Indo Cotspin Ltd Management Discussions

Cautionary Statement:

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

a) Industry structure and developments:

During the period under the review, the Company had been operating in Textile activities i.e. cloth processing. The textile sector has always been an important part of peoples lives in India. The textile industry in India is one of the oldest manufacturing sectors in the country and is currently its largest. Textile machinery and accessories have been identified as core sectors under Make in India campaign the government has been pushing for indigenous production through Make in India campaign to bring down imports.

India is the worlds second-largest exporter of textiles and apparels, with a massive raw material and manufacturing base. The textile industry is a significant contributor to the economy, both in terms of its domestic share and exports. The Indian textiles industry is extremely varied, with the hand-spun and handwoven textiles sectors at one end of the spectrum, while the capital-intensive sophisticated mills sector at the other end of the spectrum. The decentralized power looms/ hosiery and knitting sector form the largest component of the textiles sector. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world. Industry faces a nonlevel playing field in many markets due to tariff barriers, however industry needs to improve its productivity levels, economies of scale and organize itself better for large production at competitive prices.

b) Segment-wise or product-wise performance:

The primary business of our company is manufacturing of non-woven fabric products.

The Companys main business activity is textile and its related activities which fall under single reportable segment i.e. Textiles. The Company has majorly focused on quality and production.

Nonwoven fabric is a fabric-like material made from long fibres, bonded together by chemical, mechanical, heat or solvent treatment. The term is used in the textile manufacturing industry to denote fabrics, such as felt, which are neither woven nor knitted. Nonwoven materials typically lack strength unless densified or reinforced by a backing. In recent years, nonwovens have become an alternative to polyurethane foam.

Nonwoven fabrics are engineered fabrics that may be a have a limited life, single-use fabric or a very durable fabric. Nonwoven fabrics provide specific functions such as absorbency, liquid repellence, resilience, stretch, softness, strength, flame retardancy, wash ability, cushioning, thermal insulation, acoustic insulation, filtration, use as a bacterial barrier and sterility. These properties are often combined to create fabrics suited for specific jobs, while achieving a good balance between product use-life and cost. They can mimic the appearance, texture and strength of a woven fabric and can be as bulky as the thickest paddings. In combination with other materials, they provide a spectrum of products with diverse properties, and are used alone or as components of apparel, home furnishings, health care, engineering, industrial and consumer goods.

A large number of fibers are available in the market, but the Nonwovens market is mainly dominated by three fibers, namely polyolefins, polyester, and rayon. These three fiber types make up a substantial part of the 2025-26 overall Nonwovens markets for fibers.

Nonwovens find numerous applications ranging from baby diapers to industrial high-performance textiles. Some of the important areas where nonwovens are treated as primary alternative for traditional textiles as Geotextiles, materials for building, thermal and sound insulating materials, hygienic and health care textiles and automotive industries. Nonwovens are also used in cover stocks, agriculture, aerospace, home furnishings etc.

With the nonwovens successfully moving into more technical end-uses, the fiber requirements have also become more important with regard to the fiber properties. The cooperation between fiber supplier and fabric producers is now seen as important criteria for more advancement to come about in the nonwovens field.

c) Business:

Incepted in the year 1995, the Company is one of a significant player in Non-Woven Products such as Non-Woven Fabrics, Non-Woven Carpets, Non-Woven Felts, Non-Woven Designer Carpets, Tufted Carpets and many others Textiles Products.

d) Product Range:

> Non-Woven Fabrics

> Non-Woven Carpets

> Non-Woven Felt

> Non-Woven Designer Carpets

> Non-Woven Geo Textiles

> Tufted Carpets

e) Factory Location:

The Company has its manufacturing plant located Delhi Milestone 78 K.M, Nh-44, Opp. Village Jhattipur, Opp. ICD Jhattipur, Panipat, Haryana, India, 132103 (Haryana) India.

f) Our Quality:

Maintaining high quality standards in every stage of business is the goodwill of our company. We do obey quality dimensions from the beginning of collecting raw materials to delivering the products. Exporting premium quality of products is the hallmark of our corporate entity.

For manufacturing the products, our production team normally uses pp, polyester staple fiber as the raw materials. Our export quality inspection team is well equipped with our in-house latest tools and techniques as well. We usually import products like latex chemicals, textile material and stock lots of textiles, etc.

g) Infrastructure:

Our well-arranged infrastructure includes expert manufacturing team and experienced production unit.

Here, our engineers use several equipments like raw material processing machines, designing machines, quality checking machines and many useful tools.

