Yajur Fibres Ltd Management Discussions

FY 2026 represents the fiscal year 2025-26, from 1 April 2025 to 31 March 2026, and analogously for FY 2025 and previously such labeled years

The Board of Directors is pleased to present the Management Discussion and Analysis Report for the financial year ended March 31, 2026. This Report has been prepared in accordance with the applicable provisions of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and provides an overview of the economic environment, industry developments, business performance, opportunities, risks, internal control systems, and future outlook of the Company.

Yajur Fibres Limited is engaged in the manufacture of premium cottonised bast fibres, including flax (linen), hemp and jute fibres. The Company specializes in converting long and brittle bast fibres into cotton-like short staple fibres that can be blended with cotton and man-made fibres using the conventional cotton spinning system. The Companys focus on innovation, sustainability and quality enables it to cater to the evolving requirements of domestic and international textile manufacturers.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Yajur Fibres Limited is engaged in the manufacturing of premium cottonised bast fibres, including flax (linen), jute and hemp fibres. The Company specializes in converting long and brittle bast fibres into cotton-like short staple fibres, enabling blending with cotton and man-made fibres through conventional cotton spinning systems.

The global textile industry is increasingly shifting towards sustainable and environmentally responsible raw materials. Natural fibres such as flax, hemp and jute are witnessing growing demand owing to their biodegradability, lower environmental footprint and increasing acceptance in fashion, technical textiles, home furnishings and industrial applications. Cottonised bast fibres provide an efficient solution for textile manufacturers seeking sustainable alternatives without significant investment in new spinning infrastructure.

Government initiatives such as "Make in India", the Production Linked Incentive (PLI) Scheme for textiles, PM MITRA Parks and the National Technical Textiles Mission are expected to strengthen the Indian textile ecosystem and create additional opportunities for manufacturers of specialty fibres.

GLOBAL ECONOMY

During FY 2025–26, the global economy continued to recover amid persistent geopolitical tensions, elevated interest rates in several developed economies and ongoing supply chain adjustments. While inflation moderated in many regions, global trade remained uneven due to changing trade policies, logistics constraints and fluctuations in commodity prices.

The textile and apparel industry experienced mixed demand across international markets. Consumers increasingly preferred environmentally responsible and sustainable textile products, creating opportunities for manufacturers of natural and biodegradable fibres. Sustainability, traceability and circular economy initiatives continued to influence sourcing decisions by global brands.

Despite short-term uncertainties, long-term demand for sustainable textile raw materials is expected to remain positive, supported by increasing environmental awareness and regulatory focus on reducing the carbon footprint of textile manufacturing.

INDIAN ECONOMIC OVERVIEW

India remained one of the fastest-growing major economies during FY 2025–26, supported by resilient domestic demand, robust infrastructure investment, government reforms and expanding manufacturing activities.

Government initiatives such as: •Make in India •PM MITRA Parks •Production Linked Incentive (PLI) Scheme •National Technical Textiles Mission •National Logistics Policy

Continue to strengthen Indias textile ecosystem and improve the countrys competitiveness in global markets.

Indias growing middle-class population, expanding textile exports and increasing preference for sustainable products provide a favourable environment for manufacturers of value-added natural fibres.

TEXTILE INDUSTRY OVERVIEW

The Indian textile industry is one of the largest contributors to manufacturing output, employment and exports. The industry continues to transition towards value-added, sustainable and eco-friendly products in response to changing consumer preferences and global environmental standards.

Growing awareness regarding biodegradable fibres has accelerated the demand for flax, hemp and jute-based textile products. Cottonised bast fibres enable textile manufacturers to blend natural fibres with cotton using existing spinning infrastructure, thereby reducing capital investment while improving sustainability.

Increasing adoption of sustainable fibres by apparel brands, home textile manufacturers and technical textile producers is expected to create significant growth opportunities over the medium to long term.

Key industry growth drivers include:

Rising demand for eco-friendly textiles.

Increasing exports of value-added textile products.

