Anlon Healthcare Ltd Management Discussions

OF FINANCIAL CONDITION AND RESULT OF

OPERATION

You should read the following discussion of our financial condition and results of operations together with our Restated Financial Information which have been included in this Red Herring Prospectus. The following discussion and analysis of our financial condition and results of operations is based on our Restated Financial Statement for the Financial Years ended March 31, 2025, 2024 and 2023 including the related notes and reports, included in this 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 derivedfrom our auditedfinancial 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.

Our Companys financial year commences on April 1 and ends on March 31 of the immediately subsequent year, and references to a particular fiscal year are to the 12 months ended March 31 of that particular year. Unless otherwise indicated or the context otherwise requires, the financial information included herein is based on or derived from our Restated Financial Statement included in this Red Herring Prospectus. For further information, see Restated Financial Statement on 257. Additionally, see Definitions and Abbreviations on page 1 for certain terms used in this section. Unless the context otherwise requires, in this section, references to we, us and our our Company or the Company refer to Anlon Healthcare Limited.

Unless otherwise indicated, industry and market data used in this section has been derived from the industry report titled Industry Report on Pharmaceutical Sector dated April 14, 2025 and updated on July 28, 2025 prepared and issued by Dun & Bradstreet (D&B), appointed by us on September 12, 2024, and exclusively commissioned and paid for by us in connection with the Offer (D&B Report). D&B is an independent agency which has no relationship with our Company, our Promoters and any of our Directors or KMPs or SMPs. The data included herein includes excerpts from the D&B Report and may have been re-ordered by us for the purposes of presentation. There are no parts, data or information (which may be relevant for the proposed Issue), that has been left out or changed in any manner. Unless otherwise indicated, financial, operational, industry and other related information derived from the D&B Report and included herein with respect to any particular year refers to such information for the relevant calendar year. A copy of the D&B Report is available on the website of our Company at www.anlon.in until the Bid/Issue Closing Date. For more information, see Risk Factors - Certain sections of this Red Herring Prospectus disclose information from the D&B Report which has been commissioned and paidfor by us exclusively in connection with the Issue and any reliance on such information for making an investment decision in the Issue is subject to inherent risks on page 71.

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 on pages 34 and 24 respectively, and elsewhere in this Red Herring Prospectus.

BUSINESS OVERVIEW

We are a chemical manufacturing company engaged in manufacturing of; (i) high purity advance pharmaceutical intermediates (Pharma Intermediate) which serves as raw material/ key starting material in the manufacturing of active pharmaceutical ingredients; and (ii) active pharmaceutical ingredients (APIs) which serves as a raw material for pharmaceutical formulations in preparation of various type of Finished Dosage Formula ( FDF) such as tablet, capsules, ointment, syrup etc, ingredients in nutraceuticals formulations, personal care products and animal health products. Our products spans across the family of pharmaceutical intermediates, active pharmaceutical ingredients, nutraceutical APIs and ingredients for personal care and veterinary API. Our active pharmaceutical ingredient products are manufactured in accordance with Indian and international pharmacopeia standards such as IP, BP, EP, JP, USP.

We are one of the few manufacturers of loxoprofen sodium dihydrate in India, which is a notable API widely used in treatment of pain/inflammation association with conditions including rheumatoid arthritis, osteoarthritis, lower back pain, frozen shoulder, neck-shoulder-arm syndrome, tooth pain or after surgery, injury or tooth extraction

(Source: D&B Report).

In addition to the manufacturing of Pharma Intermediate and APIs in accordance with various domestic and international standards, we have recently started undertaking custom manufacturing services for complex or novel chemical compounds, tailoring the manufacturing process to meet specific customer requirements, including producing chemicals with purity levels that exceed industry standards. Our domain knowledge and expertise enables us to reduce existing impurities and employ appropriate processes to achieve the desired level of purity (source: D&B Report).

We also undertake API customization, preparation and filing of Drug Master File (DMF) in the Indian and global markets as per the pharmacopeia requirements of our customers and regulatory agencies. As on date, we have received approval for Drug Master File from (i) Brazilian Health Regulatory Agency (ANVISA, Brazil) for our API product namely, loxoprofen sodium dihydrate; (ii) National Medical Products Administration, China (NMPA, China) for our API product namely, loxoprofen sodium dihydrate; (iii) Pharmaceuticals and Medical Devices Agency, Japan (PMDA, Japan) for our API product namely, loxoprofen sodium dihydrate and loxoprofen acid. Further, as on date, we have filed twenty-one (21) DMF with regulatory authorities of European Union, Russia, Japan, South Korea, Iran, Jordan, Pakistan amongst other and we are in process of filing DMF for approval of Ketoprofen with regulatory authority of USA and Dexketoprofen Trometamol with regulatory authority of Spain, Italy, Germany and Slovenia.

