Aaradhya Disposal Industries Ltd Management Discussions

OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our restated standalone financial statements for the financial years ended on March 31, 2025, March 31, 2024 and March 31, 2023 prepared in accordance with the Companies Act, 2013 and Companies Act, 1956 to the extent applicable and Indian GAAP and restated in accordance with the SEBI ICDR Regulations, including the schedules, annexure and notes thereto and the reports thereon, included in the chapter titled “Restated Standalone Financial Statements” beginning on page 207.

Indian GAAP differs in certain material respects from U.S. GAAP and IFRS. We have not attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in this Red Herring Prospectus, nor do we provide a reconciliation of our financial statements to those under U.S. GAAP or IFRS. Accordingly, the degree to which the Indian GAAP financial statements included in this Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with the Companies Act, Indian GAAP and the SEBI ICDR Regulations.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in the chapters titled “Risk Factors” and “ForwardLooking Statements” beginning on pages 27 and 17 respectively.

BUSINESS OVERVIEW

Our Company was originally incorporated as ‘Aaradhya Disposal Industries Private Limited as a private limited company under the Companies Act, 1956 on January 16, 2014 pursuant to a Certificate of Incorporation bearing CIN: U21098MP2014PTC032173 issued by the Registrar of Companies, Gwalior. Thereafter, our Company was converted into a public limited company from a private limited company pursuant to a special resolution passed by the shareholders of our Company on September 05, 2024 consequent to which the name of our Company changed from ‘Aaradhya Disposal Industries Private Limited to ‘Aaradhya Disposal Industries Limited and a fresh Certificate of Incorporation bearing no. U21098MP2014PLC032173 was issued by the Registrar of Companies, Gwalior (“RoC”) on October 28, 2024.

Our Company specializes in the manufacturing of high-quality paper products that cater to a wide range of industries, both domestically and internationally. With over a decade of expertise, we offer an extensive range of paper-based solutions that are engineered for performance, sustainability, and versatility which mainly includes:

• Paper cup blanks

? PE coated

? PLA coated and

? Barrier coated;

• Food Grade Papers including:

? Greaseproof Paper,

? Greaseproof 4K Paper,

? Greaseproof Slip Easy Paper,

? Wet Strength Greaseproof,

? OGR (Oil and Grease Resistant) Paper,

? Vegetable Parchment Paper and

? TDL (Titanium Di-oxide) Poster Paper.

We offer customized solutions tailored to the unique needs of our customers, ensuring that they receive products that meet their specific requirements. Whether for retail packaging, foodservice use, or commercial printing, our products are trusted for their quality, performance, and sustainability. For more details on business, please refer to the chapter titled “Our Business” beginning on page 138.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR

In the opinion of the Board of Directors of our Company, there have not arisen, since the date of the last financial statements disclosed in this Red Herring Prospectus i.e., March 31, 2025, any significant developments or any circumstance that materially or adversely affect or are likely to affect the profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months except as follows:-

1. The authorized capital of Rs. 14,00,00,000 (Rupees Fourteen Crores only) consisting of 1,40,00,000 Equity Shares of face value of Rs.10 each was increased to Rs. 16,00,00,000 (Rupees Sixteen Crores only) consisting of 1,60,00,000 Equity Shares of face value of Rs.10 each pursuant to a resolution of the shareholders dated June 30, 2025.

2. Resignation of Mr. Uttam Maheshwari as an Independent Director on July 14, 2025.

3. Reconstitution of Stakeholders Relationship Committee and Nomination and Remuneration Committee on July 14, 2025.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the chapter titled “Risk Factors” beginning on page 27. Our results of operations and financial conditions are affected by numerous factors including the following:

• Changes, if any, in the regulations / regulatory framework / economic policies in India and / or in foreign countries, which affect national & international finance.

• Companys results of operations and financial performance.

• Performance of Companys competitors.

• Trained manpower.

• Natural Calamites

• Significant developments in Indias economic and fiscal policies.

• Significant developments in Indias environmental regulations.

• Evolving customer needs and market trends.

• Orders from significant customers.

• Volatility in the Indian and global capital market;

DISCUSSION ON RESULT OF OPERATION

The following discussion on results of operations should be read in conjunction with the audited financial results for financial years ended on March 31, 2025, March 31, 2024 and March 31, 2023.

