NASDAQ: JRSH

This chart reflects our organizational structure as of the date of
this annual report:

1

Jerash Garments was established in Jordan on November
26, 2000 and operates out of our factory in Al Tajamouat Industrial City, a Development Zone in Amman, Jordan. Jerash Garments’
principal activities are to house management offices and to operate production lines and printing, sewing, ironing, packing, and quality
control units, as well as house our trims and finished products warehouses. We also operate our factory in Al-Hasa County (as discussed
below) under Jerash Garments.

Chinese Garments was established in Jordan on
June 13, 2013 and operated out of our factory in Al Tajamouat Industrial City. Chinese Garments’ principal activities were to house
administration, human resources, finance, and management offices and to operate additional production lines and sewing, ironing, and packing
units, as well as house our trims warehouse.

Jerash Embroidery was established in Jordan on
March 11, 2013 and operated out of our factory in Al Tajamouat Industrial City. Jerash Embroidery’s principal activities were to
perform the cutting and embroidery for our products.

Paramount was established in Jordan on October
24, 2004 and operated out of our factory in Al Tajamouat Industrial City. Paramount’s principal activities were to manufacture garments
per customer orders.

During the fiscal year 2026, principal activities
of Chinese Garments, Jerash Embroidery, Paramount were transferred to Jerash Garments. Chinese Garments, Jerash Embroidery, and Paramount
have no operation currently.

MK Garments was established in Jordan on January
23, 2003. On June 24, 2021, Jerash Garments and the sole shareholder of MK Garments entered into an agreement, pursuant to which Jerash
Garments acquired all of the outstanding stock of MK Garments. As of October 7, 2021, MK Garments became a subsidiary of Jerash Garments.
MK Garments operates out of our factory in Al Tajamouat Industrial City. MK Garments’ principal activities are to manufacture garments
per customer orders. The new facilities are an existing garment manufacturing operation adjacent to Jerash’s four largest manufacturing
centers. Jerash assumed ownership of all of the machinery and equipment owned by MK Garments through the acquisition.

Treasure Success was established in Hong Kong
on July 5, 2016 and operates in Hong Kong. Treasure Success’s primary activities are sales of garments and to employ sales and merchandising
staff and supporting personnel in Hong Kong to support the business of Jerash Garments and its subsidiaries.

Jiangmen Treasure Success was established in Jiangmen
City of Guangdong Province in the PRC on August 28, 2019 and operates in the PRC. Jiangmen Treasure Success’s primary activities
are to provide support in sales and marketing, sample development, merchandising, procurement, and other areas.

Jerash The First was established in Jordan on
July 6, 2020 and operate out of our factory in Al-Hasa County. Jerash The First’s principal activities were to manufacture and trade
personal protective equipment (“PPE”) products. Jerash The First has no operation currently.

Jerash Supplies was formed in Delaware on November
20, 2020. Jerash Supplies is engaged in the trading of PPE products.

Kawkab Venus was established in Amman, Jordan,
on January 15, 2015 with a declared capital of JOD 50,000. It holds land with factory premises, which are leased to MK Garments. On July
14, 2021, Jerash Garments and the sole shareholder of Kawkab Venus entered into an agreement, pursuant to which Jerash Garments acquired
all of the outstanding stock of Kawkab Venus. Apart from the land and factory premises, Kawkab Venus had no other significant assets or
liabilities and no operation activities or employees at the time of acquisition, so the acquisition was accounted for an asset acquisition.
As of August 21, 2022, Kawkab Venus became a subsidiary of Jerash Garments.

Ever Winland was organized in Hong Kong on December
3, 2020. It held office premises, which were leased to Treasure Success. On June 22, 2022, Treasure Success and the shareholders of Ever
Winland entered into an agreement, pursuant to which Treasure Success acquired all of the outstanding stock of Ever Winland. Apart from
the office premises used by Treasure Success, Ever Winland had no other significant assets or liabilities and no operating activities
or employees at the time of this acquisition, so this transaction was accounted for as an asset acquisition. As of August 29, 2022, Ever
Winland became a subsidiary of Treasure Success. Treasure Success acquired the office premises as of January 8, 2026.