As on the date of this Red Herring Prospectus, our product portfolio consists of sixty-five (65) commercialised products and twenty-eight (28) products which are at pilot stage and forty-nine (49) products which are at laboratory testing stage. For details, see Our Business on page 196.

Key Performance Indicators

In evaluating our business, we consider and use certain key performance indicators that are presented below as supplemental measures to review and assess our operating performance. The presentation of these key performance indicators is not intended to be considered in isolation or as a substitute for the Restated Financial Statement included in this Red Herring Prospectus. We present these key performance indicators because they are used by our management to evaluate our operating performance. Further, these key performance indicators may differ from the similar information used by other companies, including peer companies, and hence their comparability may be limited. Therefore, these matrices should not be considered in isolation or construed as an alternative to Ind AS measures of performance or as an indicator of our operating performance, liquidity, profitability or results of operation. Our key financial performance indicator for the Financial Year 2025, Financial Year 2024 and Financial Year 2023 are detailed as below:

in lakhs, unless stated otherwise)

Parameter	For the year ended on March 31, 2025	For the Year ended on March 31, 2024	For the Year ended on March 31, 2023
Total income	12,045.51	6,669.19	11,312.00
Total revenue from operations	12,028.66	6,658.37	11,287.74
Current Ratio	2.64	2.01	1.97
EBIDTA	3,237.73	1,556.94	1,265.74
EBIDTA Margin (in %)	26.88	23.35	11.19
Net Profit	2,051.79	965.71	582.00
Net Profit Margin (in %)	17.06	14.50	5.16
Return on Net Worth (in %)	25.51	45.92	78.92
Return on Capital Employed (in %)	21.93	16.29	17.16
Debt-Equity Ratio	0.73	3.55	9.00
Debt Service Coverage Ratio	2.78	1.49	1.46

As certified by our Statutory Auditors vide certificate dated July 23, 2025.

Notes:

(a) Total income includes revenue from operation and other income

(b) Revenue from operations represents the Sale ofgoods in Domestic Market as well as Export Market.

(c) Current Ratio is a liquidity ratio that measures our ability to pay short-term obligations (those which are due within one year) and is calculated by dividing the current assets by current liabilities.

(d) EBITDA means Earnings before interest, taxes, depreciation and amortization expense, which has been arrived at by obtaining the profit before tax/ (loss) for the year and adding back finance costs, depreciation, and amortization expense.

(e) EBITDA margin is calculated as EBITDA as a percentage of total income.

(f) Net Profit for the year represents the restated profits of our Company after deducting all expenses.

(g) Net Profit margin is calculated as restated profit & loss after tax for the year divided by total income.

(h) Return on net worth is calculated as Profit for the year, as restated, attributable to the owners of the Company for the year divided by Average Net worth (average total equity). Average total equity means the average of the aggregate value of the paid-up share capital and other equity of the current and previous financial year.

(i) Return on capital employed calculated as Earnings before interest and taxes divided by average capital employed (average capital employed calculated as average of the aggregate value of total equity, total debt of the current and previous financial year).

(j) Debt- equity ratio is calculated by dividing total debt by total equity. Total debt represents long term and short- term borrowings. Total equity is the sum of equity share capital and other equity.

(k) Debt Service Coverage Ratio is calculated by dividing the sum of Profit after Tax and interest amount by sum of the repayment of loan and Interest.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO MARCH 31, 2025:

In the opinion of the Board of Directors of our Company, since the date of the last financial statements disclosed in this Red Herring Prospectus, there have not arisen 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.

KEY FACTORS AFFECTING THE RESULTS OF OPERATION:

Our business is subjected to various risks and uncertainties, including those discussed in the section titled Risk Factors on page 34. Our Companys future results of operations could be affected potentially by the following factors:

• We operate in a highly regulated industry and our operations are subject to extensive regulation in each market in which we do business. All aspects of our business, including our manufacturing operations and sales and marketing activities, are subject to extensive legislation and regulation by various local, regional, national and overseas regulatory regimes.

• Expansion of our existing product categories.

• Our manufacturing facility is subject to regular audit by our customers and the regulatory authority of their jurisdiction. Our manufacturing facility is audited by 33 customers and/or their regulatory authorities.

