Akshar Spintex Ltd Management Discussions

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2) (e)
of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 is presented in a separate section as an "Annexure IV" forming part of this Annual Report.

CORPORATE GOVERNANCE:

Pursuant to Regulation 34 of the SEBI Listing Regulations, Report on Corporate Governance along with the
certificate from a Practicing Company Secretary certifying compliance with conditions of Corporate Governance
is part to this Report. The Report on the Corporate Governance is annexed herewith as "Annexure -I".

AUDITORS & AUDITORS REPORT:

Statutory Auditor:

Pursuant to provisions of Section 139 of the Companies Act, 2013, M/s. H. B. Kalaria & Associates, Chartered
Accountants (FRN: 104571W), were appointed as a Statutory Auditors of the Company to hold office from
Conclusion of 8^th Annual General Meeting till the conclusion of 13^th Annual General Meeting to be held for
the Financial Year ended on 31^st March, 2026. The statutory auditors have confirmed that they are not
disqualified from continuing as auditors of the Company

Further, the Statutory Auditor of the Company have submitted Auditors Report on the accounts of the
Company for the accounting year ended 31^st March, 2025.

The Company has generally been regular in depositing undisputed statutory dues including Goods and
Services Tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs,

duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities apart from
a few delays in the payment of professional tax.

During the year under review, the Company has complied with the majority of its statutory obligations
within the prescribed timelines. However, there were a few isolated instances of delays in the remittance of
professional tax, which were not material in nature and have since been addressed. The management has
taken corrective measures to streamline internal processes and strengthen compliance mechanisms to avoid
recurrence of such delays in the future.

There were undisputed amounts payable in arrears as at the balance sheet date for a period of more than six
months from the date they became payable. The details of which are as follows:

Details of statutory dues which have not been deposited as at the balance sheet date on account
of disputes are given below:

During the year under review, the Company has defaulted in the repayment of loans and borrowings from
financial institutions and banks. The defaults pertain to both principal and interest obligations, which were not
serviced within the stipulated due dates as per the terms and conditions of the respective loan agreements.

The Company is actively engaging with its lenders and financial stakeholders to restructure or regularize the
overdue amounts. Management is taking necessary steps to improve cash flows and operational efficiency to
meet its financial obligations in a timely manner going forward.

Further details regarding the nature and extent of such defaults, including the amount and period of default,
are disclosed in the notes to the financial statements and relevant annexures to this Report, as per applicable
regulatory requirements., the details or which are as follows:

the Company has not been declared as a willful defaulter by any bank or financial institution or other lender
during the reporting period.

Secretarial Auditor;

D N Vora & Associates, Company Secretaries in Practice, was appointed as a Secretarial Auditors of the Company
for the Financial Year 2024-25 and have submitted their Report in Form No. MR-3 as required under Section 204
of the Companies Act, 2013 for the financial year ended 31^st March, 2025. The Report forms part of this report as
"Annexure V".

This Secretarial Auditors Report is self-explanatory except some remarks. The explanation is provided
hereunder;

?S The Company has appointed new company secretary which has been delayed by 99 days.

It was observed that Mr. Sohilkumar Dineshkumar Patel and Mr. Brijeshkumar Prahladbhai Patel were
appointed as Additional Directors of the Company with effect from 27th December, 2024. However, their
appointments have not been regularised by the shareholders at a General Meeting within the prescribed time
frame of three months as stipulated under Section 161(1) of the Companies Act, 2013. Accordingly, the
Company has not complied with the statutory requirement for regularisation of Additional Directors.

?S As per the outcome of the Board Meeting held on January 27,2025, the Board approved the appointments of
Mr. Rohit Naval (DIN: 10542718) as Additional Director in the capacity of Executive Director, and Mr. Keshav
Makhija (DIN: 10542719) as Additional Director in the category of Non-Executive Independent Director.
However, as on the date of this report, the requisite e-forms for their appointments have not been filed with
the Ministry of Corporate Affairs (MCA), resulting in non-compliance with the applicable provisions of the
Companies Act, 2013 and relevant Rules made thereunder.

The Company has not Filed Form DIR-12 with ROC for following:

1. Appointment of Additional Director of Mr. Rohit Naval & Mr. Keshav Makhija.

2. The Internal Auditor resigned on 12^th August, 2022 and no new Internal Auditor was appointed up to 31^st
March 2025;

Cost records and audit;

M/s. Mitesh Suvagiya & Co., Cost Accountant, have appointed as a Cost Auditor of the Company, by the Board
of Directors in their Meeting held on 30^th June, 2025 on the recommendation of the Audit Committee, to
conduct the Cost Audit of the records for the Financial Year 2025-26 on a remuneration as mentioned in the
Notice of Annual General Meeting for conducting the audit of the cost records maintained by the Company.

A Certificate from M/s. Mitesh Suvagiya & Co. Cost Accountants has been received to the effect that their
appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified
under Section 148 of the Companies act, 2013 of the Act and Rules framed thereunder. A resolution seeking
Members ratification for the remuneration payable to Cost Auditor forms part of the Notice of the Annual
General Meeting of the Company and same is recommended for your consideration and approval.

HUMAN RESOURCES

The Company treats its "Human Resources" as one of its most important assets.

Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. The
Company thrust is on the promotion of talent internally through job rotation and job enlargement.
COMPLIANCES OF SECRETARIAL STANDARDS

The Board of Directors confirms that the Company, has duly complied and is in compliance, with the applicable
Secretarial Standard/s, namely Secretarial Standard-1 (SS-1) on Meetings of the Board of Directors and
Secretarial Standard -2 (SS-2) on General Meetings, during the financial year 2024-25 ended 31 March 2025.

