Bang Overseas Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS
Global Economic Outlook

Amidst the prevailing global economic landscape, challenges such as a subdued manufacturing
environment, faltering trade flows and persistent inflation concerns paint a complex picture for the
future ahead. However, amidst these challenges, certain sectors, notably services, demonstrate
resilience. The recent update from the International Monetary Fund (IMF) offers a glimmer of hope,
with a modest upgrade in growth projections for 2024 and 2025. Global growth is projected at 3.0
percent in 2025 and 3.1 percent in 2026, marking an increase from previous forecasts. reaching 4.2%
in 2025 and 3.6% in 2026.

Indian Economy Outlook

Despite a sluggish global economy, India maintained its trajectory as one of the fastest growing
economies in the world. Amid a volatile global economic landscape, India shines as a beacon of
stability. The Indian economy maintained a steady growth trajectory, solidifying its position as the
fifth largest economy in the world. According to the provisional estimates of gross domestic product
(GDP) growth released by the National Statistical Office (NSO), Indias GDP growth rate has exceeded
the second advance estimate and is estimated to reach 8.2% in FY 2023-24 compared to 7.0% in FY
2022-23. The fourth quarter of FY 2023-24 witnessed a robust growth rate of 7.8% Y-o-Y due to
strong performance in the manufacturing sector. The overall economic growth was supported by
strong domestic demand, increased investment, moderate inflation and a stable interest rate
environment.

Indias economic outlook remains promising, with the IMF projecting a GDP growth rate of 6.8% in FY
2024 -25 and 6.5% in FY 2025-26. The economy is poised to benefit from the demographic dividend,
increased capital expenditure, proactive government policies, robust consumer demand, and
improving rural consumption prospects. As headline inflation eases towards the target, it is expected
to stimulate consumption demand, especially in rural areas.

With the improvement of business accessibility, the general investment climate is growing more
favourable. Furthermore, with rising consumer confidence, progression of labour markets and
increasing private consumption, the Government aims to improve capital investment and lower
budget deficit.

Textile Industry

The industry seems to be headed towards a positive steady growth phase, after a period of turbulence.
The Textile industry in India is a vast and dynamic sector, playing a significant role in the countrys
economy. With a rich history of textiles that dates back millennia, India continues to be a major
producer and exporter of fabrics, clothing, and home textiles. The textile and apparel industry
contributes 2.3% to the countrys GDP. The Indian textile and apparel market size is valued at
approximately US$ 165 billion in FY 2022-23, with the domestic market contributing ~76% to the
market size and exports accounting for the remaining 24%. The market is projected to grow at a 10%
CAGR to reach US$ 250 billion by FY 2030-31, driven by sustained growth in domestic demand and
significant export potential.

The Indian textile industry was always known for its employment generation capabilities. Direct
Employment in Textiles sector is estimated at 45 million. The textile company is dedicated to reducing
waste and promoting sustainability through its recycling and upcycling initiatives.

According to CRISIL research, the domestic textile industry is on a path to recovery. Growth is
expected to revive, supported by sustained domestic demand, stability in cotton prices, and export
recovery. Additionally, it is anticipated that orders from major US retailers will rise as the backlog of
inventory from FY 2022-23 diminishes due to improvements in global supply chain challenges and a
gradual sales recovery.

Indias competitiveness is expected to improve in the medium term due to positive developments,
such as free trade agreements (FTA) with the UK and the establishment of textile parks under the PM
MITRA scheme and Scheme for Integrated Textile Park (SITP), further supported by conducive
government initiatives. From allowing 100% FDI in the Indian textile sector to initiating various
schemes, the government aims for comprehensive improvement within the textile industry, bolstering
domestic manufacturing capabilities, and boosting exports in the textiles and apparel sector.

Indian Apparel Industry

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, with the capital-intensive sophisticated mills sector at the other end. The
decentralised power looms/ hosiery and knitting sector form the largest component of 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 a wide variety of
products suitable for different market segments, both within India and across the world.

