Lahoti Overseas Ltd Management Discussions

Industry Structure and Development Textile division:

India is the_ 6th largest textile exporter globally, contributing about_ 2% of GDP,_ 8.21% of national exports, and_10% of industrial output_as of 2023–24. e sector provides_ direct employment to over 45 million people, especially in cotton textiles and apparel. Lahoti Overseas Limited is mainly engaged in the merchant exports of cotton yarn & grey fabrics where the Company has strong presence and leadership. e Company has strong market presence in export markets like Germany, Portugal, Bangladesh, Vietnam, South Korea, Peru, Colombia, Egypt, Turkey & so on. e Company enjoys the excellent relationship with its overseas customers, which has been built over the years by strictly adhering to delivery schedules maintaining consistent quality and providing prompt after sales service. Indias Export Statistics for cotton textile (April 2024- January 2025)

Indias cotton production in 2024–25 dropped by ~10% due to reduced acreage and weather issues. is led to a_ rise in domestic prices_ and_ increased import dependence, making Indian cotton textiles costlier than global competitors. Exporters faced_ margin pressures_and were unable to offer competitive prices to foreign buyers. India_imposed an 11% import duty on raw cotton, increasing the input cost for raw material.

India added afirecord 25 GW of renewable (nonfossil) capacity_ in FY 2024–25—the highest ever raising the total to approximately_222.9 GW_as of February. Solar power led the growth:_ ~20.8–23.8 GW added, pushing total solar capacity to ~100–102 GW (>100 GW Wind added ~4.15 GW, taking total to ~48–50 GW. Government of India has taken several measures to encourage Renewable Energy Sector in India. Many State Governments and Government of India undertakings also have come out with the Reverse Bidding System to fulfil their obligations for Renewable Energy and combined with this sector has become the most talked about sector attracting huge investments and has the potential for huge growth in future. Lahoti Overseas Limited has ventured into the Renewable Energy Sector by installation of Wind Power projects and Solar Power projects. However, the falling trend in the power purchase prices are affecting adversely on the profit margins and growth prospects.

• e Company has won the Business World International Business Award for Category – "Best Export House" for excellent performance in exports in the year 2010-11.

• e Company have received Second Award in Merchant Exporter Category and ird Award in Trading House Category from Government of Maharashtra for its export performance in the year 2010-11.

• e Company has been awarded with Gold Trophy Award for highest exports of Cotton Yarn (count 50s & below Category II) by Texprocil for the year 2021-22.

• e Company has received Golden Plaque award for highest exports of Cotton Yarn Counts 51s and above in Category I and Silver Trophy for Second Highest Exports of Grey Fabrics in Category II.

• e company has received Silver Trophy for Second Highest exports of Cotton Yarn Counts 50s and below in Category II in the year 2022-23.

ese awards recognized the efforts of the Company in the creation of path breaking trends and excellent export performance in Cotton Textile Industry.

• Production-Linked Incentive (PLI) Scheme, though initially targeted at MMF, has downstream benefits for blended and cotton yarn segments.

• PM-MITRA parks_ (Mega Integrated Textile Region and Apparel) aim to create_ plug-and-play ecosystems, where cotton yarn manufacturing can anchor spinning units.

• Cotton Productivity Mission_ launched in 2024 to support raw material supply and reduce dependence on imports.

• Indias_ apparel and home textiles sectors_ are growing steadily due to: o Expanding_middle class_and urbanization o Increased_ online retail_ and fashion brands sourcing locally

• Global buyers are_diversifying supply chains away from China, and India is a key alternative.

• Indias proximity, cost advantage, and quality consistency_make it a viable supplier for global mills.

• eres growing demand for_organic, BCI-certified, recycled, and traceable cotton yarn_ from brands focused on ESG compliance.

• Indian mills adopting_ zero-liquid discharge, renewable energy (solar/biomass), andfitraceability tech_are gaining favor with international brands.