SUSPENSION OFTRADING

The equity shares of the Company have been listed and actively traded on Main Board of NSE and BSE. There
was no occasion wherein the equity shares of the Company have been suspended for trading during the FY
2024-25.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE IBC 2016

During the year under review no application was made further no any proceeding pending under the Insolvency
and Bankruptcy Code, 2016 (31 of 2016) against the company

RISK & MITIGATING STEPS:

A well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure,
potential impact and risk mitigation process is in place. The objective of the mechanism is to minimize the impact
of risks identified and taking advance actions to mitigate it. The mechanism works on the principles of probability
of occurrence and impact, if triggered. A detailed exercise is being carried out to identify, evaluate, monitor and
manage both business and non-business risk

The Board has adopted a risk management policy where various risks faced by the Company have been
identified and a framework for risk mitigation has been laid down. Even though not mandated, the Company
has constituted a Risk Management Committee to monitor, review and control risks. The risks and its mitigating

factors are discussed in the Board. The Risk Management Policy has been placed on the website of the Company
at;

http://aksharspintex.in/pdf/Corporate%20Governance/Risk%20Manaaement%20Policv.pdf
VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES:

As per the provisions of Section 177(9) and (10) of the Companies Act, 2013, Regulation 22 of the Listing
Regulations and Regulation 9A of Securities and Exchange Board of India (Prohibition of Insider Trading)
Regulations, 2015, the Company has established a vigil mechanism through which employees and business
associates may report unethical behavior, wrong doing, malpractices, fraud, violation of Companys code of
conduct, leak or suspected leak of unpublished price sensitive information without fear of reprisal. The Policy
provides that the Company investigates such reported matters in an impartial manner and takes appropriate
action to ensure that requisite standards of confidentiality, professional and ethical conduct are always upheld.

The Company has adopted a Whistle-Blower Policy for Directors and employees to report genuine concerns and
to provide for adequate safeguards against victimization of persons who may use such mechanism. The policy
on vigil mechanism of the company is also available on the website of the company at;
http://aksharspintex.in/pdf/Corporate%20Governance/Whistle%20Blower%20Policv.pdf

MATERIAL ORDERS OF JUDICIAL BODIES /REGULATORS:

There were no significant and material Orders passed by the Regulators or Courts or Tribunals impacting the
going concern status and Companys operations in future. However, some complaint had made in previous year
which was in the nature of Civil and Criminal in which the company is a party. Till the completion of the financial
year decision were pending in the matter.

BUSINESS RESPONSIBILITY REPORT:

During the year under Review, the Report on Business Responsibility is not applicable to the company.
ANNUAL RETURN

Pursuant to the provision of Section 134(3(a) and Section 92(3) of the Act and Rule 12 of the Companies
(Management and Administration) Rules, 2014, the Annual Return for F.Y. 2024-25 is uploaded on the website
of the Company at https://www.aksharspintex.in/annual-return.htmI

ACKNOWLEDGEMENT:

The Board of Directors acknowledges with gratitude for the co-operation and assistance received from National
Stock Exchange of India Limited (NSE), Bombay Stock Exchange (BSE) and Securities Exchange Board of India
(SEBI), Auditors, Advisors & Consultants, other Intermediary service provider/s and other Investor/s for their
continuous support for the working of the Company.

The Board of Directors also take this opportunity to extend its sincere thanks for co-operation and assistance
received by the Company from the Central- State - Local Government and other regulatory authorities, Bankers

and Members. The Directors also record their appreciation of the dedication of all the employees at all levels for
their support and commitment to ensure that the Company continues to grow.

MANAGEMENT DISCUSSION ANDANALYSIS REPORT

The management discussion and analysis report provide an over view of the financial and Business activities for
the fiscal year ended on 31st March 2025, gives an overall sight of the yarn industry, opportunities and threats in
the business and Companys strategy to deal with that. This report is designed to focus on current years activities,
resulting changes and other known facts in conjunction to the financial and strategic position of the Company.

GLOBAL ECONOMY

The year 2024 began with confidence that inflation was largely beaten and that major economies would likely
avoid recession. Those expectations were correct. However, as the year ended, it became increasingly clear that
inflation remained more persistent than anticipated. And while the United States experienced strong growth,
most other advanced economies did not. Moreover, as the year ended, many economies including India
experienced currency depreciation, which could potentially become disruptive especially for emerging market
economies.

As 2025 begins, there is some uncertainty due to the likely shift in policy following numerous elections around
the world. New policies could lead to new trajectories for inflation, borrowing costs, and currency values, as well
as trade flows, capital flows, and costs of production. Meanwhile, governments and central banks continue to
navigate a balance between a desire to suppress inflation and a goal to boost growth.

The global economy exhibited steady yet uneven growth across regions in 2024. A notable trend was the
slowdown in global manufacturing, especially in Europe and parts of Asia, due to supply chain disruptions and
weak external demand. In contrast, the services sector performed better, supporting growth in many economies.
Inflationary pressures eased in most economies. However, services inflation has remained persistent.

Despite global uncertainty, India has displayed steady economic growth. Indias real GDP growth of 6.4% in FY25
remains close to the decadal average.

The US economy continues to outperform its developed economy peers. Real gross domestic product growth for
2024 is expected to reach 2.8%. Despite elevated interest rates, consumer spending has grown strongly. A
relatively tight labor market, stronger inflation-adjusted wage growth, and a sharp increase in immigration have
supported aggregate consumer spending. Business investment has also held up relatively well, largely due to
industrial policies that caused a sharp increase in factory construction.

The Federal Reserves preferred measure of inflation, the personal consumption expenditures (PCE) price index,
had come down to 2.3% in October 2024 on a year-ago basis, from 2.8% in March 2024. As a result, the Fed was
able to cut the federal funds rate by 100 basis points between September and December 2024. Although
additional rate cuts are anticipated for 2025, the pace of those cuts is expected to be modest, due in part to the
persistence of services inflation. The mix of federal fiscal policy could also affect the pace of future rate cuts.

Aside from the uncertain policy environment, the US economic outlook remains bright. The economy is gradually
slowing toward its potential rate of growth. Unemployment remains low, and inflation is nearing 2%. As a result,
the Fed is expected to ease monetary policy at a modest pace, which should prevent a more protracted slowdown
in the near term.

Indias GDP growth slowed to 6.0% year over year in the first half of fiscal year 2024 to 2025, significantly below
the Reserve Bank of Indias (RBI) projection of 6.9%. Consequently, the central bank lowered its annual growth
forecast

> Services: Services grew 7.1% in the first half of the fiscal year, with a large contribution coming from
the financial, real estate, and professional services sectors. Services exports also surged 12.8% year
over year, reaching US$248 billion from April to November 2024, with November exports reaching
the highest levels ever. This shows the rising significance of services to growth and urban income.

