Priti International Ltd Management Discussions

Industry Structure and Developments

a) The Handicraft Industry:

The Indian handicraft sector is one of the most vibrant and culturally rich contributors to the nations economy, employing over seven million artisans and craftsmen across rural and semi-urban areas. Traditionally considered a cottage industry, it has evolved into a major revenue generator and exporter, showcasing consistent growth of around 15% in previous years.

In FY 2023324, handicraft exports stood at USD 3.3 billion, marking a 638% decline compared to the prior fiscal due to global demand volatility, inflationary pressures in key markets (notably the US and Europe), and shipping disruptions. Despite these headwinds, the sector continues to receive significant government support through initiatives such as the Comprehensive Handicrafts Cluster Development Scheme (CHCDS) and the National Handloom Development Programme (NHDP). Over the last five years, 6.4 lakh weavers and 5.1 lakh artisans have benefited from various training, design innovation, and marketing infrastructure programs.

There is huge demand for the Indian Handicraft products in both national and international market. To match the demand and supply with quality, there is need to have greater technological support and innovativeness with uniqueness in industry. The significant advances in the availability of handicraft products on various online portals are bolstering market growth in India. Various types of handicraft use different kinds of raw materials that are sourced from different parts of the nation. These include wood, hand-printed textiles, leather crafts, metallic art ware, carpet, wood designs, shawls, various kinds of stone carvings, hand-printed textiles, and various designer ornamental jewelry. Thus, handicrafts are becoming increasingly popular as the countrys travel and tourism industry grows.

The sector is now witnessing digital transformation, with increased presence on e-commerce platforms, modern cluster-based production models, and greater emphasis on contemporary design integration while preserving traditional crafts. Demand for Indian handicrafts remains strong both domestically and internationally, supported by tourism growth and the availability of diverse raw materials such as wood, textiles, leather, metal, stone carvings, and ornamental jewelry.

b) The Furniture Industry:

The Indian furniture industry has undergone significant transformation, driven by urbanization, rising disposable incomes, evolving consumer lifestyles, and growth of e-commerce channels. Valued at USD 23.8 billion in 2024, it is projected to reach USD 44.2 billion by 2033, growing at a CAGR of 6.4%.

Key trends includeShift towards modular, space-saving, and sustainable furniture solutions, Government support under Make in India and Aatmanirbhar Bharat initiatives, Increasing domestic manufacturing capacity through Production Linked Incentive (PLI) schemes

A notable trend is the growing preference for modular, space-saving, and sustainable furniture solutions. Additionally, government initiatives under the "Make in India" and "Aatmanirbhar Bharat" programs, coupled with Production Linked Incentive (PLI) schemes, are encouraging domestic manufacturing and reducing reliance on imports. Organized players are expanding their retail footprint and digital capabilities to tap into both Tier-1 and Tier-2 cities. With rising aspirations among middle-income households and increased traction from institutional and commercial buyers, the industry is poised for robust expansion, albeit with challenges related to raw material costs and supply chain standardization.

The moulded furniture business exhibited a muted performance amid persistent competitive pressure from both unorganized local players and organized industry counterparts. Intense price competition in the entry and mid-range segments posed significant challenges. In response, the Company strategically shifted its focus toward value-added and premium product offerings, aligning with the evolving preferences of the discerning Indian consumer. Simultaneously, we adopted competitive pricing strategies in the entry-level category to safeguard our market share.

The Indian furniture industry is popular in the nation and internationally because of its rich handicraft and attractive traditional art and design. The Indian Furniture market has evolved over time. It has broadened its market from chair and table to designed interiors like wardrobe or sofas. India is a place for unique and excellent creative work of furniture. Furniture has been an essential part of an Indian household for centuries. A major part of the Indian furniture industry accounts in the unorganized sector.

c) The Solar Industry:

The company has recently engaged into business of Solar.

The Budget has been allocated of Rs.10,000 crore for solar infrastructure (large parks, rooftop, off-grid projects).The extension of the PLI Scheme with Rs.24,000 crore to ramp up domestic solar module/cell manufacturing and reduce import reliance.

