Aritas Vinyl Ltd Management Discussions

Your directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2026.

Our Company was originally incorporated on April 17, 2020 as a Private Limited Company as Aritas Vinyl Private Limited under the provisions of the Companies Act, 2013 with the Registrar of Companies, Central Registration Centre. Subsequently, pursuant to a Special Resolution of our Shareholders passed in the Extra-Ordinary General Meeting held on January 03, 2025 our Company was converted from a Private Limited Company to Public Limited Company and consequently, the name of our Company was changed to Aritas Vinyl Limited and a Fresh Certificate of Incorporation consequent to Conversion was issued on January 23, 2025 by the Registrar of Companies, Central Registration Centre.

A significant milestone in the Companys journey was achieved with the successful listing of its Equity Shares on the SME Platform of Bombay Stock Exchange of India (BSE) on January 23, 2026. The listing has enhanced the Companys visibility, strengthened its corporate governance framework, and provided a platform for future growth and value creation for all stakeholders.

Our Company is engaged in manufacturing of technical textile, such as Artificial leather also known as PU Synthetic leather and PVC-coated leather, using the latest technology known as Transfer Coating Technology.

PVC leather, also known as polyvinyl chloride leather, is a type of synthetic leather made by coating a fabric typically polyester or cotton—with a layer of PVC (polyvinyl chloride) offering a soft, flexible, and alternative to genuine leather. It is designed to mimic the appearance and feel of genuine leather offering a range of additional benefits that make it ideal for various commercial and industrial applications.

Our manufacturing facility is situated at Survey No 1134, Village Kubadthal, Taluka Daskroi, Ahmedabad - 382430 admeasuring approximately 6,067 square meters, with an installed production capacity of around 7.8 million meters per year, allowing us to effectively meet a wide range of client demands.

Our Company has a management team with extensive industry experience. Anilkumar Prakashchandra Agrawal and Sanjaykumar Kantilal Patel are the founding promoters of the company, having built it from the ground up since its inception. Anilkumar Prakashchandra Agrawal brings extensive experience in the ceramic industry, which played a key role in establishing and shaping the companys foundation. Together, the promoters set the vision for the business and laid the groundwork for its growth.

Over time, they have gradually passed on key responsibilities to the next generation. Ankit Anilbhai Agrawal, son of Anilkumar Prakashchandra Agrawal, has taken charge of the marketing and sales functions. Additionally, Mohit Ashokkumar Agrawal, a member of their extended family, has also joined the leadership team, contributing to the companys expansion and overall development.

Rutvik Patel, son of Sanjaykumar Kantilal Patel, and Rohit Dineshbhai Agrawal, a member of the extended family, have also joined the family business, contributing to its day-to-day operations. Rutvik Patel oversees the Purchase Department, while Rohit Dineshbhai Agrawal is in charge of the Dispatch Department.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The leather industry has a significant impact on the Indian economy. It is among the top ten foreign exchange earners in the country. Indian cattle & buffalo population accounts for 20% and the goat & sheep population of the country accounts for 11% of the worlds total. This places it in a dominant

position in terms of affluent raw material availability. With the leather industry being among the oldest trade in the country, India has strong skilled manpower and innovative technology. The country has a strong and eco-sustainable tanning base and modern manufacturing units. It also has strong support from the leather, chemical and auxiliary industries. The industry employs about 4.42 million people in the country. It is a prominent source of employment in the rural parts of India with women employed at about 30% in the sector.

India has four main leather sectors: Tanning, Footwear, Leather Garments and Leather garments and Accessories. The country accounts for 13% of the worlds total leather production. It is also the second- largest producer and consumer of leather footwear.

Major footwear and leather products producing states in India are Tamil Nadu, West Bengal, Uttar Pradesh, Maharashtra, Punjab, Karnataka, Madhya Pradesh, Haryana, Kerala, Rajasthan, and Jammu & Kashmir.

OUR COMPETITIVE STRENGTH

The Company endeavours for better quality products that would enable the business to grow into one of the leading Artificial leather manufacturers in the region and an established player in the market. The Companys products are accepted by customers including overseas companies.

1. Quality & Customization:

Our Company is ISO 9001:2015 and IATF 16949:2016, certified for quality management system standard, to comply with the norms of International Standards. We strive hard to maintain quality standards of our product. Quality assurance and quality control are integral part of our manufacturing operations. We cater to specific client requirements, ensuring bespoke texture, color, pattern and feel of the product. We customize the product as per the specific requirement of our client. We believe that quality is an ongoing process of building and sustaining relationship. Our testing laboratory is equipped with necessary infrastructure to test raw material and finished goods. Keeping in view of the expectations of our customers for the quality of our products, we take special care from procuring raw material to packing of finished goods.

