Ginni Filaments Ltd Management Discussions

The Management of the Company is pleased to present its Report on the industry scenario, including the Companys performance during the financial year 2025-26.

During the year under review, the Company has taken a strategic decision to close the operations of its Garment Division located at D-196, Sector-63, Noida - 201 307 (U.P), with effect from June 30, 2025. This step has been undertaken to streamline operations and improve overall efficiency.

The Company had previously transferred its loss making yarn and knit fabric undertaking in the year 2024 -2025 and has closed its loss making Garment unit in the current financial year with a view to continue its focus on its core business segments, including the non-woven and consumer product divisions, with an objective to enhance value for all stakeholders.

The management of Ginni Filaments Limited has provided an analysis of the Companys division-wise performance and key business updates for the financial year ended March 31,2026, along with its outlook for the future. The outlook is based on the current economic environment; however, it may be influenced by global socio-economic and political developments.

1. Industry Structure and Developments Nonwoven Division & Consumer Product Division

Forecasts for spunlace nonwovens indicate healthy growth in the years ahead. According to market analyst Smithers, compound annual growth rates for the 2025-2030 period are projected at 8.8% in tons, 9.8% in square meters and 9.5% in market value. Notably, spunlace is the fastest-growing nonwovens process in the 2020-2030 period.

Globally spunlace non-woven is widely used in wipes, surgical draps, gowns and wound dressing. This segment provides major consumption of spunlace. With crosslapping and further coating/laminating spunlace provide further areas of growth such as filteration, automative PVC/Leather etc.

The global FMCG landscape for wet wipes and cosmetic products (skincare, beauty care, hygiene, and personal care) is expected to witness steady but structurally transformative growth between 2026 and 2031. Wet wipes, once convenience-driven, are now embedded as essential hygiene products, with the global market projected to expand steadily (approx. 2.7-3.8% CAGR) driven by rising hygiene awareness, urban lifestyles, and demand for portable solutions. Simultaneously, personal care wipes alone are growing faster (~6% CAGR) reflecting premiumization and multi-use adoption across baby care, intimate hygiene, and facial cleansing. The adjacent cosmetics segment is being reshaped by “clean beauty,” dermatological safety, and wellness-led consumption, with consumers prioritizing natural, organic, and skin-sensitive formulations over purely aesthetic appeal.

A defining global trend for 2026-2031 is sustainability-led innovation. Regulatory pressure and consumer awareness around plastic waste and microfibers are pushing manufacturers toward biodegradable, compostable, and plant-based substrates. At the same time, product differentiation is shifting toward functional benefits?antibacterial, dermatologically tested, and multi-purpose wipes?along with premium skincare formats such as infused wipes and hybrid products that replace traditional cleansing routines. Digital commerce and influencer-led discovery are accelerating adoption, particularly in emerging markets where online channels are driving product trials and brand switching. However, risks remain in the form of regulatory tightening (especially on disposables), raw material volatility (nonwoven fabrics, chemicals), and consumer backlash against non-eco-friendly products.

India represents a high-growth, underpenetrated opportunity within this global context. The wet wipes market alone is expected to grow at ~6.4% CAGR to reach over USD 3.4 billion by 2030 market value [Grand view Research],. supported by rising disposable incomes, urbanization, and increasing hygiene awareness. The broader personal care wipes segment is similarly expanding, with strong traction in baby care, intimate hygiene, and cosmetic wipes, alongside a surge in domestic startups offering natural and affordable alternatives. In parallel, Indias beauty and personal care market is evolving rapidly?projected to reach ~$27 billion by 2029?driven by a young population, digital penetration, and growing demand for Ayurveda-inspired and clean-label products. Tier 2 and Tier 3 cities, along with e-commerce penetration, are expected to be the next major growth engines.

2. Opportunities and Threats

Indias domestic market for spunlace fabric is also improving having growth rate of about 15% due to increasing of disposable income and because of hygiene consideration, particularly by young population of India.

For Ginni Filaments Ltd., the opportunity lies in leveraging its core competency in nonwoven fabrics to move up the value chain into branded or private-label FMCG products, especially in sustainable wipes and dermo-cosmetic applications. The company targeted through backward integration, export potential, and OEM partnerships with global brands. However, strategic risks include margin pressures from commoditization, the need for strong branding capabilities (well taken and progressing on that direction), and increasing ESG compliance costs. Success in this sector will depend on innovation in eco-friendly materials, strategic brand positioning (or B2B partnerships), and the ability to align with evolving consumer expectations around safety, sustainability, and convenience”

3. Segment-wise or product-wise performance

The Non-Woven as well as Consumer Product Division of the Company has shown improvement both in terms of top line and margins. Closure of Garment units has improved the overall performance of the Company

4. Internal Control System and their adequacy

The company has Internal Control System commensurate with the size, scale and complexity of its operations. The framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorized use, executing transaction with proper authorization and ensuring compliance with corporate policies. The controls, based on the prevailing business conditions and processes have been tested during the year and no reportable material weakness in the design or effectiveness was observed.

