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.

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. The Indian textiles and apparel industry faces several challenges that constrain its export potential and long-term growth:

Skilled labour shortage: The industry requires a skilled workforce, but the availability of trained personnel remains limited.

Trade and currency volatility: Changes in trade policies and fluctuations in foreign exchange rates may affect industry performance.

Rising production costs: The absence of coherent, long-term strategic policies contributes to increasing production costs.

Sustainability pressures: Economic, environmental, and social challenges require coordinated action to support sustainable development across the sector.

Performance and Future Outlook

During the year under review, Revenue from operations decreased to Rs. 137.20 Lakhs from Rs 199.39 Lakhs. Loss before Tax for the current year stood at Rs. 12.51 Lakhs and the Company reported a Net Loss of Rs. 12.43 Lakhs as compared to net loss of Rs. 11.98 Lakhs reported last year.

Segment wise/Financial/Operational performance

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

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.

Financial Ratios

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.