2

J&B is a joint venture company established
in Hong Kong on January 10, 2023. On March 20, 2023, Treasure Success and Eratex entered into a Joint Venture and Shareholders’
Agreement, pursuant to which Treasure Success acquired 51% of the equity interests in J&B on April 11, 2023. J&B engages in the
business of garment trading and manufacturing for orders from customers. On June 16, 2025, Treasure Success and Eratex attended a meeting
of shareholders of J&B and approved the termination of J&B’s business operations and the dissolution of J&B, which is
expected to complete in April 2027.

Jerash Newtech is a joint venture company established
in Hong Kong on November 3, 2023. On October 10, 2023, Treasure Success and Newtech entered into a Joint Venture and Shareholders’
Agreement. Pursuant to this agreement, both parties agreed to form a joint venture company in Hong Kong named Jerash Newtech, of which
Treasure Success holds 51% of the equity interests and Newtech holds 49%. Jerash Newtech engages in the business of supplying fiber and
fabric printed with Cooltrans technology, and may engage any other businesses in the future as both parties shall agree from time to time.
On August 20, 2025, Treasure Success and Newtech Textile (HK) Limited attended a meeting of shareholders of Jerash Newtech and agreed
to and authorized an application to be made for the deregistration of Jerash Newtech.

Products

As a garment manufacturing group, we specialize
in manufacturing sportswear and outerwear. Our sportswear and outerwear product offering consists of jackets, polo shirts, t-shirts, pants,
and shorts. During fiscal 2026, our primary product offerings were vests, shorts and pants, which accounted for approximately 35% of our
total shipped pieces. During fiscal 2025, our primary product offering was crew neck, which accounted for approximately 37% of our total
shipped pieces.

Manufacturing and Production

Our production facilities are located in Al Tajamouat
Industrial City in the Amman Governorate, in the Al-Hasa District in the Tafilah Governorate, and in the Balama Sub-district in the Mafraq
Governorate of Jordan.

Our production facilities in Al Tajamouat Industrial City in the Amman
Governorate comprise six operating factories and six warehouses. Effective as of January 1, 2019, the government of the Hashemite Kingdom
of Jordan converted Al Tajamouat Industrial City into a Development Zone. Following this change, we continued to operate under benefits
similar to the Qualifying Industrial Zone designation, but were subject to a 10% corporate income tax plus a 1% social contribution. Starting
from January 1, 2020, the corporate income tax rate increased from 10% to 20% throughout the years. Effective January 1, 2024, we have
been subject to a 20% corporate income tax rate plus a 1% social contribution. Effective from October 1, 2025, Jerash Garments has been
granted tax concession at a corporate income tax rate 10% plus a 1% social contribution in accordance with the Jordanian Income Tax Law.
Currently, the first factory, which we own, employs approximately 1,550 people. Its primary functions are to house our management offices,
as well as production lines, trims warehouse, and printing, sewing, ironing, and packaging units. The second factory, which we lease,
employs approximately 1,800 people. Its primary function is to house our administrative and human resources personnel, merchandising and
accounting departments, embroidery, printing, additional production lines, trims and finished products warehouses, and sewing, ironing,
packing and quality control units. The third factory, which we lease, employs approximately 200 people. Its primary functions are to perform
the cutting for our products. The fourth factory (under Paramount), which we lease, currently employs approximately 1,400 people. Its
primary functions are to house additional production lines. The fifth factory (under MK Garments) currently employs approximately 650
people. Its primary function is to manufacture garments for orders from customers.

On February 2, 2026, the Housing Bank for Trade
and Finance (the “Housing Bank”) approved the Property Purchase Request submitted by Jerash Garments on January 20, 2026 for
the purchase of the property located on Property No. 1326, Basin No. 3 Abu Sawwana, Al-Ruqaim Village, from the lands of South Amman,
Jordan (“Property No. 1326”). The purchase was completed on February 19, 2026. Property No. 1326 will be our sixth factory
in Al Tajamouat Industrial City and production is scheduled to commence in fiscal 2027.