• Changes in laws and regulations applicable to our business and in the area in which we operate.

• Companys inability to retain its experienced employees.

• Our projects are exposed to various implementation and other risks, including risks of time and cost overruns, and uncertainties;

• Failure to adapt the changing technology in our industry of operation may adversely affect our business

• Availability and cost of raw material.

• Material outstanding litigations involving our Company, if determined adversely.

OUR SIGNIFICANT ACCOUNTING POLICIES

The notes to the Restated Summary Statements included in this Red Herring Prospectus contain a summary of our significant accounting policies. For details relating to our Significant accounting policies, see Significant Accounting Policies - Annexure V-Restated Financial Statement beginning on page 257.

PRINCIPAL COMPONENTS OF STATEMENT OF PROFIT AND LOSS

Set forth below are the principal components of statement of profit and loss from our continuing operations:

Income

Our total income comprises of (i) revenue from operations and (ii) other income.

Revenue from Operations

Revenue from operations comprises of Income generated from sale of manufactured products in domestic market as well as International market.

Other Income

Other income includes (i) interest income, (ii) Export duty draw back (iii) job work income and (iv) commission income.

Expenses

Our expenses comprises of: (i) cost of material consumed; (ii) changes in inventories; (iii) employee benefits expense; (iv) finance costs; (v) depreciation and amortisation expense; and (vi) other expenses.

Cost of Material Consumed

Cost of material consumed the purchase of various raw material adjusted with opening and closing stock of Raw material.

Change in inventory

Change in inventory includes difference between opening and closing balance of work-in-progress, finished goods as at the beginning and end of the year

Employee Benefits Expense

Employee benefits expenses primarily include (i) salary and wages, (ii) Managerial Remuneration (iii) contribution to employee benefits (gratuity, provident fund and other funds) and (iii) staff welfare expenses.

Finance Cost

Finance cost includes (i) bank interest on Working capital loan; (ii) Interest on term loan (iii) Interest on packing credit limit used for export of goods (iv) bank charges (v) processing fees

Depreciation and Amortisation expenses

Depreciation and amortisation expenses primarily include depreciation expenses on our property, plant and equipment.

Other Expenses

Other expenses include (i) Power and fuel charges; (ii) Packing Material Cost; (iii) Marketing Expenses; (iv) Repairs and Maintenance Expenses; (v) Freight Forward Charges; (vi) Quality control Expenses; (vii) Professional Expenses; (viii) Job work expenses; (ix) Freight Expenses; (x) Fuel Charges ; (xi) Water Charges; (xii) Canteen Expenses; (xiii) office and administrative expenses; (xiv) rent and lease; (xv) Disposal Expenses .

RESULTS OF KEY OPERATIONS

R in lakhs)

Particulars	For the year ended on
	31.03.2025	31.03.2024	31.03.2023
Income from continuing operations
Revenue from operations	12,028.66	6,658.37	11,287.74
% of growth	80.65	(41.01)	97.54
Other Income	16.85	10.82	24.25
% total Revenue	0.14	0.16	0.21
Total Revenue	12,045.51	6,669.19	11,312.99
Expenses
Cost of Material Consumed	7,458.71	3,366.31	8,794.96
% of Revenue from operations	62.01	50.56	77.92
Employee benefits expense	488.19	477.82	406.87
Particulars	For the year ended on
	31.03.2025	31.03.2024	31.03.2023
% Increase/(Decrease)	2.17	17.44	29.50
Finance Costs	371.52	393.07	379.78
% Increase/(Decrease)	(5.48)	3.50	(6.72)
Other expenses	860.88	1,268.12	844.44
% Increase/(Decrease)	(32.11)	50.18	60.74
Depreciation and amortisation expenses	177.39	188.75	186.64
% Increase/(Decrease)	(6.02)	1.13	1.34
Total Expenses	9,356.69	5,694.08	10,612.67
% to total revenue	77.68	85.38	93.82
EBITDA	3,237.73	1,556.93	1,265.74
% to total revenue	26.88	23.35	11.19
Restated profit before tax from continuing operations	2,688.82	975.11	699.32
Exceptional Item
Total tax expense	637.02	9.40	117.32
Restated profit after tax from continuing operations (A)	2,051.79	965.71	582.00
% to total revenue	17.03	14.48	5.14

COMPARISON OF F.Y. 2024-25 WITH F.Y. 2023-24:

