Pasupati Fincap Ltd Management Discussions

Overview of the Company:

Pursuant to the alteration of the Main Objects Clause of the Memorandum of Association approved by the Members at the 30th Annual General Meeting held on September 30, 2025, and the acquisition of control by the incoming Promoters, was taken on record by the Board on July 28, 2025, the Companys principal line of business has changed from real estate development to a diversified textile and plastic enterprise. Presently, the Company is engaged in trading, distribution and agency services across the textiles value chain — including yarns, fabrics, garments and medical textiles — and plastic products, alongside the management of related assets and industrial infrastructure.

The Companys revised objects permit it to carry on business across the textiles and plastics value chain, from raw material sourcing and processing through to trading and distribution, together with the management of the assets and industrial infrastructure required to support these activities. The transition reflects the Boards assessment that this diversified trading model offers a more sustainable and scalable growth path for the Company, given the changed market conditions that had earlier made continued expansion in real estate development difficult. Presently, the company is mainly into textiles and plastics value chain business.

Several factors may affect the Companys results of operations, financial condition and cash flows going forward, including:

• Macroeconomic conditions and industrial/consumption demand cycles;
• Availability and price volatility of raw materials (raw cotton, yarn, fibre, polymers/resins);
• Pricing pressure due to competition and competitive bidding;
• Human resource management, including availability of skilled and unskilled labour;
• Relationships with suppliers, distributors, agents and institutional clients;
• Capital expansion and capital expenditure for plant, machinery and infrastructure;
• Industry structure and development in the textiles and plastics sectors;
• Key strategic priorities;
• Risks and concerns, including raw-material, regulatory, environmental and operational risk;
• Adequacy of internal control systems
• Outlook, opportunities and threats

We have briefly elaborated the above factors below:

Economic Conditions and Business Cycles

The Companys business, apart from internal factors, will also depend on macro- economic conditions. Demand for textile and plastic products is affected by various factors outside the Companys control, including the prevailing domestic and export economic environment, income and demographic conditions, input cost trends, and changes in governmental policies affecting the textiles and plastics sectors. Any slowdown, or perceived slowdown, in the Indian economy, or in the consumption sectors that the Company serves, could adversely impact its business and financial performance. Conversely, sustained growth in these sectors is expected to bring additional demand for the Companys products.

Ability to Control Cost and Attain High Productivity

The prices of the Companys products are determined principally by market forces of supply and demand. Raw material costs — including cotton, yarn and fibre for textiles, and polymers/resins for plastics — together with power, fuel and manpower (skilled and unskilled), form a major portion of the Companys cost base. The Companys ability to execute orders on a timely basis while maintaining cost competitiveness will be a key determinant of profitability.

Pricing Pressure Due to Competition/Competitive Bidding

The textiles and plastics industries in India are highly fragmented and competitive, comprising both organised and unorganised players. Prices for the Companys products are determined principally by market forces of supply and demand, and the Company expects competitive intensity to increase over time, which could affect its profitability if not managed through cost discipline and product differentiation.

Capital Expansion and Capital Expenditure

Capital expansion — including investment in trading and distribution services across cities—involves significant capital expenditure and will determine the Companys future earnings potential. The timing of expansion programmes, the specific projects undertaken, and prevailing general economic conditions will together determine the future growth trajectory of the Company.

Relationships with Suppliers, Distributors, Agents and Clients

The Companys operations and revenues in any period will depend on the orders and business relationships it is able to secure across the textiles and plastics value chain — including raw material suppliers, processing and manufacturing partners, distributors, agents and institutional/retail clients. The Companys ability to win new business and repeat orders, and to maintain good relationships with market intermediaries, will determine its growth.

Human Resource Management

Human capital is pivotal to the growth and success of the organisation. The Company strives to foster a safe, congenial and inclusive work environment and promotes trust, transparency and teamwork through comprehensive and well- documented HR policies covering talent acquisition, onboarding, learning and development, performance management and succession planning.

The Companys culture is centred on four core pillars — engaging with compassion, transparency, respect and ethics. Trading operations of the kind the Company is entering are typically manpower- intensive, and the Companys growth is therefore likely to be affected by its ability to attract, train and retain skilled and unskilled workforce across its textile and plastic operations.

