Accretion Nutraveda Ltd Management Discussions

OPERATIONS

You should read the following discussion of our financial position and results of operations together with our Restated Financial Information which have been included in this Draft Red Herring Prospectus. The following discussion and analysis of our financial position and results of operations is based on our Restated Financial Information for the financial years ended March 31, 2025, 2024 and 2023 including the related notes and reports, included in this Draft Red Herring Prospectus prepared in accordance with requirements of the Companies Act and restated in accordance with the SEBI Regulations, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Our Financial Statements, as restated have been derived from our audited financial statements for the respective period and years. Accordingly, the degree to which our Restated Financial Information will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity with Indian

GAAP, Companies Act, SEBI Regulations and other relevant accounting practices in India.

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 described under "Risk Factors" and "Forward Looking Statements" beginning on page 32 and 23, respectively, and elsewhere in this Draft Red Herring Prospectus. Our Financial Year ends on March 31 of each year. Accordingly, all references to a particular Financial Year are to the 12 months ended March 31 of that year.

OUR BUSINESS

Our Company is engaged in offering our clients with a quality range of ayurvedic products in the form of tablets, capsules, liquid orals, oral powders, external preparations, and oils. The company caters to diverse healthcare segments including Ayurvedic products for Bone & Joint Care, Respiratory Care, Gynec Care, Skin Care, Hair Care, Digestive Care, Urinary Track Care. We have various formulation of Nutraceuticals & Health Supplements for Memory & Neuron Care, Cardiac Care, UTI Care, Liver Care, Paediatric Care, GIT Care etc. Apart from this we manufacture Baby Products like various Balm and Oils.

Accretion Nutraveda Limited offers a broad and diversified product portfolio across multiple dosage forms, developed using both classical Ayurvedic formulations and modern nutraceutical science. The Companys products are manufactured at its GMP certified facility, adhering to stringent quality standards and regulatory compliance, and cater to preventive and therapeutic healthcare needs in both domestic and international markets.

For further details, see "Our Business" beginning on page 157 of this Draft Red Herring Prospectus.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Preparation

The Restated summary statement of assets and liabilities of the company as at 31st March 2025, 31st March 2024 and 31st March 2023 and related restated summary statement of profit and loss and cash flow for the year ended 31st March 2025, 31st March 2024, and 31st March 2023 (herein collectively referred to as ("Restated Summary Statement") have been compiled by the management from the audited Financial Statements for the year ended as on 31st March 2025, 31st March 2024 and 31st March 2023.

Restated summary Statements have been prepared to comply in all material respects with the provisions of Part I of Chapter III of the Companies Act, 2013 (the "ACT") read with Companies (Prospectus and Allotment of Securities) Rules, 2014, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2018 ("ICDR Regulations") issued by SEBI and Guidance Note on Reports in Companies Prospectuses (Revised 2019) ("Guidance Note").

Restated Summary Statements have been prepared specifically for inclusion in the offer document to be filed by the Company with the BSE in connection with its proposed BSE SME IPO. The Companys management has recast the

Financial Statements in the form required by Schedule III of the Companies Act, 2013 for the purpose of restated summary statements.

The Restated Financial Statement are prepared and presented under the historical cost convention and evaluated on a going- concern basis using the accrual system of accounting inaccodance with the accounting principles generally accepted in India (Indian GAAP) and the requirements of the Companies Act, including the Accounting Standards as prescribed by the section 133 of the Companies Act ("the Act") read with Rule 7 of the Companies (Accounts) Rules, 2014.

All assets and liabilities have been classified as current and non-current as per normal operating cycle of the company and other criteria set out in the schedule III of the Companies Act, 2013.

b. Use of Estimates

The preparation of financial statements in conformity with the Generally Accepted Accounting Policies requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosures of contingent assets and liabilities. The estimates and assumptions used in the accompanying standalone financial statements are based upon managements evaluation of the relevant facts and circumstances as on the date of the standalone financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any differences of actual results to such estimates are recognized in the period in which the results are known/ materialized.

c. Revenue Recognition

Revenue from contract with customer is recognized upon transfer of control of promised products or services to customers on complete satisfaction of performance obligations for an amount that reflects the consideration which the Company expects to receive in exchange for those products or services. Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts and other incentives, if any, as per contracts with the customers. Revenue also excludes taxes or amounts collected from customers in its capacity as agent. The specific recognition criteria from various stream of revenue is described below:

Sale of goods: Revenue from the sale of products is recognized at the point in time when control is transferred to the customer. Revenue is measured based on the transaction price, which is the consideration, net of customer incentives, discounts, variable considerations, payments made to customers, other similar charges, as specified in the contract with the customer. Additionally, revenue excludes taxes collected from customers, which are subsequently remitted to governmental authorities.