Income from Operations

We are a chemical manufacturing company engaged in manufacturing of; (i) high purity advance pharmaceutical intermediates (Pharma Intermediate) which serves as raw material/ key starting material in the manufacturing of active pharmaceutical ingredients; (ii) active pharmaceutical ingredients (APIs) which serves as a raw material for pharmaceutical formulations in preparation of various type of Finished Dosage Formula (FDF) such as tablet, capsules, ointment, syrup etc, ingredients in nutraceuticals formulations, personal care products and animal health products. Our Companys total revenue from operations for FY 2024-25 was Rs12,028.66 lakhs consist of Domestic sale of Rs11,639.00 lakhs and Export sale of Rs 389.66 lakhs which is increased by 80.65% in comparison to F.Y 2023-24 total revenue of operation of Rs6.658.37 lakhs. The Increase in the Business in the FY 2024-25 looks high because the plant was non-operative for complying with the recommendation and observations of the Brazilian Health Regulatory Agency (ANVISA, Brazil) during its audit of our Manufacturing Facility for their approvals of our API product namely, Loxoprofen Sodium Dihydrate in FY 2023-24. IN FY 2024-25 the plant was in operation for the full year. The comparison of the business with the full year of operation for FY 2022-23 shows the growth of 6.56 % only.

Expenditure:

Cost of Material Consumed

The Cost of Material Consumed for F.Y.2024-25 was Rs7458.71 lakhs against the cost of Material Consumed of ^3,366.31 lakhs in F.Y. 2023-24. The cost of material consumed was adjusted for the change in inventory. The cost of material consumed was 62.01% of the total revenue from operations in F.Y 2024-2025 as against 50.56 % of total revenue from Operations in F.Y 2023-24.

Employee Benefits Expenses:

The Employee expenses for F.Y. 2024-25 were Rs 488.19 lakhs against the expenses of Rs477.82 lakhs in F.Y. 202324 showing increase by 2.17%. The increase in the normal increment to the existing employees result in to increase of the employee cost by 2.17% in F.Y. 2024-25 as compared to F.Y. 2023 -24.

Finance Cost:

The Finance Cost for F.Y. 2024-25 was Rs 371.52 lakhs against the cost of Rs393.07 Lakhs in the F.Y. 2023-24 showing decrease of 5.48%. The Decrease in the Finance cost is due to repayment of long-term borrowings by Rs 1588.32 Lakhs during the F.Y 2024-25.

Other Expenses

Other Expenses decreased to Rs860.88 lakhs for F.Y. 2024-25 against Rs1268.13 Lakhs in F.Y 2023-24 showing Decrease by 32.11%. The other expenses decrease on account of Power and fuel expenses which was Rs 114.87 lakhs in FY 2024-25 against Rs 221.98 lakhs in FY 2023-24, Fuel Expenses which was Rs 82.22 lakhs in FY 202425 against Rs 187.39 lakhs in FY 2023-24, Job work Expenses which was Rs 75.69 lakhs in FY 2024-25 against Rs 221.98 lakhs in FY 2023-24 and Repairs and Maintenance which was Rs63.86 lakhs in FY 2024-25 against Rs 121.16 lakhs in FY 2023-24. We are using Brine Chiller which having motor of 150HP, during the period we have improved our chemical process in our regular product and we have not used the chiller for our production campaign due to no req. of lower temperature below 0oC, hence consumption of power is lower in FY 2024-25 compared to F.Y 2023-24.

In addition to that our optimised process has reduced the water waste in some of our product, which is mainly treated in Multi Effect Evaporator (MEE) Plant and consume the ~20-25% higher electricity, our optimized manufacturing gave us the benefit in electricity and biofuel consumption

Depreciation and Amortisation Expenses:

The Depreciation for F.Y. 2024-25 was Rs 177.39 lakhs as compared to Rs188.75 lakhs for F.Y. 2023-24. The depreciation was decreased by 6.02 % in F.Y 2024-25 as compared to F.Y. 2023-24.

EBITDA

The EBITDA for FY 2024-25 stood at Rs3,237.73 lakhs as against Rs1,556.93 lakhs in FY 2023-24. EBITDA as a percentage of total revenue improved to 26.88% in FY 2024-25 from 23.35% in FY 2023-24. This increase was primarily driven by a reduction in other expenses, mainly due to lower power and fuel costs, job work charges, and repairs and maintenance expenses during FY 2024-25 compared to the previous year. Other expenses accounted for 0.07% of revenue in FY 2024-25, down from 0.19% in FY 2023-24. Additionally, the Companys business grew by 80.65% in FY 2024-25 as compared to FY 2023-24.

