Osiajee Texfab Ltd Management Discussions

AnnexureI

Objective of Report

The Objective of this report is to convey Managements perspective on the external environment and textile industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, internal control systems and their adequacy in the Company during the financial year 2024-25 This report should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Annual Report. The Companys financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) complying with the requirements of the Companies Act, 2013, (Act) and regulations issued by the Securities and Exchange Board of India (SEBI), each as amended from time to time.

External Environment

Global Economic Condition and Outlook:

The year 2022 saw the developed world grapple with some of the highest levels of inflation in recent history. The global recovery from the COVID-19 pandemic and Russias invasion of Ukraine is slowing amid widening divergences among economic sectors and regions. In May, the World Health Organization (WHO) announced COVID-19 as no longer a "global health emergency". However, Inflation remains high and continues to erode household purchasing power. As per the IMF estimates, the world economy projected at 3.2% for both 2024 and 2025. The most notable disparity was seen between the growths of Advanced and Emerging economies. The Advanced economies modest acceleration, from about 1.6% in 2023 to 1.7% in 2024 and 1.8% in 2025 while the Emerging and developing economies: slowdown from 4.3% in 2023 to 4.2% in both 2024 and 2025.

The IMF estimates that the Global growth: revised to 3.0% in 2025, with a further uptick to 3.1% in 2026. . The major forces that shaped the world economy in 2024 seem to continue in 2025 but with changed intensities. Debt levels remain high, limiting the ability of fiscal policymakers to respond to new challenges. Commodity prices that rose sharply following Russias invasion of Ukraine have moderated, but the war continues, and geopolitical tensions are high. Infectious COVID-19 strains caused widespread outbreaks last year, but economies that were hit hard - most notably China - appear to be recovering with easing of supply-chain disruptions.

While the Western world becomes the epicentre of global tensions, Emerging markets and developing economies: growth expected at 4.1% in 2025, easing to 4.0% in 2026 . "Emerging Asian economies led by China and India are projected to grow by 5.2% in 2024 and 5.1% in 2025 respectively, with China expected to expand at 4.6% in 2024 and 4.1% in 2025, while India continues to outperform with growth of 6.8% in 2024 and 6.5% in 2025."

"According to the IMF World Economic Outlook - July 2025, the priority across most economies remains bringing inflation back to target while safeguarding financial stability amid slowing global growth and elevated debt levels. Central banks are advised to maintain a restrictive policy stance until inflation expectations are firmly anchored, while also strengthening financial supervision, risk monitoring, and coordination with fiscal authorities to preserve stability."

Indian Economy and Outlook:

"The IMF has estimated Indias growth at 6.8% in 2024 and 6.5% in 2025, well above other major economies, leading many to state that this could indeed be Indias decade. India continues to stand out as the fastest - growing large economy in the world, maintaining its position as a beacon of resilience amid a challenging global environment."."The Reserve Bank of India (RBI) has continued to balance its policy stance between controlling inflation and maintaining financial stability while ensuring adequate liquidity in the system. Navigating inflation management and supporting growth remains a delicate task. The central government has sustained its thrust on infrastructure-led growth through a strong capital expenditure push. In the Union Budget 2024-25, capex has been increased to around ^11.1 lakh crore, constituting nearly 3.4% of GDP.

According to the RBI, this level of public investment is expected to crowd in private sector activity and keep Indias real GDP growth close to 7% in FY25. Despite global headwinds, Indias resilient domestic demand, robust financial sector, and demographic advantages are expected to help the economy remain the fastest- growing major economy in the world."

Textile Industry

Global Textile Industry

The International Textile Manufacturers Federation (ITMF) reports that the global textile industry, after a gradual recovery since late 2023, worsened slightly by early 2025. Although garment makers showed relative stability, other segments like technical and home textiles remained under pressure. Regional divergences are stark: while Africa and South America exhibit positive business sentiment, East Asia and Europe face deepening challenges. However, confidence for Q4 2025 remains cautiously optimistic in most regions except East Asia.

