Vaxfab Enterprises Ltd Management Discussions

1. Industry Structure and Developments:

The Indian textile industry is one of the largest in the world, contributing significantly to the countrys export earnings and employment. In FY 2024-25, the industry witnessed moderate recovery amid global uncertainties, raw material price volatility, and changing trade dynamics.

Despite inflationary pressures and geopolitical tensions, the domestic textile sector showed resilience, supported by government initiatives such as the Production Linked Incentive (PLI) scheme, increased focus on technical textiles, and a boost in export infrastructure.

Growing demand for sustainable and organic textiles has also reshaped consumer preferences, prompting companies to innovate and invest in eco-friendly production technologies.

2. Opportunities and Threats:

• Opportunities:

• Rising global demand for sustainable and ethical fashion.

• Expansion of e-commerce and digital retail platforms.

• Government incentives and favourable policies under Atmanirbhar Bharat and PLI schemes.

• Potential in technical textiles, medical textiles, and smart fabrics.

• Threats:

• Price fluctuations of raw materials like cotton and synthetic fibers.

• Competition from low-cost producing countries.

• Labor availability and rising wage costs.

• Environmental regulations and compliance requirements.

The Company recognizes that above risks are an integral part of business and is committed to control & manages these risks in a proactive and efficient manner. The Company assesses various potential risk factors from time to time in the internal & external environment and in corporate risk mitigation in its strategy, business and operation plans using cost-effective available tools to minimize its impact on the overall businesses.

3. Segment-wise or product-wise performance:

The Company is operating in only one segment i.e. Textiles and Clothing business. Therefore there is no requirement of Segment wise reporting.

4. Future Outlook:

The outlook for FY 2025-26 remains cautiously optimistic. The company aims to expand its market share through:

• Product diversification and value addition.

• Investment in automation and digital transformation.

• Strengthening export presence, especially in North America and Europe.

• Focus on sustainability and ESG compliance to align with global standards.

5. Risks and Concerns:

• Exchange Rate Volatility: Impacts competitiveness in exports.

• Compliance Risks: Stricter environmental and labor norms across markets.

• Climate Impact: Variability in monsoon affects cotton availability.

• Logistics Disruption: Global supply chain remains vulnerable to geopolitical developments.

6. Internal control systems and their adequacy:

The company has a robust internal control framework to ensure operational efficiency, reliability of financial reporting, and compliance with laws. The systems are regularly reviewed and enhanced to address emerging risks and ensure transparency.

7. Discussion on financial performance with respect to operational performance:

The financial performance of the Company for the Financial Year 2024-25 is described inthe report of Board of Directors of the Company.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof are as under:

Sr. No.	Ratios	Percentage change in ratios	Reason for changes more than 25%
1	Current Ratio	(37.15%)	Due to increase in sales as com pared to previous year.
2	Debt Equity Ratio	8264.74%	Due to increase in debt as compared to previous year.
3	Return on Equity	(118.22%)	Due to Profit in Current Year as compared to loss in Previous Year.
4	Inventory Turnover Ratio	(49.95%)	Due to increase in sales as compared to previous year
5	Trade Receivables Turnover Ratio	102.85%	Due to increase in sales as compared to previous year
6	Trade Payables Turnover Ratio	84.99%	Due to increase in sales as compared to previous year
7	Net Capital Turnover Ratio	123.51%	Due to increase in sales as compared to previous year
8	Net Profit Ratio	(102.55%)	Due to Profit in Current Year as compared to loss in Previous Year.
9	Return on Capital Employed	(110.28%)	Due to Profit in Current Year as compared to loss in Previous Year
10	Return on Investment	600.96%	Due to higher Revaluation Loss in Current Year as compared to Previous Year.

8. Material developments in Human Resources / Industrial Relations front including number of people employed:

The company maintained cordial industrial relations throughout the year. Training and skill development initiatives were undertaken to upskill workers and adapt to technological changes. As of March 31, 2025, the company employed 3(three) people.

9. Caution Statement:

Statements made in the Management Discussion and Analysis describing the various parts may be forward looking statement within the meaning of applicable securities laws and regulations. The actual results may differ from those expectations depending upon the economic conditions, changes in Govt. Regulations and amendments in tax laws and other internal and external factors.

Date: September 05, 2025	For and on behalf of the Board of Directors
Place: Ahmedabad	Ravindra Ashokbhai Joshi
	Managing Director (DIN: 10112296)