> High-value manufacturing exports: With the support of government schemes, Indian
manufacturing is moving up the value chain. Electronics, engineering goods, and chemicals now
make up 31 % of exports, supported by contributions from micro, small, and medium enterprises and
rising credit availability.

> Fiscal deficit control: At 3.1% of GDP in the second quarter, the fiscal deficit remains manageable,
with government spending on capex expected to rise significantly in the second half of the year to
meet annual targets.

TEXTILES & INDIAN ECONOMY

The Indian Textile and Apparel Industry;

plays a crucial role in Indias economic growth,

boosting exports, creating jobs, empowering
women and showcasing Indias rich heritage and
culture.

The industry contributes nearly 2% to the countrys
GDP, 10% to industrial production, and 8.21 % to
Indias overall exports.

In terms of Global trade, India is the sixth largest exporter of textiles, with a 3.91% share in World Textile
exports.The domestic textile and apparel production is approximately US$175.7 billion. Exports accounted for US $
35.87 bn to the sector (2023-24)

The textile sector is highly labour intensive. Overall the sector provides direct employment to over 45 million
people, including a large number of women and the rural population. This makes it the second largest
employment generator in the country, next only to agriculture. The sector also has perfect alignment with the

Governments overall objectives of Make in India, Skill India, Womens Empowerment, Rural Youth Employment
and inclusive growth.

The textiles and apparel industry in India has strengths across the entire value chain from fiber, yarn, fabric to
apparel. The Indian textile and apparel industry is highly diversified with a wide range of segments ranging
from products of traditional handloom, handicrafts, wool, and silk products to the organized textile industry
in India. The organized textile industry in India is characterized by the use of capital-intensive technology for
the mass production of textile products and includes spinning, weaving, processing, and apparel manufacturing.

The global cotton yarn market size is projected to grow from $86.11 billion in 2024 to $117.79 billion by 2032, at
a CAGR of 4.0% during the forecast period.

The share of textile and apparel (T&A) including handicrafts in Indias total exports stands at a significant 8.21% in
2023-24. Our country has a share of 3.9% of the global trade in textiles and apparel. Major textile and apparel export
destinations for India are USA and EU and with around47% share in total textile and apparel exports. India is a
major textile and apparel exporting country and enjoys trade surplus. Bulk of import takes place for re- export or
for industry requirement of raw material.

COTTON YARN INDUSTRIES

Cotton yarn refers to a type of yarn that is made from cotton fibers.
It is commonly used in the textile industry to create a wide range of
clothing products. Cotton yarn is popular because it is soft,
breathable, and comfortable to wear. It can also be dyed in a wide
range of colors, making it versatile for various design options.

Cotton yarn is made using natural cotton harvested from the Cotton
plant. These yarns are produced using different types of spinning
processes. Based on the spinning process used to manufacture
cotton yarn, the yarn produced across the globe can be primarily

categorized into two types, carded and combed yarns. Different types of yarns have unique characteristics which
ultimately influence the type of application it will be employed in and the quality of finished textile goods. For
example, combed yarn is produced using high-quality cotton fiber by adding the combing process to the carded
yarn.

Combed yarn is a finer and better-quality product, making it useful for manufacturing fabrics with premium
texture and durability. The majority of cotton yarn produced across the globe is used to manufacture a aparels.
Currently, consumers and brands are promoting sustainable fashion like never before, and clothing made using
cotton yarn is an excellent choice for sustainability.

India has a 4% share of the global trade in textiles and apparel. The textiles and apparel industry contribute 2.3%
to the countrys GDP, 13% to industrial production and 12% to exports.

The textile industry has around 45 million of workers employed in the sector, including 3.5 million handloom
workers. Indias textile and apparel exports (including handicrafts) stood at US$ 44.4 billion in FY22, a 41%
increase YoY.

Total textile exports are expected to reach US$ 65 billion by FY26. The Indian textile and apparel industry is
expected to grow at 10% CAGR to US$ 190 billion by 2025-26. The Indian apparel market is expected to reach
US$ 135 billion by 2025

FUTURE OUTLOOK OF THE COTTON YARN
INDUSTRY

India is the worlds second-largest producer of textiles and garments.

The Indian textile industry is one of the oldest and most important sectors in the country contributing
significantly to its economic growth and employment. The industry has come a long way from its traditional roots,
embracing modern technologies and practices to stay competitive in the global market, focusing on key factors
such as the demand for cotton yarn, the buying and selling of yarn, and the effect of technology on the industry.

Indias textile industry is a strong economic driver, offering employment and notable revenue. It covers fibers, yarns,
fabrics, and apparel, making India a major global manufacturing hub. Fueled by great resources, skilled labor, and
supportive policies, the sector has seen great growth amid growing local and global demands.

Cotton is the most widely used fiber in India, accounting for a large portion of the textile industrys raw material
requirements. The country is known for its high-quality cotton production, which has made it a preferred sourcing
destination for many global textile players.

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 fundamental strength of the textile industry in
India is its strong production base of a wide range of yarns from natural fibres like cotton, jute, silk and wool, to
synthetic/man-made fibres like polyester, viscose, nylon and acrylic.

The Indian textile industry has traditionally been dominated by small and medium enterprises (SMEs) and unclean
players. However, in recent years, there has been a change towards joining, with larger corporations investing in
modern manufacturing facilities and adopting advanced technologies.

One of the key factors driving this transformation is the growing adoption of technology in the industry.
Automation, artificial intelligence, and data analytics are revolutionizing textile manufacturing, leading to increased
efficiency, productivity, and quality. These technological advancements also enable manufacturers to offer
customized and personalized products, catering to the evolving demands of consumers.

Indias cotton spinning industry is forecast to grow:

• by 12-14 % in financial year 2026 (FY26),

• Cotton yarn exports typically account for approximately 25-35 % of Indias cotton yarn
production, while the remaining is accounted for by the domestic market.