We believe that we employ an extensive and stringent quality control through our in-house fully equipped Laboratory for testing of our products at the manufacturing stage which are required to ensure that our finished product conforms with the exact requirement of our customers and successfully passes all validations and quality checks. Our Company is dedicated towards quality of products, processes and inputs; we get repetitive orders from our buyers, as we are capable of meeting their quality standards.

2. Experienced Promoters with sound market knowledge:

We attribute our growth to the experience of our Promoters and senior management team. Our Promoters Mr. AnilKumar Agarwal and Mr. Sanjaykumar Patel leads the company with their vision. Our Promoters share various functional responsibilities amongst themselves for effective management and are also well supported by experienced staff at different levels. The strength and entrepreneurial vision of our Promoters and management have been instrumental in driving our growth and implementing our strategies. We get the benefit from the experience of the promoter and core management team who are actively involved in the day-today affairs of our Companys operations adding valuable knowledge and experience required for sustainable growth. Further, the Company has able technical personnel with the requisite skills, technical know-how and understanding of the industry and complete control over quality of the products being manufactured at its facilities.

3. Fully integrated manufacturing plant set up at a strategic location:

Our manufacturing facility near Ahmedabad is well equipped with the machineries and infrastructure for the production of technical textile, such as Artificial leather also known as PU Synthetic leather and PVC-coated leather. Our state-of-the-art manufacturing facility Utilizing the transfer coating technology and techniques to produce our final products efficiently, safely, and with high quality. We have an integrated automated and efficient production process whereby it will have complete control over final products, quality, cost and output time, we are able to offer competitive pricing without compromising on quality. Our ability to scale production ensures that we meet both small and large client demands promptly. Our facility is designed with Zero Liquid Discharge Solution, where no industrial waste water is discharged into surface waters, thereby minimizing environmental pollution.

4. Enhanced production capacity within a span of three years.

We have started the Manufacturing in the financial year 2022 with an installed Capacity of 42 lakhs meters per year. In the very first year we have utilized 50 % of installed capacity and in the next year we have utilized almost 85% of the installed capacity. In the short span of time, we have started production smoothly and the products are also well accepted by the market. In this year of operation i.e. In Fiscal 2023-24 we have increased the installed capacity from 42 lakhs meters to 78 Lakh meters by investing in the plant and machinery.

5. Long-standing relationship with our customers from diverse industry.

We have diversified customer base across varied end-use industries such as furniture & upholstery, footwear, automobile, Hospital, fashion accessories, and more, within India and overseas. Our business and growth are significantly depending on our ability to provide quality products, timely delivery of goods and maintain the healthy client relationship. We understand the industry is highly competitive and maintaining healthy relationship with them will help us to beat the competition. We have gained significant experience and have established track record and reputation for efficient and timely delivery of our product and services. The customer centric approach of the promoters is one of the key factors for the development of the business of the Company.

6. Our Commitment to Excellence: High-Quality, Versatile, and Certified Products.

Our companys strength lies in our dedication to producing durable, versatile, and high-quality products tailored to the diverse needs of customers across various industries with respect to thickness, fabric, colour, texture and patterns. We uphold the highest standards by ensuring strict compliance with international certifications such as ISO & IATF. Through innovation and sustainable practices, we go beyond meeting expectations—delivering solutions that exceed industry standards while prioritizing environmental responsibility and safety.

OPPORTUNITIES AND THREATS

Opportunities:

1. Growing Consumer Demand for Innovation : Consumer demand for new, innovative products continues to grow, particularly in the dietary/nutritional and cosmetics segments. The Company is well-positioned to capitalize on this trend by focusing on R&D and product innovation.

2. Rising Demand in Emerging Markets : The Company has identified emerging markets, particularly covered all Indian market and then in Asia and Africa, as areas for significant growth. These markets are experiencing an increase in disposable income and consumer demand for health-related and wellness products.

3. Geographic and Market Expansion : The Company plans to expand its footprint in international markets. As part of its strategy, it is exploring entry into additional countries, where demand for the Companys products is expected to rise.

4. Innovation and New Product Development : Continuous innovation and new product launches represent a major growth opportunity. The Company has a robust pipeline of products slated for release in the coming fiscal years, which are gaining traction.

Threats:

1. Low Consumer Awareness : In certain markets, especially emerging economies, consumer awareness of the Companys products is still developing. This could pose a challenge to sales growth, especially in new geographic regions.

2. Government Scheme Delays : The Companys business in certain segments, such as veterinary feeds, may be impacted by delays in the implementation of government schemes and regulations, which could affect the timely release of new products.

3. Professional Skill Shortage : The Companys ability to innovate and maintain high operational standards is challenged by the shortage of skilled professionals in certain markets. This can potentially slow down product development and impact growth.

