Oswal Yarns Ltd Management Discussions.

Industry Structure and Developments

The world currently suffering from the Covid-19 pandemic which has adversely affected the world economy on the whole. The world is currently fighting a health pandemic as well as an economic pandemic. The outbreak of Covid-19 has posed one of the biggest unforeseen threat to the Global Economy. The company predominantly operates in one segment i.e. manufacturing and trading of knitted cloth. It falls under the single business segment of Textiles. Covid-19 pandemic has hit the textile sector very hard. Fall in consumer demand with the continuous rise in inputs has adversely affected the sector on the whole. Looking forward, this pandemic has posed unforeseen and unprecedented challenges.

Opportunities and Threats

Strategically located unit in the heart of the industrial town of Ludhiana is an opportunity for the company in these difficult times. Strong core competence fundamentals of promoters and easily accessible customer base are the other strengths of the Company.

Poor macro-economic conditions and uncertainty in the markets going ahead pose significant threat to the Company. The Company has been into losses for many years which makes it difficult for the Company to meet working capital fund requirements

Performance and Future Outlook

During the year under review, Revenue from operations increased to Rs. 314.58 Lakhs from Rs 288.66 Lakhs. Loss before Tax stood at Rs. 0.71 Lakhs and the Company has reported a Net Loss of Rs. 1.00 Lakhs as compared to loss of Rs. 1.29 Lakhs reported last year Keeping in view the current situation of the economy as well as financial position of the Company, the future outlook remains uncertain for the Company.

Internal Control System

Your company has adequate internal control system commensurate with the size and nature of business to ensure utilization and protection of assets, compliance with statues and proper recording of transactions. The company has engaged "Berry & Associates" as its external agency to conduct internal audit of affairs of the company. The scope of their work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes and assessing the internal control strengths in all areas. Internal Auditors findings are discussed and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis.

Cautionary Statement

Statements in the Management Discussion and Analysis Report describing the Companys expectations, estimates and projections may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied.