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Classic Electrodes India Ltd Management Discussions

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Sep 8, 2025|10:39:30 AM

Classic Electrodes India Ltd Share Price Management Discussions

You should read the following discussion and analysis of financial condition and results of operations together with
our financial statements included in this Red Herring Prospectus. The following discussion relates to our Company
and is based on our restated financial statements. Our financial statements have been prepared in accordance with
Indian GAAP, the accounting standards and other applicable provisions of the Companies Act.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates,
expectations or prediction may be "Forward looking statement" within the meaning of applicable securities laws
and regulations. Actual results could differ materially from those expressed or implied. Important factors that could
make a difference to our operations include, among others, economic conditions affecting demand/supply and price
conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws
and other Statutes and incidental factors.

Our Company was originally incorporated as a private limited company under the Companies Act, 1956 in the
name and style of ‘Classic Electrodes (India) Private Limited vide certificate of incorporation dated
September, 30, 1997, bearing Corporate Identification NumberU70100WB1997PTC085600issued by the
Registrar of Companies, Kolkata ("RoC") West Bengal. Thereafter, our company was converted into a public
limited company pursuant to a special resolution passed by the shareholders of our Company on April 18, 2009
and consequently the name of the company was changed to ‘Classic Electrodes (India) Limited and a fresh
certificate of incorporation consequent to change of name was issued by the Registrar of Companies, Kolkata
dated June 13, 2009 bearing Corporate Identity Number U70100WB1997PLC085600.

We have consistently grown in terms of our revenues over the past years. In the recent periods our revenues from
operation were Rs. 13,384.12 lakhs in F.Y. 2021-22, Rs. 15,087.12 lakhs in F.Y. 2022-23 and Rs. 19,382.12 lakhs
in F.Y. 2023-24. Our Net Profit after tax for the above-mentioned periods were Rs. 145.37 lakhs, Rs. 208.48 lakhs,
and Rs. 1228.40 lakhs respectively.

Factors contributing to the growth of our Revenue:

1. For FY 2021-22 the following were the factors that contributed to growth of our revenue:

• Significant Surge in Revenue from Operations:

Our revenue from operations saw substantial expansion, increasing from Rs 8,929.76 Lakhs in FY 2020-21 to Rs
13,384.12 Lakhs in FY 2021-22, reflecting an impressive growth of almost 49.88 %. This growth was primarily
attributed to the successful realization of organic opportunities within our current product offerings i.e., increase in
sale of powder, scrap, wire rod, MS Wire, Zinc Ingot, SS-MIG Wires and MS-MIG Wires attributing to the boost
in the revenue from operations.

• Cost of Purchase:

As part of our growth strategy, the company focused on promoting their capabilities and successes stories with
significant changes in cost of Production and Stock Holding period, aligning well with the companys growth
objectives. Increased visibility and accessibility, played a pivotal role in the overall revenue surge.

2. For FY 2022-23 the following were the factors that contributed to growth of our revenue:

• Steady Revenue Increase:

Our revenue from operations experienced a positive trajectory, escalating from Rs 13,384.12 Lakhs in FY 2021-22
to Rs 15,087.13 lakhs in FY 2022-23, marking a substantial growth of almost 12.72%. This marginal increase in
Revenue from Operations was primarily a demand driven result of increase in volumes of sales of SS-MIG Wires,
and MS-MIG Wires & increase in price of products.

• Strategic Marketing :

The Company created a track record of positive testimonials and timely product delivery & after sales service
which clearly built trust and credibility in the market, which is crucial for winning new orders and maintaining a
competitive edge in the market.

3. For FY 2023-24 the following were the factors that contributed to growth of our revenue:

• Steady Revenue Increase:

Our revenue from operations experienced a positive trajectory, escalating from Rs 15,087.13 Lakhs in FY 2022-23
to Rs 19,382.12 lakhs in FY 2023-24, marking a substantial growth of almost 28.47%. This substantial growth was
due to increase in geographical presence and favourable market giving an ultimate boost to the growth in sales of
Wire Rods, MS-Wires and organic growth in SS-MIG Wires, MS-MIG Wires and Electrodes.

• Strategic expansion:

The Company expanded its Market in Eastern India. Marketing Team is effectively involved in approaching New
Customers.

(Amount in Lakhs, except EPS, % and ratios)

Key Financial Performance

Period ended
February 28,
2025
Fiscal 2024 Fiscal 2023 Fiscal 2022

Revenue from Operations (1)

18760.18 19382.12 15087.13 13384.12

Growth in revenue from operations (%)

N.A. 28.47% 12.72% 48.94%

Total Income (2)

18,789.56 19,440.73 15,112.69 13,436.80

EBITDA (3)

1,924.17 2,303.64 854.12 607.85

EBITDA Margin (%) (4)

10.24% 11.85% 5.65% 4.52%

Restated profit for the period/year (5)

957.31 1229.79 208.48 149.31

Restated profit for the period/year (PAT Margin)
(%) (6)

5.10% 6.34% 1.38% 1.12%

Return on Net Worth (7)

21.95% 36.14% 9.59% 7.60%

Return on Average Equity ("RoAE") (%) (8)

24.66% 44.11% 10.08% 7.80%

Return on Capital Employed("RoCE") (%) (9)

17.68% 25.78% 9.38% 7.95%

Debt- Equity Ratio (10)

1.23 1.37 2.03 2.05

Notes:

(1) Revenue from operations represents the revenue from sale of service & product & other operating revenue of

our Company as recognized in the Restated financial information.

(2) Total income includes revenue from operations and other income.

(3) 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 / period and adding back interest cost, depreciation, and
amortization expense.

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

(5) Restated profit for the period / year margin is calculated as restated profit for the period / year divided by revenue
from operations.

(6) PAT Margin (%) is calculated as Profit for the year/period as a percentage of Revenue from Operations.

(7) Return on net worth is calculated as Net profit after tax, as restated, attributable to the owners of the Company
for the year/ period divided by Net worth at the end of respective period/year. Networth means aggregate
value of the paid-up equity share capital and reserves & surplus.

(8) RoAE is calculated as Net profit after tax divided by Average Equity.

(9) Return on capital employed calculated as Earnings before interest and taxes divided by capital employed as at
the end of respective period/year. (Capital employed calculated as the aggregate value of total equity, total
debt and deferred tax liabilities)

(10) 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 share capital and reserves & surplus.