Our production facility in Al-Hasa County in the
Tafilah Governorate of Jordan comprises one factory, which currently employs approximately 550 people and its primary functions are to
manufacture garment products per customer orders. We commenced the construction of this factory in 2018 and we started operations in November 2019.
This is a joint project with the Jordanian Ministry of Labor and the Jordanian Education and Training Department. According to our agreement
with these government agencies, we used this factory without paying rent through December 2022. We have continued to use the factory without
paying rent since January 2023 as new arrangements with the Jordanian Ministry of Labor are still being made. See “Item 2. Properties”
below for more information regarding this factory.

3

Our production facility in Balama Sub-district
in the Mafraq Governorate comprises one factory, which currently employs approximately 150 people, and its primary functions are to manufacture
garment products per customer orders. According to our agreement with these government agencies, we are allowed to use this factory without
paying rent through February 2029.

In April 2021, we commenced construction of a
195,000-square-foot housing facility for our multi-national workforce, situated on a 49,000-square-foot site owned by us in Al Tajamouat
Industrial City. In fiscal 2025, the construction was completed and our workers moved in. To meet increasing demand, we are also finalizing
plans to construct an additional project on a nearby 133,000-square-foot parcel that we purchased in 2019 for $1.2 million. Two-thirds
of the land will be used for our factory and the remaining one-third will be used for housing. As of the date of this annual report, we
are working with engineering consultants on the architectural design of the building, taking into account the potential business growth
brought about by the new business expansion with new customers such as Hansoll Group. We will carefully plan the construction investment
to meet the progress of business developments.

Total annual capacity at our existing facilities
was approximately 24 million pieces (average for product categories including t-shirts, polo shirts, pants, shorts, and jackets) as of
March 31, 2026. Our production flow begins in the cutting department of our factory. Then the product is sent to the embroidery department
for embroidery if applicable. From there, the product moves to be processed by the sewing unit, finishing department, quality control,
and finally the ironing and packing units.

We do not have long-term supply contracts or arrangements
with our suppliers. Most of our ultimate suppliers for raw materials, such as fabric, zippers, and labels, are designated by customers
and we purchase such materials on a purchase order basis.

Employees

As of March 31, 2026, we had an aggregate of approximately
6,300 employees located in Jordan, Hong Kong, China, and the United States of America, all of which are full-time employees.

Customers

The following table outlines the dollar amount
and percentage of total sales to our customers for the fiscal years ended March 31, 2026 (“fiscal 2026”) and March 31, 2025
(“fiscal 2025”).

Fiscal 2026
Fiscal 2025

Sales

Sales

(USD, in

thousands)
%
(USD, in

thousands)
%

VF Corporation(1)
$87,020
52.3%
$94,151
64.6%

New Balance
22,760
13.7%
17,872
12.2%

Suzhou Unitex
10,332
6.2%
5,696
3.9%

Tharanco
7,663
4.6%
4,673
3.2%

Hansoll
6,952
4.2%
-
0%

SWC Inc.
5,532
3.3%
5,049
3.5%

G-III
3,799
2.3%
2,352
1.6%

Hugo Boss
1,315
0.8%
4,018
2.8%

Others
20,891
12.6%
12,001
8.2%

Total
$166,264
100.0%
$145,812
100.0%

(1)
A large portion of our products are sold under The North Face, Timberland, and Vans brands owned by VF Corporation.

4

In fiscal 2026 and 2025, we depended on a few
key customers for our sales, and a large portion of our sales in fiscal 2026 and 2025 were to one customer, VF Corporation.

We started producing garments for VF Corporation
in 2012. A large portion of the products we manufacture are sold under The North Face, Timberland, and Vans brands which are owned by
VF Corporation. Currently, we manufacture primarily outerwear for The North Face. Approximately 52% and 65% of our sales in fiscal 2026
and 2025 were derived from the sale of manufactured products to VF Corporation, respectively. We are not party to any long-term contracts
with VF Corporation or our other customers, and our sales arrangements with our customers do not have minimum purchase requirements. As
is common in our industry, VF Corporation and our other customers place purchase orders with us after we complete detailed sample development
and approval processes that we and our customers have agreed upon for their purchase of the relevant manufactured garments. It is through
the sample development and approval processes that we and VF Corporation and our other customers agree on the purchase and manufacture
of the garments. For fiscal 2026, VF Corporation issued approximately 14,300 purchase orders to us in amounts ranging from approximately
$5 to $296,000. For fiscal 2025, VF Corporation issued approximately 14,700 purchase orders to us in amounts ranging from approximately
$6 to $929,000.

