Vivaa Tradecom Ltd Management Discussions

> INDIAN TEXTILE INDUSTRY OVERVIEW/ INDUSTRY STRUCTURE AND DEVELOPMENTS

Indias textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital-intensive sophisticated mills sector on the other end. The decentralised power looms/ hosiery and knitting sector forms the largest component in the textiles sector. The close linkage of textiles industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles makes it unique in comparison to other industries in the country. Indias textiles industry has a capacity to produce wide variety of products suitable for different market segments, both within India and across the world. The textiles sector has witnessed a spurt in investment during the last five years.

Exports have been a core feature of Indias textile sector. Exports of both man-made textile and readymade garments have seen a major boost. A major factor behind the robustness of Indias textile industry is its strong production base with a wide range of fibres and yarns. India is among the top producers of jute and silk, and beyond its natural fibres such as cotton, jute, silk and wool; and synthetic, its manmade fibres such as polyester, viscose, nylon and acrylic have also created a niche for themselves in the market.

> OPPORTUNITIES

Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the sector under the automatic route. The Company is at the growing stage and expanding its business operations. As part of our commitment to increasing production capacity, we intend to expand our product basket and export, grow our value added segment, realign our customer base and achieve operational excellence.

Despite the aforementioned growth initiatives, we acknowledge the existence of certain market challenges, including volatility in cotton prices and the availability of high-quality cotton crops. We also anticipate headwinds in downstream segments, such as home textiles, while demand from the apparels segment continues to recover. The domestic and exports textile markets may remain moderate for some more time. Furthermore, we anticipate that changes in trade policies and fluctuations in foreign exchange rates may impact the prices of imported materials, potentially affecting our competitive position in the global market.

To maintain a sustainable and resilient business, we have adopted several key principles. These principles include cash conversion, in-depth knowledge of the textile market, supply chain resilience, Value added processes, innovation, and a strong focus on customer satisfaction. These principles serve as critical enablers that set us apart from our competitors and contribute to our ability to sustainably grow and prosper in the future.

> REVIEW AND FUTURE OUTLOOK OF THE COMPANY

The Company is continuously trying to accomplish the desired results. Steps have been taken for cost diminution and manufacturing quality products by various installed machineries of the Company. Various aspects of working conditions of workers, health related issues, minimizing risk of accidents at work place etc. are being taken care of by the Company. The Company will achieve more turnovers by various marketing strategies, offering more quality products, etc. in coming years followed by increase in profit margin by way of various cost cutting techniques and optimum utilization of various resources of the Company.

> THREATS/ RISK, CONCERN AND INTERNAL CONTROL SYSTEM AND THEIR ADEQUECY

The Company has received a legacy of well-established framework of internal controls of the businesses and operations. The Company has adequate monitoring procedures and has appointed competent personnel to safeguard its assets, protect loss from unauthorized use or disposition ensuring reliably authorized, accurately recorded and transparently reported transactions. Establishment of highly efficient management information and reporting systems combined with robust corporate policies form the overall control mechanisms.

The Company conducts its business with integrity, high standards of ethical behavior and in compliance with all applicable laws and regulations that govern its business. To supplement the internal control mechanism, the Company appointed external independent internal audit agencies to carry out concurrent internal audit at all its locations for its business. The Audit Committee of the Board of Directors has started to review the internal control systems on a regular basis to improve their effectiveness besides verifying statutory compliances. The Audit Committee shall meet periodically to discuss findings of the internal auditors along with the remedial actions (i.e. Action Taken Report). The statutory audits are conducted by a well- qualified and experiences audit agencies to ensure that the companys practices are in line with global best practices. A compliance management tool had also been adopted to ensure timely compliance with legal, financial, environmental, labour, governance, safety and other relevant regulations.

Apart from the above, the Company believes that Risk Management and Internal Audit functions complement each other to form an elaborate risk management system that evaluates the efficacy of the framework relating to risk identification and mitigation. The Company strives to adopt a de-risking strategy in its operations while making growth investments. This involves setting up and monitoring risks on a regular basis. The Company shall continue to adopt Risk Management in a well- defined, integrated framework, which promotes awareness of risks and an understanding of the Companys risk tolerances. The management monitors the internal control system, designed to identify, assess, monitor and manage risks, associated with the Company. Each risk is provided with different number of control measures depending upon its potential impact and probability of occurrence. The risk management framework incorporates both financial and non-financial risks.