Interest Income: Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assets net carrying amount on initial recognition. Other items of income are recognized on accrual basis. Income from export entitlement is recognized as on accrual basis.

d. Employee Benefits

Short Term Employee Benefits Employee benefits payable wholly within twelve months of rendering the services are classified as short-term employee benefits and recognized in the period in which the employee renders the related service. These are re-cognized at the undiscounted amount of the benefits expected to be paid in exchange for that service.

e. Property, Plant and Equipment

Fixed Assets:-

Fixed Assets are value at cost less depreciation. The depreciation has been calculated as prescribed in Companies Act, 2013 on single shift and if the Asset is purchased during the year depreciation is provided on the days of utilization in that year.

Tangible Assets:

Property, Plant and Equipment are stated at historical cost less accumulated depreciation, and accumulated impairment loss, if any. Historical cost comprises of the purchase price including duties and non-refundable taxes, borrowing cost if capitalization criteria are met, directly attributable expenses incurred to bring the asset to the location and condition necessary for it to be capable of being operated in the manner intended by management and initial estimate of decommissioning, restoring and similar liabilities.

Subsequent cost related to an items of property, plant and equipment are recognized as a separate assets, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are recognized in statement of profit and loss during the reporting period when they are incurred.

An item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gains or losses arising from the de-recognition are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is de-recognized.

f. Depreciation and amortization

In accordance with the provisions of the Companies Act, 2013, effective from April 1, 2014, the Company has revised the depreciation rates on tangible fixed assets based on the useful lives specified in Part C of Schedule II of the Act.

Depreciation is calculated using the Written down value (WDV) Method over the estimated useful lives of the assets, as prescribed under Schedule II or as estimated by the management, wherever applicable.

Key Depreciation Policies: Component Accounting:

Where the cost of a part of an asset is significant in relation to the total cost of the asset and the useful life of that part differs from the rest of the asset, such part is depreciated separately based on its own useful life.

Pro-rata Depreciation:

Depreciation is charged pro-rata for assets acquired or disposed of during the year from the date the asset is available for use or until the date of disposal.

Measurement Basis:

Tangible fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Direct costs attributable to bringing the asset to its working condition for its intended use are capitalized.

Depreciation Rates:

Depreciation is provided on the Written Down Value method, at rates derived based on the useful lives specified in Schedule II to the Companies Act, 2013 or as estimated by the management in cases where the useful life differs from Schedule II.

Type of Assets	Useful Life as per Schedule II	Useful Life as per Company
Buildings - 9.50%	30 Years	30 Years
Plant and Equipment - 18.10%	15 Years	15 Years
Furniture and Fixtures - 25.89%	10 Years	10 Years
Office equipment -45.07%	5 Years	5 Years
Processing Unit - 63.16%	3 Years	3 Years

g. Impairment of assets

At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment. Recoverable amount is the higher of an assets net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Reversal of impairment loss is recognized as income in the statement of profit and loss.

h. Inventories

Raw materials are carried at the lower of cost and net realizable value. Cost is determined on a FIFO (First In First Out) basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realizable value. Stores and spare parts are carried at lower of cost and net realizable value. Finished goods produced or purchased by the Company are carried at lower of cost and net realizable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads. i. Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term balances (with an original maturity of three months or less from the date of acquisition) and highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. For the purposes of the cash flow statement, cash and cash equivalents include cash on hand, in banks and demand deposits with banks, net of outstanding bank overdrafts that are repayable on demand, book overdraft and are considered part of the Companys cash management system. j. Cash Flow Statement (AS - 3)

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the group are segregated.

k. Foreign currency transactions

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities other than net investments in non-integral foreign operations are translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses are recognized in the statement of profit and loss. Exchange difference arising on a monetary item that, in substance, forms part of an enterprises net investments in a non-integral foreign operation are accumulated in a foreign currency translation reserve.

l. The Effect of changes in Foreign Exchange Rates:

An enterprise may carry on activities involving foreign exchange in two ways. It may have transactions in foreign currencies or it may have foreign operations.

Initial Recognization:

A foreign currency transaction is a transaction which is denominated in or requires settlement in a foreign currency, including transactions arising when an enterprise either: (a) buys or sells goods or services whose price is denominated in a foreign currency; (b) borrows or lends funds when the amounts payable or receivable are denominated in a foreign currency; (c) becomes a party to an unperformed forward exchange contract; or (d) otherwise acquires or disposes of assets, or incurs or settles liabilities, denominated in a foreign currency. A foreign currency transaction should be recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

At Balance sheet date

(a) Foreign currency monetary items should be reported using the closing rate. However, in certain circumstances, the closing rate may not reflect with reasonable accuracy the amount in reporting currency that is likely to be realized from, or required to disburse, a foreign currency monetary item at the balance sheet date, e.g., where there are restrictions on remittances or where the closing rate is unrealistic and it is not possible to effect an exchange of currencies at that rate at the balance sheet date. In such circumstances, the relevant monetary item should be reported in the reporting currency at the amount which is likely to be realized from, or required to disburse, such item at the balance sheet date; (b) Non-monetary items which are carried in terms of historical cost denominated in a foreign currency should be reported using the exchange rate at the date of the transaction; and (c) Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency should be reported using the exchange rates that existed when the values were determined.

m. Taxes on income

Current income tax expense comprises taxes on income from operations in India. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expenses for the year comprising current & deferred tax are considered in determining the net profit for the year.