The Key Advantages of the Indian Textile Industry

The Indian textile industry has several key advantages that contribute to its global prominence. India
has a 5-6% share of the global trade in textiles and apparel. Here are some of the major ones:

> Abundant Raw Materials: It is the industry in the country which is self-reliant and complete in
the value chain i.e. from raw material to highest value added products. India is one of the largest
producers of cotton, jute, and silk. The availability of these raw materials reduces dependency on
imports and ensures a steady supply for the textile industry.

> Skilled Workforce: India has a large pool of skilled and semi-skilled workers who are well-
versed in traditional and modern textile manufacturing techniques. This workforce is crucial for
maintaining high-quality production standards.

> Diverse Product Range: The Indian textile industry offers a wide variety of products, from
traditional handloom and handicrafts to modern, high-tech fabrics. This diversity allows the
industry to cater to different market segments and consumer preferences globally.

> Strong Domestic Market: India has a large and growing domestic market with increasing
disposable incomes. This ensures a stable demand for textile products within the country,
providing a buffer against international market fluctuations.

> Rich Heritage and Craftsmanship: India has a rich tradition of textile craftsmanship, including
techniques like weaving, dyeing, printing, and embroidery. This heritage adds unique value to
Indian textile products and attracts international buyers looking for authentic and artisanal items.

> Cost Competitiveness: India benefits from relatively low labor and production costs compared to
other major textile-producing countries. This cost advantage makes Indian textiles more
competitive in the international market.

> Integrated Value Chain: The Indian textile industry has an integrated value chain, from fiber
production to garment manufacturing. This integration ensures efficient coordination and reduces
lead times, making the industry more responsive to market demands.

> Emerging Fashion Industry: Indias burgeoning fashion industry, with its growing number of
designers and fashion weeks, promotes Indian textiles and garments, boosting their visibility and
demand both domestically and internationally.

> Environmental Initiatives: Increasing awareness and adoption of sustainable practices, such as
organic cotton farming and eco-friendly dyeing processes, are enhancing the industrys appeal to
environmentally conscious consumers and businesses.

> Government Support: The Indian government has implemented various policies and schemes to
support the textile industry, such as the Technology Upgradation Fund Scheme (TUFS), the Make
in India initiative, and export incentives. These measures help in modernizing the industry and
boosting exports.

> Large Indian players such as Arvind Mills, Welspun India, Vardhman textiles, Raymond, Trident
have established themselves as quality producers in the global market. This recognition would
further enable India to leverage its position among global retailers. India has gathered experience
in terms of working with global brands and this should benefit Indian vendors.

Outlook

The global macro and geopolitical environment is quite uncertain and marked by increasing volatility.
Interestingly, it also offers clear signs of opportunities.

Recently concluded trade deal with UK, and likely similar deals with USA and Europe should unlock
significant opportunities for us. The broader trend of western buyers finding alternative to China
continues to drive interest and enquiries from many of our customers, especially the Americans.
Overall economic and political stability of India continues to reinforce the belief among buyers as
preferred sourcing destination. Many buyers are investing to ramp up their local teams as they look to
scale up volumes.

In the short term over next couple of quarters, volatility continues to be strong. US tariffs announced
in early April, and ongoing changes on the topic continue to impose uncertainty. While some
customers have expedited buying to pre-empt a potential increase in tariff post 90-day period, others
have put the decisions on hold anticipating a quick trade agreement. Irrespective, most customers
have asked for us to part absorb the 10% tariff which has been imposed in the interim.

In summary, we believe we should be on an opportunity path once we are out of this short-term
uncertainty. Looking ahead, we are cautiously optimistic about the year ahead. While we are watching
the impact of tariff keenly and taking necessary steps to insulate the business from its negative
ramifications, we acknowledge the short-term disruptions in margin to be a pain point, however we
are also trying to negate the overall impact by doing higher options towards hedging risk resulting
from changes and fluctuations in foreign currency exchange rates.

The Indian textiles market is expected to be worth more than US$ 209 billion by 2029

The apparel market encompasses every kind of clothing, from sportswear to business wear, from
value clothing to statement luxury pieces. After difficulties in 2020, during the coronavirus pandemic,
when sales across the apparel industry took a hit, the global demand for clothing and shoes is set to
rise again. The countries that account for the majority of this apparel demand are the United States
and China, both generating substantially higher revenues than any other country. It is perhaps no
surprise that the same two countries play a significant role in international trade. China leads the
rankings for the highest value of apparel exports. The U.S. is second only to the EU in the value of
apparel imports. India is one of the country in Top 5 Global Textile Leaders List.