Profit after Tax (PAT)

The Profit After Tax (PAT) for the financial year 2024-25 stood at Rs2,051.80 lakhs as against Rs965.71 lakhs in 2023-24. The PAT margin improved to 17.03% of total revenue in 2024-25 compared to 14.48% in 2023-24, reflecting a growth of 2.55%. During FY 2023-24, our manufacturing facility was non-operative to ensure compliance with the recommendations and observations made by the Brazilian Health Regulatory Agency (ANVISA, Brazil) after their audit for the approval of our API product, Loxoprofen Sodium Dihydrate. This temporary suspension resulted in lower operational income while fixed costs continued to be incurred, leading to a decrease in profit margins for that period.

COMPARISON OF F.Y. 2023-24 WITH F.Y. 2022-23:

Income from Operations

We are a chemical manufacturing company engaged in manufacturing of; (i) high purity advance pharmaceutical intermediates (Pharma Intermediate) which serves as raw material/ key starting material in the manufacturing of active pharmaceutical ingredients; (ii) active pharmaceutical ingredients (APIs) which serves as a raw material for pharmaceutical formulations in preparation of various type of Finished Dosage Formula ( FDF) such as tablet, capsules, ointment, syrup etc, ingredients in nutraceuticals formulations, personal care products and animal health products. Our Companys total revenue from operations for FY 2023 -24 was Rs6,658.37 lakhs consist of Domestic sale of Rs5,997.25 lakhs and Export sale of ^661.13 lakhs which is decreased by 41.01% in comparison to F.Y. 2022-23 total revenue of operation of Rs11,287.74 lakhs. Our Manufacturing Facility was non

operative for complying with the recommendation and observations of the Brazilian Health Regulatory Agency ( ANVISA, Brazil) during its audit of our Manufacturing Facility for their approvals of our API product namely, Loxoprofen Sodium Dihydrate. The non operation of the manufacturing unit result into decrease in the Income from Operation.

Expenditure:

Cost of Material Consumed

The Cost of Material Consumed for F.Y.2023-24 was Rs3,366.31 lakhs against the cost of Material Consumed of Rs8,794.96 lakhs in F.Y. 2022-23. The cost of material consumed was adjusted for the change in inventory. The cost of material consumed was 50.56% of the total revenue from operations in F.Y 2023-2024 as against 77.92 % of total revenue from Operations in F.Y 2022-23.

We have filed the Drug Master File (DMF) for one of our Key product Loxoprofen Sodium Dihydrate to the Brazilian regulatory agency ANVISA, for that Customer has done pre-audit to our facility and provided observations to us for the required changes in the infrastructure and documentation as per latest GMP Guideline of ANVISA, which is mandatory to comply to get GMP approval from ANVISA for our manufacturing facility. To comply with all the required changes we have to do major modification in production area, store area and QC area, which forced us for the mandatory shutdown of the facility about 4 months. Due to shutdown of the production our entire planning was disturbed and not able to achieve to targeted sales in the F.Y. 2023-24. Meanwhile we were in queue for the approval of our products at our customer and able to get the major orders of the high profitable products which is directly impacted in financials.

Employee Benefits Expenses:

The Employee expenses for F.Y. 2023-24 were Rs477.82 lakhs against the expenses of Rs406.87 lakhs in F.Y. 202223 showing increase by 17.44%. The increase in the normal increment to the existing employees and revision of the Directors remuneration result in to increase of the employee cost by 17.44% in F.Y. 2023-24 as compared to F.Y. 2022-23.

Finance Cost:

The Finance Cost for F.Y. 2023-24 was Rs393.07 lakhs against the cost of Rs379.78 Lakhs in the F.Y. 2022-23 showing an increase of 3.50%. The Company had provided bank guarantees for the various projects awarded to the Company. The increase in the Finance cost is due to utilization of more working capital limit in F.Y. 2023 -24 as compare to F.Y 2022-23.

Other Expenses

Other Expenses increased to Rs1,268.13 lakhs for F.Y. 2023-24 against Rs844.44 Lakhs in F.Y. 2022-23 showing increase by 50.18%. The other expenses increase on account of job work expense which was Rs 221.98 lakhs in FY 2023-24 against Rs 1.74 lakhs in FY 2022-23, Repairs, Maintenance expense which was Rs 121.16 lakhs in FY 2023-24 against Rs 92.59 lakhs in FY 2022-23, Marketing Expenses which was Rs 139.01 lakhs in FY 2023-24 against Rs 10.94 lakhs in FY 2022-23 and payment of interest on late payment of Tax in FY 2023-24 of Rs16.25 lakhs which was Nil in FY 2022-23. The job work charges and repairs and maintenance has increased in FY 202324 due to closure of plant for preparation and filing of regulatory Drug Master File (DMF) with Brazilian Health Regulatory Agency (ANVISA, Brazil) and renovation for same.