Provision is made for current tax and based on tax liability computed in accordance with the relevant tax laws applicable to the company. Provision is made for deferred tax for all timing difference arising between taxable incomes and accounting income at currently enacted or substantively enacted tax rates, as the case may be.

Deferred tax assets (other than in situation of unabsorbed depreciation and carry forward losses) are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance sheet date.

Deferred tax assets, in situation of unabsorbed depreciation and carry forward losses under tax law are recognized only to the extent that where is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be recognized.

Deferred tax assets and Deferred Tax liability are been offset whenever the company has legally enforceable right to set off current tax asset against current tax liability and where the deferred tax asset and deferred tax liability relate to income taxes levied by the same taxation authority.

n. Provisions, Contingent liabilities and Contingent assets

Provisions: A provision is recognized when the company has a present obligation as a result of past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of amount of obligation. Contingent Liabilities: Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only on the occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Contingent Assets: Contingent Assets are neither recognized nor disclosed in the Financial Statement.

o. Current Assets, Loans, and Advances & Liabilities

In the Opinion of the Board, the value on realization of the current assets, loans and advances, if realized in the ordinary course of business, shall not be less than the amount, which is stated, in the current year Balance sheet. The provision for all known liabilities is reasonable and not in excess of the amount considered reasonably necessary.

p. Earnings Per Shares

The earnings in ascertaining the companys EPS comprises the net profit after tax attributable to equity shareholders and includes the post-tax effect of any extraordinary items. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/(loss) after tax attributable to Equity shareholders (including the post-tax effect of extra ordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares are deemed to be dilutive only if their conversion to equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period.

q. Contributed Equity

Equity shares are classified as equity:

Basic earnings per share is calculated by dividing -the profit attributable to the owners group

-by the weighted average number of equity shares outstanding during the year.

r. Segment accounting

The Company is engaged only in manufacturing and sale of pharmaceutical products and there are no separate reportable segments as per Accounting Standard (AS) 17 Segment Reporting.

For further details in respect of Statement of Significant Accounting Policies, please refer to "Restated Financial Information" beginning on page 251 of this Draft Red Herring Prospectus.

KEY PERFORMANCE INDICATORS

The following table sets forth a breakdown of our revenue from operations, as well as other key performance indicators, for the periods indicated:

( in Lakhs except percentages and ratios)

Key Financial Performance	March 31, 2025	March 31, 2024	March 31, 2023
Revenue from Operations (1)	1600.18	500.52	290.31
Revenue from Operation Growth %	219.70%	72.41%	-
EBITDA (2)	364.66	120.60	59.12
EBITDA Margin (3)	22.79%	24.10%	20.36%
Restated Profit After Tax(4)	261.28	82.19	28.06
PAT Margin (5)	16.33%	16.42%	9.67%
EBIT (6)	340.53	94.44	27.99
Net worth(7)	534.87	108.49	26.31
Capital Employed(8)	920.74	325.86	223.64
RoE(%)(9)	81.22%	121.94%	228.56%
RoCE (%)(10)	36.98%	28.98%	12.51%
Debt(11)	385.87	217.36	197.33

KPI disclosed above is certified by M/s V S S B & Associates, Chartered Accountants the statutory auditors of our Company pursuant to their certificate dated September 19, 2025 UDIN No:. 25109944BMGPRM2848

Notes:

1 Revenue from Operations means the Revenue from Operations as appearing in the Restated Financial Statements

2 EBITDA is calculated as Profit before tax + Depreciation + Amortization+ Interest Expenses - Other Income

3 EBITDA Margin is calculated as EBITDA divided by Revenue from Operations

4 Restated Profit after Tax is calculated as Profit after tax for the period.

5 PAT Margin is calculated as PAT for the period/year divided by revenue from operations.

6 EBIT is calculated as Profit before tax + Interest Expenses - Other Income

7 Net worth means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account reduced by miscellaneous expenditure and the debit of Profit & Loss Account

8 Capital Employed means aggregate of shareholders funds and total liabilities (current as well as non-current)

9 Return on Equity is calculated as Restated Profit after Tax divided by Average Shareholders equity.

10 Return on Capital Employed is calculated as EBIT divided by capital employed, which is defined as shareholders equity plus total borrowings (current and non-current).