India is one of the largest producers of cotton and jute in the world. India is also the 2nd largest
producer of silk in the world and 95% of the worlds hand-woven fabric comes from India. The Indian
technical textiles segment is estimated at $16 bn, approximately 6% of the global market.

The textiles and apparel industry in India is the 2nd largest employer in the country providing direct
employment to 45 million people and 100 million people in allied industries.

India is the largest producer of cotton globally, accounts
for 23% of total global cotton production. It is a crop
that holds significant importance for the Indian
economy and the livelihood of Indian cotton farmers.
Cotton grows over 13.06 million hectares in India
compared to 33.1 million hectares globally. The Indian
cotton industry provides livelihood to about 60 million
people in the country.

Apart from being the provider of a basic necessity of life

i.e. clothing which is next only to food, cotton is also one of the largest contributor to Indias net foreign exchange
by way of exports in the form of raw cotton, intermediate products such as yarn and fabrics to ultimate finished
products in the form of garments, made ups and knitwear. Due to its economic importance in India, it is also
termed as "White-Gold

Majority of the cotton production comes from ten major cotton growing states, which are grouped into three
diverse agro-ecological zones, as under

• Northern Zone: Punjab, Haryana and Rajasthan

• Central Zone: Gujarat, Maharashtra and Madhya Pradesh

• Southern Zone: Telangana, Andhra Pradesh,

Karnataka and Tamil Nadu

As per Cotton Association of India (CAI), all India total cotton pressing numbers for the 2024-25 season have been
estimated at 302.25 lakh bales of 170 kgs. each (equivalent to 317.18 lakh running bales of 162 kgs. each).

The CAI also drew a cotton balance sheet as on 30th September 2025. The State-wise breakup of the cotton
pressing numbers and balance sheet for the season with the corresponding data for the previous crop year are
enclosed. The Committee however felt that there could be a variation of

+/- 5% in the cotton pressings and balance sheet numbers on account of unpredictable monsoon pattern and
other factors influencing the crop.

As per CAI data,

> the highest cotton yield in India during the last five years was 2.67 bales per hectare in 2019-20
season, the lowest cotton yield during the last five years was 2.42 bales bales per hectare in 2021-
22 season and

> the average yield during the last five years was
2.55 bales per hectare.

Considering this and the showing of 112.90 lakh hectare reported by the Ministry of Agriculture in its report dated
27th September 2024, the highest cotton production in India during 2024-25 season is about 301 lakh bales of
170 kgs. each (equivalent to 315.86 lakh running bales of 162 kgs. each), the lowest cotton production during
2024-25 season is about 273 lakh bales of 170 kgs. each (equivalent to 286.48 lakh running bales of 162 kgs, each)
while the average cotton production in India during the ongoing crop year 2024-25 is about 288 lakh bales of
170 kgs. each (equivalent to 302.22 lakh running bales of 162 kgs. each.

The total cotton supply till end of the cotton season 2024-25 (i.e. upto 30th September 2025) is estimated at
357.44 lakh bales of 170 kgs. each (equivalent to 375.09 lakh running bales of 162 kgs. each) as against the last
years total cotton supply of 371.69 lakh bales of 170 kgs. each (equivalent to 390.05 lakh running bales of 162
kgs. each).

CONSUMPTION

CAI has maintained cotton consumption for 2024-25 season at 313 lakh bales of 170 kgs. each (equivalent to
328.46 lakh runninq bales of 162 kqs. each).

GOVERNMENT GRANTS AND POLICIES:

Government policies play an important role in shaping the
future of the textile industry in India. The government has
recognized the potential of the industry and has implemented
various policies to promote its growth and competitiveness in
the global market. Also, the government has announced
incentives and tax breaks to promote exports and attract

foreign investment in the textile sector. These policies aim to boost Indias exports and position it as a global
textile hub.

Pivotal government policies and initiatives are steering the future of Indias textile industry. Key programs like
"Make in India" are fostering an ecosystem of innovation and investment. Additionally, the textile policy and
the production-linked incentive scheme aim to boost competitiveness and attract investments. At the same time,
the Technical Textiles Mission seeks to promote advanced textile applications in various sectors.

The governments plans for 75 textile hubs, skill development programs, and encouragement of FDI and JVs
further contribute to the industrys growth, supporting innovation, productivity, and global competitiveness. The
government has been implementing various policy initiatives and schemes to encourage cotton spinning millers
in the country, including the announcement of key reforms under a Special Package that includes additional

incentives under the Amended Technology Upgradation Fund Scheme (ATUFS), relaxation of Section 80JJAA of
the Income Tax Act, and the introduction of fixed- term employment for the apparel sector. Under the Market
Access Initiative (MAI) Scheme, the government offers rebates on state and central taxes and levies that are
integrated into production, as well as aid to exporters. Schemes like SAMARTH (Scheme for Capacity Building in
the Textile Sector) aim to address the shortage of skilled workers in the textile sector with a target of training 10
lakh people. The Cott-Ally mobile app was created to help farmers by providing information on minimum
support prices (MSP), locating nearby procurement centers, tracking payments, sharing best farming practices.

BHARAT TEX:

BHARAT TEX2025, a global textile mega event organized by a consortium of 11 Textile Export Promotion Councils and
supported by the Ministry of Textiles was held from February 14-17, 2025 in New Delhi. Bharat Tex 2025 event was
having 5000+ Exhibitors, 12000+ Textile Products, 6000+ Overseas Buyer, 1,20,000+ Trade Visitors and 70+ Knowledge
Sessions in a single roof having area of2,20,000 Sq. Meters with a focus on sustainability and resilient supply chains, it
promises to be a tapestry of tradition and technology attracting the best and the brightest from the textile world. It has
dedicated pavilions on Sustainability and Recycling, thematic discussions on resilient global supply chains and
digitization, interactive fabric testing zones, product demonstrations and master- classes by crafts persons and events
involving global brands and international designers. Bharat Tex2025 was a unique experience for knowledge, business
and networking.