The scope and authority of the Internal Audit function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit Function Report to The Chairman of the Audit Committee. The Internal Audit team develop an annual audit plan based on the risk profile of the business activities. The Internal Audit plan is approved by the Audit Committee, which also reviews compliance to the plan.

The Internal Audit team monitors and evaluates the efficiency and adequacy of internal control system in the Company, its compliance with operating system, accounting procedures and policies at all location of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action(s) in their respective area(s) and thereby strengthen the control. Significant audit observations and corrective action(s) thereon are presented to the Audit Committee.

The use of SAP platform and internal audits by independent Chartered Accountant firm with vast experience and knowledge further strengthen the internal control system.

5. Risk, Concerns and Outlook

The Non - Woven segment consisting of all varieties of non- wovens is growing by 8 to 9% per annum and the Spunlace non -woven comprise about 12% of the total non-woven and this is likely to reach 14% of the total non-woven by 2028 .

Global spunlace market is highly competitive, with strong pressure on standard grades due to broad capacity availability in many regions. At the same time, demand continues to shift toward higher-performance and more specialized nonwovens, especially where customers need consistent technical properties, premium feel and reliable supply “Overall, the growth outlook is positive, but success increasingly depends on differentiation, quality stability and application-focused product design.

This will provide new opportunities to use of cross lapper and coated spunlace in these area. The same aspect is in consideration of Ginni Filaments Ltd.

However, recent issue of trade tariff imposition by U.S and the war situation in Middle East has also created risks for entire global which is to be watched closely.

6. Financial performance with respect to operational performance.

The same is referred to the Audited Financial Statement, which is forming part of the Annual Report of 2025-26 may be referred. However, the overall financial performance figures are indicated in Directors report which is further enumerated below;

FINANCIAL HIGHLIGHTS

Figures in Lacs

Particulars	Year ended 31-03-2026	Year ended 31-03-2025
Gross sales and other income
Continuing operations:	37053.39	30551.24
Discontinued Operations:	1025.82	7398.40
Total	38079.20	37,949.64
Net profit/(loss)
Continuing operations :	4096.58	1747.31
Discontinued Operations:	(392.81)	(1327.78)
Total	3703.77	419.53

7. Human Resources / Industrial Relations

The Company believes that the human resources are the most critical element responsible for growth. Company strives towards attracting, retaining and developing the best talent required for the business to grow. The employees are regularly provided with training and development programmes to enhance their skills and focus on career progression. Company nurtures a work culture that leads to employee satisfaction, unflagging motivation and high retention rate.

Company HR policies ensure working together with the employees for their personal and professional development and at the same time aligning their goals with those of the Company to create a win-win situation. The Company focus on ensuring transparent, safe, healthy, progressive and engaging work environment is aimed at creating leaders of the future. Employees have a sense of belongingness and feel empowered in driving business profitability The well-disciplined workforce who has served the Company for thirty years lies at the very foundation of the companys major achievements. The focus is on adopting best practices to ensure better work life balance for the employees of the Company.

8. Details of Significant Changes in Key Financial Ratios

Key Financial Ratios

Sl No Particulars	2026	2025	Variance	Reasons for change in ratio by more than 25%
1 Trade receivable Turnover Ratio	5.71	6.23	-8.27%	NA
2 Inventory Turnover Ratio	7.41	7.12	4.01%	NA
3 Interest Coverage Ratio	13.20	1.44	816.90%	Interest Coverage Ratio is improved due to decrease in Interest and increase in Profitability
4 Current Ratio	2.69	1.73	55.43%	Improvement in liquidity position driven by higher current assets, including better realization of receivables
5 Debt- Equity Ratio	0.14	0.33	-57.51%	Due to repayment/prepayment of borrowings during the year along with improvement in shareholders equity on account of profits earned,
6 Operating Profit Margin	16.08%	3.80%	323.07%	Operating Profit Margin is improved due to increase in Profitability
7 Net Profit Ratio	11.11%	1.12%	892.04%	Improved profitability during the year as compared to previous year.
8 Return on net worth	15.72%	2.13%	638.17%	Return on Net Worth is improved due to better Working Result.

9. Cautionary Note

Statement in this management Discussion and Analysis Report Describing the Companys objectives, estimates, and expectations may constitute Forward Looking statement within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.