Depreciation and Amortisation Expenses:

The Depreciation for F.Y. 2023-24 was Rs188.75 lakhs as compared to Rs186.64 lakhs for F.Y. 2022-23. The depreciation was increased by 1.13 % in F.Y. 2023-24 as compared to F.Y. 2022-23. The depreciation was provided on Straight Line Method and the negligible increase in the depreciation is on account of increased to fixed assets of Rs 353.16 lakhs in F.Y 2023-24.

EBITDA

The EBITDA for F.Y. 2023-24 was Rs 1556.93 lakhs as compared to t 1265.74 lakhs for F.Y. 2022-23. The EBITDA was 23.35 % in FY 2023-24 of total Revenue as compared to 11.19 % in FY 2022-23. The EBITDA is increased on account of reduction of Cost of material consumed by 27.36 % in F.Y. 2023-24 as compared to F.Y. 2022-23.

Profit after Tax (PAT)

PAT is t965.71 lakhs for F.Y. 2023-24 as compared to Rs 582.00 Lakhs in F.Y. 2022-23. The PAT was 14.48% of total revenue in F.Y. 2023-24 compared to 5.14% of total revenue in F.Y. 2022-23. Though the business of the Company decreased by 41.01 % in FY 2023-24 compared to F.Y. 2022-23 on account of closure of plant for four months, the profit margin was increased by 9.34 % on account of Decrease in cost of material consumption.

LIQUIDITY AND CAPITAL RESOURCES

We depend on both internal and external sources of liquidity to provide working capital and to fund capital expenditure. We have historically funded our capital expenditure with cash flow from operations, Equity capital and debt financing. We generally enter into long-term borrowings in the form of working capital and term loan from bank.

CASH FLOW

Particulars	For the year ended on March 31, 2025	For the Year ended on March 31, 2024	For the Year ended on March 31, 2023
Net cash from Operating Activities	(2,255.17)	(322.60)	(284.97)
Net cash flow from Investing Activities	278.54	(336.90)	(33.49)
Net Cash Flow Financing Activities	1,894.15	824.58	226.59

Cash flow from Operating activity FY 2025

The cash flow from operating activity was negative of t 2255.17 lakhs. Our Profit before Tax for that period was t 2688.82 lakhs. Adjustment for non-cash and non-operating items primarily consist of Depreciation amounting to Rs 177.39 lakhs, Interest expenses of Rs 371.52 lakhs, provision of gratuity of t 2.35 lakhs which was primarily set off by the Interest income of t8.12 lakhs. Our Operating profit before change in working capital was Rs 3,262.41 lakhs. The Net change in working capital was t 5,415.08 lakhs which is mainly on account of increase in inventories , Trade Receivables , other current assets and Other current Liabilities.

FY 2024

The cash flow from operating activity was negative of Rs 322.60 lakhs. Our Profit before Tax for that period was t975.11 lakhs. Adjustment for non-cash and non-operating items primarily consist of Depreciation amounting to Rs 188,75 lakhs, Interest expenses of Rs 393.07 lakhs, provision of gratuity of t9.33 lakhs which was primarily set off by the Interest income of t7.57 lakhs. Our Operating profit before change in working capital was Rs 1,558.70 lakhs. The Net change in working capital was t(1,879.96) lakhs which is on account of increase in inventories, loans, increase of other current assets, increase in other financial assets, decrease in Trade payables and decrease in other current liabilities which was primarily set off by decrease in trade receivables, decrease in investments and increase of Provisions.

FY 2023

The cash flow from operating activity was negative of Rs 284.97 lakhs. Our Profit before Tax for that period was Rs 699.32 lakhs. Adjustment for non-cash and non-operating items primarily consist of Depreciation amounting to Rs 186.64 lakhs, Interest expenses of Rs 379.78 lakhs, provision of gratuity of Rs 2.84 lakhs which was primarily set off by the Interest income of Rs3.73 lakhs. Our Operating profit before change in working capital was Rs1264.84 lakhs. The Net change in working capital was ^(1,549.81) lakhs which is on account of Increase in trade Receivables, increase in inventories, loans, increase of other current assets, increase in other financial assets, Increase in current Investment which was primarily set off by increase in Trade Payables, Increase in Other Current Liabilities, and increase in Other Provisions.