PLI Scheme:

The Government has approved the Production Linked Incentive (PLI) SchemeforTextiles with an approved outlay
of Rs 10,683 crore over a five year period to promote production of MMF Apparel, MMF Fabrics and products of
Technical Textiles in the country to enableTextile sector to achieve size and scale and to become competitive The
Scheme has two parts: Part-1 envisages a minimum investment of ? 300 crore & minimum turnover of

Rs 600 crore per company and Part-2 envisages a minimum investment of ? 100 crore & minimum turnover of ?
200 crore per company.

Remission of Duties or Taxes on Export Product
(RoDTEP):

The government of India introduced a new scheme, named RoDTEP, in September 2019 and released a budget
allocated of ? 500 billion, in a move to replace MEIS and RoSL (only refunds state taxes) The new scheme is in
terms with the conditions of the WTO, where incentives cannot be provided, but the taxes incurred during the
process can be refunded. Hence, the government plans to refund all state (RoSL) and Central government taxes
incurred by the export players during the manufacturing process of RMG. According to the government, this new
scheme would "adequately compensate" for the current 6% (4% MEIS and 2% RMG) benefits being availed of by
the RMG exporters and help them stay competitive enough in the international trade market.

PM Mitra:

The Government has launched PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks Scheme to develop
world class infrastructure including plug and play facility with an outlay ?

28. PM MITRA Parks Scheme are inspired by the 5 Fvision of Hon ble Prime Minister - Farm to Fibre to Factory to Fashion
to Foreign. Nearly ? 70,000 crore investment and 20 lakhs employment generation is envisaged. Parks will offer an
opportunity to create an integrated textiles value chain right from spinning, weaving, processing/dyeing and printing
to garment manufacturing at a single location. World-class industrial infrastructure would attract cutting edge
technology and boost FDI and local investment in the sector. Centre and States to form SPVs for setting up PM MITRA
Parks. These parks will be developed in PPP mode.

SAMARTH:

The Government with a view to enhance the skills of the workforce in the textile sector has formulated Samarth
Scheme under a broad skilling policy framework with the objective of providing opportunity for sustainable
livelihood. The implementation period of the scheme is upto March 2024.

The scheme aims to provide demand driven and placement oriented National Skill Qualification Framework
(NSQF) compliant skilling programmes to incentivize and supplement the efforts of the industry in creating jobs
in the organised textile sector and related sectors, covering the entire value chain of textiles excluding spinning &
weaving and in addition it also provides skilling and skill- upgradation in the traditional textile sectors.

Kasturi Cotton Bharat:

Kasturi Cotton Bharat programme of Ministry of Textiles is a first of its kind branding, traceability and
certification exercise carried out jointly by the Government of India, T rade Bodies and Industry to promote Indian
Cotton. Stakeholders across the supply chain including farmers, Ginning Units, Spinning Mills, Processing Houses,
Weaving Units, Garmenting Units, Home Textile manufacturers and even Retailers and Brands will be involved
in a collaborative effort to promote and enhance the value of Indian Cotton across the domestic and overseas
markets. To encourage the Trade and Industry to work on the principle of self- regulation by owning complete
responsibility of Traceability, Certification and Branding of Kasturi Cotton Bharat, MoU has been signed between
CCI on behalf of Govt, of India, Ministry of Textiles and TEXPROCIL.

Other Grants & Incentives:

Scaling-up organic cotton industry:

• Cott-Ally mobile app has been developed for farmers to increase awareness about MSP
rates, nearest procurement centers, payment tracking, best farm practices etc.

• the Tamil Nadu government included a Sustainable Cotton Cultivation Mission in its
agriculture budget by allocating US$ 1.86 million (? 15.32 crore) to enhance the yield of
organic cotton.

Innovations to create sustainable textiles:

• Many Indian textile players are now opting for sustainable production. BRFL Textiles Private
Limited (BTPL), Indias largest fabric processing facility, has introducing a new sulphur dyeing
process involving continuous dyeing without requiring water. BTPL is the first company in the
textile sectorto implement this new process of dyeing, making it the pioneer of this innovative
sustainable process.

• Amended Technology Upgradation Fund Scheme(ATUFS)

• The Sustainable Textiles for Sustainable Development (SusTex) project by the United Nations
Climate Change entity enhances the employment and working circumstances of textile
artisans while promoting the sustainable production and use of environmentally friendly
textiles.

GLOBAL OUTLOOK

Cotton Yarn Market Size 2025 And Growth Rate

The cotton yam market size has grown strongly in recent years. It has grown from $73.46 billion in 2024 to $78.52
billion in 2025 at a compound annual growth rate (CAGR) of 6.The growth in the historic period can be attributed
to textile industry growth, natural fiber preference, global cotton production, cotton yarn innovation, affordability and
accessibility Cotton Yam Market Size 2025 And, Growth Rate:

The cotton yarn market size is expected to see strong growth in the next few years. It will grow to $103.16 billion in 2029
at a compound annual growth rate (CAGR) of 7.1 %. The growth in the forecast period can be attributed to sustainable
and organic trend, E-Commerce growth, regulatory emphasis on sustainable practices, demand in emerging markets,
circular economy initiatives. Major trends in the forecast period include technology integration in manufacturing,
sustainable and organic cotton, technological innovations in spinning processes, digitalization in supply chain
management, fluctuations in cotton prices and global trade dynamics.

India aims to achieve a prominent global position in manufacturing and exports of different types of textiles
including jute, silk, cotton and wool. India has the potential to increase its textile exports in the next five years.
Exports of Cotton yarns are a significant component of Indias export basket, as it plays a vital role in boosting
the domestic economy.

Cotton Yarn Market Driver: Growing Textile Industry Demand Propels Cotton Yarn Market Expansion:

The increasing demand from the textile industry is expected to propel the growth of the cotton yarn market
going forward. Textile refers to any material that is made from fibers or yarn that are spun, woven, knitted, or
otherwise formed into a fabric or cloth Cotton yarn is a popular and widely used material in the textile industry.
It is made by spinning together the individual fibers of cotton into a continuous thread or yarn. This yarn can then
be used to create a wide range of different textile products, such as clothing, bedding, and home decor. Cotton
yarn is popular among textile manufacturers because of its durability, breathability, and softness, so these factors
boost the cotton yarn market. For instance, In May 2023, according to the National Council of Textile
Organizations (NCTO) is a US-based trade association that representing textile industry, in 2022, the estimated
value of U.S. shipments in the man-made fiber, textile, and apparel sector reached $65.8 billion, showing an
increase from the $64.04 billion recorded in 2021. Notably, U.S. exports in textiles and apparel to the Western
Hemisphere experienced a significant rise of 14.9%, reaching a total of $18 billion in 2022. Therefore, the
increasing demand from the textile industry is driving the growth of the cotton yarn market.