Government support for textile manufacturing.

Expansion of technical textiles.

Growth in premium apparel and home furnishing segments.

Increasing global focus on sustainable sourcing.

INDUSTRY OPPORTUNITIES

The Company believes that the following factors present significant opportunities:

•Growing global demand for sustainable natural fibres.

•Increasing preference for biodegradable textile materials.

•Expansion in technical textile applications.

•Higher demand for flax, hemp and jute blended yarns.

• Increasing export opportunities.

•Strong government support for the Indian textile sector.

•Rising consumer awareness regarding environmentally responsible products.

BUSINESS MODEL

The Companys business model focuses on creating value through efficient sourcing, technologically advanced manufacturing processes and customer-centric product development.

Inputs •Premium quality flax (linen), hemp and jute fibres.

•Skilled workforce.

•Modern processing facilities.

•Robust quality control systems.

•Efficient logistics network.

Value Creation Process

Raw Material Procurement Fibre Cleaning Cottonisation Process Quality Inspection Packing Distribution Customer Satisfaction

Outputs

•Premium cottonised flax fibres.

•Cottonised hemp fibres.

•Cottonised jute fibres.

•Sustainable raw materials for textile manufacturers.

Value Delivered

•Sustainable textile solutions.

•Consistent product quality.

•Reliable supply chain.

•Customer satisfaction.

•Long-term stakeholder value.

MANUFACTURING PROCESS

The Companys manufacturing process is designed to produce premium-quality cottonised bast fibres while maintaining consistency, efficiency and sustainability.

Step 1 – Procurement

High-quality flax, hemp and jute fibres are sourced from reliable domestic and international suppliers.

Step 2 – Cleaning & Preparation

Raw fibres undergo cleaning and preparation to remove impurities and ensure uniformity before processing.

Step 3 – Cottonisation

Using specialized machinery and proprietary processing techniques, long bast fibres are converted into cotton-like short staple fibres suitable for conventional spinning systems.

Step 4 – Quality Assurance

Each production batch is subjected to rigorous quality checks for fibre length, fineness, strength, moisture content and consistency to ensure compliance with customer specifications.

Step 5 – Packing & Dispatch

Finished products are securely packed and dispatched through an efficient logistics network to domestic and international customers.

The Company continuously invests in process improvements to enhance productivity, reduce wastage and improve product quality.

COMPANY OVERVIEW

Yajur Fibres Limited operates a bast fibre cottonising unit in India. Situated in Howrah, our Company is a part of the well-recognised conglomerate, The Kankaria Group. The group has rich experience of over 80 years in the Jute Industry. Our group, in the year 2006, acquired the manufacturing operations of cotton and cotton blended yarns into Yajur Bast Fibres Limited (formerly known as M.F.L Corporation Ltd). Subsequently, we have started manufacturing of premium cottonised bast fibres, including flax (linen), jute, and hemp in the year 2017-18. Yajur Bast Fibres Limited was amalgamated into our Company pursuant to the Scheme of Amalgamation under Section 230 to 232 of the Companies Act, 2013, sanctioned by the National Company Law Tribunal, Kolkata bench, vide order dated January 12, 2023 w.e.f. appointed date of April 1, 2021.

Our Company specializes in producing premium cottonised bast fibres, including flax (linen), jute, and hemp. We cottonise long & brittle bast fibres into cotton like short staple fibre such that the cottonised fibres can easily blend upto 55% with cotton and man-made fibres in the existing cotton spinning system or similar. Cottonising jute fibres until few years ago was considered a farfetched idea but with robust R&D and diligent commercial production of the same by Yajur has changed the landscape of sustainable bast Fibres altogether. While there are thousands of cotton & polyester spinning mills globally there are less than 400 spinning mills between linen, jute and hemp. Our cottonised Fibres can spin from 10% to 85% in cotton spinning systems and easily blends with natural and manmade fibres. These blended fibres spin at 70% of average cotton spinning speed, while the linen rich blends give similar look and feel like 100% linen fabrics, however the cost of production is 25 % less than original linen fabrics. It has taken away the easy wrinkle issues associated with 100% linen. Our Company has capacity of over 300 MT per month of Cottonised Fiber, Flax Yarn and Jute yarn. Our Company is known for its extensive experience and innovation in bast fibres, which has made it the preferred choice for many top spinning & weaving mills in India, Turkey, Indonesia, Nepal and Bangladesh. Our products are being processed and manufactured in accordance with best practices available globally. Our system and product are tested constantly at each level to ensure international standards of quality in-house. Our Company places a strong emphasis on research and development (R&D) to continuously test and improve its products. We are dedicated to achieving excellence and best in class practices.

