BUSINESS SEGMENT- TEXTILES

The Management Discussion and Analysis (MD&A) report of RLF Limited presents an overview of the Companys business performance, industry environment, opportunities, risks and financial performance for the financial year ended 31st March, 2026 . This report has been prepared in accordance with the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 . The statements contained herein may include forward-looking statements based on the Companys current expectations and assumptions and are subject to various risks and uncertainties.

BUSINESS PERFORMANCE

During the financial year 2025-26, the Company continued its operations in the textile and embroidery segment through its embroidery unit at Gurugram. The Company operated computerized embroidery machines and remained focused on maintaining product quality, operational efficiency and effective utilisation of resources.

The Company has also entered into the sports sector through its Sports Academy vertical , which is at an early/development stage. The initiative is focused on structured sports training, athletic development, modern facilities and certified coaching. The Company believes that this business vertical has the potential to provide an additional avenue for long-term growth and diversification.

The overall performance during the year remained challenging, particularly due to a decline in revenue from operations. Going forward, the Company intends to focus on strengthening its core textile business while developing its emerging business verticals.

FINANCIAL PERFORMANCE

During the financial year ended 31st March, 2026, the Company recorded total revenue of Rs.99.04 lakh, as compared to Rs.154.85 lakh in the previous financial year. Revenue from operations stood at Rs.49.31 lakh during FY 2025-26 as against Rs.108.01 lakh in FY 2024-25.

Other income increased to Rs.49.73 lakh during FY 2025-26 from Rs.46.83 lakh in the previous year. Total expenses during the year stood at Rs.130.64 lakh, as compared to Rs.155.17 lakh in FY 2024-25.

The Company reported a loss before tax of Rs.31.60 lakh during FY 2025-26, as compared to a loss before tax of Rs.5.08 lakh in the previous financial year. The Company consequently reported a net loss of Rs.31.60 lakh during FY 2025-26, as against a net loss of Rs.22.82 lakh in FY 2024-25.

The Basic and Diluted Earnings Per Share (EPS) stood at Rs.(0.33) and Rs.(0.32), respectively, during FY 2025-26, as compared to Rs.(0.24) and Rs.(0.23), respectively, during FY 2024-25.

The financial performance during the year reflects a challenging operating environment and lower revenue from operations. The Company remains focused on improving operating efficiency, strengthening its business operations and pursuing opportunities for sustainable growth.

INDUSTRIAL OUTLOOK

The Indian embroidery industry forms an important value-added segment of the textile and apparel sector. Demand for embroidered products continues to be influenced by changing fashion trends, increasing consumer preference for customised products and growing demand for value-added and premium textile products.

The Company believes that increasing fashion consciousness, diversification of textile applications and the growing role of technology in embroidery provide opportunities for businesses with appropriate capabilities and product offerings.

The textile industry, however, remains competitive and is subject to changes in consumer preferences, raw material prices, economic conditions and domestic and international market trends. The Company intends to respond to these developments through operational efficiency, product diversification and prudent resource management.

The sports and fitness sector is also witnessing increasing interest, supported by greater awareness of fitness, youth participation in sports and government initiatives. The Companys Sports Academy initiative seeks to participate in this emerging opportunity through structured training and sports development.

GOVERNMENT POLICIES AND DEVELOPMENTS

The textile sector continues to receive support through various government initiatives aimed at technological upgradation, modernisation, development of textile capabilities and promotion of exports. The Company remains mindful of applicable regulatory and environmental requirements and continues to monitor developments relevant to its operations.

In the sports sector, initiatives such as the Khelo India programme and the Fit India Movement , together with increasing investment in sports infrastructure and training, are contributing to the development of the sports ecosystem.

The Company will continue to monitor relevant government policies, schemes and regulatory developments and evaluate opportunities that may support its business operations.

OPPORTUNITIES AND THREATS

OPPORTUNITIES:

The Company sees opportunities arising from increasing demand for value-added and customised embroidered textiles, expansion into new markets and the growing use of digital and e-commerce channels. Opportunities may also arise through collaborations with fashion designers, brands and other market participants and through adoption of advanced embroidery technologies.

The Companys Sports Academy vertical provides an additional opportunity for business diversification, supported by increasing public and private interest in sports, fitness and athletic development.

THREATS:

The Company operates in a competitive market and may face pressure from competing manufacturers and changing pricing dynamics. Fluctuations in the prices of raw materials such as threads and fabrics may affect production costs and margins.

Changes in consumer preferences, economic slowdowns, supply chain disruptions and dependence on suppliers and logistics arrangements may also affect business performance. The sports business may require significant initial investment and may have a relatively long gestation period, while regulatory approvals and competitive pressures may impact its expansion.