Except as otherwise stated in this Red Herring Prospectus and the Risk Factors given in the Red Herring
Prospectus, the following important factors could cause actual results to differ materially from the expectations
include, among others:

We do not have long-term agreements with our suppliers for raw materials

Our purchases of raw materials are concentrated from a few suppliers with our top 10 suppliers contributing
of the total purchases of raw materials on restated financial statement are as follows:

Period

Amt (Rs in Lakhs) % of total Purchase

2024

13958.22 89.71

2023

12600.26 96.91

2022

11,266.41 96.06

Our ability to remain competitive, maintain costs and profitability depend, in part, on our ability to source and
maintain a stable and sufficient supply of raw materials at acceptable prices. Our major raw materials include
metals including Iron and Steel, Nickel, Titanium Wires and Titanium Oxide, Quartz, Chemicals such as
Carbonates, Sodium, Hydrogen Bicarbonate etc. We depend on external suppliers for all the raw materials
required and typically purchase raw materials on a purchase order basis and place such orders with them in
advance based on our requirements. As a result, the success of our business is significantly dependent on
maintaining good relationships with our raw material suppliers. The absence of long-term supply contracts
subjects us to risks such as price volatility caused by various factors viz. commodity market fluctuations, currency
fluctuations, climatic and environmental conditions, transportation cost, changes in domestic as well as
international government policies, regulatory changes and trade sanctions. Some portions of the raw materials
were imported during the last two Fiscal years from Australia. As a result, we continue to remain susceptible to
the risks arising out of foreign exchange rate fluctuations as well as import duties, which could result in decline
in our operating margins. If we cannot fully offset the increase in raw material prices with increase in the prices
for our products, we will experience lower profit margins, which in turn may have a material adverse effect on
our results of operations, financial condition and ultimately lead to a liquidity crunch. In the absence of such
contracts, we are also exposed to the risk of unavailability of raw materials in desired quantities and qualities, in
a timely manner.

Our inability to collect receivables and default in payment from our customers could result in the reduction of
our profits and affect our cash flows.

We sell at our standard terms with payment due before dispatch and conduct our business on the basis of various
milestone payments. A small percentage of our sales are to customers on an open credit basis, with standard
payment terms of generally between 30 to 90 days. While we generally monitor the ability of our customers to
pay these open credit arrangements and limit the credit we extend to what we believe is reasonable based on an
evaluation of each customers financial condition and payment history, we may still experience losses because of

a customer being unable to pay. As a result, while we maintain what we believe to be a reasonable allowance for
doubtful receivables for potential credit losses based upon our historical trends and other available information,
there is a risk that our estimates may not be accurate.

Particulars

As at

February 28,
2025

Fiscal 2024 Fiscal 2023 Fiscal 2022
Amt

(Rs in Lakhs)

Amt

(Rs in Lakhs)

Amt

(Rs in Lakhs)

Amt

(Rs in Lakhs)

Unsecured, Considered Good

Trade Receivable more than six
months

628.12 585.38 574.73 740.23

Trade Receivable less than six months

4283.72 2,835.79 2,712.19 2,001.77

Unsecured, Considered Doubtful

Trade Receivable more than six
months

- - -

Total

4911.84 3,421.17 3286.92 2742.00

Any increase in our receivable turnover days will negatively affect our business. If we are unable to collect
customer receivables or if the provisions for doubtful receivables are inadequate, it could have a material adverse
effect on our business, results of operations and financial condition.

Macroeconomic conditions could also result in financial difficulties, including insolvency or bankruptcy, for our
customers, and as a result could cause customers to delay payments to us, request modifications to their payment
arrangements, that could increase our receivables or affect our working capital requirements, or default on their
payment obligations to us. An increase in bad debts or in defaults by our customer, may compel us to utilize
greater amounts of our operating working capital and result in increased interest costs, thereby adversely affecting
our results of operations and cashflows.

Regulatory Framework

We have obtained all regulatory permissions which are necessary to run our business, Further, some of the
approvals are granted for fixed periods of time and need renewals, which are obtained in the course of business,
however, there may be change in statutory regulations at any time which cannot be predicted by us. There can be
no assurance that the change in regulations will not impact our operations in the future.

Our business and profitability is substantially dependent on the availability and cost of our raw materials and
any disruption to the timely and adequate supply or volatility in the prices of raw materials may adversely
impact our business, results of operations, cash flows and financial condition

We are engaged in the manufacturing of complex and high precision engineered components, requiring raw
materials having certain technical specifications. The tables below provide cost of raw materials and components
consumed as a percentage of our total revenue in the years/ periods indicated:

in Lakhs)

Particulars

February 28, 2025

Fiscal 2024

Fiscal 2023

Fiscal 2022

Amt
(Rs in
Lakhs)
% of total
Revenues
Amt
(Rs in
Lakhs)
% of total
Revenues
Amt
(Rs in
Lakhs)
% of
total
Revenue

s

Amt
(Rs in
Lakhs)
% of
total
Revenue

s

Cost of Raw
Materials and
Components
Consumed

8851.23 47.18% 8657.32 44.67% 7,634.89 50.61% 6,298.28 47.06%

We may experience volatility in the cost or availability of raw materials. A major portion of raw materials
comprises of metals including iron and steel, nickel, Titanium Wires and Titanium Oxide, Quartz, Chemicals such

as Carbonates, Sodium, Hydrogen Bicarbonate etc. The prices of such raw materials are volatile and are dependent
on a number of factors, such as, their availability, fluctuations in domestic and international demand and supply,
international production and capacity, fluctuation in the volume of metal imports, transportation costs, protective
trade measures and various social and political factors, in the economies in which the metal producers sell their
products. For instance, in Fiscal 2023 proved to be a tumultuous year for the steel sector as the Russia-Ukraine
conflict that started in the last quarter of fiscal 2022 pushed up the prices of coking coal, iron ore, pig iron and
steel. Prices of all these commodities hit new all-time highs, hurting the domestic demand. The prices directly
impacted the procurement decisions of the players in the end-use segments in the first quarter of fiscal 2023.
(Source: CRISIL Report) While our arrangements with customers allow us to seek an upward revision in pricing,
our cash flows may still be adversely affected because of any gap in time between the date of procurement of
those primary raw materials and date on which we can reset the prices for our customers, to account for the
increase in the prices of such raw materials. Our ability to pass through costs or otherwise mitigate these cost
increases could adversely affect our business. From time to time, commodity prices may also fall rapidly. If this
happens, suppliers may withdraw capacity from the market until prices improve which may cause periodic supply
interruptions. If these supply interruptions occur, our costs for procuring our raw materials could increase, and
our business, cash flows and results of operations could be adversely affected.