Cash flow from Investing activity

FY 2025

The cash flow from Investing activity was positive of Rs 278.54 lakhs primarily due to sale of assets of Rs323.34Lakhs and interest income of Rs8.12 lakhs which was partially set off by purchase of f fixed asset of Rs52.93 lakhs.

FY 2024

The cash flow from Investing activity was negative of Rs336.90 lakhs primarily due to purchase of fixed assets of Rs353.16 lakhs which was partially set off by sale of fixed asset of Rs8.70 lakhs and interest income of Rs7.57 lakhs.

FY 2023

The cash flow from Investing activity was negative of Rs33.49 lakhs primarily due to purchase of fixed assets of Rs37.22 lakhs which was partially set off by interest income of Rs3.73 lakhs.

Cash flow from Financing Activity

FY 2025

The cash flow from financing activity was positive of Rs1894.15 lakhs primarily due to issue of Equity share with share premium of Rs3887.24 lakhs which was partially set off by repayment of longterm borrowings of Rs1588.82lakhs , short term borrowings ofT32.76 Lakhs and interest payment of Rs371.52 lakhs.

FY 2024

The cash flow from financing activity was positive of Rs824.57 lakhs primarily due to issue of Equity share of Rs400.00 lakhs and increase in short term borrowings of Rs1,210.74 lakhs which was partially set off by repayment of long term borrowings of Rs393.09 lakhs and interest payment of Rs393.07 lakhs.

FY 2023

The cash flow from financing activity was positive of Rs226.59 lakhs primarily due to increase in short term borrowings of Rs15.45 lakhs and increase of Long-term borrowings of Rs590.91 lakhs which was partially set off by interest payment of Rs379.78 lakhs.

SELECTED BALANCE SHEET ITEMS

Trade Receivables

in lakhs)

Particulars	For the year ended on March 31, 2025	For the Year ended on March 31, 2024	For the Year ended on March 31, 2023
Not Due	1,511.30	215.54
Due less than 3 months	2,246.35	2,403.37	3,166.42
Due for 3 to 6 months	1,277.91	18.52	989.54
Due for more than 6 months to 1 year	1,827.79	134.40	21.86
Due for more than 1 year to 2 years	96.75	898.43	-
Due for more than 2 to 3 years	346.14	12.88	0.40
Due for more than 3 years	193.63	189.91	202.35
Total	7,499.87	3,873.05	4,380.57

Out of the trade receivables of Rs 7,499.87lakhs as on March 31, 2025 which is 62.35 % of the total revenue, the receivables outstanding for more than 6 months to 1 year are Rs1827.79lakhs. The Company had sold goods to 2,615.73 Lakhs to Aadishwar Excipients Private Limited and outstanding from the said party was Rs1811.43Lakhs. The Promoter of the Company was expired on road accident in August 2024. There were no successor in the company and one of the married daughter has started to manage the operations from September 2024 and promised to due payments before end of September 30,2025. Untill now the company had received Rs629.76 Lakhs by way of purchase of material from the Aadishwar Excipients Private Limited. The total customers from the amount to be received are Forty one and the recovery from the customers are slow. Out of total forty one customers, the company has to recover the Rs 6,144.20 Lakhs from seven customers.

Trade Payables

Particulars	As at March 31, 2025	As at 31st March 2024	As at 31st March 2023
Outstanding dues of creditors micro enterprises and small enterprises
Not due
Years	47.68	40.50	1.64
Less than 01
01-02 Years			-
02-03 Years			-
More than 3 Years			-
Outstanding dues of creditors other than micro enterprises and small enterprises
Not Due	253.19	167.90	6.46
Outstanding for Following Period from Due date
Less than 01 Years	627.64	773.83	1862.25
01-02 Years	66.42	339.14	2.55
02-03 Years	277.01	2.03	95.04
More than 3 Years	692.39	675.82	564.70
Total	1,964.34	1,999.22	2,532.65

Out of the Trade Payables of Rs1,964.34 lakhs as on March 31,2025, the amount payable outstanding for more than 2 years are Rs969.40 lakhs. The total parties to whom the payment to be made and outstanding for more than 2 years are Twenty-Eight.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various types of market risks during the normal course of business. Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk and commodity risk. We are exposed to commodity risk, foreign exchange risk, interest rate risk, credit risk and inflation risk in the normal course of our business.

