Gujarat Hy-Spin Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

Our company was incorporated in the year 2011 as "Gujarat Hy-spin Private Limited" and subsequently converted into public limited in the year 2017. In the year 2018 company came out with public offer by way of offer for sale and listed its securities on

SME platform of BSE. Our Company, "Gujarat Hy-spin Limited" is engaged in manufacturing and processing of yarn. Gujarat Hy-spin Limited is a leading player in the field of yarn manufacturing. Gujarat Hy-spin provides special types of threads in the garment industry. Our technical expertise, reliability, and flexibility of production helps us to have an upper hand in this field. We believe in manufacturing and delivering quality products and our manufacturing process is under supervision by qualified person. At Company, we desire to demonstrate its capability to provide various products conforming to needs of its customers. We aim to satisfy the needs of customers including product requirements, the regulatory authorities and accreditation bodies and to achieve customer satisfaction by maintaining the best standards at all level from procurement to dispatch.

2. OPPORTUNITIES AND THREATS

We believe our senior management team is able to leverage our market position and their collective experience and knowledge in the industry, to execute our business strategies and drive our future growth. In addition, we believe the strength and entrepreneurial vision of our Promoters and senior management has been instrumental in driving our growth and implementing our strategies. We believe our position as a yarn manufacturing Company represents a significant competitive advantage in attracting and retaining high-quality talent. Our Company has adequate production capacity to meet an increase in demand. We believe our business model, together with our quality control measures, and efficient management systems optimize our cost structure and ensure quality products. The Company has been sourcing major portion of raw material from its promoter group entity Gujarat ginning and oil Industries thus may enjoy favorable terms in both price as well as supplies. We believe that we are a quality focused company. We are committed to maintain quality for the satisfaction of our customer. We have established a quality control team which has the responsibility to ensure compliance with manufacturing practices.

3. FINANCIAL PERFORMANCE

It was an unprecedentedly challenging year. But our agile management of the business environment and focused approach to fulfilment needs helped us record strong growth. The key highlights of financial performance are as under:

Revenue from operations: Revenue from operations stood at 9255.63 Lakhs in FY 2025 against 9176.28 Lakhs in FY 2024. Other operating income is 240.75 Lakhs.

Profit / Loss before Tax: Profit before tax for the FY 2025 was 13.36 lakhs compared to profit of 14.88 lakhs in the previous FY 2024.

Net Profit / Loss: Profit after Tax (PAT) of in 9.72 Lakhs FY 2025 as compared to the Net profit was 16.81 Lakhs in FY 2024.

4. RISK & CONCERNS

The Companys well-established process of risk management includes identification of design gaps, analysis and assessment of various risks, formulation of risk mitigation strategies and implementation of the same to minimize the impact of such risks on the operations. The process ensures that new risks, which might arise, or the impact of existing risks which might have increased, are identified and a strategy is put in place for mitigating such risks.

Company embraces a risk management portfolio for forecasting and mitigating the impact of internal and external risk factors. The internal risks which are mainly associated with the operations of the Company and the external risks which are linked with the economic and market volatilities are stated below:

Internal Risks:

Working Capital Risk: Company caters to the textile segments, which largely depends on the economy. Therefore, any setback in the economy directly impinges on the demand emerging from these industrial segments. The risk of economic downturn could lead to fund scarcity and delayed realization of receivables which in turn would affect the working capital requirements of Company. Company gives priority to the customers who have sound financial locus standing. Company closely monitors the working capital requirements by constant follow up on receivables and maintaining lean and symmetric inventories

Operational Risk: It related to people, processes, systems and external factors have a potential risk on your Companys performance. To reduce such risk, your

Company has a risk-review policy in all areas of operations.

Technology Risk: Company is agile on the technology frontier by constantly reviewing new technology in terms of production and process to avoid obsolescence. The Company has a background of constantly upgrading the technology to maintain its position at par with international players and remain ahead of its peers in the home-turf.

External Risks:

Competition Risk: The risk involves entry barriers which are gradually being made more stringent by the customers to screen out several players. Company is addressing to the quality conscious customers to retain its market share.

Market Demand Risk: The Government policies have a direct bearing on the demand from the various market segments. Company has a broad base clientele, flexible manufacturing set-up, therefore, it can somewhat off-set the cyclical or depressed demand of affected segment with the other segments. From time-to-time, the Company makes changes in its product-mix to suit the order and demand pattern.

Customer Risk: To mitigate these risks, your Company maintains constant touch with its clientele to understand and deliver products and services aligned to its changing priorities. Your Company has built a reputation as a preferred supplier with most of its customers by creating a quality trust in a bid to protect itself from competition and entry of new players.

5. INTERNAL CONTROL SYSTEMS

The Companys internal control systems are commensurate with the nature of its business and the size and complexities of its operations. These systems are designed to ensure that all assets of the Company are safeguarded and protected against any loss and that all transactions are properly authorized, recorded and reported. The Company has an adequate system of internal control in place, which assures of:

Authorization, recording, analysing and reporting of transactions.

Recording and adequate safeguarding of assets.

Upkeep of accounting records and trustworthiness of financial information.

Audit Committee of the Board which monitors and reviews all risks and control issues and financial matters.

Computerized and integrated financial and accounting functions, information feedback system of process parameters and backtracking from finished products to raw material stage.

Routine evaluation of all financial operating and information technology system.

6. CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the

Companys objectives, projections, estimates, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.