Order intake has declined for four straight months through May 2025, with Europe and East Asia seeing the most significant drops, while Africa stands out with continued gains. Order backlogs and capacity utilization remain moderate, reflecting mixed recovery momentum across sectors.

The key concern remains weak demand (highlighted by 61% of surveyed participants), followed by trade tensions and operational cost pressures—even as energy and raw material price concerns ease, worries over interest rates and evolving sustainability regulations are on the rise.

Indian Textile Industry

The overall Indian textile and apparel market is now estimated to be around US $225 billion in 2025, up from approximately US $165 billion in 2022—reflecting a sustained annual growth rate of about 10-12% Hypetrics.The sector is set to almost double in size, with projected revenue reaching US $350 billion by 2030, growing at a 10% CAGR IBEF+1. For FY25, textile and apparel exports (including handicrafts) reached Rs. 3,12,540 crore, which translates to around US $36.6 billion. The Ready-Made Garments (RMG) segment led this with US $15.99 billion (44%), followed by Cotton Textiles at US $12.06 billion (33%) and Man-Made Textiles at US $4.87 billion (13%) IBEF. RMG exports are projected to climb further—expected to exceed US $30 billion by 2027, expanding at a robust CAGR of 12-13% .

In The Union Budget 2024-25 and 2025-26 developments, as well as recent PLI outcomes and investment. Five-Year Cotton Mission (2025-26)

A new five-year Cotton Mission focuses on boosting the productivity of Extra-Long Staple (ELS) cotton with science and technology support—enhancing raw material supply, reducing ELS cotton imports, and strengthening domestic garment manufacturing.Press Information Bureau+1

Expanded Budget for Textiles Ministry

Allocation to the Ministry of Textiles rose by 19% to ^5,272 crore for FY 2025-26 from ^4,417 crore in FY 2024-25, underscoring enhanced policy backing.Invest IndiaPress Information Bureau

Duty-Free Modernization (Shuttle-less Looms)

Two new types of shuttle-less looms—Rapier and Air-jet—have been added to the list for full duty exemption (duty dropped from 7.5% to 0%), aiding quick modernization and technical textile expansion. Press Information Bureau

Custom Duty Adjustment (Knitted Fabrics)

Customs duty on select knitted fabrics has been raised to "20% or ^115 per kg whichever is higher," shielding domestic producers from cheap imports and enhancing market competitiveness.Press Information Bureau

PLI Scheme Effectiveness

The PLI scheme for manmade fibre and technical textiles has catalyzed ^7,343 crore in investments, generated

^4,648 crore in turnover, and produced ^538 crore in exports—demonstrating strong industrial traction.The Economic Times

PM MITRA Parks Expansion

Seven PM MITRA (Mega Integrated Textile Region and Apparel) parks continue to be developed across key states, equipped with plug-and-play infrastructure. The first park in Madhya Pradesh has received ^2,100 crore in approval, with ^4,445 crore allocated across all parks through 2027-28.Knitting ViewsFibre2FashionPress Information BureauTextile Outlook India

Global Trade Outreach and Investment Drives

The government is engaging Japanese textile firms to invest in PM MITRA parks, leveraging the India-Japan CEPA to improve access for exports and collaborations in MMF and technical textiles

OPPORTUNITIES AND GROWTH DRIVERS

• PLI Schemes Expansion - The Production Linked Incentive (PLI) schemes across sectors such as electronics, EVs, pharma, and textiles are expected to attract large-scale investments and create employment opportunities.

• Union Budget 2024-25 Capex Push - The governments record capital expenditure of ^11.1 lakh crore (3.4% of GDP) will accelerate infrastructure creation, spur private investment, and provide a strong multiplier effect for economic growth.

