GTN Industries Ltd Management Discussions

1. INDUSTRY STRUCTURE & DEVELOPMENTS:

The Indian textile industry, one of the largest sectors in the economy, has shown resilience and growth potential despite global economic challenges. The sector contributes approximately 14% to industrial production and 4% to the GDR making it a significant employment generator and contributor to export earnings. In FY2024-25, the industry benefited from recovering global demand post-COVID-19, increased production capacities, and favorable government initiatives. There has been a marked shift towards sustainable and eco-friendly textiles, Companies are investing in sustainable practices that comply with global standards, thus appealing to a growing market of environmentally conscious consumers,

The textile sector in India has shown significant resilience and adaptability in FY2024-25, navigating challenges while positioning for growth, As we continue to innovate and respond to market demands, we remain optimistic about achieving our strategic goals for the coming years.

The Imposition of Tariffs Under President Trumps administration has led to significant disruptions in the global cotton industry Indian manufacturers are navigating a complex Environment of Both New Opportunities and Heightened challenges,

Cotton association of India (CAI) Estimation of cotton pressing is reduced by 4 Lakh bales It is Approximately 306,83 lakh bales ( bale weight 162 kgs),The Export for the season 2024-25 will be 18 lakhs , 10 lakhs less compared to Last Season. The cotton Imports into India are Increased to 33 lakh bales for 2024-25 , 14 lakh bales higher by Last Season

Maximum Cotton procurement being done by cotton corporation of INDIA (CCI) in all states ; approximately 100 lakhs bales ; they Bought from Farmers @ MSP ( Declared by the Central Government of India),Approximately 28 Lakh bales Sold to the Mills. Closing stock as at 30th September 2025 is estimated at 23,49 Lakh bales as against 30,19 lakh bales in Last Season

Cotton is one of the most important cash crops and accounts for around 21% of the total global fibre production. In the raw material consumption basket of the Indian textile industry, the proportion of cotton is around 60%, The consumption of cotton is approximately 316 lakh bales (170 kg each) per year. India occupies first position in the world in cotton acreage with around 126,80 lakh hectares under cotton cultivation which is around 36% of the world area of 326.36 lakh hectares. Approximately 62% of Indias Cotton is produced on rain-fed areas and 38% on irrigated lands, India has emerged one of the largest producers, consumers and exporters of cotton in the World.

Cotton plays a major role in sustaining the livelihood of an estimated 5,8 million cotton farmers and 40- 50 million people engaged in related activities such as cotton processing and trade. To support the cotton industry, Government of India announces Minimum Support Price (MSP) for two basic staples groups viz,, medium staple and long staple cotton. Cotton Corporation of India (CCI), a Public Sector Undertaking under the Ministry of Textiles, is the nodal agency of Government of India for undertaking MSP operations in the event of prevailing seed cotton (kapas) price touching the MSP level.

Presently the yarn market in both domestic and overseas is quite subdued, as demand is quite low due to recession fears and other factors, The entire industry is reeling under low demand and price realisations.

We are expecting a rebound in the coming months

The future of Indian Textile industry is highly depending on availability of raw material at a competitive price, With the introduction of Hybrids and BT Cotton, the cotton production in India is increasing. However, it depends on timing and quantum of monsoon rains and it is expected that the supply of quality cotton will be comfortable in the coming season for 2024-2025

Chinese exports of Textiles and clothing are declining especially to USA due to political reasons thus, provides an opportunity to India for improving its export performance, In long run, the prospectus of Indian Textile Industry is bright. However, there is a recession in international markets such as Europe and other Asian countries.

Spinning units are highly capital intensive and has to maintain large Raw Material inventory levels due to its seasonality, Your Company makes all efforts to have efficient inventory management and constant efforts arebeing made to monitor the inventory levels keeping in view of interest costs,Your company has a system of assessing the risks on on-going basis. This includes an effective internal control and management reporting system. Further, the framework also captures the existing practices to manage commodity price risk, interest risk, and foreign exchange risk etc, An important aspect of this frame work is to promote a balanced approach that considers risk and return.

Expect things to be better after September 24, when the european markets are back from summer holidays,

The Company is mainly engaged in the business of manufacture and export of cotton yarn and accordingly this is the only Single Reportable Segment.

The Company continues to be an important player in the field of cotton yarn in medium and fine count segment yarns, There are good prospects for increasing exports of cotton yarn to Asian countries, The company is making all efforts to explore new markets apart from current markets.

The Company has a proper and adequate internal control system to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition and that all transactions are authorised, recorded and reported correctly,

The internal control is supplemented by an extensive programme of internal audits, review by management and documented policies, guidelines and procedures, The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data and for maintaining accountability of assets,

Please refer Directors Report on performance review.

The Company recognizes the importance and contribution of its human resources for its growth and development and is committed to the development of its people. The company has been adopting methods and practices for Human

Resources Development, With utmost respect to human values, Company served its human resources with integrity through a variety of services by using appropriate training, motivation techniques and employee welfare activities etc, Industrial relations were cordial and satisfactory As on 31st March 2025, the Company has about 310 (including workers etc.) employees.

Statements made in this report describing the Companys projections, estimates, expectations or predictions may be forward looking predictions within the meaning of applicable securities laws and regulations, Actual results may differ from such estimates, projections, etc. whether expressed or implied, Factors which would make a significant difference to the Companys operations include availability of quality raw cotton, market prices in the domestic and overseas markets, changes in Govt, regulations and tax laws, economic conditions affecting demand/supplies and other environmental factors over which the Company does not have any control.