Any increase in prices of raw materials could have an impact on our working capital as we would require
additional funds to procure the necessary steel at the higher prices. As a result, we may be required to allocate a
larger portion of our working capital towards purchasing raw materials to maintain our production levels. This
increased allocation towards purchase can potentially strain our working capital availability.

Ability of Management

Our success depends on the continued services and performance of the members of our management team and
other key employees. Competition for senior management in the industry is intense, and we may not be able to
retain our existing senior management or attract and retain new senior management in the future. The loss of any
member of our senior management or other key personnel may adversely affect our business, results of operations
and financial condition.

Market & Economic conditions

India is one of the largest economies and is growing at a rapid pace. But in this globalised economy, all the
businesses face an uncertain level of volatility from unexpected global events which ranges from global pandemics
to wars, to weather changes to supply chain disruption, which may change the economic dynamics and the
purchasing capability of the end customers. At the time of market slowdown, the demand falls which has adverse
impact on our business.

Competition

We operate in a competitive atmosphere. Our competition varies by market, geographic areas and type of products.
Our Company may face stiff competition from domestic as well as global market as the dynamic changes. Some
of our competitors may have greater resources than those available to us. While service quality, technical ability,
performance records, etc. are key factors in client decisions among competitors, however, price& quality are the
deciding factor in most cases. Further, this industry is fragmented with many small and medium sized companies
and entities, which manufactures some of these products at various levels, which may adversely affect our business
operation and financial condition. Further, there are no entry barriers in this industry and any expansion in capacity
of existing market players would further intensify competition. Moreover, as we seek to diversify into new
geographical areas, new territories, new emerging markets, we may face competition from competitors that have
a pan-India presence and also from competitors that have a strong presence in regional markets. The markets in
which we compete and intend to compete are undergoing, and are expected to continue to undergo, rapid and
significant change. We expect competition to intensify as technological advances and consolidations continue.
These competitive factors may force us to reduce rates, and to pursue new market opportunities. Increased
competition could result in reduced demand for our products, increased expenses, reduced margins and loss of
market share. Failure to compete successfully against current or future competitors could harm our business,
operating cash flows and financial condition.

COVID-19 Pandemic

Since the onset of the COVID-19 pandemic in March 2020, our Companys operations have been affected as our
employees faced the threat of getting infected. In 2020, cases of the novel corona virus started rapidly increasing
in India, which led the government of India to impose a nationwide lockdown. The spread of Covid-19 and its
recent developments have had and might continue to have repercussions across local, national and global
economies. To prevent the spread of Covid-19 and to comply with the restrictions, we had to temporarily suspend
our operations in order to follow the Governments norms. We continuously monitored the economic conditions
and have outlined sufficient measures to combat the pandemic situation at our business premises. Once the
lockdown was lifted, our operations restarted in full swing. Initially we did find a little hiccup in finding workers
but because of our enterprising organization, we were able to source quality workforce and we were able to train
them and we restarted our operations. After lifting the lockdown and resuming our operations the demand in our
industry abruptly increased from the different sectors and we attained the highest production during the partial
year 2020-21 and FY 2021-22. The demand after pandemic ultimately nullified the impact of shutdown during
COVID 19 pandemic. The future impact of COVID-19 or any other severe communicable disease on our business
and results of operations depends on several factors including those discussed in the chapter "Risk Factors" on
Page No. 57 - Risk Factor No. 42- Unplanned slowdowns or shutdowns of our manufacturing operations could
have an adverse effect on our business, results of operations, financial condition, cash flows andfuture prospects.
We are continuing to closely monitor the economic conditions and the effect of COVID-19 and have outlined
certain measures to combat the pandemic situation and to minimize the impact on our business.

Significant Developments after February 28, 2025 that may affect our Future Results of Operations

The Directors confirm that there have been no other events or circumstances since the date of the last financial
statements as disclosed in the Red Herring Prospectus which materially or adversely affect or is likely to affect
the business or profitability of our Company or the value of our assets, or our ability to pay liabilities within next
twelve months.

a) BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS

The restated summary statement of assets and liabilities of the Company as at 28 February, 2025, 31 March 2024,
31 March 2023 and 31 March 2022 and the related restated summary statement of profits and loss and cash flows
for the period/ year ended 28 February 2025, 31 March 2024, 31 March 2023 and 31 March 2022 (herein
collectively referred to as ("Restated Summary Statements") have been compiled by the management from the
audited Financial Statements of the Company for the period/ year ended on 28 February 2025, 31 March 2024, 31
March 2023 and 31 March 2022 approved by the Board of Directors of the Company. 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 Requirements) 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 NSE in connection with its proposed 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 financial statements of the Company have been prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section
133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as
applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The
accounting policies adopted in the preparation of the financial statements are consistent with those followed in the
previous year.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted
accounting principles in India.

All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle
and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time
between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company
has determined its operating cycle as twelve months for the purpose of current - non-current classification of assets
and liabilities.

b) USE OF ESTIMATES

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make
estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent
liabilities) and the reported income and expenses during the year. The Management believes that the estimates used
in preparation of the financial statements are prudent and reasonable. Future results could differ due to these
estimates and the differences between the actual results and the estimates are recognised in the periods in which the
results are known / materialise.

c) PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS

(i) Property, Plant & Equipment

All Property, Plant & Equipment are recorded at cost including taxes, duties, freight and other incidental expenses
incurred in relation to their acquisition and bringing the asset to its intended use.

d) DEPRECIATION / AMORTISATION

Depreciation on fixed assets is calculated on a Written - Down value method using the rates arrived at based on the
useful lives estimated by the management, or those prescribed under the Schedule II to the Companies Act, 2013.
Individual assets cost of which doesnt exceed Rs. 5,000/- each are depreciated in full in the year of purchase.

e) INVENTORIES

Inventories comprises of Raw Material, Work-in-Progress and Stock-in-Trade.

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-
in, first-out principle.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and the estimated costs necessary to make the sale.

f) IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount
is the higher of an assets net selling price and its value in use. Value in use is the present value of estimated future
cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life.
Net selling price is the amount obtainable from sale of the asset in an arms length transaction between
knowledgeable, willing parties, less the costs of disposal. An impairment loss is charged to the Statement of Profit
and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting
periods is reversed if there has been a change in the estimate of the recoverable value.

g) INVESTMENTS:

Non-current investments are carried at cost less any other-than-temporary diminution in value, determined on the
specific identification basis.

