Mahaalaxmi Texpro Ltd Management Discussions

Your directors take pleasure in presenting the Management Discussion and Analysis Report for the year ended March 31, 2025.

Indias textiles and clothing industry is one of the mainstays of the national economy. It is also one of the largest contributing sectors of Indias exports worldwide. Raw material costs have been increasing globally, coupled with a shortage of skilled workers. The industrial climate in India has become adverse due to regular increases in input costs. Any further appreciation of the Rupee will adversely affect exports from India.

With increasing global awareness around sustainability, Indian textile companies have a unique opportunity to lead in organic and eco-friendly fabrics. The demand for biodegradable materials, water-efficient processes, and ethical sourcing is rising, paving the way for innovative and sustainable business models. Digital platforms enable manufacturers to streamline supply chains, enhance production efficiency, and deliver better customer experiences. The rise of e- commerce has further opened direct-to-consumer opportunities for textile brands.

The volatility in raw material prices, particularly cotton and synthetic fibers, continues to impact production costs. Global supply chain disruptions, influenced by geopolitical tensions and climate change, also pose risks to material availability and pricing stability. While India has a large workforce, a shortage of skilled labour in advanced textile manufacturing processes remains a challenge.

In terms of the Ind AS, there is only one reportable segment i.e., Textile Segment. The construction division of the company is inoperative, therefore the whole of the operations of the Company relates only to the Textile unit and hence Segment wise reporting is not necessitated.

Since the company was under the liquidation, with the support of new management team, company is trying to work with their available capacity. The management is looking at the future with optimism and expects that with the improvement in demand and softening of raw cotton prices in the coming periods, will give a relief to the Textile Industry. The Company will continue to explore new markets while creating more value-added products to enhance revenues.

The broader economic trends are poised to directly affect a companys growth potential. Persistent inflation has resulted in increase in commodity prices worldwide. Furthermore, the anticipated rise in central bank interest rates in the coming year may dampen growth and strain economies, especially in emerging markets. It is thereby important to manage cost pressures to sustain the Companys overall performance in these conditions. Reduced purchasing power and increased demand could result in significant shifts in consumer behavior, negatively impacting the textile and apparel market. Consumers might seek more budget-friendly options, potentially leading to reduced growth and profitability for the Company.

The Company has established comprehensive internal control systems and processes designed to align with its unique business operations and complexities. By implementing strong policies and procedures, it ensures business integrity, asset protection, accurate financial reporting and fraud prevention. These systems undergo regular evaluations to enhance their effectiveness and drive continuous improvement.

The audit committee reviews reports presented by the internal auditors on a routine basis. The committee makes note of the audit observations and takes corrective actions wherever necessary.

The Company values its dedicated and motivated employees as its greatest asset. It maintains a healthy work environment, offers competitive compensation and acknowledges employee contributions through a structured reward and recognition program. To support professional growth, the Company encourages employees to participate in voluntary assessments beyond their core responsibilities, promoting creativity and continuous learning. As of 31^st March, 2025, the Company had a workforce of 75.

During the year, Company has made turnover of f 462.21 Lakhs as compared to f 942.79 Lakhs during the previous financial year whereas company has incurred a Loss before tax and Exceptional Items of f 520.36 Lakhs as against Loss before tax of f 845.94 Lakhs in previous year.

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Amendment Regulations, 2018, the Company is required to give details of significant changes (changes of 25% or more as compared to immediately previous financial year) in financial ratios are as follows:

1 Debtors Turnover Ratio: Ratio has reduced significantly as sales volumes declined and average receivables increased post business restructuring.

2 Current Ratio: Improvement is mainly on account of reduction in current liabilities pursuant to settlement and restructuring, though the ratio continues to reflect a lower-than-ideal liquidity position.

3 Debt Equity Ratio: Negative net worth in FY 2024-25 due to losses and capital reduction has impacted the ratio, making it not strictly comparable with previous year.

4 Operating Profit : the Operational Margins have reduced pursuant to underutilization of capacities as compared to previous year and substantial reduction I sales

5 Net Profit : Though the Company reported a loss, the loss as a percentage of revenue is lower than last year because FY 2023-24 included higher exceptional items.

6 Return on Net Worth: Decline is attributable to net loss in FY 2024-25 compared with significant one-time income in the previous year. Negative net worth impacts comparability.

Statements in this Directors Report and Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.