Overview of Revenue & Expenditure

Revenues

Our Companys revenue is primarily generated from Manufacturing and also does some Job work on case to case basis:

(Rs. in Lakhs)

Particulars	For the Financial Year ended on March 31
	2025	2024	2023
Income
Revenue from Operations	11,306.80	7,305.51	8,129.10
Increase/Decrease in %	54.77	(10.13)%	-
Other Operating Revenue in respect of Services supplied	62.35	87.98	285.53
Increase/Decrease in %	(29.13)	(69.19)%	-
Other Income	226.48	197.78	236.42
Increase/Decrease in %	14.51	(16.34)%	-
Total Revenue	11,595.63	7,591.26	8,651.05

The following is the Income mix in terms of value of revenue from operations of our Company for different products.

For the financial year ended on March 31, 2025: -

Product	Category of Product	Quantity (in KG)	Amount (Rs. in Lakhs)	% of Revenue from Operations
Sale of Finished Goods
Paper Sheet /Board/ Reel (Uncoated)	Food Grade Paper	52,71,021	4,519.20	39.75
Paper Reel /Bobbin / Sheet (Coated)	Food Grade Paper	34,67,171	3,004.87	26.43
Paper Cup Blank	Paper Cup Blanks	18,57,433	1,658.78	14.59
Paper Cup Blank/Roll Barrier Coated (Export)	Paper Cup Blanks	5,13,321	805.34	7.08
Paper Reel/Sheet/Plate/Roll Coated (Export)	Food Grade Paper	5,53,822	475.31	4.18
OGR Paper	Food Grade Paper	2,35,029	427.75	3.76
Paper MTR /OTR	Food Grade Paper	1,35,158	285.18	2.51
Paper Cup Bottom Barrier Coated (Export)	Paper Cup Bottom	87,602	102.91	0.91
Paper Roll Kraft		59,480	20.76	0.18
Other Material (Export)		6,250.00	1.52	0.01
Paper Cup / Straw / Lead		-	1.48	0.01
Other Receipts
Job Work Receipt		-	12.64	0.11
Sale of Scrap & Others
Paper Katran		2,67,207	46.32	0.41
Other Scrap		-	7.06	0.06
Total		1,24,53,494	11,369.15	100.00

For the financial year ended on March 31, 2024: -

Product	Category of Product	Quantity (in KG)	Amount (Rs. in Lakhs)	% of Revenue from Operations
Sale of Finished Goods
Paper Cup/ Straw/ Lead		65,453	81.79	1.11
Paper Cup Blank	Paper Cup Blank	5,38,881	467.56	6.32
Paper Reel /Bobbin / Sheet (Coated)	Food Grade Paper	23,74,071	1,607.08	21.74
Paper Sheet / Paper Reel (Uncoated)	Food Grade Paper	51,69,132	4,312.75	58.33
Paper Cup (Export)	Food Grade Paper	-	0.00	0.00
Paper Cup Blank (Export)	Paper Cup Blank	4,62,680	466.94	6.32
Paper Cup Bottom (Export)	Paper Cup Bottom	74,874	68.19	0.92
Paper Reel/Sheet Coated (Export)	Food Grade Paper	2,60,568	252.62	3.42
Corrugated Boxes		11,977	7.03	0.09
Other Material Export		-	6.84	0.09
Other Receipt
Job Work Receipt		-	39.73	0.54
Sale of Scrap & Others
Paper Kataran Scrap		2,61,305	48.25	0.65
Other Scrap		-	34.70	0.47
Total		92,18,941	7,393.48	100.00

For the financial year ended on March 31, 2023: -

Product	Category of Product	Quantity (in KG)	Amount (Rs. in Lakhs)	% of Revenue from Operations
Sale of Finished Goods
Paper Cup/ Straw/ Lead		88,334	100.36	1.19
Paper Cup Blank	Paper Cup Blank	13,05,579	1,240.38	14.74
Paper Reel /Bobbin / Sheet (Coated)	Food Grade Paper	8,07,903	1,045.05	12.42
Paper Sheet / Paper Reel (Uncoated)	Food Grade Paper	37,07,137	3,697.41	43.94
Paper Cup (Export)		19,414	62.82	0.75
Paper Cup Blank (Export)	Paper Cup Blank	8,27,460	1,012.76	12.04
Paper Cup Bottom (Export)	Paper Cup Bottom	2,47,126	271.84	3.23
Paper Reel/Sheet Coated (Export)	Food Grade Paper	6,01,438	667.50	7.93
Corrugated Boxes	Corrugated Boxes	19,471	11.71	0.14
Other Material		-	5.25	0.06
Other Receipts
Job Work Receipt		-	35.20	0.42
Sale of Scrap & Others
Paper Kataran Scrap		6,14,536	181.36	2.16
Other Scrap		-	15.09	0.18
incentives
Sales of MEIS		-	1.32	0.02
Sales Rodtep		-	38.26	0.45
Export Incentive Claim		-	28.31	0.34
Total		82,38,398	8,414.62	100.00