• Digital Public Infrastructure (DPI) - Indias digital stack (UPI, Aadhaar, ONDC, Account Aggregator) continues to drive financial inclusion, boost e-commerce, and create efficiency gains across industries.

• Green Energy Transition - Indias commitment to achieve 500 GW of non-fossil fuel capacity by 2030 and rapid expansion in solar, wind, and green hydrogen present significant opportunities in renewable energy and allied sectors.

• Make in India and Manufacturing Push - Policy support and ease-of-doing-business reforms are encouraging domestic manufacturing, positioning India as an alternative global supply chain hub.

• Demographic Dividend - With a young working population and rising urbanisation, India offers a vast labour force and growing consumer demand that can sustain long-term growth.

Threats

Global Economic Uncertainty - Slowing global growth and geopolitical tensions (Russia-Ukraine war, Middle East instability, US-China trade conflicts) could impact exports and investor sentiment.

Inflationary Pressures - Persistent food and fuel price volatility may keep inflation elevated, constraining RBIs monetary flexibility.

High Public Debt & Fiscal Constraints - Rising government borrowings and fiscal deficits may limit future policy support.

Cliate & Environmental Risks - Increasing frequency of extreme weather events (floods, droughts, heatwaves) threatens agriculture, infrastructure, and energy security.

Global Trade Protectionism - Tariff hikes, export restrictions, and trade disputes pose risks to Indias integration with global supply chains.

Skill Gap & Employment Challenges - Despite the demographic dividend, lack of adequate skilling and job creation could undermine long-term growth.

Financial Sector Vulnerabilities - Rising NPAs in some segments and exposure to global financial shocks could affect financial stability.

Company Overview

Osiajee Texfab Limited (the Company) incorporated in the year 1995 as a Public Limited Company engaged in the business of trading in Textile Products, the end users of which are various manufacturing houses. The Company is currently dealing in the Textile of Fabrics with the mission to make Osiajee Texfab a trusted name in the textiles segment by delivering best products and customer services. The company is currently involved in trading of fabrics. The company is expanding its reach through modern trade and e-commerce. The Company is currently dealing in trading of Textile products with the mission to make "OSIAJEE" a trusted name in the textiles segment by delivering best products and services to its customers.

The Company operates with its core values of Passion, Excellence, Creativity, Teamwork and Loyalty towards its employees, business partners, consumers and customers. The Company is committed to create future opportunities through growth by seeking long term profitability through win-win situation across all disciplines.

In September, 2021 the Company incorporated a Wholly Owned Subsidiary Company in the name of Osiajee Agro Farms Limited which commenced its business operations in Agro Farming and is generating profits since its first financial year. The wholly owned subsidiary Company endeavors to pursue the high growth opportunities in agriculture, horticulture & agro farming industry and is pursuing high growth agro farming in Eucalyptus and Poplar trees and cultivation of other crops in Hoshiarpur district of Punjab, the produce of which will be sold to nearby plywood industry as well as other wood-based manufacturers.

Financial Performance

On standalone basis, the Company earned total income of Rs. 15.52 Lakhs in the current year as against Rs. 7.09 Lakhs in the previous year and earned a Loss before tax of Rs. 2.06 Lakhs in the current year as against Rs.3.82 Lakhs in the previous year. The Company incurred net loss of Rs. 2.06 lakhs with EPS of (0.03) for the year ended March 31, 2025 as compared to net profit of Rs. 3.82 Lakhs with EPS 0.07 for the year ended March 31, 2024.

Segment wise or Product wise Performance

The Company is engaged in the business of trading in textile products and there is no separate reportable segment.

Risk and Concern

Risk is an integral and unavoidable component of all businesses. The broader trends in the economy are expected to have a direct impact on your Companys growth prospects as well. Inflation is expected to remain elevated for the foreseeable future, driven by war-induced commodity price increases and broadening price pressures.