• Ongoing negotiations and existing Free Trade Agreements (FTAs) with countries like_ UAE, Australia, Japan, and UK_are expected to increase demand for Indian textiles.

• India may gain_preferential accessfito high-demand regions where cotton yarn is a key intermediate good (e.g., EU, Southeast Asia).

While FY 2024–25 presented_ challenges in raw material supply and global volatility, the_ long-term outlook for cotton yarn in India remains promising. Power Projects Division:

Power Projects specifically the Renewable Energy projects are highly capital intensive. ese projects are also dependent on natural resources like wind, water, sunlight etc. e requirement of good infrastructures such as connectivity of roads, viability of communication systems play key roles in such projects. Being highly capital intensive, the cost of production of energy is relatively higher in such projects._ However, there is no consumption of Raw Materials and also due to the substantial reduction in the capital cost in recent times, these projects are now becoming viable. e floor price of REC have been revised downwards recently will help to increase the sale of REC, however the matter of allowing the vintage multiplier to the old investors in the sector is still to be resolved and the same is subjudised.

Derivatives can help investors diversify their portfolios, hedge against price fluctuations, and manage risk. Derivatives allow investors to hedge against price fluctuations, diversify portfolios, and enhance overall risk management strategies

Revenue in Textile Division has shown an increased by Rs. 1866.84 Lakhs when compared to last year. e profits of the Company shown an increase of Rs.96.30 Lakhs when compared to last year profits.

Revenue from Power Division decreased by Rs. 113.95 Lakhs when compared to last year. However the Profits of Power division has shown a decrease by Rs. 99.68 lakhs.

Revenue from Derivatives (F&O) increase during the year by Rs. 69.62 Lacs. e Profit of the Derivatives has shown increase by Rs. 113.68 which includes increase from other Income (Interest from G-Sec) 59.30 during the year.

e long term objective of the Company is to remain strong player in the cotton textiles export market with strong emphasis on product and market development, value added yarns, customer services and Technology Up gradation. Your Company is also continuously improving its operational efficiency, and cost control which alone can improve the bottom line in future in highly competitive environment. Further, your Company is hopeful to get advantage of the overall good times likely to come for the Indian Cotton Textile Industry and will do all out efforts to secure the bigger share of the increasing market in future.

A stable outlook on cotton and synthetic textiles would result from favorable policy environment, improvements in demand-supply position, continued stability in input costs and consequent improvement in margins/liquidity. However, the good monsoon and pick up in Indian economy due to various measures taken by the Government would unleash demand in the long run and offset any slowdown in exports. Further, the hope of revival of USA & European economy will als By encashing the rich experience gained by_ the Company in the Cotton Textile sector, the company has plans to increase its efforts of marketing and to open up foreign offices in order to better serve its customers. e emphasis will also be on more exports of value added items such as dyed yarns, specialty yarns and grey and dyed fabrics.

e overall outlook of the Renewable Energy sector in India has been positive. e supportive steps taken by Government of India and almost all State Governments in India have given a big boost to this sector. e reduction in capital cost of the project particularly in Solar Power have made this sector viable and due to the improvement in technology, this sector will become more competitive and self-sufficient. India has huge potential for Wind and Solar Power as the availability of wind and sunlight are available in abundance in India with favorable weather conditions and India has the __h largest installed_wind power_capacity in the world.

e value of derivatives traded in India in 2025 was 422 times traditional cash trading - the highest among major global markets, Axis Mutual Fund said in a report last year. Retail investors now make up 35% of derivative trading in the country, prompting the regulator to issue repeated warnings on the risks of such trading. Indian regulators will form a panel to study the risk posed by the derivative trading surge. Nudged by SEBI, both BSE and NSE have launched investor awareness campaigns and issued warnings on risks associated with trading in options. e two exchanges have now shi_ed focus to wooing institutional investors, including foreign ones.