Other Income

Other Income consists of the following:

(Rs. in Lakhs)

Particulars	March 31, 2025	March 31, 2024	March 31, 2023
Interest Income on FDR	0.28	0.11	0.01
Duty Draw Back claim received	15.83	9.24	5.06
Scrap claim which burn in fire	-	8.11	0.00
Rate differences on Sales	-	28.09	0.00
Udhyog Capital Subsidy	194.89	122.57	75.42
Profit /(Loss) on Sale of Fixed Assets	1.25	-	151.38
Interest received from PPKVVCL	1.04	1.18	0.75
Foreign Exchange Gain/(loss)	-	21.90	0.00
Remission of Duty and Taxes on Export	13.16	6.57	3.80
Sundry Balances Written off	0.02	-	-
Total	226.48	197.78	236.42

The following is the other income mix in terms of percentage of other income:

Particulars	March 31, 2025	March 31, 2024	March 31, 2023
Interest Income on FDR	0.12	0.06	0.00
Duty Draw Back claim received	6.99	4.67	2.14
Scrap claim which burn in fire	-	4.10	0.00
Rate differences on Sales	-	14.20	0.00
Udhyog Capital Subsidy	86.05	61.98	31.90
Profit /(Loss) on Sale of Fixed Assets	0.55	0.00	64.03
Interest received from PPKVVCL	0.46	0.60	0.32
Interest received from others	-	0.00	0.00
Foreign Exchange Gain/(loss)	-	11.07	0.00
Remission of Duty and Taxes on Export	5.81	3.32	1.61
Sundry Balances Written off	0.01
Total	100.00	100.00	100.00

Expenditure

Our Companys operating expenditure consists of following: -

Cost of Materials Consumed and Change in Inventories, Employees benefit expenses, Finance Cost, Depreciation & Amortization Expenses and Other Expenses.

RESULTS OF OPERATIONS

Statement of profits and losses

The following table sets forth, for the fiscal years indicated, certain items derived from our Companys restated standalone financial statements, in each case stated in absolute terms and as a percentage of total sales and/or total revenue.

(Rs. in Lakhs)

Particulars	As at March 31, 2025	% of Total Revenue	As at March 31, 2024	% of Total Revenue	As at March 31, 2023	% of Total Revenue
1 Revenue from Operation	11,369.15	98.05	7,393.48	97.39	8,414.63	97.27
2 Other Income	226.48	1.95	197.78	2.61	236.42	2.73
3 Total Income (1+2)	11,595.63	100.00	7,591.26	100.00	8,651.05	100.00
4 Expenditure
(a) Cost of Material Consumed	9,779.80	84.34	6,218.82	81.92	7,997.89	92.45
(b) Changes in inventories of Stock in trade	(681.18)	(5.87)	126.11	1.66	(607.87)	(7.03)
(c) Employee Benefit Expenses	167.15	1.44	105.80	1.39	111.68	1.29
(d) Finance Cost	288.50	2.49	179.45	2.36	195.57	2.26
(e) Depreciation and Amortisation Expenses	245.90	2.12	138.89	1.83	148.22	1.71
(f) Other Expenses	306.35	2.64	200.79	2.65	546.02	6.31
5 Total Expenditure 4(a) to 4(f)	10,106.52	87.16	6,969.86	91.81	8,391.52	97.00
6 Profit/(Loss) Before Exceptional & extraordinary items & Tax (3-5)	1,489.10	12.84	621.40	8.19	259.53	3.00
7 Exceptional item	-	-	0		0
8 Profit/(Loss) Before Tax (6-7)	1,489.10	12.84	621.40	8.19	259.53	3.00
9 Tax Expense:
(a) Tax Expense for Current Year	425.75	3.67	116.40	1.53	84.92	0.98
(b) MAT Credit	-	-			-
(c) Short/(Excess) Provision of Earlier Year	-	-	-		-
(d) Deferred Tax	35.97	0.31	106.41	1.40	(39.87)	(0.46)
Net Current Tax Expenses	461.72	3.98	222.81	2.94	45.04	0.52
10 Profit/(Loss) for the Year (8-9)	1,027.39	8.86	398.59	5.25	214.48	2.48

