Kandagiri Spinning Mills Ltd Management Discussions

During the financial year 2024-25, the Company continued to carry out yarn trading business and generated revenue. There was steep decrease in yarn selling price during the year and yarn sales had to be made at a lower price to sustain the competitive market conditions. The Company is receiving moderate volume of orders for value added counts. The market is expecting significant growth due to the increasing demand for textiles in developing economies. This trend is driven by the expanding middle class population in these regions, leading to a rise in consumer spending on textiles. Fashion trends continue to influence the textile market, with consumers seeking innovative and unique textiles for their clothing and home decor needs. Following almost three years of slump in demand and rising production costs, Textile Industry is looking at gradual market improvement and better performance in the years to come.

The company has generated goodwill and brand image in yarn trading business. The Board of Directors hope to continue to use these advantages by continuing trading business. As earlier informed, as a change in Management and Takeover, the partners of Akshayam Creations LLP took the Board positions on 08.08.2025 and the Board of Directors is also exploring new business in the coming years and exploring various possibilities for settling the outstanding liabilities and revival of the Company in the near future.

Your Company has devised risk management policy which involves identification of the business risks as well as the financial risks, its evaluation, monitoring, reporting and mitigation measures. The Audit Committee and Board of Directors of the Company periodically review the risk management policy of the Company so that management controls the risk through properly defined network. Head of Departments are responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Board and the Audit Committee. The details of risk management mechanism and key risks faced by the Company are enumerated in the risk management policy. Risk management policy is uploaded in the companys website www.kandagirimills.com.

The Company has in place a well established internal control procedures. Necessary checks and balances have been instituted for timely correction with an effective internal audit system.

Employees are your companys most valuable resource. Your Company continues to create a favourable environment at work place.

The CSR provisions became inapplicable to the Company and accordingly, the CSR Committee was dissolved by the Board with effect from 18.06.2020. There is no CSR obligation for the Company for the FY 2024-25 in accordance with the provisions of section 135 of the Companies Act, 2013. Accordingly, requirement of CSR disclosure in required format is not applicable for the Company

Details of significant changes on following ratios (i.e., changes if 25% or more as compared to immediately previous financial year

(i) Debtors Turnover ratio : Due to better collection of receivables

(ii) Interest Coverage Ratio : Due to increase in unsecured loans by Directors

(iii) Current ratio : Due to decrease in current assets and due to loss incurred

(iv) Operating profit margin and Net profit margin : Net loss is reduced during this year mainly because of waiver of interest on unsecured loan of Director

(v) Return on Net worth : Due to continuous loss and continuous erosion of networth