Increasing demand for online shopping is expected to help the apparel manufacturing market grow.
Manufacturers can now sell their products on a larger platform than before, which will increase their
customer base geographically driving the growth of the apparel manufacturing market. In countries,

such as India, for instance, e-commerce portals have boosted the sales of traditional garments by
giving larger exposure to producers who were confined to one geography where the weaving
community was located. Along with digitalization, another key apparel industry trend is sustainability.
More consumers are concerned about the future of the planet and are putting pressure on fashion
brands that do not have eco-friendly practices

India is pioneering sustainable textiles contributing to lesser carbon footprint

Market Size and promoting circular economy: Union Textile Minister, Shri Piyush Goyal

Source: Ministry of Textile

India has a share of 5-6% of the global trade in textiles and apparel. The sector is also the second
largest provider of employment in India, after agriculture. It employs a significant portion of the
population, especially in rural and semi-urban areas, contributing substantially to both income
generation and economic development. The sector has perfect alignment with Governments key
initiatives of Make in India, Skill India, Women Empowerment and Rural Youth Employment. India is
the 2^nd largest exporter of Textiles & Apparel in the world, following China. Indias textiles and
clothing industry is one of the mainstays of the national economy. India has a share of 5-6% of the
global trade in textiles and apparel. The Indian textile and apparel industry is expected to grow at 10%
CAGR from 2019-20 to reach US$ 223 billion by 2025-26.

The consumption of cotton in India is approximately 250 lakh bales per year, with each bale weighing
around 170 kg. India occupies the first position in the world in cotton acreage with around 120 lakh
hectares under cotton cultivation, which is around 36% of the worlds total cotton cultivation area of
approximately 330 lakh hectares.

As of recent data:

> The share of textile and apparel (T&A) including handicrafts in Indias total merchandise
exports stood at a significant 12% in 2023-24.

> India has a share of approximately 5-6% of the global trade in textiles and apparel.

These figures highlight Indias substantial presence in both domestic and global markets for textiles
and apparel.

Government Initiatives

The exemption of import duty on shuttle-less looms - specifically Rapier Looms and Air Jet Looms
is a highly advantageous move for textile companies in India. By reducing the duty from 7.5% to nil,
the cost of acquiring advanced, high-performance looms significantly decreases, making it
morefeasible for manufacturers to invest in modern machinery. This policy directly supports the
modernisation and capacity expansion of the weaving sector, enabling improved fabric quality,
higher productivity, and enhanced global competitiveness. Additionally, the focus on promoting
technical textiles such as agro-textiles, medical textiles, and geo-textiles opens up high-margin,
growthoriented segments for companies to explore. This aligns well with the governments ‘Make
in India vision, fostering domestic manufacturing and reducing dependency on imports, while
empowering Indian textile companies to scale operations and cater to emerging global markets.

The increase in Basic Customs Duty on knitted fabrics - from"10% or 20%" to "20% or ^ 115 per
kg, whichever is higher" - is a beneficial move for the Indian textile industry, particularly Rising
sustainability norms, led by global brands and strict EU regulations, challenge Indian MSMEs,
especially in meeting demands for green sourcing, renewable energy, and recycling

• Fast fashion and rising textile waste pose growing concerns, with Indias recycling market still
small despite expected growth amid global waste projections for 2030

• Labour issues like increasing minimum wages, high attrition and migrant worker challenges
cause workforce instability, with shortages in textile hubs and underutilised surplus inother states

• Sustainability compliance costs are rising as globalregulations demand stricter environmental and
labour standards, increasing production expenses

OUTLOOK, OPPORTUNITIES AND THREATS

The Indian textile industry is in a much stronger place than it was at any point of time in the last half a
dozen decades. The raise in productivity, increase in exports, replication of investment during few
years under Technology Upgradation Fund Scheme (TUFS), clearly put forward that the Indian textile
manufacturing industry has capability in facing the challenges of modern economic system. Its the
time, to strengthen the Company through fuller exploiting of available opportunities in both the
domestic and worldwide markets which are summarized here below:

OPPORTUNITIES

I. Growing Global Demand for Sustainable Textiles:

The increasing awareness and demand for sustainable and eco-friendly textiles present a significant
growth area for Indian textile manufacturers. Innovations in organic cotton, recycled fibers, and eco-
friendly dyes can help Indian companies capture a larger share of this market.