Global Cotton Yarn Market Trend: Innovations In The Cotton Yarn Production:

Major companies operating in the cotton yarn market are focusing on developing innovative yarn types, such as
compact spun yarns and blended yarns, to enhance fabric quality and meet growing industry demands. Compact
spun yarns enhance fabric quality by minimizing imperfections, resulting in superior strength, smoothness, and
durability. In light of this, your company has also expanded with the addition of 41,472 spindles of Compact
Cotton Yarn, commissioned on 31 st January 2024, to deliver better quality to the world.

The Blended yarns combine natural fibers such as cotton with synthetic materials, providing improved sheen,
strength, and a softer feel. For instance, in June 2024, Gimatex Industries Pvt. Ltd., an India-based textile
manufacturer, launched two innovative types of yarns, Siro Compact Yarns and Chief Value Cotton (CVC) Yarns.
These yarns enhance fabric quality and meet industry demands by utilizing compact spinning technology to
reduce imperfections, resulting in superior strength, smoothness, and durability. The CVC Yarns combine a
cotton-like touch with polyester for improved sheen and strength.

Regional Outlook for The Global Cotton Yarn Market:

North America was the largest region in the cotton yarn market in 2024. The regions covered in the cotton yarn
market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the cotton yarn market report are Australia, Brazil, China, France, Germany, India,
Bangladesh (Cotton Yarn Importer), Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Bangladesh Crisis:

Textile and garment industry of Bangladesh is a vital pillar of its economy that accounts for over 80% of the
countrys total export earnings and contributes approximately 11% to the GDP. The industry employs millions of
people.

The sector faced a severe crisis due to a volatile mix of political unrest marked by violent protests, and catastrophic
floods in August. The situation threatened to unravel the years of growth and global presence of the sector. The
unprecedented anti-government protests led to resigning and fleeing of reigning Prime Minister from the
country. The political unrest disrupted factory operations as they were forced to close during the peak season
of Christmas shipments and the booking of next seasons orders. The Bangladesh Garment Manufacturers and
Exporters Association (BGMEA) estimated a shortfall of 6,400 crore ($534 million) due to shutdowns and
communication breakdowns disrupting both export activities and production, resulting in an expected shortfall
of nearly $45 billion in export target for 2024.

India is also a major cotton yarn exporter to Bangladesh, and your company has also exported to Bangladesh
during the year. However, there has been no impact on the companys payments, and no significant effect has
been observed on its operations, as all exports to Bangladesh are made on a 100% Letter of Credit (LC) basis,
ensuring full security in the payment terms.

Today, Indian yarn is widely accepted in international markets as the exporters here regularly meet the needs of
importers with unmatched efficiency and economy in countries like USA, Italy, Spain, Japan, China, South Korea,
Taiwan, Bangladesh, Vietnam etc.

> The Indian cotton textile industry has been facing increasing
competition in world markets. This is largely due to high cost of
production and consequently high prices of cotton. It is paradoxical
in a country where wages are low and cotton is internally available.

> Availability of quality cotton in required volume can be made
achievable through framing Government Policies for increasing the
productivity of cotton on par with international producers.

Risk & Concerns

The Companys processes for risk identification, assessment, mitigation, and reporting are supported by an
effective framework for risk management. Indian Textile Industry continues to face stiff competition from China,
Bangladesh, Taiwan and other emerging economies. The relative competitiveness of Industry is dependent upon
the raw cotton prices, exchange rates and prevalent interest rates regime. The primary raw material for the
manufacturing of yarn is cotton which is an agriculture produce. Its supply and quality are subject to forces of
nature i.e. Monsoon. Any increase in the prices of raw cotton will make the things difficult for the Textile Industry
resulting weak demand and thin margins. Thus availability of raw cotton at the reasonable prices is crucial for the
spinning industry. Any significant change in the raw cotton prices can affect the performance of the Industry.

There are certain key risks associated with our Company. Such risks are stated in the table below along with our
mitigation strategies for curbing the same:

Risk	Impact	Mitigation
Finance risk due to fluctuation in Raw Material Prices	Fluctuation in cotton prices can adversely impact our Company	Our purchasing policy allows us to enjoy control over the purchase price. We constantly track cotton prices and store the raw material as and when price decreases. This practice helps us mitigate the risk of price.
Business & Competition risk	An increase in the competition from textile industry can severely hamper our Companys market share	The Company is a prominent player in this segment. The Company has always focused on quality products with strong brand equity. Its ability to understand the market demand and fulfil it accordingly helps them retain clients and market position
Technology Risk	It is possible that the business continuity and disaster recovery plans wont work when needed There is no Data Leakage Prevention (DLP) mechanism in place to track any organizational data leakage	> Short Term SAP drill conducted once every 6 months > BCP to be formalized > USBs blocked across the organization > MS Intune installed > Firewall for social media blocking
Operational Risk	The completion of projects may be delayed by the need for approvals and procedural challenges brought on by excessive delays from government departments	> Pre-construction trackers in place > Review conducted every 15 days of local regulation > Best in class liaison consultants
— . -
Capacity	Inadequate capacity may lead to loss of opportunity	Short Term > Capacity expansion > Upgradation and expansion Long Term > Continuously looking for opportunities
Raw Material Securitization	Inadequacy or absence of raw material has the potential to impact operations	> Increasing green coverage and planting trees
Cost of Production	High cost of production can reduce profit margins	> Reduce cost of Raw Materials and Packaging
Higher Prices and Shortage of Basic Raw Material	Shortage of Cotton/ Higher Cotton Prices	To mitigate the price risk, the following actions are initiated: > Develop a dedicated strategy for components that are subject to volatility > Use financial and operational hedging > Monitor pricing trends > Manage inventory to soften impact of price changes e.g. Stockpiling Continuous engagement with cotton materials suppliers
Competition Risk	An increase in the competition from textile industry can severely hamper our Companys market share.	> Regular customer satisfaction survey and engagement mechanism to sustain strong relationship with customers > Continue to undertake operational savings initiatives to remain cost efficient > Gather intelligence and assess risk > Use industry research and advisory firms to scan for competitive risk > Periodic monitoring of all actions of competitors Improve competitive analysis
Availability of skilled personnel	Our success depends upon our ability to attract and retain skilled personnel. Any kind of failure in this area can adversely affect our business and operations	We conduct induction programmes to nurture our talent in a structured manner. We also offer various incentives and growth opportunities to our people. This helps retain the talented and skilled workforce

