Angel Fibers Ltd Management Discussions

COMPANYS BUSINESS

The Company is principally engaged in the manufacture and marketing of cotton yam. Its spinning units are situated between Rajkot & Jamnagar, a prominent cotton-producing region in Gujarat, with an aggregate installed capacity of 39648 spindles.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian textile industry has an integrated value chain extending from fibre and yarn to fabrics, processing, garments and made-up textile products, with the spinning industry serving as an important link between cotton cultivation and downstream textile manufacturing.

India remained the sixth-largest exporter of textiles and apparel globally in 2024, accounting for approximately 4.1% of global trade in the sector. Exports of major textile commodities amounted to USD 3.10 billion in July 2025, registering year-on-year growth of 5.37%.

Exports of cotton textiles, comprising cotton yarn, fabrics, made-ups and handloom products, amounted to USD 1.02 billion in July 2025, recording year-on-year growth of 5.17%.

Cumulative exports of cotton textiles during April-July 2025 stood at USD 3.88 billion and remained broadly stable compared with the corresponding period of the preceding year. The textile and apparel value chain provided direct employment to more than 45 million people during 2025, highlighting its importance as one of Indias largest employment-generating industries.

Approximately 95% of the cotton available in the domestic market is consumed by the textile industry, demonstrating the close linkage between cotton availability and the performance of spinning and downstream textile units.

During 2025, the Government temporarily exempted all varieties of imported cotton from the applicable 11% import duty up to 31 December 2025, with the objective of improving raw-material availability and stabilising input costs for textile manufacturers.

(Source: Ministry of Textiles/ DGCIS)

OPPORTUNITIES

Indias integrated cotton-to-textile value chain provides a strong foundation for growth in the spinning industry. The Ministry of Textiles has set a target of achieving textile and apparel exports of ?9 lakh crore by 2030, indicating significant long-term export potential.

Development of seven PM MITRA Parks with an approved outlay of ?4,445 crore is expected to improve infrastructure, integration and logistics efficiency across the textile value chain. The Union Budget allocation for the Ministry of Textiles increased by 19% to ?5,272 crore for FY 2025-26, reflecting continued policy support for the sector.

Growth in domestic garments, hosiery, fabrics and home textiles is expected to support demand for quality cotton yarn. Diversification of global sourcing may create additional export opportunities for efficient and quality-focused Indian spinning mills. Investment in automation, energy-efficient machinery and improved process controls offers scope for higher productivity and lower manufacturing costs. Demand for compact, contamination-controlled, organic and sustainably produced yarn provides opportunities for product diversification and improved realisations.

Spinning units with efficient cotton procurement, consistent quality and diversified domestic and export customers are expected to be better positioned to benefit from these opportunities.

(Source: Ministry of Textiles)

THREATS

Volatility in domestic and international cotton prices may adversely affect raw-material costs, inventory valuation and operating margins. Global tariff-related issues and uncertainty in major export markets may affect demand and yarn realisations.

Fluctuations in input costs, particularly power, labour and finance costs, may reduce the competitiveness of spinning units. Dependence on seasonal cotton arrivals may result in higher working-capital requirements and expose mills to procurement and inventory risks.

Competition from other cotton-producing countries and alternative fibres may place pressure on export volumes and product margins.

(Source: Ministry of Textiles)

SEGMENTAL REVIEW AND ANALYSIS

Company is engaged in manufacturing of only one product i.e. cotton yarn and hence there is single segment reporting. The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements of the Company have been prepared in accordance with the Accounting Standards (AS) prescribed under Section 133 of the Companies Act, 2013, read with the applicable rules thereunder. The Company has consistently followed the accounting treatments prescribed under the applicable Accounting Standards and has not adopted any accounting treatment different from those prescribed under the said Accounting Standards in the preparation of the financial statements.

RISKS AND CONCERNS

Fluctuations in cotton prices, availability, quality and exchange rates may materially affect production costs, inventory values and profitability. Uncertainty arising from global tariffs and changing international demand may impact cotton-yarn exports and selling prices.

Increasing power, labour, finance and compliance costs may exert pressure on operating margins and working-capital requirements. Dependence on seasonal cotton procurement exposes the Company to supply-chain disruption, stock-holding and price-mismatch risks. Competition from domestic manufacturers, overseas suppliers and man-made fibres may affect capacity utilisation, market share and product realisations.

(Source: Ministry of Textiles)

OUTLOOK

The outlook for the spinning industry remains cautiously positive, supported by Indias established cotton base, integrated textile value chain and continuing domestic demand for yam.

Cotton yarn, fabrics and made-up textile exports recorded growth of approximately 4.1% in November 2025, indicating improvement in demand during the period. Government initiatives such as PM MITRA Parks are expected to improve textile infrastructure, reduce logistics costs and strengthen the competitiveness of domestic manufacturers.

The Governments objective of expanding textile exports by 2030 may create long-term opportunities for efficient and quality-focused spinning units.