> HUMAN RESOURCES

In the Company, we are really proud of our "HUMAN RESOURCES". We believe that our employees make a key difference to our business success. Employees are one of our five key stakeholders and needless to mention that managing our human capital has been our key strength and pride. It is our firm belief that nurturing and strengthening the human resource capital is of utmost importance to run the organization effectively and smoothly. Therefore, the HR function takes pride in managing the human capital both with warmth and care as a hallmark of a caring organization. The Human Capital is managed in a structured manner with key focus areas being Talent Management, Organizational capability Development, Employee Engagement and harmonious Industrial Relations. Good human resource management is vital for the success of any business, therefore, the Company regularly reviews and revisits its various HR policies and practices to ensure that we comply with the values of the Company and can be benchmarked against the leaders in the industry. Our HR mission emphasizes on creating a value driven, high performance learning organization in an engaged and digitized environment so that we are one among the employer of choice.

> DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Companys financial performance with respect to operational performance is as under:

(Rs. in Lakhs)

Particulars	For the year ended on 31st March, 2025	For the year ended on 31st March, 2024
Revenue from Trading	28750.48	19,840.56
Other Income	0.81	6.59
Total Income	28751.29	19,847.15
Less: Operating and Administrative Expenses	28638.50	19,742.39
Profit/ (Loss) before Depreciation, Extraordinary/ Exceptional Items and Taxes	112.79	104.76
Less: Depreciation and Amortization	9.03	10.29
Less: Extraordinary/Exceptional Items	-	0
Profit/ (Loss) before Tax (PBT)	103.79	94.47
Less: Taxes (including deferred tax)	27.74	24.38
Profit/ (Loss) after Tax (PAT)	76.02	70.09
Earnings Per Equity Share (Basic and Diluted)	1.93	2.25

Note: Figures of previous year have been regrouped whenever necessary, to confirm to current years presentation.

During the year under review, the Company has earned Total Income of Rs. 28751.29/- Lakhs as compared to Rs. 19,847.15/- Lakhs in the previous year and incurred Expenses of Rs.28,638.50/- Lakhs as compared to Rs. 19,752.68/- Lakhs in the previous year.

The Company has earned Profit of Rs. 76.02/- Lakhs which is more than double to the profit of the previous year which was Rs. 70.09/- Lakhs. The Company has attained organic growth by virtue of it offering quality and range wide fabrics and garments, catering to international as well as domestic markets.

> KEY FINANCIAL RATIOS

The details of changes in the Key Financial Ratios for the Financial Year 2023-24 as compared to the immediately previous Financial Year are provided under the Notes to Accounts to the Standalone Financial Statements and hence, not repeated here for the sake of brevity. However, brief of the same is produced below:

Ratio	Current period	Previous Period	% variance 2024-25	Reason for variance
Current ratio	1.40	1.67	-16.5456	-
Debt-equity ratio	3.19	1.98	61.02	Due to Increase in Sundry Creditors during the year
Debt service coverage ratio	0.22	0.20	14.38	-
Return on equity ratio	0.05	0.06	(13.11)	Due to Increase in share capital during the year
Trade receivables turnover ratio	1.41	1.58	(10.73)	Reduce in receivables during the year
Trade payables turnover ratio	5.59	5.65	(1.12)	Due to reduce in creditors at year end
Net capital turnover ratio	11.41	9.72	17.37	-
Net profit ratio	0.26	0.35	(25.15)	Due to Increase in sales by 44.90 % in FY 24-25 (IN FY 23-24 48.04% ) but Net profit increase by only 8.46 % where IN FY 23-24 NP increase by 133.38% .
Interest service coverage ratio	14.51	32.49	(55.34)	Due to Increase in finance cost during the year as compared to last financial year
Return on capital employed	13.14	9.39	39.99	Due to increase in profit during the year as compared to last financial year

> CAUTIONARY STATEMENT

This Management Discussion and Analysis Statement of the Annual Report has been included in adherence to the spirit enunciated in the code of corporate governance approved by the Securities and Exchange Board of India. Statement in the Management Discussion and Analysis describing Companys objectives, projections, estimates, expectation may be forward- looking statements within the meaning of applicable securities laws and regulations. Actual result could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include economic conditions affecting demand/supply and price conditions in the Government regulations, tax laws, other rules & regulation applicable to the Company and other incidental factors. Further, the discussion following herein reflects the perceptions on major issues as on date and the opinion expressed here are subject to change without notice. The Company undertakes no obligations to publicly update or revise any of the opinions of forward looking statements expressed in this report, consequent to new information future events, or otherwise. Readers are hence cautioned not to place undue reliance on these statements and are advised to conduct their own investigation and analysis of the information contained or referred to this statement before taking any action with regard to specific objectives.

> SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company is having only one segment, details and performance of the same are provided hereinabove and in the respective heads of this Annual Report.

	By Order of the Board of Directors For, Vivaa Tradecom Limited
	sd/-
	Miteshbhai Jayantilal Adani
Date: 4th July, 2025	(Chairman & Managing Director) DIN:03279695
Place: Ahmedabad