FISCAL YEAR ENDED MARCH 31, 2025 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2024

Income

The Company primarily earns its revenue from the sale of products, including Paper Cup Blanks, Paper Sheets, and Paper Reels. Other operating revenues consist of income from job work and other services. For the fiscal year ended March 31, 2025, the total revenue (including other income) was Rs. 11,595.63 lakhs.

Revenue from operations increased by Rs. 4,001.29 lakhs, or 54.77%, to Rs. 11,306.80 lakhs in Fiscal 2025, compared to Rs. 7,305.51 lakhs in Fiscal 2024. This significant growth was primarily driven by higher product demand. The sale volume increased from 9,621.55 MT in Fiscal 2024 to 12,626.35 MT in Fiscal 2025, reflecting a 31.23% increase. Additionally, our Company added new products in Fiscal 2025, such as Paper MTR /OTR and OGR Paper which contributed Rs. 285.18 lakhs and Rs. 427.75 lakhs or 2.51% and 3.76% respectively in the overall sales mix. In Fiscal 2024, revenue from operations had declined by Rs.823.59 lakhs compared to Fiscal 2023 due to a fire incident that disrupted business operations for approximately two months. As a result, only nominal sales were recorded during that period. The low revenue base in Fiscal 2024 also contributed to the higher year-on-year growth observed in Fiscal 2025.

Revenue from other operating income, which includes job work and income from other services, decreased by Rs. 25.62 lakhs, or 29.13%, to Rs. 62.35 lakhs in Fiscal 2025, compared to Rs. 87.98 lakhs in Fiscal 2024. This decrease was primarily due to a reduction in sales of ink and the remission of duties and taxes on exports.

Other income increased by Rs. 28.70 lakhs, or 14.51%, to Rs.226.48 lakhs in Fiscal 2025, compared to Rs. 197.78 lakhs in Fiscal 2024. The increase was primarily driven by a rise in the receipt of Udyog Capital Subsidy, which grew by Rs.72.32 lakhs, or 59.00%, to Rs.194.89 lakhs in Fiscal 2025 from Rs. 122.57 lakhs in Fiscal 2024. However, this increase was partially offset by the absence of income from rate differences on sales, which stood at nil in Fiscal 2025 compared to Rs.28.09 lakhs in Fiscal 2024, and the non-receipt of scrap claim related to fire- damaged materials, which was nil in Fiscal 2025 as against Rs.8.11 lakhs in Fiscal 2024.

Expenditure

Our total expenses increased by Rs. 3,136.66 Lakhs or 45.00% to Rs. 10,106.52 lakhs for Fiscal 2025 compared to Rs. 6,969.86 lakhs for Fiscal 2024. This was primarily attributable to:

Cost of Materials consumed

Our cost of materials consumed increased by Rs. 3,560.98 lakhs or 57.26% to Rs. 9,779.80 lakhs for Fiscal 2025 compared to Rs. 6,218.82 lakhs for Fiscal 2024. The increase in Cost of Material Consumed is mainly due to higher consumption driven by increase in production and revenue from operations.

Change in inventories of finished goods and work-in-progress

Change in inventory of finished good stood at Rs. (681.18) lakhs in Fiscal 2025 as compared Rs. 126.11 lakhs in Fiscal 2024.

Employee Benefit Expenses

Our employee benefits expense increased by Rs. 61.35 Lakhs or 57.99 % to Rs. 167.15 lakhs for Fiscal 2025 from Rs. 105.80 lakhs for Fiscal 2024. The increase is primary due to the increase in salary and wages by Rs. 39.32 Lakhs or 87.64% to Rs. 84.19 lakhs in Fiscal 2025 from Rs. 44.87 lakhs in Fiscal 2024 and increase in the Director Remuneration by Rs. 20.00 Lakhs or 37.04% to Rs. 74.00 lakhs in Fiscal 2025 from Rs. 54.00 lakhs in Fiscal 2024.