The Indian solar energy industry has emerged as a key pillar in the nations transition to a sustainable and low-carbon energy future. As of March 2025, the country achieved a significant milestone by surpassing 107.9 GW of installed solar capacity, comprising both utility-scale and rooftop solar installations.

Solar generation for FY 2024325 stood at 144.15 TWh, marking a substantial increase from the 115.97 TWh recorded in the previous year. The industrys structure is now increasingly vertically integrated, with major Indian players establishing end-to-end capabilities from polysilicon to module assembly. Notable developments include Reliance Industries massive Rs.75,000 crore investment in the Jamnagar Giga Complex and Tata Powers Rs.4,300 crore manufacturing project in Tamil Nadu. Domestic solar manufacturing has rapidly scaled, with module capacity reaching 74 GW and cell capacity 25 GW by March 2025, underpinned by the PLI scheme and customs duties that incentivize domestic production. Indias solar PV exports surged to USD 2 billion in FY 2023324, driven by strong demand from the United States, which accounted for over 95% of export volumes. Policy support remains robust, with regulatory innovations such as

Karnatakas Distributed Solar PV Regulations 2025 enabling group net metering and residential solar adoption. However, industry continues to face challenges including high land acquisition costs, limited energy storage infrastructure, and increasing global competition. Management focus remains centered on achieving cost efficiency, backward integration, battery storage expansion, and capital access to fund long-term capacity growth.

Outlook

Priti International Limited continues to consolidate its position as one of Indias most trusted and recognized furniture and lifestyle brands, offering a thoughtfully curated collection of interior solutions for modern living. Our designs blend contemporary aesthetics with diverse styles4 from natural and minimalist to classic and premium4each crafted with clean lines, refined finishes, and uncompromising attention to detail. Over the years, our furniture and handicraft products have become an integral part of Indian homes and global interiors, often cherished for generations due to their strength, durability, and timeless appeal. Known for delivering high-quality, sustainable, and design-led solutions, we have earned a reputation for excellence across both retail and project-based markets, serving individual homeowners, corporates, designers, and institutional clients in India and abroad.

Looking ahead, we foresee continued positive momentum for our core furniture and handicraft business, driven by rising domestic demand, evolving consumer lifestyles, and increasing appreciation for handcrafted and sustainable furniture in international markets. With established exports to the USA, UK, Spain, Belgium, Holland, Turkey, Netherlands, Germany, and other global destinations, we are confident that repeat orders and long-term client relationships will sustain growth in FY 2025326. Our marketing strategy will remain focused on participating in international fairs and exhibitions, expanding our digital presence, and building new collaborations with designers and distributors to reach a wider customer base. We expect our scalable, order-driven business model, supported by strong in-house capabilities for upcycling and transforming waste wood and metal into creative d?cor solutions, to reinforce our leadership position as a preferred global supplier of handcrafted furniture.

At the domestic level, our brand continues to penetrate deeper into the Indian market by offering affordable yet premium ready furniture solutions, making the process of choosing and owning furniture seamless and delightful. With manufacturing facilities in Basni, Boranada, and Mogra, we cater to a wide product range spanning living room, bedroom, dining, and office furniture, as well as d?cor and textile-based products. This breadth, coupled with our commitment to customization, sustainable materials, and competitive pricing, strengthens our value proposition and enhances customer loyalty across multiple segments.

In alignment with our long-term vision of sustainable and diversified growth, we have ventured into the solar energy sector during the year. With India surpassing 107 GW of installed solar capacity and the sector expected to grow at an annual rate exceeding 20325 GW, this strategic expansion is aimed at reducing energy costs for our own manufacturing operations while tapping into emerging opportunities in captive and commercial solar projects. This initiative not only aligns with our sustainability ethos but also opens new revenue streams, positioning Priti International Limited as a forward-looking company integrating traditional craftsmanship with clean energy solutions.

