)
Depreciation	1.47	546.01
Profit Before Tax & Exceptional items (PBT)	189.88	(2714.87)
Exceptional items	1036.37	12908.38
Profit Before Tax	1226.25	10193.51
Less- Provision for Tax (Including Deferred Tax)	—
Profit for the year (PAT)	1226.25	10193.51
Other Comprehensive Income	1.50	0.00
Add - Surplus brought forward from previous Year	"	"
Profit available for Appropriations	1227.75	10193.51

Resource Utilization

a) Fixed Assets

The gross fixed assets (including work-in-progress & capital advances) as at 31st March, 2023 are Rs. 954.26 lacs (1215.54 lacs in the previous year). The net fixed assets (including work-in- progress & capital advances) as on 31^st March, 2023 are Rs. 211.62 lacs as compared to Rs. 467.45 lacs in the previous year.

b) Investments

The Company has made investments (net of provision) in its subsidiaries to the tune of Rs. 122.88 lacs by way of equity capital.

c) Current Assets

Sundry debtors (Net of Provision) of the company are Rs. 219.92 lacs in the year 2022-23 as against Rs. 571.45 lacs in the previous year. Inventory level is at Rs. 13.98 lacs in the year 2022- 23 as against Rs. 13.98 lacs in the previous year. Cash and cash equivalents decreased from Rs. 9.76 lacs in the year 2021-2022 to Rs.3.75 lacs in the year 2022-23.

Risk and Concerns

Risks are an integral part of the growth of a business. However, to effective risk management framework helps the organization in mitigating the risks effectively and ensure business sustainability. The company is mitigating all these risks through internal as well as external audits.

The uncertainty in demand with prolonged economic impacts of the COVID-19 pandemic will result in impact to the production of the company.

Future Outlook

The future outlook of the Indian Textile Industry looks optimistic as the Indian government has come up with a number of export promotion policies for the textiles sector. We expect that the situation will improve in the current financial year and the Government will support the Textile industry in this difficult period with several incentives which are important for the future growth of the textile Industry.

Internal Control and their Adequacy

The company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to the Companys policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures. The company uses ERP (Enterprise Resource Planning) system to record data for accounting.

Health, safety and environment

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner so as to ensure safety of all concerned, and preservation of natural resources

During the year, your Company continued generating interest among staff and labour for maintaining hygienic and green surrounding. More emphasis is given to social distance, cleanliness workplace and good house-keeping.

Material Development in terms of Human Resources

The company believes that employees are the real strength of organization. The Company has identified Human Resources Development as a major strategic initiative since it believes that people contribution will be the main engine for growth of the company. The company has taken lot of efforts to train its employees include building skills, attracting and retaining talent and nurturing and developing leadership potential. Industrial relations during the year remained cordial and initiative were taken to enhance productivity of employees.

Cautionary Statement

Statement in the Management Discussion and Analysis describing the Companys objectives, projects, estimates, expectations 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 a difference of the Companys operation include economic conditions affecting demand changes in Government policies/regulations, tax law and other statutes and other incidental factors.