Filatex Fashions Ltd Management Discussions

(a) Overview

We always want to look ahead and push ourselves to reinvent and re innovate. We took this opportunity to be introspective and realised our core strengths. We do not see these restrictions as a hurdle but an opportunity to explore new markets and new fields. We believe that with over 29 years of combined management experience in the socks markets in India enable us to be competent in this field and its activities in Manufacturing.

(b) Industry Structure and Developments

The Company follows all the rules and regulations of the respective exchange for depository / SEBI.

(c) Opportunities and Threats

The Company being a player in the socks market, the performance of the Company largely depends on the National and Global Markets. Your Company continues to achieve cost effectiveness through the application of technology. We have been fashioning our own responses to these challenges, and we believe that we can turn them into opportunities, which can unlock growth for us in the future.

Opportunities

1. Growing Financial Services industrys share of wallet for disposable income.

2. Regulatory reforms would aid greater participation by all the class of investors.

3. Leverage technology to enable best practices and process.

Threats

1. Execution Risk

2. Slowdown in global liquidity flows

3. Intense competition from local and global players

4. Unfavourable economic conditions

(d) Segment-wise or Product-wise Performance

The Company carries on 100% socks manufacturing and allied products.

(e) Internal Control & Adequacy

The Company has adequate internal technology upgrading to ensure that all machines are upgraded from time to time.

(f) Risk Management System

The Company manages our business risk through strict compliance and internal control system.

(g) Outlook

Company is focusing on service-based activities. We believe that with over 33 years of combined management experience in the capital markets and corporate space in India enable the company to be competent in this field. The company has decided to venture into different business through investments in subsidiaries company.

(h) Change in Net Worth

Net worth has been increased for the financial year as there is an increase in share capital and profit.

(i) Human Resource

Company has adequately trained and well experienced personnel. Our employees are highly motivated and work in line of the organizational goal.

(j) Cautionary Statement

The statements made in this report describe the Companys objectives and projections that may be forward looking statements within the meaning of applicable laws and regulations. The actual results might differ materially from those expressed or implied depending on the economic conditions, government policies and other incidental factors, which are beyond the control of the Company.

(k) Details of Significant Changes:

Particulars	F.Y. 2025-26	F.Y. 2024-25	% of Changes
Current Ratio	1.74	2.35	-26.00%
Debt Equity Ratio	0.09	0.06	65.00%
Debt Service Coverage Ratio	0.61	1.21	-50.00%
Return on Equity Ratio	0.001	0.004	-70.00%
Inventory Turnover Ratio	3.70	7.84	-53.00%
Trade Receivables Turnover Ratio	0.58	1.23	-53.00%
Trade Payables Turnover Ratio	0.97	2.50	-61.00%
Net Capital Turnover Ratio	0.91	1.57	-42.00%
Net Profit Ratio	0.03	0.05	-52.00%
Return on Capital employed	0.002	0.01	-73.00%

Remark - Any change in the ratio by more than 25% as compared to the preceding year.

Reason of Variance

i. Growth in trade payables exceeding the growth in liquid assets.

ii. Increase in external borrowings exceeding the increase in shareholder equity.

iii. Decrease in operating earnings exceeding the decrease in annual debt obligations.

iv. Decrease in final net profit exceeding the changes in shareholder capital.

v. Increase in average stock exceeding the decrease in annual purchase volumes.

vi. Increase in average customer balances exceeding the decrease in sales revenue.

vii. Increase in average supplier credit exceeding the decrease in annual purchase volumes.

viii. Increase in working capital exceeding the decrease in sales revenue.

ix. Decrease in final net profit exceeding the decrease in sales revenue

x. Decrease in operating earnings exceeding the changes in total capital employed.