gujarat hy spin ltd share price Management discussions

Gujarat Hy-spin Limited is a leading player in the field of yarn manufacturing. Gujarat Hy-spin provides special types of threads in the garment industry. Our technical expertise, reliability, flexibility of production helps us to have an upper hand in this field.

We believe in manufacturing and delivering quality products and our manufacturing process is under supervision by qualified person. At Company, we desire to demonstrate its capability to provide various products conforming to needs of its customers. We aim satisfy the needs of customers including product requirements, the regulatory authorities and accreditation bodies and to achieve customer satisfaction by maintaining the best standards at all level from procurement to dispatch.

We believe our senior management team is able to leverage our market position and their collective experience and knowledge in the industry, to execute our business strategies and drive our future growth. In addition, we believe the strength and entrepreneurial vision of our Promoters and senior management has been instrumental in driving our growth and implementing our strategies. We believe our position as a yarn manufacturing Company represents a significant competitive advantage in attracting and retaining high-quality talent.

Our Company has adequate production capacity to meet an increase in demand. We believe our business model, together with our quality control measures, and efficient management systems optimize our cost structure and ensure quality products. The Company has been sourcing major portion of raw material from its promoter group entity Gujarat ginning and oil Industries thus may enjoy favorable terms in both price as well as supplies.

We believe that we are a quality focused company. We are committed to maintain quality for the satisfaction of our customer. We have established a quality control team which has the responsibility to ensure compliance with manufacturing practices.

It was an unprecedentedly challenging year. But our agile management of the business environment and focused approach to fulfillment needs helped us record strong growth.

The key highlights of financial performance are as under:

Revenue from operations: Revenue from operations stood at 6079.85 Lacs in FY 2023 against 6945.34 Lacs Lacs in FY 2022. Other operating income is 202.42 Lacs.

Profit / Loss before Tax: Loss before tax for the FY 2023 was Rs.(67.36 Lacs) compared

to Profit of Rs.43.29 Lacs in the previous FY 2022.

Net Profit / Loss: Net Loss was Rs.(54.00) Lacs in FY 2023 as compared to the Profit after

Tax (PAT) of Rs.29.00 Lacs in FY 2022.

Company embraces a risk management portfolio for forecasting and mitigating the impact of internal and external risk factors. The internal risks which are mainly associated with the operations of the Company and the external risks which are linked with the economic and market volatilities are stated below:

• Working Capital Risk: Company caters to the textile segments, which largely depends on the economy. Therefore, any setback in the economy directly impinges on the demand emerging from these industrial segments. The risk of economic downturn could lead to fund scarcity and delayed realization of receivables which in turn would affect the working capital requirements of Company. Company gives priority to the customers who have sound financial locus standing. Company closely monitors the working capital requirements by constant follow up on receivables and maintaining lean and symmetric inventories.

• Technology Risk: Company is agile on the technology frontier by constantly reviewing new technology in terms of production and process to avoid obsolescence. The Company has a background of constantly upgrading the technology to maintain its position at par with international players and remain ahead of its peers in the home-turf.

• Competition Risk: The risk involves entry barriers which are gradually being made more stringent by the customers to screen out several players. Company is addressing to the quality conscious customers to retain its market share.

• Market Demand Risk: The Government policies have a direct bearing on the demand from the various market segments. Company has a broad base clientele, flexible manufacturing set-up, therefore, it can somewhat off-set the cyclical or depressed demand of affected segment with the other segments. From time-to-time, the Company makes changes in its product-mix to suit the order and demand pattern.

• Customer Risk: To mitigate these risks, your Company maintains constant touch with its clientele to understand and deliver products and services aligned to its changing priorities. Your Company has built a reputation as a preferred supplier with most of its

customers by creating a quality trust in a bid to protect itself from competition and entry of new players.

The Companys internal control systems are commensurate with the nature of its business and the size and complexities of its operations. These systems are designed to ensure that all assets of the Company are safeguarded and protected against any loss and that all transactions are properly authorized, recorded and reported. The Company has an adequate system of internal control in place, which assures of:

> Authorization, recording, analyzing and reporting of transactions.

> Recording and adequate safeguarding of assets.

> Upkeep of accounting records and trustworthiness of financial information.

> Audit Committee of the Board which monitors and reviews all risks and control issues and financial matters.

> Computerized and integrated financial and accounting functions, information feedback system of process parameters and backtracking from finished products to raw material stage.

> Routine evaluation of all financial operating and information technology system.