Profit or loss on sale of investments is determined as the difference between the sale price and carrying value of
investment, determined individually for each investment. Cost of investments sold is arrived using average
method.

h) FOREIGN CURRENCY TRANSLATIONS

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction.
Any income or expense on account of exchange difference either on settlement or on translation at the balance sheet
date is recognized in Profit & Loss Account in the year in which it arises.

i) BORROWING COSTS

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of
the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for
intended use. All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they
are incurred.

j) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision involving substantial degree of estimation in measurement is recognized when there is a present
obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities
are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the
financial statements.

k) REVENUE RECOGNITION

Revenue is Recognised only when significant risk and rewards of ownership has been transferred to the buyer and
it can be reliably measured and its reasonable to expect ultimate collection of it. Gross sales are of net trade discount
and sales returns.

The Company adopts accrual concepts in preparation of accounts. Claims /Refunds not ascertainable with
reasonable certainty are accounted for on final settlement.

l) OTHER INCOME

Interest Income on fixed deposit is recognized on time proportion basis. Other Income is accounted for when right
to receive such income is established.

m) EMPLOYEE BENEFITS

Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees.
The plan provides for lump sum payment to vested employees at retirement, death while in employment or on
termination of employment of an amount equivalent to 15 days salary payable for each completed year of service
without any monetary limit. Vesting occurs upon completion of five years of service. Provision for gratuity has
been made in the books as per actuarial valuation done as at the end of the year.

n) TAXES ON INCOME

Income taxes are accounted for in accordance with Accounting Standard (AS-22) - "Accounting for taxes on
income", notified under Companies (Accounting Standard) Rules, 2014. Income tax comprises of both current
and deferred tax.

Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act, 1961.

The tax effect of the timing differences that result between taxable income and accounting income and are capable
of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are
measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax
laws, are recognized, only if there is virtual certainty of its realization, supported by convincing evidence. Deferred
tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of
its realization.

o) CASH AND BANK BALANCES

Cash and cash equivalents comprises Cash-in-hand, Current Accounts, Fixed Deposits with banks. Cash equivalents
are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid
investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of
changes in value. Other Bank Balances are short-term balance (with original maturity is more than three months
but less than twelve months).

p) EARNINGS PER SHARE

Basic earnings per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of
extraordinary items, if any) by the weighted average number of equity share outstanding during the year. Diluted
earnings per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable
taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares which could
have been issued on the conversion of all dilutive potential equity shares.

q) EMPLOYEE BENEFITS

Defined Contribution Plan:

Contributions payable to the recognised provident fund, which is a defined contribution scheme, are charged to the
statement of profit and loss.

Defined Benefit Plan:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees.
The plan provides for lump sum payment to vested employees at retirement, death while in employment or on
termination of employment of an amount equivalent to 15 days salary payable for each completed year of service
without any monetary limit. Vesting occurs upon completion of five years of service. Provision for gratuity has
been made in the books as per actuarial valuation done as at the end of the year.

^EsuLtsofouRoPeRAtIONI^^

(Amount Rs in lakhs)

Particulars

For the period
ended

February 28,
2025

% of
Total--
For the year
ended 31st
March, 2024
% of
Total--
For the year
ended 31st
March, 2023
% of
Total--
For the year
ended 31st
March, 2022
% of
Total--

INCOME

Revenue from Operations

18,760.18 99.84% 19,382.12 99.70% 15,087.13 99.83% 13,384.12 99.61%

Other Income

29.38 0.16% 58.61 0.30% 25.56 0.17% 52.68 0.39%

Total Revenue (A)

18,789.56 100.00% 19,440.73 100.00% 15,112.69 100.00% 13,436.80 100.00%

expenditure

Cost of material consumed

8,851.23 47.11% 8,657.32 44.53% 7,634.89 50.52% 6,298.28 46.87%

Purchase of Stock-in-Trade

6,362.75 33.86% 6,903.15 35.51% 5,368.03 35.52% 5,430.02 40.41%

Direct Expenses

985.67 5.25% 840.92 4.33% 668.79 4.43% 588.88 4.38%

Changes in inventories of work in progress and
finished goods

(75.95) -0.40% 128.44 0.66% 33.94 0.22% 54.50 0.41%

Employee benefits expense

241.20 1.28% 241.63 1.24% 207.94 1.38% 186.26 1.39%

Finance costs

466.61 2.48% 458.08 2.36% 359.36 2.38% 306.36 2.28%

Depreciation and amortization expense

206.81 1.10% 218.21 1.12% 234.91 1.55% 129.27 0.96%

Other expenses

461.85 2.46% 347.51 1.79% 326.37 2.16% 245.37 1.83%

Total Expenses (B)

17,500.17 93.14% 17,795.26 91.54% 14,834.23 98.16% 13,238.94 98.53%

Profit/(Loss) before Tax

1,289.39 6.86% 1,645.47 8.46% 278.46 1.84% 197.86 1.47%

Tax Expense/ (benefit)

(a) Current Tax Expense

342.12 1.82% 423.02 2.18% 81.42 0.54% 47.68 0.35%

(b) Deferred Tax

(10.04) -0.05% (7.34) -0.04% (11.44) -0.08% 0.87 0.01%

Net tax expense / (benefit)

332.08 1.77% 415.68 2.14% 69.98 0.46% 48.55 0.36%

Profit/(Loss) for the year

957.31 5.09% 1,229.79 6.33% 208.48 1.38% 149.31 1.11%

Components of our Profit and Loss Account
Income

Our total income comprises of revenue from operations and other income.

Revenue from Operations

Our revenue from operations as a percentage of our total income was 99.84%, 99.70%, 99.83% and 99.61% for period
ended February 28, 2025 and Financial Years ended March 31, 2024, March 31, 2023 and March 31, 2022 respectively.

(Amount f in lakhs)

Particulars

For the period
ended February
28,2025
For the year
ended March 31,
2024
For the year
ended March 31,
2023
For the year
ended March 31,
2022

Sale of Goods

Domestic

18,751.86 19,174.41 15,010.63 13,073.30

Export

8.32 207.71 76.50 310.82

Total

18,760.18 19,382.12 15,087.13 13,384.12

Other Income

Our other Income consists of Interest Income, Interest on FDR, Interest on IT Refund, Foreign Exchange Gain,
Discount Received, Rent Received, Rate Difference, Dividend, Profit on sale of Asset, Duty Drawback, Sundry
balances written off and Profit on sale of Shares.