Finance Costs

Our finance costs increased by Rs. 109.05 Lakhs or 60.77% to Rs. 288.50 lakhs for Fiscal 2025 compared to Rs. 179.45 lakhs for Fiscal 2024. This increase was primarily due to the increase in the long term and short-term borrowing during the year. The increase in the short-term borrowing is primarily to fund the working capital requirement of the Company which rose due to increase in the revenue from operations. However, the short-term borrowing decreased to Rs. 2,799.88 lakhs as at the end of Fiscal 2025 from Rs. 3,073.70 lakhs as at the end of Fiscal 2024 and long-term borrowing decreased to Rs. 1,166.20 lakhs as at the end of Fiscal 2025 from Rs. 1,446.15 lakhs due to the repayment of borrowing at the end of the Fiscal 2025.

Depreciation & Amortization Expenses

Depreciation and amortisation expense increased by Rs.107.01 lakhs, or 77.05%, to Rs. 245.90 lakhs in Fiscal 2025, compared to Rs.138.89 lakhs in Fiscal 2024. The increase was primarily due to the addition of Plant and Machinery and Factory Building amounting to Rs. 1,931.25 lakhs and Rs. 230.54 lakhs, respectively in Fiscal 2024. These assets were capitalised in the later part of Fiscal 2024, resulting in only partial depreciation being charged during that year. However, in Fiscal 2025, depreciation on these additions was charged for the entire year, leading to a higher depreciation and amortisation expense.

Other Expenses

Our other expenses increased by Rs. 105.56 lakhs or 52.57% to Rs. 306.35 lakhs for Fiscal 2025 as compared to Rs. 200.79 lakhs for Fiscal 2024. This increase was primarily due to increase in Export Expenses, Ocean Freight- Export, Professional & Legal Fees, Travelling Expenses and Miscellaneous Expenses by Rs. 22.62 lakhs, Rs. 21.40 lakhs, Rs. 22.92 lakhs, Rs. 11.58 lakhs and Rs. 18.13 lakhs respectively between Fiscal 2024 and Fiscal 2025.

Profit before Exceptional & Extraordinary Items and Tax

Profit Before Exceptional & Extraordinary Items and Tax increased by Rs. 867.70 Lakhs or 139.64% to Rs. 1,489.10 lakhs in Fiscal 2025 as compared to Rs. 621.4 lakhs for Fiscal 2024. This increased due to Increase of Margin and increase in the revenue from operations.

Tax Expenses

Our tax expenses increased by Rs. 238.91 Lakhs or 107.23% to Rs. 461.72 lakhs for Fiscal 2025 as compared to Rs. 222.81 lakhs for Fiscal 2024. The increase in current tax was primarily on account of increase in taxable income for Fiscal 2025.

Profit for the Year

As a result of the abovesaid factors, our profit for the year increased by Rs. 628.80 lakhs or 157.76% to Rs. 1,027.39 lakhs for Fiscal 2025 as compared to Rs. 398.59 lakhs for Fiscal 2024.

• The profit margin increased to 9.04% in Fiscal 2025 as compared to 5.39% in Fiscal 2024. This improvement in margins is primarily attributable to a higher proportion of high-margin products in the sales mix. During Fiscal 2025, the Company introduced two high-margin products, Paper MTR/OTR and OGR Paper, which contributed 2.51% and 3.76% respectively to the overall sales mix.

• Total expenses to revenue from operation was 88.89% in Fiscal 2025 compared to 94.27% in Fiscal 2024.

FISCAL YEAR ENDED MARCH 31, 2024 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2023

Income

The company primarily earns its revenue from the sale of products, including Paper Cup Blanks, Paper Sheets, and Paper Reels. Other operating revenues consist of income from job work and other services. For the fiscal year ended March 31, 2024, the total revenue (including other income) was Rs. 7,591.26 lakhs.

Revenue from manufactured products decreased by Rs. 823.59 lakhs, or 10.13%, to Rs. 7,305.51 lakhs in Fiscal 2024, compared to Rs. 8,129.10 lakhs in Fiscal 2023. This decline in revenue from operations was primarily due to a fire incident, which caused the company to remain shut for two months for infrastructure rearrangement. During this period, only nominal sales occurred. However, despite the decrease in revenue, our sales volume increased from 7,946.79 MT in Fiscal 2023 to 9,261 MT in Fiscal 2024, reflecting a 21.07% increase. The decrease in value, despite higher volumes, was mainly due to a reduction in overall paper prices.