The Currently the company has 3 permanent employees under the employment of the company.

Industry Structure and Development

Indias textiles industry is one of the oldest and largest in the countrys economy, with an integrated value chain spanning fibre, yarn, fabric, garments and technical/medical textiles, and remains a significant contributor to manufacturing output, exports and employment. The plastics industry in India has similarly grown steadily, supported by rising demand from packaging, consumer goods, infrastructure and industrial applications. Both sectors continue to benefit from Government initiatives aimed at boosting domestic manufacturing, favourable demographics, and growing domestic consumption, alongside export opportunities, though they also face rising input costs, regulatory and environmental compliance requirements, and increasing competitive intensity, including from imports.

4. Key Strategic Highlights

• Building Trading and service capability across the textiles and plastics value chain
• Growth in the market through new product lines, business models and collaboration/marketing arrangements
• Margin enhancement through cost discipline, backward/forward integration and operational efficiency
• Innovation and sustainability, including exploration of medical textiles and value- added plastic products
• Investment opportunities in plant, machinery and industrial infrastructure to support scale

As a Company, the Board is optimistic about the future and the Companys growth path in its new textiles and plastics business and is confident in its ability to grow organically by adopting appropriate technologies and processes across the value chain.

5. Risks and Concerns

Risk is an integral and unavoidable component of all businesses. The Company is committed to managing its risk in a proactive manner. Though risks cannot be completely eliminated, an effective risk management plan ensures that risks are reduced, avoided, retained or shared. The principal risks applicable to the Companys textiles and plastics business include:

• Raw material risk — volatility in the price and availability of cotton, yarn, fibre, polymers and resins
• Competition risk — from both organised and unorganised players, including new entrants
• Operational risk — including risks relating to plant operations, supply chain and workforce
• Concentration risk — arising from reliance on particular products, suppliers, clients or geographies

The Company is in the process of establishing a comprehensive risk management framework commensurate with the size and nature of its new business, covering identification, assessment, mitigation, monitoring and reporting to the Board and Audit Committee, which are responsible for overseeing the effectiveness of this framework.

6. Internal Control Systems and Their Adequacy

The Company is committed to maintaining a system of internal controls commensurate with the nature, size and complexity of its textiles and plastics operations. These controls are intended to provide reasonable assurance regarding:

• Timely preparation of reliable financial information
• Accuracy and completeness of accounting and inventory/production records
• Safeguarding of assets, including plant, machinery and inventory, from unauthorised use or loss
• Prevention and detection of fraud and errors
• Effectiveness and efficiency of operations

The Companys internal control framework is being aligned with the requirements of the Companies Act, 2013, and will be supported by an Internal Audit function, together with periodic reviews by management and well- documented policies and guidelines, as the Company establishes and scales its processing operations.

7. Outlook, Opportunities and Threats

The outlook for Indias textiles and plastics sectors remains broadly positive, supported by rising domestic consumption, Government initiatives to boost domestic manufacturing and exports, and opportunities in value- added segments such as medical textiles and technical/engineering plastics. At the same time, both sectors face threats and challenges, including volatility in raw material prices, rising input and compliance costs, competition from low- cost domestic and imported products, and tightening environmental regulation. The Company will continue to monitor these developments closely and calibrate its strategy accordingly as it builds out its textiles and plastics operations.

8. Cautionary Statement

Statements made in this Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates and other similar matters may constitute forward- looking statements within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied in such statements. Important factors that could influence the Companys operations include, among others, climatic and economic conditions affecting demand and supply, raw material price volatility, government regulations and taxation, environmental and labour compliance requirements, and natural calamities, over which the Company does not have direct control. The Company undertakes no obligation to publicly update or revise any forward- looking statements, except as required by law.

By Order Of The Board
For Pasupati Fincap Limited
Date: September 03, 2026
Place: New Delhi
Sd/- Anil Malik	Sd/- Rishabh Talwar
Whole Time Director	Non- Executive & Non- Independent Director
DIN: 10948189	DIN: 10316259