Commodity Risk

We are exposed to the price risk associated with purchasing our raw materials, which form the highest component of our expenses. We typically do not enter into formal arrangements and long-term contract with our suppliers. Therefore, fluctuations in the price and availability of raw materials may affect our business, cash flows and results of operations. We do not currently engage in any hedging activities against commodity price risk.

Foreign Currency Risk

We operate internationally and the major portion of our business is transacted in USD. Our sales, purchase, borrowing (etc.) is in foreign currency. Consequently, we are exposed to foreign exchange risk. Although our exposure to exchange rate fluctuations is partly hedged through the exports of products and the import of the necessary raw materials and production equipment, we are still affected by fluctuations in exchange rates for certain currencies, particularly the U.S. Dollar.

Interest Rate Risk

We are exposed to interest rate risk primarily as a result of term loans from banks. As at March 31, 2025, we had all of our loans that are subject to floating rates of interest, which exposes us to market risk as a result of changes in interest rates. Upward fluctuations in interest rates would increase the cost of new debt and interest cost of outstanding variable rate borrowings. In addition, any increase in interest rates could adversely affect our ability to service long-term debt, which would in turn adversely affect our results of operations. Interest rates are highly sensitive to many factors beyond our control, including the monetary policies of the RBI, domestic and international economic and political conditions, inflation and other factors. Upward fluctuations in interest rates increase the cost of servicing existing and new debts, which adversely affects our results of operations and cash flows.

Inflation

India has experienced high inflation in the recent past, which has contributed to an increase in interest rates. High fluctuation in inflation rates may make it more difficult for us to accurately estimate or control our costs.

Credit Risk

We are exposed to credit risk on amounts owed to us by our clients. If our clients do not pay us promptly, or at all, it may impact our working capital cycle, and/or we may have to make provisions for or write-off on such amounts.

INFORMATION REQUIRED AS PER ITEM 11 (II) (C) (IV) OF PART A OF SCHEDULE VI TO THE SEBI REGULATIONS:

1. Unusual or infrequent events or transactions

To our knowledge, there have been no unusual or infrequent events or transactions that have taken place during the last three years other than shut down of business due to COVID-19.

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

We are a chemical manufacturing company engaged in manufacturing of; (i) high purity advance pharmaceutical intermediates (Pharma Intermediate) which serves as raw material/ key starting material in the manufacturing of active pharmaceutical ingredients; (ii) active pharmaceutical ingredients (APIs) which serves as a raw material for pharmaceutical formulations in preparation of various type of Finished Dosage Formula (FDF) such as tablet, capsules, ointment, syrup etc, ingredients in nutraceuticals formulations, personal care products and animal health products. We operate in a highly regulated industry and our operations are subject to extensive regulation in each market in which we do business. Any change in the Government Policies may adversely affect our business and results of operations. For further details, see Industry Overview on Page 155 and Risk Factor on 34.

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.

Apart from the risks as disclosed under Section titled Risk Factors on page 34, to our knowledge 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. Expected Future Changes in relationship between costs and revenues, in case of events such as future increase in labour, Material costs or prices that will cause a material change are known.

Other than as described Risk Factors, Our Business, Managements Discussion and Analysis of Financial Position and Result of Operations on Pages 34, 196 and 299 respectively, to our knowledge, there are no known factors that might affect the future relationship between expenditure and income which may have a material adverse impact on our operations and finances.

5. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices.

Changes in revenue in the last three Financial Years are as described in Results of Key Operations - Comparison of FY 2023 -24 with FY 2022-23 and Comparison of FY 2022-2023 with FY 2021 -2022 and mentioned above. Increases in revenues are by and large linked to increases in volume of business mentioned above.

6. Total turnover of each major industry segment in which the issuer company operated.

The Company is in the chemical manufacturing business. For detail, see Our Business and Industry Overview on page 196 and 155.

7. Status of any publicly announced new products or business segment.

Except as set out in this Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new products or new business segments.

8. The extent to which business is seasonal.

Our Companys business is not seasonal in nature.

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

Our business is affected by risks associated with our dependency on some of our customers. For further details see, Risk Factors - Our revenue from operations is dependent upon a limited number of customers and the loss of any of these customers or loss of revenuefrom any of these customers could have a material adverse effect on our business, financial condition, results of operations and cash flows on page 38.

10. Competitive conditions.

We operate in a competitive environment. Our Business operations are affected by competition from domestic as well international Competitors. For details, see Our Business, Industry Overview and Risk Factors on page 196, 155 and 34 respectively.