Prag Bosimi Synthetics Ltd Management Discussions

DISCLAIMER STATEMENT

Certain statements in this report on Management Discussion and Analysis may be forward looking statements and have been issued in terms of the applicable laws and regulations. These statements are based on certain assumptions and expectations of future events.

Actual results could however differ materially from those expressed in the statements or implied due to the influence of external and internal factors, which are beyond the control of the Company. The Company assumes no responsibility in respect of forward-looking statements, which may be amended or modified in future on the basis of subsequent developments, information or events.

GLOBAL ECONOMY AND OUTLOOK

The global economy demonstrated measured resilience in 2025, navigating a challenging landscape defined by geopolitical tensions, elevated interest rates, and persistent supply-side pressures. According to the IMF World Economic Outlook, April 2026, world GDP grew by 3.4 percent in 2025 and is projected to expand by 3.1 percent and 3.2 percent in 2026 and 2027 respectively. These projections, which assume a limited-scale conflict in the Middle East, reflect a broadly stable growth trajectory as the global economy transitions beyond the initial shocks of high inflation. In the advanced economies, central banks have begun pivoting toward monetary easing as inflationary pressures recede. U.S. inflation, however, remains slightly above target, sustaining complexity in global capital flows and currency markets. Energy costs and supply chain stability continue to command boardroom attention worldwide. Sustained hostilities in the Middle East have periodically amplified geopolitical risk premiums, pushing energy prices higher and straining traditional trade routes. Against this backdrop, the global industrial sector is embracing what we see as a defining strategic shift of resilience through diversification, characterised by the regionalisation of supply chains and a deliberate effort to reduce exposure to volatile logistics costs. For a manufacturer with our international footprint, this recalibration of global trade presents both risk managing and opportunity to capture.

INDUSTRY OUTLOOK

According to the IMF World Economic Outlook, April 2026, world GDP grew by 3.4 percent in 2025 and is projected to expand by 3.1 percent and 3.2 percent in 2026 and 2027 respectively. These projections, which assume a limited-scale conflict in the Middle East, reflect a broadly stable growth trajectory as the global economy transitions beyond the initial shocks of high inflation. However, since our factory is not in operation, although we are not in the positionto take the benefit of the industrial growth, but we shall restart with major cost cutting measures for sustaining in future. Despite the global uncertainties & macro-economic challenges, Indias domestic market has shown resilience over the past few years. Indias domestic textile and apparel (T&A) market is estimated to US$ 157 billion in

2025-26, reflecting a growth of 7% compared to the previous year. Apparel dominates, contributing US$ 115 billion, while home textiles (US$ 12 billion) and technical textiles (US$ 30 billion) are steadily growing. In recent times, the Iran-Israel-US conflict has significantly impacted Indias textile and apparel sector, creating pressures across logistics, input costs, and overall operations. Disruptions in key maritime routes, particularly the Red Sea and the Strait of Hormuz, have led to shipment rerouting, increasing transit times, and raising freight and insurance costs, thereby affecting exporters margins and delivery timelines. Concurrently, energy supply constraints have intensified the situation, as Indias LPG imports, of which majority pass through the Strait of Hormuz, have been disrupted. Overall, the industry is witnessing an additional cost burden due to war-related surcharges, adversely impacting global competitiveness.

OPPORTUNITIES

We remain firmly committed to a strategy of sustainable, value-accretive growth. Our capital investment in knitting machine capacity has forward-integrated our operations into higher-value fabric products and positions us well for medium-term earnings growth. Going forward, we intend to expand our product basket, grow our value-added segment, realign our customer base toward more strategic relationships, deepen our penetration of the fabric market, and continue driving operational excellence across our manufacturing facilities. Sustainability remains a parallel priority. We will continue deploying renewable energy assets, targeting a minimum of 75 to 80 percent of our total energy requirements from green sources.The perceptible shift to manmade fibers in the international textile market is already having a similar effect in the Indian textile markets. With the right government policies for encouraging higher consumption of fabrics made from manmade fibers present an opportunity to our company in the years to come. A textile park is being developed adjacent to the factory which is likely to be operational within a year. With the textile park being operationalized the company would be in a better position to market its products and to go for more value added products. Besides with the prioritization of the look east policy, above factory is strategically placed in the north eastern part of the country which will present us with export opportunities. The company is also trying to use its expertise in trading activities and in the service of securing export and import business.

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RISKS AND CONCERNS

The broader economic trends are poised to directly affect a companys growth potential. Persistent inflation has resulted in increase in commodity prices worldwide. Furthermore, the anticipated rise in central bank interest rates in the coming year may dampen growth and strain economies, especially in emerging markets. It is thereby important to manage cost pressures to sustain the Companys overall performance in these conditions.

Reduced purchasing power and increased demand could result in significant shifts in consumer behavior, negatively impacting the textile and apparel market. Consumers might seek more budget-friendly options, potentially leading to reduced growth and profitability for the Company.

HEALTH, SAFETY AND SECURITY ENVIRONMENT

Our Company has always been adopting all possible safety measures concerning the health and safety of the Workers and staffs at all levels. This has improved the morale among the workers and staffs and also the working environment at large. Your Company is in full compliance of all Government directives issued in this behalf. The Company has always considered safety as one of its key focus areas and strives to make continuous improvement on this front.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

Post the settlement of employees through the Golden Handshake Scheme there has been no new human resources/industrial relations issued during the period under review.

CHALLENGES

PTA /MEG /POY are the principals Raw materials for our product whose prices are linked with international market of Oil & Petroleum Product Prices which is of late ever increasing. Besides, apart from normal fluctuation, currency fluctuation may also affect the prices.

Further additional tariffs imposed by the United States of America may also have an impact. Covid 19 and its after effects is another challenge being faced by the company. The Russia Ukraine conflict is another major challenge on the market. It may be noted that raw materials PTA and MEG are derivative of the petroleum product and has to compete with cotton and other natural textiles and it may not be possible for the industry to pass on the entire cost to the consumer, which may result lower margin/losses for the industry.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The company has not been in operation since Covid 19 lock down and has been incurring losses. The provision of the Companies Act, 2013 relating to CSR Initiatives are not applicable to the Company.

COMPLIANCE

The Compliance department of the Company is responsible for independently ensuring that operating and business units comply with regulatory and internal guidelines. The Compliance Department headed by the Company Secretary and Compliance officer of the

Company has continued to play a pivotal role in ensuring implementation of compliance functions in accordance with the directives issued by regulators, the Companys Board of Directors and the Companys Compliance Policy. The Audit Committee of the Board reviews the performance of the Compliance Department and the status of compliance with regulatory/internal guidelines on a periodic basis. The Company has complied with all requirements of regulatory authorities. No major penalties/strictures were imposed on the Company by stock exchanges or SEBI or any statutory authority on any matter related to capital market during the last three years.