Revenue from other operating income, which includes job work and income from other services, decreased by Rs. 197.55 lakhs, or 69.19%, to Rs. 87.98 lakhs in Fiscal 2024, compared to Rs. 285.53 lakhs in Fiscal 2023. This decrease was primarily due to a reduction in sales of ink and the remission of duties and taxes on exports.

Other income decreased by Rs. 38.64 lakhs, or 16.34%, to Rs. 197.78 lakhs in Fiscal 2024, as compared to Rs. 236.42 lakhs in Fiscal 2023. The decrease in other income was primarily due to a gain of Rs. 151.38 lakhs from the sale of fixed assets in Fiscal 2023, which did not recur in Fiscal 2024.

Expenditure

Our total expenses decreased by Rs. 1421.66 Lakhs or 16.94% to Rs. 6,969.86 lakhs for Fiscal 2024 as compared to Rs. 8,391.52 lakhs for Fiscal 2023. This was primarily attributable to:

a) Cost of Materials consumed

Our cost of materials consumed decreased by Rs.1,779.07 lakhs or 22.24% to Rs. 6,218.82 lakhs for Fiscal 2024 compared to Rs. 7997.89 lakhs for Fiscal 2023. The decrease in Cost of Material Consumed is mainly due to decline in raw materials prices.

b) Change in inventories of finished goods and work-in-progress

Our inventory level for finished goods in Fiscal 2024 had increased by Rs. 733.98 Lakhs i.e. from Rs. (607.87) lakhs in Fiscal 2023 to Rs. 126.11 lakhs in Fiscal 2024.

c) Employee Benefit Expenses

Our employee benefits expense decreased by Rs. 5.88 Lakhs or 5.27% to Rs 105.80 lakhs for Fiscal 2024 from Rs. 111.68 lakhs for Fiscal 2023. The decrease is primary due to the fire, the proportionate amounts attributed to such production have been deducted from the respective groups of expenses. As a result, a decrease of Rs. 5.88 lakhs has been observed in the employee benefit expenses.

d) Finance Costs

Our finance costs decreased by Rs. 16.12 Lakhs or 8.24% to Rs. 179.45 lakhs for Fiscal 2024 compared to Rs. 195.57 lakhs for Fiscal 2023. This decrease was primarily due to the repayment of secured long-term loans and unsecured loans from directors and relatives.

e) Depreciation & Amortization Expenses

Our depreciation and amortisation expense marginally decreased by Rs. 9.33 lakhs or 6.29% to Rs. 138.89 lakhs for Fiscal 2024 compared to Rs. 148.22 lakhs for Fiscal 2023. During the year some machines were sold and new machines was added in the month of March 2024.

f) Other Expenses

Our other expenses decreased by Rs. 345.23 lakhs or 63.23% to Rs. 200.79 lakhs for Fiscal 2024 as compared to Rs. 546.02 lakhs for Fiscal 2023. This decrease was primarily due to a decrease in Discount Expenses which decreased to Rs. 0.06 lakhs for Fiscal 2024 from Rs. 97.68 lakhs in Fiscal 2023. Additionally, Foreign Exchange Loss decreased to nil in Fiscal 2024 from Rs. 89.74 lakhs in Fiscal 2023.

Profit before exceptional & extraordinary items and Tax

Profit before exceptional & extraordinary items and Tax increased by Rs. 361.87 Lakhs or 139.43% to Rs. 621.4 lakhs Fiscal 2024 as compared to Rs. 259.53 lakhs for Fiscal 2023. This increased due to Increase of Margin and decrease in cost of material consumed and other expense and companys focus on cost optimization and operational efficiency, which have helped offset the impact of declining revenues.

Tax Expenses

Our tax expenses increased by Rs. 31.48 Lakhs or 37.07% to Rs. 116.40 lakhs in Fiscal 2024 as compared to Rs. 84.92 lakhs for Fiscal 2023. The increase in current tax was primarily on account of increase in taxable income for Fiscal 2024.

Profit for the Year

As a result of the abovesaid factors, our profit for the year increased by Rs. 184.10 lakhs or 85.83% to Rs. 398.59 lakhs for Fiscal 2024 compared to Rs. 214.48 lakhs for Fiscal 2023.

Total expenses to revenue from operation was 94.27% in Fiscal 2024 compared to 99.73% in F.Y. 2023.