• Our business shall dependent on the availability/ supply and cost of raw materials which we source from domestic suppliers. Any significant increase in the prices of these raw materials or decrease in the availability of the raw materials, could adversely affect our results of operations;

• Our business is subject to regulation by several authorities, which could have an adverse effect on our business and our results of operations;

• We are heavily dependent on our Promoters and the loss of their guidance and services may adversely affect our business or results of operations;

• Change in Government of Indias Economic Liberalization policies may hinder prices of our equity shares;

• Change in Tax laws in India (i.e. Goods & Service Tax & Income Tax) may increase tax liabilities of the company inversely affecting PAT;

• Slowdown in the Indian economy may inverse effect in our profit;

• Any Natural calamities, terrorist attack on India may hinder our profit;

• Change in economic regulations and laws may also effect the company adversely

• Unfavourabletari_mayreducethecompetitiveness of Indian textiles.

• Risk of property damage or liability stemming from errors during the building of new projects;

• Risk affecting the viability of the project developer, for example, risks related to key personnel, financial solidity and technical ability to execute on plans;

• Risk of environmental damage caused by the solar park including any liability following such damage;

• Risk of insufficient access to investment and operating capital;

• Risk of a cost increases for key input factors such as labour or modules, or rate decreases for electricity generated;

• Risk of unscheduled plant closure due to the lack of resources, equipment damages or component failures;

• Risk of reduction in sale price;

• Risk of components generating less electricity over time than expected;

• Risk of a change in policy that may affect the profitability of the project, for example changes in levels of tax credit or RPS targets. Also, this includes changes in policy as related to permitting and interconnection and implementation of such policy by Government;

• Risk of changes in electricity generation due to lack of sunshine or dust covering solar panels for long periods of time;

• Risk that all or parts of the solar park will be subject to sabotage, terrorism or the_ and thus generate less electricity than planned;

• Risk of Natural Calamities.

e Company has a proper adequate internal control system to ensure that all the assets are safe guarded and protected against the loss from unauthorized usage or disposition and that transactions are authorized, recorded and reported correctly.

e internal control is supplemented by an extensive internal audit, periodical review by the management and documented policies, guidelines and procedures. e 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.

During the year under review your Company has reported a total income of Rs. 51,262.85 Lakhs out of which the sale realization has increased by 3.86% at Rs. 50,170.79 Lakhs when compared to previous years proceeds of Rs. 48,303.95 Lakhs from the textile division and a decrease of 29.31% at Rs. 274.85 Lakhs when compared to previous year proceeds of Rs. 388.79 Lakhs in the Power division. ere is a realization of Rs. 130.81 lakhs from the Shares and Securities division increase by 113.78% compared to previous year proceeds of Rs. 61.19 Lakhs from the Shares and Securities division during financial year 2024-25.

Further the other income amounts to Rs. 606.39 Lakhs which has decreased by 2.52% Rs. 622.04 Lakhs as compared to the previous year.

During the year, there has been a Cash inflow from Operating activity to the extent Rs.2117.06 lakhs as against cash outflow of Rs. 3620.96 Lakhs during the corresponding previous year. Further during the year there is cash outflow of Rs. 902.11 Lakhs on account of Investment activity as against inflow of Rs. 3239.47 Lakhs during the previous year. During the year the outflow generated over finance activity is Rs. 679.96 Lakhs as compare to outflow Rs. 121.75 Lakhs in the previous year.

e Company continues to lay emphasis on developing and facilitating optimum human performance. Performance management was the key word for the Company this year. Recruitment process has been strengthened to ensure higher competence levels.

Human Resource is the most vital factor to achieve the goals of any organization. To maintain its competitive edge in a highly dynamic industry, Company recognizes the importance of having a work force which is consumer-focused, performance-driven and future-capable. We believe in fostering equal employment opportunities, where individuals are selected and treated on the basis of their job-relevant merits and are given equal opportunities within the organization.

ere were 39 permanent employees on the rolls of the Company as on March 31, 2025.