As we move into the next fiscal period, our strategic priorities include expanding global export footprints, enhancing product innovation, scaling domestic retail presence, optimizing operational efficiencies, and driving sustainable initiatives across our value chain. With our legacy of quality craftsmanship, strong supplier and customer relationships, and new ventures in renewable energy, Priti International Limited is well-poised to deliver resilient and sustainable growth while creating long-term value for its stakeholders.

Currently the Company is carrying on its manufacturing units on following locations:

1. F-43 MIA, Phase I Basni Jodhpur, 342005.

2. Khasara No. 20, Opp. Meera Sansthan, Boranada, Jodhpur, 342012

3. Khasara No. 130/2/3/4 Mogra Kallan by The Side Off JIET College Bridge, Pali Road 342802

Recent Government Initiatives:

Pradhan Mantri Vishwakarma Kaushal Samman (PM-VIKAS)

The PM-VIKAShas been launched by the Ministry of MSME in September 2023, it aims to benefit over 3 million artisans by providing skilling, toolkit vouchers up to Rs. 15,000, marketing support, and access to collateral-free business loans at 5% interest. As of the latest data, over 2.37 million artisans have successfully enrolled, and more than 11 lakhs have received training

National Handicraft Development program (NHDP)

The National Handicraft Development Programme (NHDP) is a flagship initiative of the Ministry of Textiles, Government of India, aimed at the holistic growth and sustainability of the handicraft sector. It provides financial, technical, design, marketing, and infrastructure support to artisans and craft clusters across the country. The program focuses on skill development, design innovation, technology upgradation, raw material support, common facility centers, and market linkages through domestic and international fairs.

Under NHDP, over 6 lakh artisans have benefited in recent years, gaining access to modern tools, improved production techniques, and enhanced visibility on e-commerce platforms. The scheme also encourages the preservation of traditional crafts, boosts employment generation in rural areas, and enhances the global competitiveness of Indian handicrafts.

PM Surya Ghar: Muft Bijli Yojana

Launched in February 2024, this landmark scheme targets 1 crore households, offering rooftop solar systems with subsidies of up to Rs.78,000 per household, along with 300 units of free electricity per month. Over 10 lakh households have been onboarded, with Rs. 4,770 crores in subsidies disbursed by March 2025

Opportunities and Threats

Opportunities

Rising Global Demand for Handcrafted and Sustainable Products: Increasing consumer preference for eco-friendly, artisanal, and ethically sourced furniture provides strong growth prospects in both domestic and international markets.

Export Market Expansion: With established presence in countries like the USA, Spain, Belgium, Holland, Turkey, and Germany, along with government support through schemes such as NHDP, PM Vishwakarma Yojana, and ODOP, there is significant scope to scale exports further.

Digital and E-commerce Growth: Online retail channels and collaborations with major global marketplaces present opportunities to reach wider customer segments, particularly in Tier-2 and Tier-3 cities as well as overseas markets.

Product Diversification and Customization: The ability to offer bespoke, made-to-order furniture and d?cor solutions enhances value proposition and caters to evolving customer preferences.

Renewable Energy Expansion: Entry into the solar energy sector offers long-term growth potential amid Indias ambitious renewable energy targets, government subsidies (e.g., PM

Surya Ghar Yojana, PLI scheme), and rising corporate adoption of clean energy solutions.

Government Support and Cluster Development: Continuous policy support for artisans, MSMEs, and export-led manufacturing through NHDP, design upgradation programs, and international trade fairs boosts industry competitiveness.

Threats

Global Economic Uncertainty: Fluctuations in demand from key export markets due to economic slowdowns, inflation, or geopolitical factors may impact sales volumes.

Raw Material Price Volatility: Dependence on wood, metal, and textiles exposes the company to fluctuations in input costs, which may affect margins.

Unorganized Sector Competition: The presence of low-cost, unbranded players in domestic markets may create pricing pressures, particularly in the furniture segment.

Supply Chain Disruptions: Logistics delays, container shortages, and high shipping costs can affect timely delivery of export orders.