(Amount f in lakhs)

Particulars

For the
period ended
February 28,
2025
For the
year ended
March 31,
2024
For the
year ended
March 31,
2023
For the
year ended
March 31,
2022

Interest Income

1.74 6.56 0.18 6.75

Interest on FDR

4.96 6.43 3.93 3.78

Interest on IT Refund

- 0.41 1.25 -

Foreign Exchange Gain

3.38 1.04 - 1.91

Rent Income

17.60 19.20 19.20 19.20

Rate Difference

- 2.84 - -

Profit on sale of asset

- 17.78 - 15.66

Dividend

1.02 0.86 1.00 1.15

Profit on sale of shares

- - - 3.66

Sundry balances written back

0.58 - - 0.57

Duty Drawback-Customs

0.10 3.49 - -

TOTAL

29.38 58.61 25.56 52.68

Expenditure

Our total expenditure primarily consists of cost of material consumed, purchases of stock-in-trade, direct expenses,
changes in inventories of work in progress, finished goods and stock-in-trade, employee benefits expense, finance
costs, depreciation and amortization expense and other expenses.

Direct Expenses

Our direct expenses comprise primarily of Cost of Material consumed, Purchase of stock-in-trade and Changes in
inventories of work in progress, finished goods and stock-in-trade, Operational & Manufacturing Expenses and Repair
& Maintenance Charges.

Employee Benefit Expenses

Our employee benefits expense comprises of salaries & bonus, director remuneration, wages, gratuity, employers
contribution to provident fund, ESI & other funds and staff welfare expenditure.

Finance costs

Our Finance cost expenses comprise of bank charges & commission, borrowing cost, interest on late payment of taxes
and LC discounting charges.

Other Expenses

Other expenses primarily include auditors remuneration, accounting charges, BIS expenses, share expenses, carriage
outward, commission on sale, computer expenses, loss on foreign exchange, donation, EPF & ESI arrear expenses,
general expenses, insurance, legal & professional expenses, license fees, liquidated damage, provision for diminution
in the value of investments, loss on forfeiture of investments, maintenance charges, mining expenses, vehicle
expenses, office electricity, office expense, postage & telegram, printing & stationery, professional tax, rate difference,
rates and taxes, registrations & renewals, rent, roc filling fees, sale promotion expenses, security & service charges,
survey charges, sundry balances w/off, telephone expenses, tempo running expenses, tender fees, travelling &
conveyance expenses and water expense.

(Amount Rs in lakhs)

Particulars

For the
period
ended
February
28,2025
For the
year ended
March 31,
2024
For the
year ended
March 31,
2023
For the
year ended
March 31,
2022

Auditors Remuneration

- Statutory Audit

1.25 1.20 1.20 1.04

- Tax Audit

- 0.80 0.80 0.69

- Others

- 1.10 - -

Accounting Charges

- 0.17 0.17 0.17

Share Expenses

- 0.02 0.06 0.21

Carriage Outward

122.39 121.19 83.52 71.01

Commission on Sale

1.28 3.55 2.84 -

Computer Expenses

0.70 0.67 0.55 1.34

Loss on Foreign Exchange

- - 15.63 -

Loss on sale of Fixed Assets

1.24 - - -

Donation

12.87 - 2.50 2.50

General Expenses

15.84 32.15 22.91 9.45

Insurance

41.09 44.28 46.41 45.40

Internet Expenses

0.71 1.50 - -

Laboratory Expense

0.79 - - -

Director Sitting Fees

3.60 - - -

Legal & Professional expenses

15.96 7.04 11.39 4.59

License Fees

0.03 0.05 0.01 -

Liquidated damage

- - 0.49 0.70

Loss on Forfeiture of investments

- - - 2.81

Maintenance Charges

- - 7.91 19.83

Membership & Subscription Fee

4.88 0.25 - -

Mining Expenses

2.20 0.21 0.10 0.10

Vehicle Expenses

1.82 4.20 3.63 0.93

Office Expense

1.56 4.91 2.40 1.52

Postage & Courier Charges

0.27 0.11 0.13 0.09

Printing & Stationery

3.00 3.29 2.00 1.16

Rates and Taxes

38.86 12.59 15.76 17.66

Registrations & Renewals

8.81 7.06 7.13 7.91

Rent

22.10 30.45 30.75 28.45

Sale Promotion Expenses

111.61 12.95 30.79 9.67

Security & Service Charges

14.10 7.63 9.17 5.34

Survey Charges

1.78 1.17 - 0.98

Sundry Balances W/off

- 8.28 11.91 -

Telephone Expenses

0.54 0.58 0.86 0.48

Tempo Running Expenses

13.24 13.97 10.87 5.35

Travelling & Conveyance Expenses

15.29 23.36 1.98 5.11

Water Expense

4.04 2.78 2.50 0.88

Total

461.85 347.51 326.37 245.37

Provision for Tax

Provision of Current tax is determined on the basis of taxable income and tax credits computed in accordance with the
provision of the income tax act, 1961. Deferred tax assets and liabilities are recognized by computing the tax effect
on timing difference which arise during the year and reverse in the subsequent periods. Deferred tax assets are
recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized.

For the period ended February 28, 2025

Revenue from Operations

The revenue from operations of our company for the period ended February 28, 2025 was
Rs 18,760.18 lakhs.

Other Income

The Other Income of our company for the period ended February 28, 2025 was Rs 29.38
lakhs.

Total Income

The Total Income of our company for the period ended February 28, 2025 was Rs 18,789.56
lakhs.

Expenditure

Cost of Material Consumed

For the period ended February 28, 2025 our companys cost of material consumed was Rs

8,851.23 lakhs.

Purchases of Stock-in-Trade

For the period ended February 28, 2025 our companys purchases of stock-in-trade was Rs

6,362.75 lakhs.

Direct Expenses

For the period ended February 28, 2025 our companys direct expenses was Rs 985.67 lakhs.

Changes in inventories of work in progress, finished goods and stock-in-trade

For the period ended February 28, 2025 our companys changes in inventories of work in
progress, finished goods and stock-in-trade was Rs (75.95) lakhs.

Employee benefits expense

For the period ended February 28, 2025 our Company incurred for employee benefits
expense Rs 241.20 lakhs.

Finance costs

The finance costs for the period ended February 28, 2025 was Rs 466.61 lakhs.

Depreciation and amortization expense

The depreciation and amortization expense for the period ended February 28, 2025 was Rs

206.81 lakhs.

Other expenses

For the period ended February 28, 2025 our other expenses were Rs 461.85 lakhs.