11 Debt includes long term and short term debt.

Explanation for KPI metrics:

Key Financial Performance	Explanations
Revenue from Operation	Revenue from Operations is used by our management to track the revenue profile of the business and in turn helps to assess the overall financial performance of our Company and volume of our business.
Revenue Growth Rate %	Revenue Growth rate informs the management of annual growth rate in revenue of the company in consideration to previous period
EBITDA	EBITDA provides information regarding the operational efficiency of the business
EBITDA Margin (%)	EBITDA Margin (%) is an indicator of the operational profitability and financial performance of our business
Restated Profit After Tax	Restated Profit after Tax is an indicator which determine the actual earning available to equity shareholders
PAT Margin	PAT Margin is an indicator of the overall profitability and financial performance of the Business.
EBIT	EBIT provides information regarding the operational efficiency of the business and it is after Depreciation.
Net Worth	Net worth shows the financial strength of a company (assets minus liabilities) and helps in credit approval, investor confidence, regulatory compliance, and valuation.
Capital Employed	Capital Employed refers to the total amount of capital that a company uses to run its operations and generate profits. It represents the funds invested in the business, either from shareholders or lenders that are deployed in assets to conduct business activities.
ROE %	ROE provides how efficiently the Company generates profits from shareholders funds.
ROCE %	ROCE provides how efficiently our Company generates earnings from the capital employed in the business
Debt	Debt provides access to funds without diluting ownership and interest paid is tax- deductible, reducing overall tax liability.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factors" beginning on page 32 of this Draft Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

1. We face competition in our business from organized and unorganized players, which may adversely affect our business operation and financial condition;

2. Not entering into any long term contracts with any of our customers and typically operating on the basis of purchase order basis could adversely impact our revenue and profitability;

3. Changes in government regulations or their implementation could disrupt our operations and adversely affect our business and results of operations;

4. Changing laws, rules and regulations and legal uncertainties, including adverse application of tax laws and regulations, may adversely affect our business and financial performance;

5. Political instability or a change in economic liberalization and deregulation policies could seriously harm business and economic conditions in India generally and our business in particular;

6. A slowdown in economic growth in India and globally could cause our business to suffer;

7. Our ability to maintain relationships with our existing customers;

8. Diverse regulatory and compliance requirements, and changes in those requirements that could restrict our ability to manufacture, market and sell our products;

9. Regulatory actions by domestic and foreign entities on the Company and its products;

10. Fluctuations in the Price of the raw materials used by us for manufacturing our products;

11. Our ability to protect our intellectual property rights and not infringing intellectual property rights of other parties; 12. Failure to obtain any approvals, licenses, registrations and permits in a timely manner;

13. Any disruption in operations of our manufacturing facility, which could adversely affect our business and results of operation.

Our Result of Operations

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

( in lakhs except for percentages)

Sr. No. Particulars	For period ended Total March 31, 2025	the % of period ended Total Income	For period March 31, 2024	the % of Total Income	For the ended March 31, 2023	% of Income
A. Revenue:
Revenue from operations	1,600.18	99.67%	500.52	96.31%	290.31	94.52%
Other income	5.37	0.33%	19.16	3.69%	16.83	5.48%
Total Income (A)	1,605.55	100%	519.68	100%	307.14	100%
B. Expenses:
Cost of material consumed	1,152.15	71.76%	416.41	80.13%	169.83	55.29%
Changes in Inventories of	(95.38)	(5.94%)	(129.83)	(24.98%)	0.00	0.00%
Stock in trade, Work-in- progress and Finished goods Employee benefits expense	45.68	2.85%	26.35	5.07%	12.28	4.00%
Finance costs	35.49	2.21%	23.94	4.61%	19.11	6.22%
Depreciation and amortization expense	24.13	1.50%	26.16	5.03%	31.13	10.14%
Other expenses	125.42	7.81%	65.18	12.54%	46.05	14.99%
Total Expenses (B)	1,287.49	80.19%	428.21	82.40%	278.40	90.64%
Profit before Prior Period items, extraordinary items and tax(A-B)	318.06	19.81%	91.46	17.60%	28.74	9.36%
Prior period items (Net)	0.00	-	0.00	-	0.00	-
Profit before extraordinary items and tax	318.06	19.81%	91.46	17.60%	28.74	9.36%
Extraordinary items	0.00	-	0.00	-	0.00	-
C. Profit before tax	318.06	19.81%	91.46	17.60%	28.74	9.36%
D. Tax Expense:-
- Current Tax	53.72	3.35%	10.10	1.94%	0.00	0.00%
- Deferred Tax	1.79	0.11%	-0.82	-0.16%	0.68	0.22%
- MAT Credit Entitlement	0.00	0.00%	0.00	0.00%	0.00	0.00%
- Prior Period Taxes	0.00	0.00%	0.00	0.00%	0.00	0.00%
- Excess/Short Provision	1.27	0.08%	0.00	0.00%	0.00	0.00%
Written back/off
Total Tax Expenses (D)	56.78	3.54%	9.28	1.79%	0.68	0.22%
E. Profit for the year (C - D)	261.28	16.27%	82.19	15.82%	28.06	9.14%

OVERVIEW OF REVENUE AND EXPENSES INCOME: Revenue from operations:

Revenue from operations mainly consists of revenue from sale of ayurvedic products in the form of tablets, capsules, liquid orals, oral powders, external preparations, and oils.

Other Income:

Our other income primarily comprises of subsidy income, interest income, duty drawbacks, discount income, foreign exchange gain.

