Gloster Ltd Management Discussions

ANNEXURE-I TO THE DIRECTORS REPORT

a) Industry structure and developments

The compulsory packing norms for food grains and sugar under Jute Packaging Materials (Compulsory use for Packing Commodities) Act, 1987 (JPMA) stands at the 100% & 20% of production of food grains & sugar respectively and the said notification is valid up to 30th June 2025.

- Rising concerns for reducing carbon footprints opens doors for use of more bio degradable & sustainable products made from natural fibers

- Demand for Companys industrial products like Hessian & Sacking and promotional Jute goods like lifestyle products & other made ups in particular have grown over the years and is expected to see further growth

- Restricting raw jute stock to be maintained by the Jute Mills may adversely affect the production, production mix and cost.

- Lower incentives on exports impacts competitive pricing in export market

- Any further dilution of compulsory Jute Packing Order can adversely affect the market of jute products;

- Still competition from Bangladesh jute goods and synthetic packaging materials;

- Unstable global economic outlook due to the wars.

- Ever increasing employee cost may overall result into higher conversion cost

- Sluggish export demand

The Company is engaged in the business of manufacturing Jute goods and is managed organizationally as a single unit. Accordingly, the company has only one business. However, the Company has customers in India as well as outside India and thus segment reporting on the Geographical location of its customers is as below:

(Rs. in lakhs)

In the current financial year, prices of Raw Jute were stable with upward bias in comparison to the year 2023-24. Estimate for Raw Jute crop for the upcoming season is not very encouraging as area under cultivation has gone down significantly. The carry over crop in the ensuing season is low. The price of Raw Jute in the ensuing season should be significantly higher with further upward bias.

Demands from Government have been lower during the current financial year. Further, due to sluggishness in the export market, export demand was also down. The domestic demand was with The domestic demand, however, was strong during the second half of the year. The company is continuously exploring for new market for traditional and diversified jute products. Further, the management is focused to improve its footprint in newer export market and proactively trying to strengthen its presence. Your management is continuously putting efforts to improve efficiency and productivity for achieving better performance.

The Company has adequate internal control system commensurate with the size, scale and complexity of its operations which provides reasonable assurance with regard to safeguarding the Companys assets, promoting operational efficiency by cost control, preventing revenue leakages and ensuring adequate financial and accounting controls and compliance with various statutory provisions. An independent Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvements for strengthening them.

A summary of Internal Audit observations and Action Taken Reports are placed before the Audit Committee on a periodical basis, for review

The Company is continuing its efforts through training to enhance competence of its manpower to make them more resourceful in their present job and also to prepare them for future roles. The Company has also introduced staff welfare schemes under which benefits are provided to deserving members of staff.

* The variation at 31 March 2025 compared to 31 March 2024 is primarily due to increase in short term borrowing in current financial year. # The variation are primarily due to decrease in profitability and increase in debt during the year.

** The variation is primarily due to increase in finance cost during the year.

i) Cautionary statement

Statements made in this section of the report are based on assumptions and expectations of future events. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference include finished goods prices, raw material cost and its availability, change in Government regulations, tax laws, economic developments within the country, currency fluctuation and other factors such as litigation.