Profit/ Loss before Tax

Our Company had reported a profit before tax for the period ended February 28, 2025 of
Rs 1,289.39 lakhs.

Profit/ Loss after Tax

Our Company had reported a profit after tax for the period ended February 28, 2025 was
at Rs 957.31 lakhs.

F iscal 2024 compared with fiscal 2023
Income

Revenue from Operations

The revenue from operations of our company for fiscal year 2024 was Rs 19,382.12 lakhs against Rs 15,087.13 lakhs
revenue from operations for Fiscal year 2023. An increase of 28.47% in revenue from operations. This increase was

due to increase in geographical presence in the eastern India and favourable market resulting in increase in sales of
Wire Rods, MS-Wires and organic growth in SS-MIG Wires, MS-MIG Wires and Electrodes.

Other Income

The other income of our company for fiscal year 2024 was Rs 58.61 lakhs against Rs 25.56 lakhs other income for
Fiscal year 2023. An increase of 129.30% in other income. This increase was primarily due to profit on sales on
fixed assets accruing to almost Rs 17.78 lacs and along with Interest Income of Rs 6.56 lacs, duty drawback of customs
3.49 lacs etc.

Total Income

The total income of our company for fiscal year 2024 was Rs 19,440.73 lakhs against Rs 15,112.69 lakhs total income
for fiscal year 2023. An increase of 28.64% in total income. This increase was due to increase in revenue from
operations due to increase in geographical presence in the eastern India and favourable market resulting in increase
in sales of Wire Rods, MS-Wires and organic growth in SS-MIG Wires, MS-MIG Wires and Electrodes along with
profits on sale of fixed asset and other incomes.

Expenditure

Cost of Material Consumed

In fiscal 2024, our cost of material consumed were Rs 8,657.32 lakhs against Rs 7,634.89 lakhs cost of material
consumed in fiscal 2023. An increase of 13.39%. This increase was due to increase in utilisation of the existing
production capacity along with increase in purchase of raw material during the year due to high volume of orders.

Purchases of Stock-in-Trade

In fiscal 2024, our purchases of stock-in-trade were Rs 6,903.15 lakhs against Rs 5,368.03 lakhs purchases of stock-
in-trade in fiscal March 31, 2023. An increase of 28.60%. This increase of purchase in stock-in-trade was done in
order to cater to the high order pipeline during the fiscal year.

Direct Expenses

In fiscal 2024, our direct expenses were Rs 683.54 lakhs against Rs 531.39 lakhs direct expenses in fiscal 2023. An
increase of 28.63%. This increase was due to increase in factory production overheads primarily Power & Fuel
expenses, Carriage Inward expenses and store consumables.

Changes in inventories of work in progress and finished goods

In fiscal 2024 our changes in inventories of work in progress and finished goods were Rs 128.44 lakhs against Rs 33.94
lakhs changes in inventories of work in progress and finished goods in fiscal 2023. A change of 278.43%.

Employee benefits expense

In fiscal 2024, our Company incurred for employee benefits expense Rs 399.01 lakhs against Rs 345.34 lakhs expenses
in fiscal 2023. An increase of 15.54%. This increase was due to increase in salary and wages of employees due to
overtime along with appraisals during the year and increase in employee strength.

Finance costs

The finance costs for the Fiscal 2024was Rs458.08 lakhs while it was Rs 359.36 lakhs for Fiscal 2023. An increase of
27.47% was due to increase in utilization of Bank Limit resulting in higher interest cost during the year along with
payment on Interest on delayed payment of taxes.

Other expenses

In fiscal 2024, our other expenses were Rs 347.51 lakhs and Rs 326.37 lakhs in fiscal 2023. This increase of 6.48% was
due to increase in audit fees, carriage outward, general expenses, license fees, mining expenses, office expense,
printing and stationery, professional tax, filing fees, travelling and conveyance expenses.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal 2024 of Rs 1,645.47 lakhs against profit before tax of Rs
278.46 lakhs in Fiscal 2023.An increase of 490.92%. The substantial increase in profit before taxes was due the
substantial growth in revenue from operations coming from growth in sale of products like Wire Rods, MS-Wires,
SS-MIG Wires, MS-MIG Wires and Electrodes along with cost optimization.

Profit/ (Loss) after Tax

Profit after tax for the Fiscal 2023 was at Rs 1,228.40 lakhs against profit after tax of Rs 208.48 lakhs in fiscal 2022.
An increase of 489.22%. This increase was due to increase in growth of profit before taxes adjusted with taxes..

Fiscal 2023 compared with fiscal 2022
Income

Revenue from Operations

The revenue from operations of our company for fiscal year 2023 was Rs 15,087.13 lakhs against Rs 13,384.12 lakhs
revenue from operations for Fiscal year 2022. An increase of 12.72% in revenue from operations. This marginal
increase in Revenue from Operations was primarily a demand driven result of increase in sales volumes of SS-MIG
Wires, MS-MIG Wires & increase in price of products.

Other Income

The other income of our company for fiscal year 2023 was Rs 25.56 lakhs against Rs 52.68 lakhs other income for
fiscal year 2022. A decrease of 51.48% in other income. This decrease of other income was due to absence of
Interest Income, sundry balance written off, foreign exchange gains. Along with it, no sale of assets or shares has
been executed during the year resulting in lower other income.

Total Income

The total income of our company for fiscal year 2023 was Rs 15,112.69 lakhs against Rs 13,436.80 lakhs total income
for fiscal year 2022. An increase of 12.47% in total income. This increase was due to the marginal growth in revenue
from operations coming from favourable demands of products during the year adjusted with decrease in other
incomes.

Expenditure

Cost of Material Consumed

In fiscal 2023, our cost of material consumed were Rs 7,634.89 lakhs against Rs 6,298.28 lakhs cost of material
consumed in fiscal 2022. An increase of 21.22%. This increase was due to the increase in production & capacity
utilisation of goods to cater to the demand of products during the year.

Purchases of Stock-in-Trade

In fiscal 2023, our purchases of stock-in-trade were Rs 5,368.03 lakhs against Rs 5,430.02 lakhs purchases of stock-
in-trade in fiscal March 31, 2022. A decrease of 1.14%. This marginal decrease was due to maintaining of adequate
level of stock to meet our demand of clients during the year and no material purchase was made during the end of
the year.