SEGMENT-WISE PERFORMANCE:

The Company is principally engaged in manufacturing of technical textile, such as Artificial leather also known as PU Synthetic leather and PVC-coated leather, using the latest technology known as Transfer Coating Technology.

The Companys products cater to a diversified range of applications and industries, including automotive, footwear, furnishing, bags, accessories and other consumer and industrial applications.

The Company continues to focus on strengthening its product portfolio, improving product quality and expanding its customer base in order to enhance its business performance.

OUTLOOK:

The Company continues to explore the possibilities of expansion and will make the necessary investments when attractive opportunities arise.

RISKS AND CONCERNS

The Company is exposed to various risks inherent in the manufacturing and technical textiles industry, including fluctuations in raw material prices, changes in market demand, competitive pressures, operational disruptions and changes in regulatory and environmental requirements. The Company continuously monitors these risks and takes appropriate measures to mitigate their potential impact on its business operations and financial performance.

The Company has established a well-defined and integrated risk management framework that supports informed decision-making and long-term resilience. Key components include:

• Systematic Risk Monitoring: Early detection and reporting of potential threats.

• Rigorous Control Systems: Ensuring compliance and operational integrity.

• Balanced Decision-Making: Evaluating both risks and opportunities to drive sustainable value.

Every decision within the organization is made with careful consideration of its potential impact, guided by a culture of accountability and strategic foresight.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUEACY

The company has implemented robust internal control systems that ensure efficient operations, compliance with laws and regulations, and the reliability of financial reporting. Regular audits and reviews are conducted to assess the adequacy of these systems, with improvements made as necessary to address any identified weaknesses. The internal control framework is deemed adequate and effective in mitigating risks.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The companys financial performance has been strong, with revenue growth driven by increased sales across key product segments. Operational efficiency initiatives have resulted in improved margins, despite fluctuations in raw material prices. Investment in technology and production capacity has also contributed to better operational performance, enabling the company to meet growing demand.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT- INCLUDING NUMBER OF PEOPLE EMPLOYED

During the financial year, the company has made significant strides in strengthening its human resources. New training programs have been introduced to enhance employee skills, particularly in areas of quality control and production efficiency. Industrial relations have remained stable, with no major disruptions. The total number of employees as of the end of the financial year 2025-26 stands at 73 (Seventy-Three) (Other than KMP and Directors).

The Company continues to focus on employee development, workplace safety, operational efficiency and maintaining a healthy working environment.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Ratio	Numerator	Denominator	C.Y. Ratio	P.Y. Ratio	% Change	Reason for variance
(a) Current Ratio	Current Assets	Current Liabilities	1.92	1.26	52.38	Increase in Stock, other assets and reduction in creditors from IPO proceeds
(b) Debt-Equity Ratio	Long Term Debt + Short Term Debt	Shareholder equity	0.59	1.89	-68.78	Increase in Shareholder Equity due to IPO
(c) Return on Equity Ratio	Earning After Interest, tax, Depreciation & Amortisation	Average Shareholders Equity	0.13	0.31	-58.06	Increase in Shareholder Equity due to IPO
(d)Inventory turnover ratio	Turnover	Average Inventory	2.09	2.46	-15.04	Increase in Average Inventory resulted in reduction in this ratio
(e)Trade Receivables turnover ratio	Net Credit Sales	Average Trade Receivable	3.74	4.88	-23.36	Increase in Average Debtors resulted in reduction in this ratio
(f) Trade payables turnover ratio	Net Credit Purchase	Average Trade Payable	3.29	3.76	-12.50	Increase in Average Creditors resulted in reduction in this ratio
(g) Net capital turnover ratio		Average				Increase in Average Working
	Total Sales	Working Capital	2.31	6.17	-62.56	Capital resulted in reduction in this ratio
(h) Net profit ratio	Net Profit	Net Sales	0.05	0.04	25.00	Increase in Sales
(i) Return on Capital employed	Earning Before Interest & tax	Capital employed	0.09	0.12	-25.00	Increase in Capital Employed due to IPO

CAUTIONERY STATEMENT:

Statements in the Boards Report and the management discussion and analysis containing the objectives, expectations or predictions of the company may be forward-looking within the meaning of securities laws and regulations. Actual results may differ materially from those expressed in the statement. The operations of the Company could be influenced by various factors such as domestic and global demand and supply conditions affecting sales volumes and selling prices of finished goods, input availability and cost, government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

Place: Ahmedabad Dated: 03.09.2026	BY ORDER OF THE BOARD OF ARITAS VINYL LIMITED
	SD/- ANILKUMAR PRAKASHCHANDRA AGRAWAL CHAIRMAN AND MANAGING DIRECTOR DIN: 06810266