COMPANY PERFORMANCE AND BUSINESS OUTLOOK

The Companys focus on strengthening its infrastructure to produce diverse products, including various high-
quality value-added yarn and collaborating with customers to manufacturer innovative products helped it
maintain an optimum level of capacity- Sales volume of value-added yarn such as Elitwist, Gassing, High twist,
Melange, Core Yarn and Mercerized Yarn sales decreased by 22.6%, from 5,563.23 tonnes (2024) to 4,307.96
tonnes (2025). This decline may indicate softening demand for value-added products or a strategic shift in
product mix due to market or capacity constraints.

During the Financial Year 2024-25, the company recorded a revenue from operations of ?11,676.91 lakhs,
marking a significant decline of approximately 33% compared to ?17,495.51 lakhs in the previous financial year.
This substantial decrease in revenue indicates operational and market challenges during the year. One of the key
contributing factors is the continued volatility in cotton prices. Despite improved arrivals in the latter part of the
cotton season, prices have remained elevated, primarily driven by strong domestic demand. However, higher
cotton and yarn prices alone do not fully explain the revenue decline, it is likely that a reduction in production
levels also played a significant role. This could be due to a combination of factors such as high input costs, supply
chain disruptions, operational constraints etc. the inability to produce or procure adequate quantities of cotton
at viable rates may have limited the companys ability to meet demand, thereby impacting sales volume.

Looking forward, the outlook for the spinning industry remains uncertain in the short term, primarily due to
continued volatility in cotton prices, fluctuation in demand from export markets, and global economic pressures.
However, the Company sees opportunities for recovery as domestic demand for cotton yarn remains steady and
is expected to grow with improvements in downstream textile segments. The Company aims to enhance its
procurement strategies, streamline production planning, and explore value-added yarn products to reduce
dependence on commodity-grade spinning.

Additionally, strategic investments in modernizing machinery, improving energy efficiency, and optimizing labor
productivity are being evaluated to strengthen the Companys cost competitiveness. The management remains
cautiously optimistic and believes that with a stable raw material supply chain and prudent operational planning,
the Company is well-positioned to navigate current market uncertainties and improve performance over the
medium term.

OUR PRODUCT RANGE:

• 100% Carded Cotton Yarn (16s to 44s Ne)

• 100% Semi Combed Cotton Yarn (16s to 44s Ne)

• 100% Combed Cotton Yarn (16s to 44s Ne)

• SlubYarn

• Core Spun Yarn

• TFO Yarn

• Eli Twist Yarn

• Fancy Yarn

• Melange Yarn

• Blended Yarn

• BCI Certified Yarn

• Organic Yarn

STRENGTHS. WEAKNESS. OPPORTUNITIES AND THREATS:

The textile industry is undergoing rapid transformation driven by technological innovation, shifting global
trade dynamics, and changing consumer preferences. As the sector continues to grow, modern enterprises
are gaining multiple advantages from digital integration, automation, and sustainability-focused processes.
These developments contribute to ongoing economic shifts, reshaping how textile businesses operate and
compete.

To remain competitive in this evolving environment, it is essential for textile organizations to understand and
adapt to current market trends. Strategic planning based on a deep understanding of market movements

provides companies with an early-mover advantage. One of the most effective tools for this purpose is a
SWOT analysis, which offers valuable insights into strengths, weaknesses, opportunities, and threats—
helping businesses develop focused, data-driven strategies for sustained growth.

Traditionally, the textile sector has been a cornerstone of industrial development, contributing
approximately 14% to the total output of the manufacturing sector. It addresses one of the most basic human
needs—clothing—and continues to evolve to meet growing and diversifying demands. Today, the industry
is not only self-sustaining but also a global player, attracting foreign investment and expanding export
markets.

The recent surge in innovation and global interest has accelerated the industrys growth. From eco-friendly
fabrics to smart textiles and supply chain digitization, the textile sector is now at the intersection of fashion,
technology, and sustainability. These changes position the industry as a vital contributor to economic
development, quality of life, and employment—both locally and globally.

In this rapidly shifting landscape, organizations that leverage strategic tools like SWOT analysis, embrace
innovation, and remain agile in their operations are best positioned to lead and thrive in the future of textiles.

The textile industry today enjoys several strengths that make it a key player in the global manufacturing
landscape. It contributes approximately 14% to industrial production, backed by a well-integrated and self-
sufficient supply chain that includes spinning, weaving, dyeing, and finishing. The industry benefits from a
large and growing domestic market, increasing global demand, and a skilled labor force with deep roots in
craftsmanship and innovation. These strengths help maintain its resilience and capacity for expansion.

However, the industry also faces notable weaknesses. Many regions still rely on outdated production
methods, which hampers efficiency and scalability. Environmental concerns—such as water consumption,
chemical pollution, and textile waste—pose challenges to sustainability. Additionally, fragmented supply
chains, uneven quality standards, and limited investment in research and development create operational
inefficiencies. The sector is also vulnerable to fluctuations in raw material prices, which can disrupt
production costs and profitability.

Looking ahead, there are significant opportunities for growth and innovation. The global push toward
sustainable fashion and eco-friendly fabrics opens new markets, while advancements in smart textiles and
wearable technology present cutting-edge product possibilities. Government incentives, international trade
agreements, and the digitization of supply chains through Industry 4.0 practices can enhance
competitiveness. Furthermore, emerging markets in Africa and Latin America offer untapped potential for
exports and expansion.

