Yash Management & Satelite Ltd Management Discussions

BUSINESS OVERVIEW

The Company continues to focus on sustainable growth, operational efficiency, prudent financial management and long-term stakeholder value creation.

The management remained focused on:

• Improving operational efficiencies;

• Enhancing customer relationships and market presence;

• Optimizing inventory and working capital;

• Maintaining financial discipline;

• Strengthening internal controls and governance practices.

The Company continuously evaluates market opportunities and adopts appropriate business strategies to enhance competitiveness and profitability.

This section of Annual Report has been included in adherence to the spirit enunciated in the code of Corporate Governance approved by the Securities and Exchange Board of India ("SEBI"). Though, utmost care has been taken to ensure that the opinions expressed by the Management herein contain its perceptions on most of the important trends having a material impact on the Companys Day-to-day operations, no representation was made that the following presents an exhaustive coverage on and of all issues related to the same. Further, the discussion following herein reflects the perceptions on major issues as on date and the opinions expressed here are subject to change without notice. However, its important to note that the Company cannot guarantee the accuracy or realization of these assumptions and expectations. The Company undertakes no obligation to publicly update or revise any of the opinions or statements expressed in this report, consequent to new information, future events, or otherwise.

The management of the Company is presenting herein the overview, opportunities and threats, initiatives by the Company and overall strategy of the Company and its outlook for the future. This outlook is based on managements own assessment and it may vary due to future economic and other future developments in the country.

FY 2025-26 witnessed continued uncertainty in the global economic environment due to persistent geopolitical tensions, wars and conflicts in western countries and certain regions of Europe and the Middle East, inflationary pressures, fluctuations in energy prices and disruptions in international trade and logistics.

The ongoing geopolitical conflicts significantly impacted global supply chains, shipping routes, commodity prices and overall investor sentiment. Rising energy and crude oil prices, disruptions in freight movement and volatility in currency markets affected businesses across industries globally.

Major central banks across developed economies continued to maintain a cautious monetary policy stance to control inflation, resulting in relatively higher global interest rates and tighter liquidity conditions. Although inflationary pressures moderated gradually in certain economies, uncertainty regarding global growth and geopolitical stability continued during the year.

Global businesses increasingly focused on:

• Supply chain diversification;

• Cost rationalization and operational efficiency;

• Technology and digital transformation;

• Risk mitigation and business continuity planning;

• Sustainable and ESG-driven growth initiatives.

Despite global uncertainties, several emerging economies continued to demonstrate resilience supported by domestic consumption, infrastructure investments and improving industrial activity.

India continued to remain one of the fastest growing major economies during FY 2025-26. Strong domestic demand, Government capital expenditure, infrastructure development, manufacturing growth and policy reforms contributed positively towards economic activity.

Key economic developments during the year included:

• Continued focus on infrastructure and manufacturing growth;

• Growth in banking, financial services and digital economy;

• Improved capital expenditure and industrial activity;

• Strengthening of domestic consumption demand;

• Policy support for ease of doing business and investment growth.

The Indian economy also faced certain challenges arising from:

• Global geopolitical tensions and war-related disruptions;

• Volatility in commodity and crude oil prices;

• Inflationary pressures and higher borrowing costs;

• Foreign exchange fluctuations;

• Global slowdown concerns.

However, Indias strong macroeconomic fundamentals, stable financial system and growing domestic market continued to provide long-term growth opportunities.

The Company operates in a dynamic and competitive business environment influenced by domestic and international economic conditions, regulatory developments, customer demand patterns, technological advancements and raw material price movements.

During the year under review, the industry experienced:

• Increased competition and pricing pressures;

• Volatility in input and commodity costs;

• Increased focus on operational efficiency and cost optimization;

• Technology adoption and digital integration;

• Enhanced emphasis on governance, compliance and sustainability;

• Supply chain challenges due to global geopolitical developments.

The industry continued to witness changing customer expectations, focus on quality standards and pressure on margins due to increased operating costs.

The Company continued to focus on strengthening its operational capabilities, maintaining business discipline, improving efficiencies and optimizing resources to sustain long-term growth.

The Company sees various growth opportunities driven by:

• Growth in domestic economic activity;

• Expansion opportunities in existing and new markets;

• Increasing demand across sectors;

• Operational improvements and cost optimization;

• Technology adoption and process automation;

• Strategic investments and long-term business expansion.

