Sri Nachammai Cotton Mills Ltd Management Discussions

ANNEXURE - I

The management discussion and analysis given below discuss the key issues of the industry.

The textile industry is the largest employer of workforce after agriculture; it plays a crucial role in the Indian economy. Its importance to the Indian economy is recognised for its significant contribution to industrial production and export earnings.

The financial year 2024-25 was a challenging year for Indian spinners due to fluctuating cotton prices, lower yarn margin and diminishing demand. Dumping of imported fabrics and garments from other countries also affected the demand for yarn. The power cost also had an impact on the yarn margin.

The spinning industry is dependent on cotton which is an agricultural product and this single input will be about 60% of the selling price of yarn, hence, price fluctuations and availability of cotton will play major role in the performance of spinning mills always.

At present, the segmental reporting is not applicable to the company as it operates only in single reportable business i.e. "Textiles".

The cotton yarn spinning industry in India is poised for a recovery in the fiscal year 2026, following a challenging period in the last two years. Stable cotton availability and prices, improved domestic demand in readymade garments, home textiles segment and export rebound is expected to contribute to the industrys growth.

The Company has a proper and adequate internal control system to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition. All the transactions are authorized, recorded and reported correctly.

The changes above 25% in ratios are mainly due to decrease in sales and loss.

The Company has been conducting training & motivational programs for both the management staff and the workers. The purpose is to increase the competency levels in the organization. The Company recognizes the importance and contribution of its human resources for its growth and development and is committed to the development of its people.

Certain statements made in the Management Analysis and Report relating to companys outlook, expectations, etc. may constitute forward looking statements within the meaning of the applicable laws and regulations. Actual results may vary from outlook, expectations etc., whether express or implied. Several factors could make significant difference to the Companys operations which may include climate conditions, economic conditions affecting demand and supply, Government regulations, natural calamity, etc. over which the company does not have any control.