Direct Expenses

In fiscal 2023, our direct expenses were Rs 531.39 lakhs against Rs 486.27 lakhs direct expenses in fiscal 2022. An
increase of 9.28%. This increase was due to increase in factory production overheads likes carriage inward,
inspection charges, stores consumables, maintenance cost of plant and machinery & factory expenses.

Changes in inventories of work in progress and finished goods

In fiscal 2023 our changes in inventories of work in progress and finished goods were Rs 33.94 lakhs against Rs 54.50
lakhs changes in inventories of work in progress and finished goods in fiscal 2022. A change of 37.72%.

Employee benefits expense

In fiscal 2023, our Company incurred for employee benefits expense Rs 345.34 lakhs against Rs 288.87 lakhs expenses
in fiscal 2022. An increase of 19.55%. This increase was due to increase in employee strength of the workforce
along with annual appraisals and bonuses during the fiscal year.

Finance costs

The finance costs for the Fiscal 2023 was Rs 359.36 lakhs while it was Rs 306.36 lakhs for Fiscal 2022. An increase
of 17.30% was due to increase in utilization of Cash Credit and Overdraft Limit along with increase in interest rates
during the fiscal year 2024

Other expenses

In fiscal 2023, our other expenses were Rs 326.37 lakhs and Rs 245.37 lakhs in fiscal 2022. This increase of 33.01%
was due to increase in carriage, sundry balance written off, Legal Expenses & Foreign Exchange Fluctuations.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal 2023 of Rs 278.46 lakhs against profit before tax of Rs
197.86 lakhs in Fiscal 2022.An increase of 40.74%. This increase was due to increase in the revenue from operations
highlighting the sales of existing product portfolios like SS-MIG Wires, and MS-MIG Wires adjusted with other
Income and Cost optimizations during the year.

Profit/ (Loss) after Tax

Profit after tax for the Fiscal 2023 was at Rs 208.48 lakhs against profit after tax of Rs 145.37 lakhs in fiscal 2022. An
increase of 43.41%. This increase was due to increase in profit before taxes resulting from high sales of existing
products adjusted with cost optimization during the fiscal year.

Cash Flow

(Amount Win lakhs)

Particulars

For the period ended
February 28,
2025

For the year ended March 31,

2024 2023 2022

Net Cash flow/(used in) from Operating
Activities

124.22 285.95 168.25 124.51

Net Cash flow/(used in) from Investing
Activities

(330.50) (97.35) (196.27) (401.21)

Net Cash flow/(used in) used in Financing
Activities

216.61 (196.74) 31.26 275.79

Cash Flows from Operating Activities

1. For the Period Ended February 28, 2025, Net cash flow from operating activities was t 124.22 Lakhs. This
comprised of the net profit before tax of t 1,289.39 Lakhs, which was primarily adjusted for Finance Cost of t 466.61
Lakhs, Gratuity Provision of t 9.34 Lakhs, Provision for leave encashment of t 1.42 Lakhs, Dividend Income of t
1.02 Lakhs, Interest Income of t 6.70 Lakhs, Sundry balance written back of t 0.58 Lakhs, Profit on sale of fixed
assets of t 1.24 Lakhs, and Depreciation and Amortisation Expense of t 206.81 Lakhs. The resultant Operating Profit
Before Working Capital Changes was t 1,966.51 Lakhs, which was primarily adjusted for an increase in Trade
Receivables of t 1,490.67 Lakhs, increase in Loans and Advances of t 635.37 Lakhs, increase i n Other Non-Current
Assets of t 8.83 Lakhs, increase in Inventories of t 511. 31 Lakhs, decreased in Other Current Assets (Including Other
Bank balances) of t 6.10 Lakhs and Trade Payables increased by t 808.87 Lakhs, decrease in Provisions of t 1.26
Lakhs and Other Current Liabilities decreased by t 170.72 Lakhs.

Cash Generated from Operations was t 304.76 Lakhs, which was reduced by direct tax paid for t 180.54 Lakhs,
resulting in net cash flow from operating activities of t 124.22 Lakhs.

2. In F.Y. 2023-24, Net cash flow from operating activities was t 285.95 Lakhs. This comprised the net profit before
tax of t 1,645.47 Lakhs, which was primarily adjusted for Finance Cost of t 458.08 Lakhs, Gratuity Provision of t
9.77 Lakhs, Provision for leave encashment of t 1.26 Lakhs, Dividend Income of t 0.86 Lakhs, Interest Income of t
13.40 Lakhs, Sundry balance written off of t 8.28 Lakhs, Profit on sale of fixed assets of t 17.78 Lakhs, and
Depreciation and Amortisation Expense of t 218.21 Lakhs. The resultant Operating Profit Before Working Capital
Changes was t 2,309.03 Lakhs, which was primarily adjusted for an increase in Trade Receivables of t 142.53 Lakhs,
increase in Inventories of t 1,174.15 Lakhs, increase in Other Current Assets (Including Other Bank balances) of t
59.90 Lakhs, increase in other Non-Current Assets of t 5.61 lakhs, decrease in Trade Payables of t 11.85 Lakhs, and
decrease in Provisions of t 1.05 Lakhs and Other Current Liabilities decreased by t 268.82 Lakhs.

Cash Generated from Operations was t 748.31 Lakhs, which was reduced by direct tax paid for t 462.36 Lakhs,
resulting in net cash flow from operating activities of t 285.95 Lakhs.

3. In F.Y. 2022-23, net cash flow from operating activities was t 168.25 Lakhs. This comprised of the net profit before
tax of t 278.46 Lakhs, which was primarily adjusted for Finance Cost of t 359.36 Lakhs, Gratuity Provision of t 4.84
Lakhs, Provision for leave encashment of t 1.05 Lakhs, Dividend Income of t 1.00 Lakhs, Interest Income of t 5.36
Lakhs, Sundry balance written off of t 11.91 Lakhs and Depreciation and Amortisation Expense of t 234.91 Lakhs.
The resultant operating profit before working capital changes was t 884.17 Lakhs, which was primarily adjusted for
an increase in Trade Receivables of t 556.83 Lakhs, Other Current Assets (Including Other Bank balances) of t 4.50
Lakhs, Other Current Liabilities of t 50.42 Lakhs and a decrease in Inventories of t 86.62 Lakhs, Loans and Advances

of Rs 233.12 Lakhs, Other Non-Current Assets of Rs 20.75 Lakhs, Trade Payables of Rs 496.00 Lakhs, Provisions of Rs

0. 80.Lakhs.