However, future performance will remain dependent on cotton availability and prices, yarn realisations, energy costs, capacity utilisation and demand conditions in domestic and international markets.

(Source: Ministry of Textiles)

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The company has established a robust internal control system designed to ensure the accuracy and reliability of financial reporting, safeguard assets, and promote operational efficiency. These controls are aligned with statutory requirements and are regularly reviewed to adapt to the evolving business environment. Internal audits are conducted periodically by an independent audit team to assess the effectiveness of controls and identify any areas for improvement. The audit committee, comprising members of the Board, reviews audit findings and ensures timely corrective actions. Standard operating procedures and authorization protocols are in place to prevent fraud and unauthorized transactions. Adequate checks and balances exist across departments, ensuring transparency and accountability. Continuous monitoring and automation of key control processes further strengthen the system. Overall, the internal control framework is adequate and provides a sound foundation for risk management and compliance.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Company operates in a Single Segment of Textiles; brief of the financial performance is here-in-below.

Particulars	FY 2025-26	FY 2024-25
Revenue from operations	2,11,53,19,672.00	2,00,91,41,654.00
Other income	4,69,23,569.00	4,71,38,616.00
Total revenue	2,16,22,43,241.00	2,05,62,80,270.00
EBITDA	12,40,76,579.00	12,57,94,612.00
Less:
Finance Costs	3,22,73,851.00	4,26,99,803.00
Depreciation	5,43,43,210.00	6,36,57,076.00
Profit before tax, exceptional and extraordinary items	3,74,59,519.00	1,94,37,733.00
Add/(Less): Exceptional/ Extraordinary income/ (expense)	0.00	0.00
Profit before tax	3,74,59,519.00	1,94,37,733.00
Less: Taxes on income	2,46,51,437.00	10,56,659.00
Current Tax	67,50,000.00	35,00,000.00
Deferred tax	1,79,01,437.00	(24,43,341.00)
Profit after tax	1,28,08,082.00	1,83,81,074.00
EPS - Basic	0.51	0.74
EPS - Diluted	0.51	0.74

For financial performance concerning operational performance, please refer to the Boards Report. 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, thereof :

Ratio	FY 2025-26	FY 2024-25	% Change	Reason For Change
Debtors Turnover Ratio	16.74 days	20.48 days	-18.26	Although higher revenue was earned during the year, the Debtors Turnover Ratio decreased because credit terms were relaxed to achieve sales growth, leading to slower collection times relative to sales.
Inventory Turnover Ratio (ITR)	8.92 times	10.06 times	-11.33	The Inventory Turnover Ratio decreased by 11.33% as inventory was held for a longer period before being sold. Slower inventory movement relative to the cost of goods sold resulted in an increase in inventory holding days from 36.28 days to 40.92 days.
Interest Coverage Ratio	2.73 times	1.60 times	70.63	Due to Increase in earnings before interest and tax in the year under consideration as compared to previous year.
Current Ratio	1.48 times	1.32 times	12.12	Due to decrease in the profit of the reporting year compared to previous year
Debt-Equity Ratio	1.18	1.59	-25.79	Due to repayment of debt during the year under considerations.
Net Profit Ratio	0.61%	0.91%	-32.97	Due to decrease in net profit during the year under considerations, Net profit ratio has decreased
Operating Profit Margin Ratio	7.31%	7.61%	-3.94	Due to decrease in operating profit during the year under consideration, operating profit margin ratio has decreased
Return on Net Worth	5.12%	7.04%	-27.27	Due to decrease in revenue return on net worth ratio decreased.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company continued to maintain cordial and harmonious relations with its employees during the year. It recognises its workforce as one of its most valuable assets and a key contributor to the Companys growth, operational efficiency and long-term development.

The Company remains committed to the continuous development of its employees and has undertaken various formal and informal training initiatives to enhance technical capabilities, improve productivity and promote long-term employee engagement.

During the reporting financial year, the Company had 22 on-roll office employees and an approximate factory workforce of 275 personnel, comprising contract workers and other factory staff.

The Company will continue to create employment opportunities and promote a diverse workforce while maintaining meritocracy as the principal criterion for recruitment and career development.

Industrial relations remained cordial and satisfactory throughout the year.

HEALTH, SAFETY AND SECURITY MEASURES

The Company continues to accord the highest priority to the health, safety and well-being of its employees and the communities in which it operates. It remains committed to complying with all applicable laws and regulations and to maintaining high standards of occupational health and safety across its operations.

To promote a safe and secure working environment, the Company regularly undertakes safety audits, risk assessments, safety awareness programmes and comprehensive training initiatives for its employees. The Company firmly believes that employee well-being is integral to operational excellence, productivity and sustainable growth.

Mr. Rohankumar Raiyani
Managing Director
(DIN : 08814726)

Mr. Rameshkumar Ranipa Chairman &
Whole-time Director
(DIN : 03339532)

Date: 30.07.2026
Place: Haripar, Jamanagar

For and on Behalf of the Board of Directors,
ANGEL FIBERS LIMITED