EXPENSES:

Companys expenses consist of cost of material consumed, changes in inventories of work-in-progress, finished goods, employee benefits expense, finance costs, depreciation and amortization expense and other expenses.

? Cost of material consumed

This represents purchases related to raw material, packing material and other direct expenses.

? Changes in Inventories of work-in-progress and finished goods

This represents changes in inventories of finished goods and work in progress.

Employee benefits expense

Our employee benefits expense primarily comprises of director remuneration, salaries to staff, wages, bonus expense and Gratuity Expenses.

Finance costs

Our finance cost includes bank charges, bank interest on term loan, cash credit limit, bank loan charges, penal interest and Interest on Directors Loan.

Depreciation and amortization expense

Depreciation on Property Plant and Equipments.

Other expenses

The companys other expenses comprise a wide range of operational, administrative and statutory expenditures necessary for its day-to-day functioning. These include:

Direct expenses such as:

(i) electricity expenses, (ii) gas expenses, (iii) labour charges, (iv) Packing and forwarding charges, (v) Product Approval Charges, (vi) repair and maintenance expenses, (vii) testing, transportation, and (viii) water expenses.

Further, the company incurs statutory and professional costs including:

(i) auditors remuneration, (ii) consultancy fees, (iii) insurance charges, (iv) professional fees, (v) directors professional fees, (vi) government fees, (vii) GST expense, membership fees, and (viii) statutory expenses.

Administrative overheads include:

(i) Rent expenses, (ii) office expenses, (iii) travelling expenses, (iv) documentation charges, (v) domain expenses, (vi) software expense, (vii) stationery and printing, (viii) registration and stamp duty fees, and (ix) wastage expenses.

Selling and distribution-related expenses comprise:

(i) Commission, (ii) product permission charges, and (iii) freight outward.

Additionally, certain exceptional and miscellaneous charges such as:

(i) Foreign exchange differences, (ii) sundry balances written off, and (iii) other incidental expenditures also form part of this head.

Comparison of Fiscal 2025 with Fiscal 2024

( in lakhs except for percentages)

Sr. No. Particulars	Fiscal 2025	Fiscal 2024	% Change
A. Revenue:
Revenue from operations	1,600.18	500.52	219.70%
Other income	5.37	19.16	(71.97%)
Total Income (A)	1,605.55	519.68	208.95%
B. Expenses:
Cost of material consumed	1,152.15	416.41	176.69%
Changes in Inventories of Stock in trade, Work-in-progress and Finished goods	(95.38)	(129.83)	26.53%
Employee benefits expense	45.68	26.35	73.36%
Finance costs	35.49	23.94	48.25%
Depreciation and amortization expense	24.13	26.16	(7.76%)
Other expenses	125.42	65.18	92.42%
Total Expenses (B)	1,287.49	428.21	200.67%
Profit before Prior Period items, extraordinary items and tax(A-B)	318.06	91.46	247.76%
Prior period items (Net)	0.00	0.00	-
Profit before extraordinary items and tax	318.06	91.46	247.76%
Extraordinary items	0.00	0.00	-
C. Profit before tax	318.06	91.46	247.76%
D. Tax Expense:-
- Current Tax	53.72	10.10	431.88%
- Deferred Tax	1.79	(0.82)	318.29%
- MAT Credit Entitlement	0.00	0.00	-
- Prior Period Taxes	0.00	0.00	-
- Excess/Short Provision Written back/off	1.27	0.00	-
Total Tax Expenses (D)	56.78	9.28	511.85%
E. Profit for the year (C - D)	261.28	82.19	217.90%

Total Income:

Total income for fiscal 2025 stood at 1605.55 lakhs. Total income for the fiscal 2024 stood at 519.68 lakhs representing an increase of 208.95%. The increase was due to increase in production of material which in turn increased the revenue.

Revenue from Operations:

During the fiscal 2025 revenue from operations was 1600.18 lakhs. Revenue from operations for the fiscal 2024 stood at 500.52 lakhs representing an increase of 219.70%. The revenue from operation was increased due to increase in business operations and higher volume of sales, supported by higher utilization of installed capacity.

Other Income:

During the fiscal 2025, other income was 5.37 lakhs. For fiscal 2024, it was 19.16 lakhs representing a decrease of

71.97%. The company has earned interest subsidy and CGTMSE subsidy in the fiscal 2024, due to which there was an increase in other income.

Total Expenses:

The total expenses for the fiscal 2025 stood at 1287.49 lakhs. The total expenses represented an increase of 200.67 % as compared to fiscal 2024, which is 428.21 lakhs due to the factors described below: -

Cost of Material consumed:

Our cost of material consumed is 1152.15 lakhs for the fiscal 2025 as compared to 416.41 lakhs for the fiscal 2024 representing an increase of 176.69% due to increase in our scale of operations.

Changes in Inventories

Our changes in inventories is (95.38) lakhs fiscal 2025 which was (129.83) lakhs in the fiscal 2024.