By investing in sustainable production practices and obtaining international certifications (like GOTS
for organic textiles), Indian companies can appeal to environmentally conscious consumers
worldwide.

II. Expansion of Technical Textiles:

The technical textiles segment, including products like geotextiles, agro-textiles, medical textiles, and
protective clothing, is growing rapidly. This sector is expected to see increased demand in both
domestic and international markets due to its diverse applications.

Indian manufacturers can leverage government incentives under schemes like the National Technical
Textiles Mission to invest in R&D and production capacity for technical textiles, thereby diversifying
their product portfolios and entering new markets.

III. Supportive Government Policies and Initiatives:

Government initiatives such as the PLI Scheme, PM MITRA parks, and various export incentives
provide a favorable environment for the growth of the textile industry. These policies aim to enhance
infrastructure, promote exports, and support modernization efforts.

Companies can take advantage of these schemes to upgrade technology, expand their production
capabilities, and improve competitiveness in the global market. Strategic utilization of these benefits
can lead to increased profitability and market share.

THREATS

I. Intense Global Competition:

Indian textile manufacturers face stiff competition from countries like China, Bangladesh, and
Vietnam, which often have lower production costs and more advanced manufacturing capabilities.
Mitigation: To stay competitive, Indian companies need to focus on innovation, efficiency, and quality
improvements. Investing in automation, lean manufacturing practices, and branding can help
differentiate their products in the global market.

II. Fluctuating Raw Material Prices:

The textile industry is highly dependent on raw materials like cotton and synthetic fibers, whose
prices can be volatile due to factors like weather conditions, geopolitical tensions, and changes in
global demand.

Mitigation: Diversifying raw material sources, entering into long-term contracts with suppliers, and
using financial instruments to hedge against price fluctuations can help manage this risk.

III. Environmental and Regulatory Challenges:

Increasing environmental regulations and the push for sustainable practices can be challenging for
traditional textile manufacturers. Compliance with stringent environmental standards may require
significant investments in new technologies and processes.

Mitigation: Proactively adopting sustainable practices and technologies, investing in waste
management and pollution control, and staying ahead of regulatory changes can help companies
mitigate these challenges. Embracing sustainability can also open up new market opportunities.

IV. Other threats faced by the Company: Apart from those mentioned above there are many other
threats which are faced by the Company. Following is the list of other threats:

1. High Transportation Cost

2. Rising labour costs, the shortage of skilled labour and overreliance on labour-intensive
technologies may impact the operations.

3. Frequent changes in consumer sentiments & preferences

RISK AND CONCERNS

Risks are inherent in all businesses. The challenge for the Company is to effectively and responsibly
manage and control the risks on a sustained basis to enhance returns.

Industry Risk	Raw Material Risk	Product Substitution Risk
The demand for textiles is perennial and major fluctuations occur largely due to changes in overall economic growth and manufacturing competitiveness. However, the business is cyclical on the supply side considering the quantum of capital investment involved in capacity expansion. This makes it necessary for the Company to incur large capital expenditure at the right time. Risk Mitigation: The Company has consistently invested funds in its manufacturing plant to bring them in line with the latest technology. This prudence is reflected in the enhanced market presence due to higher production and improved quality at a lower cost of production.	The Company is exposed to the vagaries of nature, with cotton being the principal raw material for fabric manufacturing. Risk Mitigation: Procurement of raw cotton at right price remains crucial. The Company covers its cotton requirements from time to time through the domestic and international markets. The Company also seeks out alternative cotton varieties and blends to increase its raw material basket. Thus, this enables an in built risk mitigation for cotton price fluctuation.	Man Made Fibers are a direct substitute for cotton textiles. Risk Mitigation: The Company specializes in producing the best quality cotton fabrics, which are at par with the highest global quality standards and has created a niche positioning with products which cater to high-end customers. The company also makes cotton shirts.