Our Companys cottonised flax fibres are known for their softness, cleanliness, and consistency. The fibres high fibre length uniformity given that natural bast fibres can be as long as 10 ft. and negligible trash, providing high yield when blended with other natural or manmade fibres. Our Company also offers cottonised jute and hemp fibres, which have gained popularity for their sustainability and versatility. We are one of the first few companies to commercially introduce cottonised jute fibres spinning at over 90,000 rotor speed and the has pioneered in introducing commercially cottonised jute fibre that can blend upto 55% with cotton or any other natural & manmade fibres in the cotton spinning system or equivalent. Our Companys manufacturing facility is located in the Jute hub of West Bengal, India. The manufacturing unit is spread across an area of approximately 19 Acres with aprox. 500 meters of Ganges River front situated at Jagannathpur. Phuleshwar, Uluberia, District Howrah, Pincode - 711316.

Our manufacturing plant is equipped with best-in-class machinery and has received certifications ISO9001, ISO14001, ISO45001, OEKOTEX 100 and EUROPEAN FLAX certification. Our Company is contributing its 100% output to the sustainability drives and desires of conscious companiesand consumers alike. The whole company is dedicated to 100% sustainable, natural & biodegradable fibres.

OPERATIONAL PERFORMANCE

During FY 2025–26, the Company continued to focus on operational excellence despite a challenging business environment.

Key operational priorities included:

•Enhancing production efficiency.

•Optimizing raw material procurement.

•Improving cost competitiveness.

•Strengthening customer relationships.

•Maintaining high-quality standards.

•Increasing operational sustainability.

The Company continued to supply premium cottonised bast fibres to customers engaged in the manufacture of yarns, fabrics, technical textiles and value-added textile products. Operational efficiencies and prudent cost management helped mitigate the impact of lower demand and pricing pressures experienced during the year.

STRENGTHS

The Company continues to leverage several competitive strengths:

•Specialized expertise in cottonised bast fibre manufacturing.

•Strong focus on sustainable and eco-friendly products.

•Experienced management team.

•Established customer relationships.

•Consistent product quality.

•Efficient manufacturing processes.

•Commitment to innovation and continuous improvement.

FUTURE OUTLOOK

The long-term outlook for Yajur Fibres Limited remains encouraging.

Increasing global demand for sustainable textiles, rising consumer awareness regarding environmentally responsible products and favourable Government initiatives are expected to support long-term growth of the natural fibre industry. The Company intends to focus on: •Expanding domestic and export markets.

• Improving operational efficiencies.

• Developing innovative value-added products.

• Strengthening customer relationships.

• Enhancing manufacturing capabilities.

•Improving profitability through cost optimization and productivity improvements.

Management remains confident that the Companys strategic initiatives, strong technical expertise and commitment to sustainability will enable it to capitalize on emerging opportunities and create long-term value for shareholders.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an adequate system of internal financial controls commensurate with the size, scale and complexity of its operations.

The internal control framework is designed to ensure: •Safeguarding of assets. •Accuracy and reliability of financial reporting. •Compliance with applicable laws, regulations and internal policies. •Efficient utilization of resources. •Prevention and detection of frauds and errors. •Timely preparation of reliable financial information. The Internal Auditors conduct periodic reviews of operational and financial controls across various functional areas. Their observations and recommendations are placed before the Audit Committee, which regularly reviews the adequacy and effectiveness of internal control systems and monitors implementation of corrective actions.