Employee benefits expense:

Our company has incurred 45.68 lakhs as employee benefits expense for the fiscal 2025. It stood at 26.35 lakhs during the fiscal 2024, representing an increase of 73.36%. The increases was primarily on account of (i) Increase in

Salaries and wages from 17.49 lakhs in fiscal 2024 to 21.54 lakhs in fiscal 2025, (ii) Increase in Bonus expenses from 0.70 lakhs in fiscal 2024 to 1.80 lakhs in fiscal 2025, (iii) Increase in Directors Remuneration from 8.10 lakhs in fiscal 2024 to 22.30 lakhs in fiscal 2025.

This increase is partially offset by decrease in Gratuity Expenses from 0.06 lakhs in fiscal 2024 to 0.03 lakhs in fiscal 2025.

Finance costs:

Finance costs for the fiscal 2025 was 35.49 lakhs. For fiscal 2024, it was 23.94 lakhs, representing an increase of 48.25%. This increase was primarily on account of: (i) increase in Interest expenses on Loans from 22.14 lakhs in fiscal 2024 to 27.84 lakhs in fiscal 2025, (ii) Increase in other bank charges from 1.79 lakhs in fiscal 2024 to 7.65 lakhs in fiscal 2025.

This increase is partially offset by decrease in Penal Interest from 0.02 lakhs in financial year ended march 31, 2024 to Nil in financial year ended march 31, 2025.

Depreciation and Amortization Expenses:

Depreciation for the fiscal 2025 was 24.13 lakhs. For fiscal 2024, it stood at 26.16 lakhs. Though there is an addition in the Fixed Assets in Fiscal 2025. However, the machinery was put to use in March 2025.

Other Expenses:

Other expenses for the fiscal 2025 stood at 125.42 lakhs. For the fiscal 2024, other expenses were at 65.18 lakhs. The increase of 92.42% was mainly due to the increase in auditors remuneration, labour expense, directors professional fees, rent expense, courier & transport charges, travelling expenses, etc.

Profit before Tax

Due to reasons mentioned above, the profit before tax increased by 247.76% from 91.46 lakhs in fiscal 2024 to 318.06 lakhs in fiscal 2025.

Tax expenses

Due to an increase in our profit before tax, our Total tax expense increased by 511.85%, from 9.28 lakhs in fiscal 2024 to 56.78 lakhs in fiscal 2025.

Restated Profit/ (Loss) after tax:

The company reported restated profit after tax for the fiscal 2025 stood at 261.28 lakhs in comparison to profit after tax of 82.19 lakhs in the fiscal 2024. This increase in the profit after tax is on account of growth in sales and business.

Comparison of Fiscal 2024 with Fiscal 2023:

( in lakhs except for percentages)

Sr. No. Particulars	Fiscal 2024	Fiscal 2023	% Change
A. Revenue:
Revenue from operations	500.52	290.31	72.41%
Other income	19.16	16.83	13.84%
Total Income (A)	519.68	307.14	69.20%
B. Expenses:
Cost of material consumed	416.41	169.83	145.19%
Changes in Inventories of Stock in trade, Work-in-progress and	(129.83)	0.00	-
Finished goods
Employee benefits expense	26.35	12.28	114.58%
Finance costs	23.94	19.11	25.27%
Depreciation and amortization expense	26.16	31.13	(15.97%)
Other expenses	65.18	46.05	41.54%
Total Expenses (B)	428.21	278.40	53.81%
	91.46	28.74	218.23%
Profit before Prior Period items, extraordinary items and
tax(A-B)
Prior period items (Net)	0.00	0.00	-
Profit before extraordinary items and tax	91.46	28.74	218.23%
Extraordinary items	0.00	0.00	-
C. Profit before tax	91.46	28.74	218.23%
D. Tax Expense:-
- Current Tax	10.10	0.00	-
- Deferred Tax	(0.82)	0.68	(220.59%)
- MAT Credit Entitlement	0.00	0.00	-
- Prior Period Taxes	0.00	0.00	-
- Excess/Short Provision Written back/off	0.00	0.00	-
Total Tax Expenses (D)	9.28	0.68	1264.71%
E. Profit for the year (C - D)	82.19	28.06	192.91%

Total Income:

Total income for the fiscal 2024 stood at 519.68 lakhs. Total income for the fiscal 2023 stood at 307.14 lakhs representing an increase of 69.20%. The increase was due to increase in revenue from operations on account of increase in production.

Revenue from Operations:

During the fiscal 2024 revenue from operations was 500.52 lakhs. Revenue from operations for the fiscal 2023 stood at 290.31 lakhs representing an increase of 72.41%. The revenue from operation was increased due to increase in volume of our business operations and higher volume of sales. Increased production has resulted in increased revenue.

Other Income:

During the fiscal 2024, other income was 19.16 lakhs. For fiscal 2023, it was 16.83 lakhs representing an increase of 13.84%. This increase was mainly due to increase in interest subsidy and CGTMSE subsidy.