The Companys business operations are exposed to various risks and challenges including:

• Intense market competition;

• Fluctuation in commodity and raw material prices;

• Inflationary pressures and rising finance costs;

• Geopolitical tensions and war-related uncertainties;

• Supply chain disruptions;

• Changes in Government policies and regulations;

• Foreign exchange volatility and economic slowdown risks.

The Company continuously monitors external developments and undertakes necessary mitigation measures to minimize potential business risks.

The challenges in the current scenario have shifted toward modernization gaps and regulatory compliance.

1. Agricultural Challenges

• Nutrient Imbalance: The nitrogen-phosphorus-potassium (NPK) ratio has deteriorated due to price distortions, leading to soil fatigue and a 10-15% loss in soil fertility in northern grain belts.

• Post-Harvest Infrastructure Gap: While the Agri Infra Fund has made progress, the "last-mile" cold chain connectivity remains inadequate for the record-high horticulture production (367 MT), leading to continued wastage of perishables.

• FPO Scaling: Strengthening Farmer Producer Organizations (FPOs) remains a challenge, as many smallholders lack the digital literacy to effectively use platforms like e-NAM and the Digital Agriculture Mission.

2. Metals & Industrial Challenges

• MSME "Green Transition" Lag: Small and mid-sized firms (which contribute 45% of manufacturing) face a "compliance wall." Limited access to affordable Green Finance makes it difficult for them to meet the new International Sustainability Standards (ISSB).

• The R&D Deficit: National expenditure on R&D stands at a mere 0.64% of GDP. The industry faces a critical challenge in moving from "import substitution" to "global innovation," specifically in battery minerals and rare earth processing.

• Digital Skill Shortage: As the sector pushes toward Industry 4.0, there is a widening gap in the availability of workers skilled in data analytics, smart sensors, and blockchain-based supply chain tracking.

The Company has established appropriate risk management systems to identify, evaluate and mitigate various business risks.

Key risks identified by the management include:

• Market and competition risk;

• Credit and liquidity risk;

• Operational and supply chain risk;

• Regulatory compliance risk;

• Economic and geopolitical uncertainties.

The Company periodically reviews its risk management framework to ensure effective mitigation measures and business continuity.

The management remains cautiously optimistic regarding the future outlook of the Company and expects gradual improvement in business conditions supported by growth in domestic demand and economic activity.

The Company intends to focus on:

• Improving operational performance and productivity;

• Strengthening financial position and liquidity management;

• Enhancing cost efficiencies and margin improvement;

• Improving business sustainability and governance standards.

While global geopolitical tensions, inflationary pressures and market volatility may continue to pose challenges, the management believes that the Companys long-term growth prospects remain positive.

The Company continuously reviews performance of its operational activities and business segments. Focus during the year remained on strengthening operational efficiency, improving profitability, enhancing customer satisfaction and optimizing utilization of resources.

The Companys main business is trading activities. All other activities of the company revolve around the main business. As such there are no separate reportable segments, as per Ind AS-108.

However, for the consolidated Financials the Company now has two reportable segments which consist of Trading Activities, and Other Activities in accordance with Ind AS-108.

Company recognizes the importance of Research and Development across all important areas and continues to maintain and update its functional facilities, in spite of its financial position in order to meet the changing product requirements of the customers, achieve cost efficiencies and meet compliance requirements of statutory agencies.

The Company has adequate internal control systems commensurate with the size, scale and nature of its business operations. The internal control framework is designed to ensure:

• Orderly and efficient conduct of business;

• Safeguarding and protection of assets;

• Accuracy and reliability of financial reporting;

• Compliance with applicable laws and regulations;

• Prevention and detection of frauds and errors;

• Efficient utilization of resources.

The Company has implemented appropriate policies, procedures and authorization mechanisms across various functions. Internal audits are conducted periodically and significant findings (if any) are reviewed by the Audit Committee. The Audit Committee regularly reviews the adequacy and effectiveness of internal controls and recommends corrective actions wherever necessary.

This Annual Report contains forward-looking statements that involve inherent risks and uncertainties. The Companys actual results may differ materially from those expressed or implied in these forward-looking statements. Factors that could cause such differences include economic conditions, market demand, regulatory changes, strategic initiatives, and the competitive landscape. Company does not undertake any obligation to update these forward-looking statements. Investors are advised to carefully consider the risk factors discussed in this Annual Report and rely on their independent judgment regarding the Companys future performance. The company assumes no responsibility to update or revise forward-looking statements to reflect new events or circumstances.