The management believes that the existing internal control framework provides reasonable assurance regarding the effectiveness of business operations and financial reporting.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)

Sustainability forms an integral part of the Companys business philosophy.

Environment

The Company remains committed to environmentally responsible manufacturing practices through: •Efficient utilization of natural resources. •Reduction in waste generation. •Responsible waste disposal practices. •Energy conservation initiatives. •Continuous improvement in manufacturing efficiency. The Companys focus on cottonised natural fibres contributes to the increasing global demand for sustainable and biodegradable textile materials.

Social

The Company believes in creating long-term value for all stakeholders by: •Providing a safe and healthy workplace. •Promoting equal employment opportunities. •Supporting employee development through continuous learning. •Maintaining cordial industrial relations. •Upholding ethical business practices.

Governance

The Company continues to maintain high standards of corporate governance through: •Transparent business practices. •Effective Board oversight. •Strong internal control systems. •Robust compliance framework. •Ethical conduct across all levels of the organization.

The highlights of the financial results for the year ended March 31, 2026 and the corresponding figure for the previous year are as under:

(Rs in Lakhs except EPS)

Particulars	Fiscal
	2025-26	2024-25
Revenue from Operations	10,097.15	11,385.90
Other Income	131.31	100.62
Total Income	10,228.46	11,486.52
Total Expenditure	9,209.90	9,972.79
Pro_t before tax	1,018.56	1,513.74
Current Tax	242.20	311.99
Income tax Adjustment	NIL	(0.83)
Deferred Tax Adjustment	24.00	38.31
Pro_t after Tax	752.36	1,164.28
Earnings per shares	4.36	7.39

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Employees continue to be the Companys most valuable asset.

The Company remains committed to attracting, developing and retaining talented professionals by providing opportunities for continuous learning, performance enhancement and career development.

Key focus areas include: •Employee training and skill development. •Leadership development. •Workplace safety. •Employee engagement. •Performance management. •Equal opportunity and diversity.

Industrial relations remained cordial throughout the financial year and the management appreciates the commitment and dedication demonstrated by employees across all levels.

Key Ratios

Particulars	FY 2026	FY 2025
Revenue (Rs. in Lacs)	10,097.15	11,385.90
Net Profit After Tax (Rs. in Lacs)	752.36	1,164.28
Earnings per share (in Rs.)	4.36	7.39
EBITDA (Rs in lacs)	1,018.56	1,513.74
Net Profit Margin (%)	7%	10%
Return on Capital Employed	4%	11%
Current Ratio (times)	4.67	1.33
Debtors Turnover(times)	8.51	19.53
Debt-equity (times)	0.23	1.09
Inventory turnover ratio (times)	0.87	2.52

OUTLOOK

The long-term outlook for the natural fibre industry remains positive, driven by increasing consumer preference for sustainable textile products, supportive government initiatives and growing awareness regarding environmental conservation.

Yajur fibres limited is well positioned to capitalize on these opportunities through its specialized expertise in cottonised bast fibres, focus on quality, customer-centric approach and commitment to innovation.

The companys strategic priorities for the coming years include: x Expanding domestic and international market presence. x Increasing operational efficiency. x Enhancing value-added product offerings. x Strengthening customer relationships. x Investing in process improvements and technological advancement. x Driving sustainable and profitable growth.

The management remains confident that these strategic initiatives will strengthen the companys competitive position and generate long-term value for shareholders.

CAUTIONARY STATEMENT

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.

Actual results may differ materially from those expressed or implied due to various factors including changes in economic conditions, government policies, demand and supply dynamics, raw material availability and prices, foreign exchange fluctuations, competition, technological developments, regulatory changes, geopolitical events and other factors beyond the Companys control.

The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances, except as required under applicable laws and regulations.