We also have high-tech lab, quality control room, site office in order to strengthening our business. We make different design of carpet items at affordable price, so that customers from across the world get benefited by our creativity.

h) Product wise performance:

Product wise performance of the Company has been mentioned in the attached balance sheet of the Company.

i) Operations and Performance of the Company

During the year under review, FY 2025-26, the Company recorded an income of ^113,831.18 as compared to ?5,608,482.56 in FY 2024-25. The decrease in income was primarily due to international crises, adverse market conditions, and other external factors affecting business operations. Despite these challenges, the Company continued to focus on cost control and operational efficiency. The management remains optimistic and is taking necessary steps to improve the Companys performance in the coming years.

j) Opportunities & Threats:

The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. The new age Indian consumer, the organized retail potential, which is creating the huge consumption opportunity, is by far the biggest Opportunity for companies like us. With the aspirational and rich class in India having a better penetration, our product led growth will help the company in both the immediate and long run. Also, with the rural India being revisited by marketers through the modern retail philosophy, the opportunity is huge.

Competition from Indian and global players remain a matter of concern and probable threat; while the company is well prepared to tackle such issues on an ongoing basis.

The textile and non-woven fabrics industry continues to operate in a dynamic business environment influenced by global economic conditions, geopolitical developments, changing trade policies, fluctuations in raw material prices, and evolving regulatory requirements.

Ongoing geopolitical tensions and war-related developments have led to volatility in global crude oil prices. Since crude oil derivatives constitute a major input for the non-woven fabrics industry, fluctuations in oil prices directly affect raw material costs and operating margins. Any prolonged disruption in global energy markets may increase production costs and adversely impact profitability.

Economic uncertainties and industry-wide challenges have led to higher employee absenteeism and increased workforce turnover. The availability of skilled and semi-skilled manpower remains a critical factor for maintaining operational efficiency Company continues to focus on product quality, innovation, customer relationships, and operational efficiency to maintain its competitive position.

k) Outlook:

The Company is continuously trying to accomplish the desired results. The Company will achieve more turnovers by various marketing strategies, offering more quality products, launching new products etc. in coming years followed by increase in profit margin by way of various cost cutting techniques and optimum utilization of various resources of the Company.

l) Internal Control System and Their Adequacy

There are adequate internal controls to safeguard the assets and protect them against losses from unauthorized use or disposition and the transactions are authorized, recorded and reported correctly. The Audit Committee periodically reviews the internal controls systems and reports their observations to the Board of Directors. The Directors have appointed M/s. R.S. Galyan & Associates, Chartered Accountants as the Internal Auditors of the Company for the 2025-2026.

m) Human resource / Industrial relations:

The Company believes that the human resources are vital in giving the Company a competitive edge in the current business environment. The Companys philosophy is to provide congenial work environment, performance-oriented work culture, knowledge acquisition / dissemination, creativity and responsibility. As in the past, the Company has enjoyed cordial relations with the employees at all levels. The Company continues to run an in-house training program held at regular intervals and aimed at updating their knowledge about issues Internal Control Systems and Adequacy. The Companys operating and business control procedures ensure efficient use of resources and comply with the procedures and regulatory requirements.

n) Details of significant changes (i.e. Change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor:

Particulars	Financial Year 2025- 2026	Financial year 2024-25
Debtors Turnover	15.16	19.48
Inventory Turnover	23.10	21.83
Interest Coverage Ratio	1.19	96.75
Current Ratio	1.52	10.66
Debt Equity Ratio	0.09	0.003
Operating Profit Margin (%)	2.02	4.48%
Net Profit Margin (%)	0.00	2.25%

o) Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

The net worth of the Company decreased marginally from ?72,508,315.87 as on March 31, 2025 to ?72,421,182.28 as on March 31, 2026. The decrease was mainly due to lower income during the year on account of adverse market conditions, international crises, and other external factors affecting the Companys operations.

B. DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT:

• shares in the demat suspense account or unclaimed suspense account:

Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year	NA
Number of shareholders who approached listed entity for transfer of shares from suspense account during the year	NA
Number of shareholders to whom shares were transferred from suspense account during the year;	NA
Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year;	NA
The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.	NA

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANYS CODE OF CONDUCT

This is to confirm that the Company has adopted a Code of Conduct for its employees including the Managing Director. The Code of Conduct as adopted is available on the Companys website. I confirm that the Company has in respect of the Financial Year ended March 31, 2026, received from the Senior Management team of the Company and the members of the Board, a declaration of Compliance with the Code of Conduct as applicable to them.

For Indo Cotspin Limited
Date :14-07-2026
Place: Panipat	Sd/-
	Bal Kishan Aggarwal
	Managing Director