Regulatory and Environmental Compliance: Increasing global and domestic environmental regulations may necessitate additional investments in sustainable sourcing and manufacturing practices.

Technological and Quality Risks in Solar Projects: As a new entrant in the solar segment, the company faces execution risks, policy changes, and high capital intensity challenges that could impact profitability in the initial stages.

Risks and Concerns

The Company operates in a dynamic business environment that is subject to various risks which may impact its operational and financial performance, both internal and external, in the undertaking of its day-to-day operations and in pursuit of its longer-term objectives.

Raw Material Price Volatility: The furniture and handicraft industry relies heavily on raw materials such as wood, metals, and textiles. Price fluctuations in these materials, driven by global demand-supply imbalances, seasonal factors, and geopolitical uncertainties, can significantly impact production costs. Prolonged price increases may compress profit margins if they cannot be fully passed on to customers.

Supply Chain Disruptions: The Companys operations are dependent on timely availability of raw materials and efficient logistics for export fulfillment. Disruptions caused by container shortages, shipping delays, port congestion, and increased freight costs can adversely affect delivery schedules and customer satisfaction, potentially resulting in order cancellations or penalties. Present risk concern is the Tariff increase in US market.

Intense Market Competition: The furniture and handicraft sector faces strong competition from both organized domestic players and small unorganized units offering low-cost alternatives. This competitive environment exerts pricing pressures and demands continuous investments in new product designs, quality enhancement, and innovation to retain and expand market share.

Foreign Exchange Fluctuations: As a significant portion of the Companys revenues comes from exports, fluctuations in currency exchange rates, especially depreciation of foreign currencies against the Indian Rupee, can impact profitability. Although the Company uses hedging mechanisms to mitigate this risk, market volatility can still lead to unforeseen losses.

Global Economic and Trade Policy Risks: Heavy reliance on international markets exposes the Company to risks from global economic downturns, changes in trade agreements, tariff barriers, or alterations in import policies of key destination countries. Any of these factors could lead to a reduction in export demand or increased operational costs.

Environmental and Regulatory Compliance: Stringent environmental norms regarding sourcing of wood and metals, proper waste management, and initiatives for reducing carbon footprint are increasingly becoming mandatory. Ensuring compliance requires continuous monitoring, investments in eco-friendly processes, and adherence to certification requirements, potentially increasing operational expenses.

Risks in Solar Energy Business:

•Execution Challenges: Being a relatively new venture, solar projects are exposed to risks of project delays, site development issues, and technological hurdles that can impact timely completion and revenue realization.

•High Capital Requirements: Solar projects are capital-intensive, requiring significant upfront investments with long payback periods, creating financing and liquidity risks.

•Policy and Regulatory Changes: Shifts in government policies, subsidy structures, or taxation frameworks can affect project viability and returns on investment.

•Competition from Established Players: Larger, well-established companies in the solar sector pose challenges in terms of pricing, technology adoption, and market penetration.

•Supply Chain Constraints: Availability of critical components such as solar panels, inverters, and batteries may be affected due to global supply shortages or price hikes.

•Grid Integration Risks: Issues related to power evacuation, grid connectivity, or regulatory approvals may impact energy distribution and project efficiency.

External Uncontrollable Factors: Despite proactive measures such as supplier diversification, robust quality checks, foreign currency hedging, and operational efficiency initiatives, certain external factors like geopolitical tensions, natural disasters, pandemics, or abrupt policy changes remain beyond managements control and may adversely influence overall business performance.

Internal Control System and Their Adequacy

The Company has instituted a comprehensive internal control framework designed to ensure effective management of operations, accuracy of financial reporting, and full compliance with applicable laws and regulations. The internal control system is commensurate with the size, scale, and complexity of the Companys business and is structured to safeguard assets, prevent and detect fraud or irregularities, and ensure operational efficiency.

The Company has implemented automated processes and ERP-based systems to enhance accuracy, prevent data inconsistencies, and maintain real-time monitoring of key operational activities. Regular internal audits are conducted by an independent internal audit team, supported by external professionals where necessary, to review the adequacy and effectiveness of existing controls. Findings from these audits are reported to the Audit Committee and senior management, ensuring timely corrective actions and continuous improvement of processes.