Total Expenses:

The total expenses for the fiscal 2024 stood at 428.21 lakhs. The total expenses represented an increase of 53.81 % as compared to fiscal 2023, which is 278.40 lakhs due to the factors described below: -

Cost of Material consumed:

Our cost of material consumed is 416.41 lakhs for the fiscal 2024 as compared to 169.83 lakhs for the fiscal 2023 representing an increase of 145.19% due to increase in our scale of operations.

Changes in Inventories

Our changes in inventories is (129.83) lakhs for the fiscal 2024 which was nil in the fiscal 2023.

Employee benefits expense:

Our company has incurred 26.35 lakhs as employee benefits expense for the fiscal 2024. It stood at 12.28 lakhs during the fiscal 2023, representing an increase of 114.58%. The overall increase in employee cost was increased due to increase in directors remuneration, staff salary and wages, bonus expense and Gratuity Expenses.

Finance costs:

Finance costs for the fiscal 2024 was 23.94 lakhs. For fiscal 2023, it was 19.11 lakhs, representing an increase of 25.27%, which is primarily due to: (i) increase in interest on directors loan from nil in fiscal 2023 to 8.06 lakhs in fiscal 2024, (ii) Increase in Bank charges.

This increase is partially offset by a decrease in (i) Interest on CC from 4.99 lakhs in fiscal 2023 to 4.90 lakhs in fiscal 2024, (ii) Interest on Term Loan from 11.09 lakhs in fiscal 2023 to 9.18 lakhs in fiscal 2024 and Bank Loan Charges from 2.92 lakhs in fiscal 2023 to 1.57 lakhs in fiscal 2024.

Depreciation and Amortization Expenses:

Depreciation for fiscal 2024 was 26.16 lakhs. For fiscal 2023, it stood at 31.13 lakhs. The reduction in depreciation is on account of no additional purchase made in fiscal 2024. Also company is following the WDV method of depreciation as prescribed by the companies Act, 2013.

Other Expenses:

Other expenses for the fiscal 2024 stood at 65.18 lakhs. For fiscal 2023, other expenses were 46.05 lakhs. The increase of 41.54% was mainly due to the increase in auditors remuneration, commission, electricity expense, labour expense, transportation expense, courier & transport charges, registration fees etc.

Profit before Tax

Due to reasons mentioned above, the profit before tax increased by 218.23% from 28.74 lakhs in fiscal 2023 to 91.46 lakhs in fiscal 2024.

Tax expenses

Due to an increase in our profit before tax, our Total tax expense increased by 1264.71%, from 0.68 lakhs in fiscal 2023 to 9.28 lakhs in fiscal 2024.

Restated Profit/ (Loss) after tax:

The company reported restated profit after tax for the fiscal 2024 stood at 82.19 lakhs in comparison to profit after tax of 28.06 lakhs in the fiscal 2023. The increase in the profit after tax was on account of increase in operations, reduction in depreciation cost and other administrative cost.

Cash Flows:

The following table sets forth our cash flows with respect to operating activities, investing activities and financing activities for the period indicated:

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Net cash flow from/ (used in)operating activities	(221.27)	23.02	68.13
Net cash flow from/ (used in)investing activities	(87.20)	(15.83)	(0.55)
Net cash flow from/ (used in)financing activities	298.12	(3.91)	(63.40)
Net increase/(decrease) in cash and Bank Balances	(10.36)	3.28	4.18
Cash and Bank Balances at the beginning of the year	11.90	8.61	4.44
Cash and Bank Balances at the end of the year	1.54	11.90	8.61

Cash flows generated from / (used in) from operating activities

The following is the Cash Flows from Operating Activities for the following periods:

Fiscal 2025

Our net cash flow used in operating activities was 221.27 lakhs for Fiscal 2025 as compared to the Restated Profit before Tax of 318.06 lakhs for the same period. Our operating profit before working capital changes was 377.74 lakhs which was primarily adjusted against Increase in inventories of 221.08 lakhs, Increase in Trade receivables of 301.75 lakhs, Increase in Loans & Advances of 46.86 lakhs, Increase in Trade Payables of 0.12 lakhs, Increase in Short-term Provisions of 45.77 lakhs, Increase in Long-term Provisions of 0.03 lakhs and decrease in other current liabilities of 20.26 lakhs. Cash used in operations is 166.28 lakhs, Income taxes paid was 55.00 lakhs.

Fiscal 2024

Our net cash flow from operating activities was 23.02 lakh for Fiscal 2024 as compared to the Restated Profit before Tax of 91.46 lakh for the same period. Our operating profit before working capital changes was 141.57 lakhs which was primarily adjusted against Increase in inventories of 108.44 lakhs, Increase in Loans & Advances of 11.53 lakhs, Increase in Other Current Liabilities of 22.29 lakhs, Increase in Short-term Provisions of 10.22 lakhs, Increase in Long-term Provisions of 0.06 lakhs and decrease in Trade receivables of 55.06 lakhs, Decrease in Trade Payables of

76.11 lakhs. Cash generated from operations is 33.12 lakhs, Income taxes paid was 10.10 lakhs.

