Omnitex Industries (India) Ltd Management Discussions

Management discussion and analysis report containing the performance and outlook including the future prospects for the Company is presented herewith.

OVERVIEW

During the year the companys trading business increased to Rs. 318.56 Lakhs from Rs. 169.52 Lakhs in the previous year. Other income has gone up to Rs. 222.65 Lakhs from Rs. 165.64 Lakhs. The company expects that the trading business will face challenges in the coming years.

On the investment front:

During the year the Company surrendered 12,241 equity shares of Strata Geosystems (India) Private Limited to exercise buy-back option at a price of Rs. 2,100/- per share and received buyback proceeds of Rs. 257.06 lakhs. The buy back profit of Rs. 255.84 lakhs was shown as an Exceptional item of Income in the unaudited financial results for the quarter ended 30th June, 2024 but was reclassified under OCI in these annual audited financial results.

Further in respect of balance 7,32,857 equity shares held in Strata Geosystems (India) Private Limited post buy-back, the Company entered into Share Subscription and Purchase Agreement, (SSPA) on 20th December 2024 for sale at a consideration of Rs. 2,828.29 per equity share aggregating to Rs. 20,727.32 lakhs. The transfer of the above equity shares under the said SSPA was completed in February 2025 and the sale proceeds of Rs. 20,727.32 lakhs has been fully realized.

Post buyback and sale the company is not holding any investment in Strata Geosystems (India) Private Limited.

The company has invested surplus funds of Rs. 17,000 lakhs in June quarter of FY 2025-26 and acquired 1 Equity Share and 39,00,781 Compulsorily Convertible Preference Shares of Blue Energy Motors Limited @ Rs. 435.81 per share. Post acquisition the holding stands at 4.6153% of Blue Energy Motors Limited.

Between the realization of sale proceeds of Strata Geosystems (India) Private Limited shares and investment in Blue Energy Motors Limited, the surplus funds were temporarily invested in mutual funds and fixed deposits. RISKS AND CONCERNS:

• The Board of the Company has formed a risk management policy to frame, implement and monitor the risk management plan for the Company. The Board of Directors are responsible for reviewing the risk management plan and ensuring its effectiveness. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. In the opinion of Board intense competition, rising costs and changing government policies and regulations are the key risk factors of the company.

OPPORTUNITIES / STRENGTH

• Growing Domestic Demand and potential for Exports

• Availability of more products for trading THREATS

• Intense competition

• Rising costs

• Regulatory and environmental compliance challenges

• Cheap Imports

SEGMENT WISE OR PRODUCT-WISE PERFORMANCE:

The company is engaged in single segment. That is trading in fabrics and yarn. And therefore segment wise performance is not applicable

OUTLOOK:

The focus for the forthcoming financial year for the Company will be to improve the trading income. INTERNAL CONTROL AND SYSTEMS

The Company has adequate internal control procedures commensurate with its size and nature of business. These internal policies ensure efficient use and protection of assets and resources, compliance with policies, statutes and reliability as well as promptness of financial reports.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE Sales:

Total income from operations was Rs. 318.56 Lakhs as against last years figure of Rs. 169.52 Lakhs.

Profit / (Loss) before Interest, Depreciation, Taxes, Exceptional Items and Impairment Loss on Fixed Assets:

The Company has earned a profit of Rs. 207.67 Lakhs, as against last years profit of Rs. 153.25 Lakhs. Financial Charges:

Financial Charges stands at Rs. Nil as against Rs. Nil in the previous financial year.

Net Profit / (Loss) After Tax:

The Company has earned net profit tax of Rs. 124.71 Lakhs as against Rs. 351.56 Lakhs during the previous year.

Total Comprehensive income:

The Company has earned total comprehensive income of Rs. 5,200.83 Lakhs as against Rs. 12,149.92 Lakhs during the previous year.

HUMAN RESOURCES

There are no material developments on the Human Resource Front.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS ALONG WITH DETAILED

EXPLANATIONS THEREFOR

Details of significant changes in key financial ratios in 2024-25

Particulars	Numerator	Denominator	Current year	Previous year	Variance % (**)
Current ratio (in time)	Current assets	Current liabilities	241.07	159.43	51.21
Debt - Equity	Non-current and current borrowings	Total equity	NA	NA	NA
Debt service coverage	Profit after tax + interest + depreciation	Interest + repayment of long term debts	NA	NA	NA
Return on equity ** (In %)	Profit/(loss) after tax	Average total equity (*)	0.82	5.32	(84.48)
Inventory turnover	Cost of goods sold	Average inventory (*)	NA	NA	NA
Trade receivable turnover (in time)	Revenue from operations	Average trade receivables (*)	24.29	7.45	226.15
Trade payable turnover	Total purchases net	Average trade payables (*)	NA	NA	NA
Net capital turnover	Revenue from operations	Working capital (average current assets - average current liabilities) (*)	0.06	0.94	(93.46)
Particulars	Numerator	Denominator	Current year	Previous year	Variance % (**)
Net profit ratio **	Profit / (loss) after tax	Total income	23.04	104.89	(78.03)
Return on capital employed **	EBIT	Average equity + Average debt (*)	1.37	5.34	(74.30)
Return on investment **	Income generated from invested funds	Average invested funds (*)	2.38	38.80	(93.86)

(*) Average = (opening + closing)/2.

(**) Reasons for variation.

(i) The current ratio has improved due to increase in cash and cash equivalents during the year on disposal of shares of Strata Geosystems (India) Private Limited.

(ii) The Company has not borrowed any funds and debts was Rs. NIL in both the years

(iii) Return on Equity has decreased as there was no dividend income and there was no sale of investment property as was the case in the previous year. Profit on sale of shares of Strata Geosystems (India) Private Limited has been routed through OCI.

(iv) The Company did not have any inventory at the end of the financial year or previous year

(v) Trade receivable ratio with revenue from operations increased due to increase in the amount of sales while receivable at the end of the financial year is NIL.

(vi) Trade payable ratio is not applicable since there were no trade payables at the end of financial year or previous year.

(vii) Net profit ratio and return on capital employed decreased due to profit on sale of shares being shown in OCI.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis may be forward looking statements and have been issued as required by applicable Securities Laws and Regulations. There are several factors which would be beyond the control of Management and as such, may affect the actual results which could be different from that envisaged.