Risk management is an integral part of the internal control framework, enabling the identification and mitigation of operational, financial, and compliance-related risks. The Company continuously reviews and upgrades its internal controls to align with evolving business needs, technological advancements, and regulatory requirements. The Board of Directors, along with the Audit Committee, regularly evaluates the adequacy and effectiveness of these controls, ensuring that the system remains robust, reliable, and capable of safeguarding the Companys assets while fostering sustainable growth.

The Statutory Auditors of the Company have reported unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting for the FY 2025.

Discussion on Financial performance with respect to operational performance

Revenue from operations decreased to Rs.77.06 crore in FY 2025 compared to Rs.90.32 crore in FY 2024. Revenue from operations declined by approximately 14.68%. The decrease was primarily due to lower demand in key markets and operational disruptions affecting production and sales and hindrances in the international market due to various global reasons.

EBITDA decreased to Rs.7.01crore in FY 2025 from Rs.13.37 crore in FY2024. A decline of 47.56% since last year.

Profit after tax decreased to Rs.4.75 crore in FY 2025 from Rs.9.56 crore in FY 2024. A decline of 50.31% since last year.

PRITI HOME: The Company has its brand PRITI HOME.

Priti Home is a brand of online Wooden Furniture store for Quality Home & Office Furniture in wide range of varieties and Style. The Company, through its websites, generates a significant number of customers. As our business in customer focus, we keep developing new ideas to promote our business to all category of customers.

BANGALORE STORE:

The company has presented the offline store in the hub city Bangalore at a prime location at No. 13, 15TH Cross Road, 4th Phase, Sarakki J.P Nagar, Bengaluru, Bengaluru Urban, Karnataka 560078 which offers all the range of furniture products living room, dinning, kitchen, seating etc.

BORANADA STORE:

In previous year, the Company launched its Fourth offline store named Priti Home. This store is strategically located at Boranada, in the heart of the Blue City, Jodhpur, Rajasthan and is set to become a hub for businesses seeking high-quality, stylish, and functional furniture solutions. This Store is situated at Opp. Meera Sansthan, Boranada Main Road, Jodhpur, Rajasthan 342012.

The Company has a robust presence on all major social media platforms, such as Instagram, Facebook, YouTube, LinkedIn, Amazon, Flipkart and other E-Commerce Market Place. We have a young and dedicated team that manages our social media handles, keeping our customers andfollowers updated on our products. And Having the Offline Store is enabling the direct customer interaction resulting in increase in Revenue generation of the Company.

PriAuction.com

The Company has launched the New Auction Website PriAuction.com, a cutting-edge online platform that seamlessly integrates exclusive furniture and timeless antiques. PriAuction.com is poised to redefine the way enthusiasts and collectors engage with premium furniture and antique pieces. This launch marks a significant step forward for our Company, positioning us as a leader in the dynamic and evolving market of exclusive furniture and antiques and resulting into Indias first-ever vintage furniture e-auction site that we will use for auctioning period and rare pieces, original antiques, collectors items and reproduction of old pieces, among others.

Government and Corporates Procurement Tenders

The Company has also achieved a milestone by fulfilling various Corporates and Government Procurement tenders for Furniture including orders from various well known establishments which gives us a significant step forward in our furniture segment. Also the order pending from

CRPF Headquarters was received this year. The 2 biggest order we received is from TATA MEMORIAL CENTRE & CRPF DELHI.

Airport Furniture segment

The Company have taken a strategic step towards diversification and expansion by entering the lucrative Airport Furniture segment. The Airport Furniture segment has presented significant opportunities for growth, and we are well prepared to capitalize on these prospects. This year we have dig out various opportunities in Airport Furniture segment through Airport Authority of India like Begumpet Airport, Kolkata Airport and Vijayawada Airport making PRITI a brand with fulfilling their needs and emerging and establishing more and more in this sector.