RISK & CONCERN

The Companys business is exposed to various operational and market-related risks. Fluctuations in demand and economic conditions may affect the demand for textile products, while volatility in raw material prices may impact margins.

Intense competition may affect market share and pricing power. Supply chain and logistics disruptions may affect production and timely delivery. The Company also remains exposed to technological risks associated with the maintenance and upgradation of machinery.

Changing regulatory requirements, including environmental and labour-related requirements, may require continuous monitoring and compliance. In addition, changing consumer preferences towards sustainability and customised products require the Company to remain responsive and adaptable.

The Sports Academy business also involves risks relating to capital requirements, infrastructure, regulatory approvals, competition and the time required to achieve operational scale.

The Company seeks to manage these risks through regular monitoring, diversification of suppliers and markets, prudent financial management, operational controls and timely management intervention.

The Company has adequate internal control systems commensurate with the size and nature of its operations.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The internal control framework is designed to ensure that business activities are appropriately authorised, recorded, monitored and reported and to safeguard the Companys assets against unauthorised use, misappropriation and other irregularities.

The Company has computerised its operational and accounting processes and maintains appropriate systems for financial reporting and management information.

The Audit Committee periodically interacts with the Statutory Auditors and reviews matters relating to financial reporting systems, accounting policies and procedures, and the adequacy and effectiveness of internal controls. The management takes appropriate action on the observations and suggestions of the Audit Committee.

The Company continues to review and strengthen its internal control framework and align its processes with appropriate governance and control practices.

HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL RELATION

Human resources remain an important component of the Companys business operations. The Company focuses on employee engagement, development, retention and creating an environment conducive to effective performance.

The Company has an employee induction process and establishes goals and deliverables for employees, which form a basis for performance evaluation and appraisal.

During the year, the Company continued to focus on employee development and capacity building across its business activities. The Company also recognises the importance of experienced and capable personnel in developing its Sports Academy vertical and maintaining effective facility and operational management.

The Company maintained cordial industrial relations during the year and continues to regard its employees as an important contributor to its long-term growth.

KEY FINANCIAL RATIOS

During the financial year ended 31st March, 2026 , the Company witnessed changes in certain key financial ratios as compared to the previous financial year. These variations were primarily attributable to changes in the Companys operating performance, revenue, working capital, capital structure and profitability during the year.

1. Current Ratio: The Current Ratio decreased from 0.72 in FY 2024-25 to 0.66 in FY 2025-26, mainly due to changes in current assets and current liabilities.

2. Debt-Equity Ratio: The Debt-Equity Ratio remained substantially stable at 0.13 during both financial years.

3. Debt Service Coverage Ratio: The ratio decreased from 0.47 to 0.14, primarily due to a decrease in EBITDA during FY 2025-26.

4. Return on Equity: The ratio stood at -1.16% as against -0.83% in the previous year, mainly due to the loss incurred during the year and changes in the share capital.

5. Inventory Turnover Ratio: The ratio increased to 0.43 from nil in the previous year, primarily due to the change in cost of goods sold during FY 2025-26.

6 . Debtors Turnover Ratio: The ratio increased to 1.52 from nil in the previous year, mainly due to revenue generated from operations during the current year.

7. Trade Payables Turnover Ratio: The ratio decreased from 2.38 to 1.00, primarily due to changes in trade payables and operating expenses.

8 . Net Capital Turnover Ratio: The ratio improved from -0.87 to -0.31, primarily due to changes in working capital, including trade receivables.

9. Net Profit Margin: The ratio stood at -64% as compared to -21% in the previous year, mainly due to the loss incurred during FY 2025-26.

10. Return on Capital Employed: The ratio improved from -0.01% to 0.23%, primarily due to changes in capital employed and operating performance.

11. Return on Investment: Not applicable, as there were no relevant investments during the year for computation of this ratio.

CAUTIONARY STATEMENT

The statements contained in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may constitute forward-looking statements within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events and are subject to risks and uncertainties.

Actual results may differ materially from those expressed or implied due to various factors, including changes in market conditions, demand, raw material prices, government regulations, taxation, economic conditions and other factors beyond the control of the Company. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

APPRECIATIONS AND ACKNOWLEDGEMENTS

Your directors place on records their deep appreciation to employees at all levels for their hard work, dedication and commitment, in particular during this unprecedented year. The Directors place on record their special gratitude toward the front-line employees who were working in our factories and in the market to ensure that the Companys products reach to the consumers.

	For and on behalf of the Board
	RLF Limited
Date: 02.09.2026	Sd/-
Place: Gurugram	Aditya Khanna
	Managing Director