At the same time, the industry must navigate several threats. These include fierce competition from low-cost
manufacturing countries and the pressure to keep up with fast-changing consumer trends and expectations.
Trade restrictions, tariffs, and geopolitical instability can also affect global supply and demand. Technological
disruptions, while offering efficiency gains, may lead to job displacement and require workforce reskilling.
Additionally, global economic uncertainty can impact both domestic and international textile markets.

INTERNAL CONTROL & ADEQUACY:

Your Company has been regularly reviewing and updating its internal controls by benchmarking against the industry
standards. Dynamics of changing business requirements, statutory compliances and corporate governance are adopted
in existing systems after careful review to remain in line with compliance requirements, expectations of business
partners like customers and institutions. Senior management monitors the recommendations of internal audits for
continuous system updating. IT System infrastructure is updated regularly to support business decision making as well
as better controls.

HUMAN RESOURCES:

Human resource is considered as the most valuable of all resources available to the Company. The Company
continues to lay emphasis on building and sustaining an excellent organization climate based on human
performance. The Management has been continuously endeavoring in fostering high performance culture the
organization. During the year the Company has employed around 174 permanent and on contract based 5
employees on rolls. Further, industrial relations remained peaceful and harmonious during the year.

SEGMENT-WISE PERFORMANCE:

The Company has identified its business segment as Primary Reportable Segment. There are no other Primary
Reportable Segment and the Companys Operations fall under a single segment "Spinning of Cotton Yarn".

Hence, Segment reporting is not applicable.

FORWARD-LOOKING STATEMENT:

This analysis contains forward-looking statements, which may be identified by their use of words like plans,

expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All
statements that address expectations or projections about the future, including but not limited to statements
about the Companys strategy for growth, product development, market position, expenditures, and financial
results, are forward-looking statements. Forward-looking statements are based on certain assumptions and
expectations of future events. The Company assumes no responsibility to publicly amend, modify or revise
any forward-looking statements, on the basis of any subsequent developments, information or events.

Statements made in this Management Discussion and Analysis Report may contain certain forward- looking
statements based on various assumptions on the Companys present and future business strategies and the
environment in which we operate. Actual results may differ substantially or materially from those expressed
or implied due to risk and uncertainties. These risks and uncertainties include the effect of economic and
political conditions in India and abroad, volatility in interest rates and in the securities market, new regulations
and Government policies that may impact the Companys businesses as well as the ability to implement its
strategies. The information contained herein is as of the date referenced and the Company does not undertake
any obligation to update these statements. The Company has obtained all market data and other information
from sources believed to be reliable or its internal estimates, although its accuracy or completeness cannot be
guaranteed

KEY FINANCIAL RATIO

Ratios		31st March 2025	31st March 2024
Current Ratio	Current assets / Current liabilities	9.91	1.58
Debt-Equity Ratio,	Total debt/Shareholders Equity	0.07	0.43
Debt Service Coverage Ratio,	Earning available for debt service / debt service	-0.04	2.79
Return on Equity Ratio,	Profit after tax / Shareholders Equity	-6.73	8.18
Inventory turnover ratio,	Turnover/average inventory	3.01	7.11
Trade Receivables turnover ratio	Turnover/Average Receivable	18.31	20.39
Trade payables turnover ratio,	Total Purchases / Average Payable	22.53	13.32
Net capital turnover ratio,	Turnover / Working capital	3.66	17.18
Net profit ratio	PAT/ Turnover	-5.03	1.97
Return on Capital employed,	PBIT / Capital Employed	-6.57	12.39
Return on investment.		NA	NA

Explanation of Movement of Ratio

1. Current ration: Current Ratio increased from 1.58 in FY 2023-24 to 9.91 in FY 2024-25, a rise of 527%.
This indicates a strong improvement in liquidity; however, the unusually high ratio may suggest
inefficient use of current assets or underutilized working capital.

2. Debt -Equity Ratio: it decreased from 0.43 in FY 2023-24 to 0.07 in FY 2024-25, a reduction of
approximately 84%. This reflects a significant decrease in reliance on debt financing, indicating a more
conservative capital structure and reduced financial risk.

3. Debt Coverage Service Ratio: it) dropped from 2.79 in FY 2023-24 to -0.04 in FY 2024-25, which is a
decrease of over 101%. This sharp decline indicates that the Company was unable to generate sufficient
earnings to cover its debt obligations, highlighting severe cash flow challenges and financial stress
during the year.

4. Return on Equity Ratio: ROE dropped 182% from 8.18% (2024) to -6.73% (2025), showing a shift from
profits to losses and a decline in shareholder value.

5. Inventory turnover ratio: The Inventory Turnover Ratio increased from 5.00 in FY 2023-24 to 5.78 in FY
2024-25, representing a growth of approximately 15.6%. This indicates that the company is managing
its inventory more efficiently by selling and replenishing stock faster than the previous year.

6. Trade Receivables turnover ratio: it decreased by 6.3% from 10.72 (2024) to 10.04 (2025), indicating
slightly slower collection of receivables and a minor decline in cash flow efficiency

7. Trade Payables Turnover Ratio: it rise by 2.2% from 47.71 (2024) to 48.76 (2025), indicating slightly
faster payments to suppliers.

8. Net Capital Turnover Ratio: It fell by 79% from 17.18 (2024) to 3.66 (2025), indicating reduced
efficiency in using working capital to generate sales.

9. Net Profit Ratio: it decreased by 36.3% from 3.33% (2024) to 2.12% (2025), indicating lower
profitability margins.

10. Return on Capital employed: it increased by 28.5% from 7.05% (2024) to 9.06% (2025), showing
improved efficiency in generating returns from capital employed.

For and on Behalf of Board of Directors

AKSHAR SPINTEX LIMITED

 

Harry D. Paghdar	Harikrushna S. Chauhan
Managing Director	Chairman cum Whole Time Director
[DIN :11096100]	[DIN :07710106]

 

Date: 1st August, 2025

Place: Haripar (Jamnagar)