Segment-wise or product-wise performance

The Company is engaged in the business of handicrafts and currently operates in two segments viz. A) Wooden and Iron Handicraft; B)Textile Handicraft; and C) Solar Items.

A) Wooden and Iron Handicraft:

Revenue from operations decreased to Rs.72.80 crore in FY2025 compared to Rs. 89.36 crore in FY 2024.

B) Textile Handicraft:

Revenue from operations decreased to Rs. 26.50 Lakhs in FY 2025 compared to Rs.96.72 Lakhs in FY 2024.

C) Solar Items

Revenue from operations is Rs.3.98 crores as compared to nil revenue in the previous financial year.

The Company has provided detailed financial performance of its segments the Segment Reporting section of its Financial Statements, which forms part of this Annual Report.

Material Developments in Human Resources/Industrial relations front, including number of people employed:

The Human Resources (HR) function of an organization is vital to the creation and development of good quality and dedicated human capital, essential to the Companys business and operations. The Company has Human Relations policies in place, which are reviewed and updated regularly in line with the Companys strategic plans. The human relations team continually conducts training programs for talent development. The Company aims to develop the potential of every individual associated with it as a part of its business goal.

The Company acknowledges the employees contribution towards leading, thinking, working, creating, processing and dealing to enhanced growth.

The Company values its human resources as the principal drivers of change. The Company focuses on providing individual development and growth in a work culture that encourages teamwork and high performance.

Financial Performance and Analysis

The discussions in this section relate to the financial results pertaining to the year that ended March 31, 2025. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the financial statements.

The following table gives an overview of the financial results of the Company:

Particulars	Current Financial Year (2024-2025)	Previous Financial Year (2023-2024)
Revenue from Operations	7706.35	9032.50
Other Income	319.86	235.91
Total Revenue	8026.21	9268.41
Less: Expenses	7325.79	7930.81
Profit/loss before Depreciation, Finance Costs,	700.42	1337.60
Exceptional items and Tax Expense
Less: Depreciation/ Amortization/ Impairment	54.17	50.41
Profit /loss before Finance Costs, Exceptional items and	646.26	1287.19
Tax Expense
Less: Finance Costs	6.48	3.48
Profit /loss before Exceptional items and Tax Expense	639.77	1283.71
Add/(less): Exceptional items	0.00	0.00
Add/(less): Extraordinary Items	0.00	0.00
Profit /loss before Tax Expense	639.77	1283.71
Less: Tax Expense (Current & Deferred)	164.38	326.95
Profit /loss for the year (1)	475.39	956.76
Total Comprehensive Income/loss (2)	(57.47)	(6.79)
Total (1+2)	417.92	949.97

Ratio Analysis:

The Company has witnessed a significant change in the financial ratios as compared to previous year which are as follows:

	UNITS	31-Mar-2025	31-Mar-2024
Ratios Financial Performance
1. Operating Profit Margin	%	8.39	14.25
2. Net Profit Margin	%	6.17	10.59
3. Return on Net Worth	%	6.84	16.94
Ratios -Growth
4. Total Revenue	%	13.40	8.92
5. EBITDA	%	47.68	28.44
6. Profit After Tax	%	50.31	34.46
Ratios- Balance Sheet
7. Debtors Turnover	Times	8.82	6.85
8. Inventory Turnover	Times	2.29	4.83
9. Interest Coverage Ratio	Times	99.66	370.11
10. Current Ratio	Times	7.04	4.75
11 Debt Equity Ratio	Times	0.00	N. A

Detailed Explanation on Change in Net Worth:

During the Year under review, the Company reported comparatively lower profitability as against the previous financial year, primarily on account of higher input costs and increased expenditure impacting operating margins, consequently, this has resulted in a moderation of the Return on Net Worth during the current year as compared to the previous year.

	For & on Behalf of Board of Directors of
	Priti International Limited
	Sd/-
Date: September 01, 2025	Goverdhan Das Lohiya
Place: Jodhpur	Chairman
	DIN: 07787326