Our customers are in the retail industry, which
is subject to substantial cyclical variations. Consequently, there can be no assurance that sales to current customers will continue at
the current rate or at all. In addition, our annual and quarterly results may vary, which may cause our profits and the market price of
our common stock to decline.

We continue to seek to expand and strengthen our
relationship with our current customers and other brand names. However, we cannot assure you that these brands will continue to buy our
products in the same volumes or on the same terms as they did in the past or that we will be successful in expanding our relationship
with other brand names.

Competition

The markets for the manufacturing of sportswear
and outerwear are highly competitive. The competition in those markets focuses primarily on the price and quality of the product and the
level of customer service. Our products compete with products of other apparel manufacturers in Asia, Israel, Europe, the United States,
and South and Central America.

Competition with other manufacturers in the clothing
industry focuses on reducing production costs, reducing supply lead time, design, product quality, and efficiency of supply to the customer.
Since production costs depend to a large extent on labor costs, in recent years most production in the industry has been moved to countries
where labor costs are low. Some of our competitors have lower cost bases, longer operating histories, larger customer bases, and other
advantages over us which allow them to compete with us. As described in more detail under “—Conditions in Jordan—Trade
Agreements” below, we were able to sell our products manufactured at our facilities in Jordan to the United States free from customs
duties and import quotas under certain conditions prior to April 5, 2025. These favorable terms enabled us to remain competitive on the
basis of price. Effective from April 5, 2025, the U.S. imposed a baseline tariff of 10% on imports from almost all countries, including
Jordan. Then, effective from April 9, 2025, it had announced “reciprocal” tariffs of imports from specified countries, amongst
them Jordan with a prevailing rate of then 20%. These “reciprocal” tariffs are postponed for 90 days, whilst the 10% baseline
tariff persists. The tariff was modified to 15% according to an executive order of presidential actions on July 31, 2025. In February
2026, the U.S. Supreme Court ruled that the “reciprocal” tariffs were illegal, and the U.S. Customs has since then stopped
to impose the “reciprocal” tariff and established a new process to refund importers for voided “reciprocal” tariff.
Following the ruling, the U.S. Government then invoked Section 122 of the Trade Act of 1974 to impose an across the board 10% tariff for
a period of 150 days expiring in July 2026, including on the imports from Jordan. While the payment of the tariff is typically the responsibility
of the importer (Jerash’s customers), the impact of the tariff on customers’ demand would be affected by the comparative levels
of the tariffs on imports from Jordan compared to other countries.

5

According to the Association Agreement between
the European Union (the “EU”) and Jordan, which came into force in May 2002, and the joint initiative on rules of origin reviewed
and improved in December 2018 by the EU and Jordan, goods manufactured by us in Jordan that are subsequently shipped to EU countries are
shipped free from customs duties.

Conditions in Jordan

Our manufacturing facilities are located in Jordan.
Accordingly, we are directly affected by political, security, and economic conditions in Jordan.

From time to time, Jordan has experienced instances
of civil unrest, terrorism, and hostilities among neighboring countries, including Syria and Israel. A peace agreement between Israel
and Jordan was signed in 1994. Terrorist attacks, military activity, rioting, or civil or political unrest in the future could influence
the Jordanian economy and our operations by disrupting operations and communications and making travel within Jordan more difficult and
less desirable. Political or social tensions also could create a greater perception that investments in companies with Jordanian operations
involve a high degree of risk, which could adversely affect the market and price for our common stock. Furthermore, the escalation of
conflicts such as Russia-Ukraine, Israel-Hamas, and Israel/U.S.-Iran, as well as Houthi rebel attacks on commercial vessels in the Red
Sea, may increase geopolitical tensions globally. These political or social tensions could disrupt international trade, industrial supply
chains, and transportation, leading to market price volatility, and may adversely affect our business, increase operational costs, and
limit our ability to secure foreign financing for our operations and capital expenditures. See “