CASH FLOW BASED ON RESTATED STANDALONE FINANCIAL STATEMENTS

(Rs. in Lakhs)

Particulars	March 31, 2025	March 31, 2024	March 31, 2023
Cash flow from Operating Activities	547.86	250.71	115.50
Cash flow from Investing Activities	4.74	(576.18)	(1,136.67)
Cash flow from Financing Activities	(591.17)	365.59	1,014.52
Cash and Cash equivalents at the end of the year	(38.56)	40.11	(6.65)

Other Key Ratios

Sr. No. Ratio	March 31, 2025	March 31, 2024	March 31, 2023	Changes in Ratio (%) 31.03.2025 v/s 31.03.24	Changes in Ratio (%) 31.03.24 v/s 31.03.23
1 Current Ratio (No. of Times)	1.38	1.07	1.13	28.97%	(5.02)%
2 Debt Equity Ratio (No. of Times)	1.35	2.71	3.13	(50.32)%	(13.46)%
3 Debt Service Coverage Ratio (No. of Times)	2.79	1.33	0.84	109.19%	59.21%
4 Return On Equity Ratio (%)	44.53%	27.14%	18.45%	64.08%	47.05%
5 Inventory Turnover Ratio (In Days)	76.23	95.16	81.38	(19.89)%	16.94%
6 Trade Receivable Turnover Ratio (In Days)	61.55	77.98	66.18	(21.07)%	17.83%
7 Trade Payable Turnover Ratio (In Days)	25.81	37.80	31.62	(31.71)%	19.54%
8 Net Capital Turnover Ratio (No of Days)	29.70	17.60	30.50	68.79%	(42.31)%
9 Net Profit Ratio (%)	9.04%	5.39%	2.55%	67.62%	111.50%
10 Return On Capital Employed (%)	25.15%	12.57%	8.24%	100.07%	52.58%
11 Return On Investment/Total Assets (%)	N.A	N.A	N.A	N.A	N.A

Note: Details of numerator and denominator for the above ratio are as under:

(1) Current Ratio = Current Assets / Current Liabilities.

(2) Debt- equity ratio = Total debt / Shareholders equity.

(3) Debt service coverage ratio = (Net Profit After Tax + Depreciation + Interest)/(Principal + Interest).

(4) Return on equity ratio= Net profit after taxes / Average Shareholders Equity.

(5) Inventory turnover ratio=Cost of goods sold or sales/Average inventory.

(6) Trade receivables turnover ratio= Revenue from Operations /Average trade receivables.

(7) Trade payables turnover ratio=Purchase/Average trade payables.

(8) Net Capital turnover ratio=Net sales/Average working capital.

(9) Net profit ratio=Net profit after taxes/Total Revenue.

(10) Return on capital employed=Earnings before interest and taxes/Capital employed (Shareholder Fund + Debt + DTL - DTA).

(11) Return on investment/Total Assets=PAT/Total Assets.

OTHER MATTERS

1. Unusual or infrequent events or transactions

Except as described in this Red Herring Prospectus, during the periods under review there have been no transactions or events, which in our best judgment, would be considered unusual or infrequent.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations

Other than as described in the chapter titled “Risk Factors ” beginning on page 27, to our knowledge there are no known significant economic changes that materially affected or are likely to affect income from continuing operations.

3. Known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations

Other than as described in the chapter titled “Risk Factors beginning on page 27, to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

4. Future relationship between Costs and Income

Our Companys future costs and revenues will be determined by demand of our Product, government policies and availability of Raw Material.

5. Total turnover of each major industry segment in which the issuer company operates.

The Company is operating in Disposable Paper Industry, relevant industry data, as available, has been included in the chapter titled “Our Industry ” beginning on page 112.

6. Status of any publicly announced new Product or business segments

Our Company has not announced any new Product and segment / scheme, other than through this Red Herring Prospectus.

7. The extent to which the business is seasonal Our Company business is not seasonal in nature.

8. Any significant dependence on a single or few suppliers or customers.

Our business is dependent on few suppliers and customers. We source our raw material from top 5 suppliers contributing 87.81%, 90.55% and 86.25% of the total purchases for the Fiscal 2025, 2024 and 2023 respectively. Further, our top 5 customers contribute 41.60%, 43.00% and 32.59% of revenue from operations for the Fiscal 2025, 2024 and 2023 respectively.

9. Competitive Conditions

We face competition from existing and potential competitors which is common for any business. We have, over a period of time, developed certain competitive strengths which have been discussed in the chapter titled “Our Business” beginning on page 138.