Fiscal 2023

Our net cash flow from operating activities was 68.13 lakh for Fiscal 2023 as compared to the Restated Profit before

Tax of 28.74 lakh for the same period. Our operating profit before working capital changes was 78.98 lakhs which was primarily adjusted against Increase in inventories of 95.52 lakhs, Increase in Trade receivables of 26.01 lakhs, Increase in Trade Payables of 93.63 lakhs, Increase in Other Current Liabilities of 15.50 lakhs, Increase in Short-term Provisions of 0.05 lakhs, Increase in Long-term Provisions of 0.02 lakhs and decrease in Loans and Advances of 1.47 lakhs. Cash generated from operations is 68.13 lakhs.

Cash flows generated from / (used in) in investing activities

Fiscal 2025

Net Cash used in investing activities for the Fiscal 2025 was 87.20 lakhs, due to payment for purchase of property plant and equipment.

Fiscal 2024

Net Cash used in investing activities for the Fiscal 2024 was 15.83 lakhs, due to payment for purchase of property plant and equipment.

Fiscal 2023

Net Cash used in investing activities for the Fiscal 2023 was 0.55 lakhs, due to payment for purchase of property plant and equipment.

Cash flows generated from / (used in) financing activities

Fiscal 2025

Net cash generated from financing activities for the Fiscal 2025 was 298.12 lakhs on account of Proceeds from Issue of Share Capital was 165.10 lakhs, Proceeds from Long Term Borrowings was 102.47 lakhs, Proceeds from Short Term Borrowings was 66.04 lakhs, Interest paid was 35.49 lakhs.

Fiscal 2024

Net cash used in financing activities for the Fiscal 2024 was 3.91 lakhs on account of Repayment of Long Term Borrowings was 85.91 lakhs, Proceeds from Short Term Borrowings was 105.94 lakhs and Interest paid was 23.94 lakhs.

Fiscal 2023

Net cash used in financing activities for the Fiscal 2023 was 63.40 lakhs on account of Repayment of Long Term Borrowings was 63.36 lakhs, Proceeds from Short Term Borrowings was 19.07 lakhs and Interest paid was 19.11 lakhs.

AUDITOR OBSERVATIONS

There have been no reservations, qualifications, matters of emphasis or adverse remarks in the Restated Financial Information of our Company for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023.

Information required as per Item (II) (C) (iv) of Part A of Schedule VI to the SEBI Regulations:

An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:

1. Unusual or infrequent events or transactions

There has not been any unusual trend on account of our business activity. Except as disclosed in this Draft Red Herring Prospectus, there are no unusual or infrequent events or transactions in our Company.

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

Other than as described in the Section titled "Financial Information" and chapter titled "Managements Discussion and Analysis of Financial Conditions and Results of Operations", beginning on Page 251 and 299 respectively of this Draft Red Herring Prospectus, to our knowledge there are no significant economic changes that may materially affect or 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 sales, revenue or income from continuing operations.

Other than as described in the chapter titled "Risk Factors" and "Managements Discussion and Analysis of Financial Conditions and Result of Operations" beginning on page 32 and 299 respectively of the Draft Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Future changes in relationship between costs and revenues

Other than as described in the sections "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 32, 157 and 299 respectively, to our knowledge, there is no future changes in relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

5. Total turnover of each major industry segment in which our Company operates

We are primarily engaged in the business of manufacturing of ayurvedic products. Relevant industry data, as available has been included in the chapter titled "Industry Overview" beginning on page no 139 of this Draft Red Herring Prospectus.

6. Status of any publicly announced New Products or Business Segment

Except as disclosed in the Chapter "Our Business", our Company has not announced any new product or service.

7. Seasonality of business

Our business is not subject to seasonality. For further information, see "Industry Overview" and "Our Business" on pages 139 and 157 respectively.

8. Dependence on single or few customers

Our business is dependent upon few customers for further details, refer "Risk Factors" on page 32 of this Draft Red Herring Prospectus.

9. Competitive conditions

Competitive conditions are as described under the Chapters "Industry Overview" and "Our Business" beginning on pages

139 and 157 respectively of this Draft Red Herring Prospectus.

10. Details of material developments after the date of last balance sheet i.e. March 31, 2025.

Except as disclosed in this Draft Red Herring Prospectus, to our knowledge no circumstances have arisen since March 31, 2025, that could materially and adversely affect or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months.

? Our company has increased its authorised share capital from 600 lakhs to 800 lakhs on September 12, 2025.

? Our company has allotted 45,000 equity shares with face value of 10/- each at a premium of 120/- on September 06, 2025 on right basis.

? Our company has allotted 47,88,000 fully paid-up equity shares of 10/- each as Bonus Shares in proportion of 9 bonus shares for every 1 equity shares held by existing shareholders on record dated September 10, 2025, by capitalizing a sum of 4.79 lakhs standing to the free reserves / security premium of the company.

? Our Company has approved the Draft Red Herring Prospectus vide resolution in the Board Meeting dated September 30, 2025.