Discussion on Financial Performance with Respect to Operational Performance
On Standalone basis

• The Companys Total Revenue was Rs. 19049.17 Lakhs in 2024-25 as compared to Rs. 13366.95
Lakhs in the previous year.

• Earnings before Interest, Depreciation, Taxes, Amortizations and Exceptional Items (EBIDTA) was
Rs. (90.77) Lakhs as compared to Rs. (477.05) Lakhs in the previous year.

• Profit before Tax was Rs. (361.59) Lakh as compared to Rs. (728.68) Lakh in the previous year in
the previous year.

• The Net Profit/(Loss) for the year was Rs. (199.82) Lakh as compared to Rs. .(720.24) Lakh in the
previous year

• Total comprehensive income/(Loss) was Rs. (204.79) Lakh as against Rs. (720.04). Lakh in the
previous year

On Consolidated basis

• The Companys Total Revenue was Rs. 18883.13 Lakh in 2024-25 as compared to Rs. 13371.80
Lakh in the previous year

• Earnings before Interest, Depreciation, Taxes, Amortizations and Exceptional Items (EBIDTA) was
Rs.(88.3) Lakh as compared to Rs.(580.86) Lakh

• Profit before Tax was Rs. (398.59) Lakhs as compared to Rs. (845.90) Lakh in the previous year

• The Net Profit for the year was Rs. (217.22) Lakh as compared to Rs. (837.60) Lakh in the previous
year

• Total comprehensive income was Rs.(221.35) Lakh as against Rs. (837.87) Lakh in the previous
year

The detailed Financial and Operational Performance present in notes to accounts for the financial year
2024-25 which forms a part of this Annual Report.

Human Resource

Human resources have always been of supreme importance as they are the growth-drivers. Your
Company firmly believes that a well-planned HRM program that is tailored to your organization and
staff can actually improve your businesss bottom line. Our teams are integral to our business. We
have embraced a culture of excellence and meritocracy to nurture our people. We believe in selecting
the right talent, training them and instilling in them the spirit of "Bangs". We focus on developing the
most superior workforce so that the organization and individual employees can accomplish their work
goals in service to customers. We aim also at achieving advance flexibility, innovation, competitive
advantage and improved business performance. We follow a performance measuring tool like Balance
Score Card (BSC) and Key Performance Indicators (KPI), applicable depending on their position in the
organization, by which periodical evaluation of the employees performance is done based on their
area of working. This also encourages them to work hard and efficiently at all levels of work. As of
March 31, 2025, the Company had 234 permanent employees.

Internal Control Systems & their Adequacy

Sound internal control systems are a prerequisite for building and enhancing shareholder value in the
long run. The Company has a sound system of internal controls commensurate with the size of the
Company and the nature of its business to ensure that all assets are safe guarded and protected
against loss from unauthorized use or disposition and that transactions are authorized and recorded
reported correctly and adequately. The Companys internal control are supplemented by internal
audits, review by management and documented policies, guidelines and procedures. The internal
control is designed to ensure that financial and other records are reliable for preparing financial
information and for maintaining accountability of assets.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of
internal controls systems and suggests improvement for strengthening them.

Cautionary Statement

Statements in this report on Management Discussion and Analysis describing the Companys
objectives, projections, estimates, expectations or predictions maybe forward looking statements
within the meaning of applicable laws or regulations. These statements are based on certain
assumptions and reasonable expectation of future events. Actual results could however differ
materially from those expressed or implied. Important factors that could make a difference to the
Companys operations include global and domestic demand- supply conditions, finished goods prices,
raw materials cost & availability, changes in Government regulations and tax structure, economic
developments within India and the Countries with which the Company has business contacts and
other factors such as litigation and industrial relations. The Company assumes no responsibility in
respect of the forward looking statements herein which may undergo changes in future on the on the
basis of subsequent developments, information or events.