In addition, the anticipated increase in interest rates by Central Banks in the coming year are also expected to lower growth and exert pressure on economies particularly those in emerging markets. In these circumstances, the ability to successfully navigate cost pressures would have a significant bearing on the overall performance of your Company. Diminishing purchasing power and demand due to the economic circumstances could result in fundamental shifts in consumer behaviours and adversely impact the market for textiles and apparel. Migration to value-for-money options could also lead to reduced growth and profitability for your Company.

Though risks cannot be completely eliminated, an effective risk management plan ensures that risks are reduced, avoided, retained or shared. The Companys risk management procedure helps identify and evaluate risks on an ongoing basis. The following are the Principal Risks considered by the Company:

• The companys business may be impacted by introduction of new policies or changes in existing policies Mitigation: The Companys management team keeps a close eye on policy regulations and formulates company plans appropriately.

• Emerging businesses, capital expenditure for capacity expansion, among other purposes.

Mitigation: Have well-defined processes and procedures in place for obtaining approvals for investments in new businesses and capacity expansions

• Commodity Price Risk.

Mitigation: Strong and long-term relationships with vendors to help ensure timely availability of raw materials.

Internal Control Systems

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Company has an Internal Audit Department with adequate experience and expertise in internal controls, operating system and procedures. The Internal Audit Department reviews the adequacy of internal control system in the Company, its compliance with operating systems and laid down policies and procedures. Based on the report of internal audit function, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. The Audit Committee reviews all financial statements to ensure adequacy of internal control systems. The Company has a well-defined organization structure, authority levels and internal rules and guidelines for conducting business transactions.

Human Resource Management and Industrial Relations

Human Capital is considered a key resource and an intrinsic contributor to a Companys success. At Osiajee Texfab Limited we believe our employees are the cornerstone of our growth and progress and Companys most valuable asset. We promote a healthy work culture along with employee friendly policies for the overall development of our employees. We ensure a safe, transparent, healthy, progressive and productive work environment conducive to enhancing employee productivity. Training and Development Programs are periodically conducted for employees. These programs are organized to create opportunity for employees to learn, grow and take their career ahead and forward. During the year under review, Industrial relations remained cordial and the Board records its appreciation for the contribution of all employees towards the growth of the company. As on March 31, 2025 the Company has 10 employees.

Key Financial Ratios:

S.No	Particulars	Financial Year 2024-25	Financial Year 202324
1	Debtors Turnover	0	0
2	Inventory Turnover	35.76	113.88
3	Interest Coverage Ratio	18.32	4.90
4	Current Ratio	6.27	1.69
5	Debt Equity Ratio	4.53	13.24
6	Operating Profit Margin in percentage	9.26%	2.15%
7	Net profit margin in Percentage	9.26%	2.15%
8	Details of any change in Return on Net worth as compared to the immediately previous Financial Year along with a detailed explanation thereof**	NO CHANGE	No change

Statutory Compliance:

The Company has in place adequate systems and processes to ensure that it is in compliance with all applicable laws. The Company Secretary is responsible for implementing the systems and processes for monitoring compliance with the applicable laws and for ensuring that the system and processes are operating effectively.

Cautionary Statement:

The Managements Discussion & Analysis Report which seeks to describe the Companys objectives, projections, estimates, expectations and predictions may be considered to be "forward-looking statements" as of the date of this report and are stated as required by applicable laws and regulations. Actual performance and results could differ materially from those expressed or implied and the Company owes no obligation to publicly update these forward looking statements to reflect subsequent events or circumstances. Market data and product analysis contained in this Report has been obtained from internal Company reports and industry publications, but their accuracy and completeness are not guaranteed and their reliability cannot be assured

	For and on behalf of the Board of Directors Of Osiajee Texfab Limited
Place: Hoshiarpur Date: 28.08.2025	Sd/- Reema Saroya Managing Director DIN:08292397	Sd/- Vibha Jain Non-Executive Director DIN:09191000