Oswal Yarns Ltd Management Discussions

Industry Structure and Developments

The companys business predominantly comprises of only one segment i.e. manufacturing and trading of knitted cloth. It falls under the single business segment of Textiles. Indias Textiles & Apparel (T&A) industry is one of the oldest industries in the Indian economy. India is one of the largest textile producers and exporters in the world. The Indian textile manufacturing industry is significantly contributing to Indias GDP and employment. It is one of the largest employers in the country, generating jobs across the entire value chain, from cotton farming and spinning to weaving, dyeing, printing, and garment manufacturing. Indian Government has proactively introduced policies to support and bolster the textile sector. Notable among these are the Production-Linked Incentive (PLI) Scheme, Scheme for Integrated Textile Parks (SITP), and PM Mega Integrated Textile Regions and Apparel (PM MITRA). These policies focus on key areas such as technology adoption, infrastructure development, skill enhancement, and environmental sustainability.

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 Indian T&A industry is also facing certain other issues which are hindering its export potential such as industry requires skilled labour; there is shortage of skilled manpower. Further changes in trade policies and fluctuations in foreign exchange rates may impact the performance of the industry. Rising cost of production is due to lack of strategic policies are other challenges faced by the industry. Overall the textile industry faces a range of economic, environmental, and social challenges that require attention and action for sustainable development.

During the year under review, Revenue from operations saw a slight increase to Rs. 199.39 Lakhs from Rs 194.04 Lakhs. Loss before Tax for the current year stood at Rs. 13.93 Lakhs and the Company reported a Net Loss of Rs. 12.01 Lakhs as compared to net loss of Rs. 5.61 Lakhs reported last year.

After considering various options the Board decided to sell/ dispose off its land located at Link Road, Industrial Area-A, Ludhiana and the Company has already received the approval from the shareholders and from the competent authority for the Change of Land Use in relation to the said land. However, any effective steps shall be taken in this regard after exploring all the options available but not limited to the market scenario and compliance of the conditions of the approval.

The company operates in single segments i.e. Textiles. Kindly refer to the Directors Report for the detailed review of the performance.

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.

(Rs. In Thousand)

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.