Cash Generated from Operations was Rs 216.95 Lakhs which was reduced by direct tax paid for Rs 48.70 Lakhs resulting
into net cash flow from operating activities of Rs 168.25 Lakhs

4. In F.Y. 2021-22, net cash flow from operating activities was Rs 124.51 Lakhs. This comprised of the net profit before
tax of Rs 197.86 Lakhs, which was primarily adjusted for Finance Cost of Rs 306.36 Lakhs, Gratuity Provision of Rs 2.19
Lakhs, Provision for leave encashment of Rs 0.80 Lakhs, Dividend Income of Rs 1.15 Lakhs, Interest Income of Rs 10.53
Lakhs, Sundry balance written back of Rs 0.57 Lakhs, Profit on sale of equity shares (investments) of Rs 3.66 Lakhs,
Loss on forfeiture of shares of Rs 2.81 Lakhs, Profit on sale of fixed assets of Rs 15.66 Lakhs and Depreciation and
Amortisation Expense of Rs 129.27 Lakhs. The resultant operating profit before working capital changes was Rs 607.72
Lakhs, which was primarily adjusted for an increase in Trade Receivable s of Rs 702.08 Lakhs, Inventories of Rs 407.72
Lakhs, Other Current Assets (Including Other Bank balances) of Rs 4.93 Lakhs, Loans and Advances of Rs 256.22
Lakhs, Trade Payables of Rs 719.70 Lakhs, Other Current Liabilities of Rs 201.45 Lakhs and decrease in Ot her Non-
Current Assets of Rs 10.54 Lakhs, and Provisions of Rs 0.98 Lakhs.

Cash Generated from Operations was Rs 167.48 Lakhs which was reduced by direct tax paid for Rs 42.97 Lakhs resulting
into net cash flow from operating activities of Rs 124.51 Lakhs.

Cash Flows from Investment Activities

1. For the Period Ended February 28, 2025, net cash used in investing activities was Rs 330.50 Lakhs, which primarily
comprised of cash used for Purchase of property, plant & equipment and intangible assets of Rs 347.22 lakhs, Sale of
property, plant & equipment of Rs 9 lakhs, proceeds from Dividend Received of Rs 1.02 lakhs and Interest Income
Received of Rs 6.70 lakhs.

2. In FY 2024, net cash used in investing activities was Rs 97.35 Lakhs, which primarily comprised of cash used for
Purchase of property, plant & equipment and intangible assets of Rs 140.07 lakhs, Sale of property, plant & equipment
of Rs 28.46 lakhs, proceeds from Dividend Received of Rs 0.86 lakhs and Interest Income Received of Rs 13.40 lakhs.

3. In FY 2023, net cash used in investing activities was Rs 196.27 Lakhs, which primarily comprised of cash used for
Purchase of property, plant & equipment and intangible assets of Rs 202.63 lakhs, proceeds from Dividend Received
of Rs 1 lakhs, Interest Income Received of Rs 5.36 lakhs.

4. In FY 2022, net cash used in investing activities was Rs 401.21 Lakhs, which primarily comprised of cash used for
Purchase of property, plant & equipment and intangible assets of Rs 469.66 lakhs, proceeds from Sale of property, plant
& equipment of Rs 21.25 lakhs, Purchase of Investments worth Rs 12.52 lakhs, proceeds from sale of investments of Rs
48.04 lakhs, Dividend Received of Rs 1.15 lakhs, Interest Income Received of Rs 10.53 lakhs.

Cash Flows from Financing Activities

1. For the Period Ended February 28, 2025, net cash used in financing activities was Rs 216.61 Lakhs, which primarily
comprised of cash used for Finance Cost Paid of Rs 460.55 lakhs and proceeds from Proceeds of Borrowings of Rs
677.16 lakhs.

2. In FY 2024, net cash used in financing activities was Rs 196.74 Lakhs, which primarily comprised of cash used for
Finance Cost Paid of Rs 457.93 lakhs and proceeds from Proceeds of Borrowings of Rs 261.19 lakhs.

3. In FY 2023, net cash flow from financing activities was Rs 31.26 Lakhs, which primarily comprised of cash used for
Finance Cost Paid of Rs359.35 lakhs and proceeds from Proceeds of Borrowings of Rs 390.61 lakhs.

4. In FY 2022, net cash flow from financing activities was Rs 275.79 Lakhs, which primarily comprised of cash used
for Finance Cost Paid of Rs 306.09 lakhs, proceeds from Proceeds of Borrowings of Rs 581.88 lakhs.

1. Unusual or infrequent events or transactions

As on date, there have been no unusual or infrequent events or transactions including unusual trends on account
of business activity, unusual items of income, change of accounting policies and discretionary reduction of
expenses.

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

Our business has been subject, and we expect it to continue to be subject to significant economic changes arising
from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described
in the section entitled "Risk Factors" beginning on page no. 35 of the Red Herring Prospectus. To our
knowledge, except as we have described in the Red Herring Prospectus, there are no known factors which we
expect to bring about significant economic changes.

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

Apart from the risks as disclosed under Chapter titled "Risk Factors" beginning on page no. 35 in this 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, in case of events such as future increase in
labour or material costs or prices that will cause a material change are known

Our Companys future costs and revenues will be determined by demand/supply situation, both of the end
products as well as the raw materials, government policies and other economic factors.

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

Our company manufactures all types of welding electrodes and Mig Wires. Our products are catering to cement,
automobile, textile, oil and gas refinery, defence, infrastructure, chemical, marine etc. industries. Increases in
revenues are by and large linked to increases in volume of business and also dependent on the price realization
on our products/services.

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

Our company manufactures all types of welding electrodes and Mig Wires. Our products are catering to cement,
automobile, textile, oil and gas refinery, defence, infrastructure, chemical, marine etc. industries. Relevant
Industry data as available, has been included in the chapter titled "Industry Overview" beginning on page no.
122 of this Red Herring Prospectus.

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

Our company manufactures all types of welding electrodes and Mig Wires. Our products are catering to cement,
automobile, textile, oil and gas refinery, defence, infrastructure, chemical, marine etc. industries. Except as
disclosed elsewhere in the Red Herring Prospectus, we have not announced and do not expect to announce in the
near future any new products or business segments.

8. The extent to which business is seasonal.

Our company manufactures all types of welding electrodes and Mig Wires. Our products are catering to cement,
automobile, textile, oil and gas refinery, defence, infrastructure, chemical, marine etc. industries. Our Companys
business is not seasonal in nature.

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

The percentage of contribution of our Companys top 10 customer vis-a-vis the total revenue from operations
respectively for the FY 2023-24, FY 2022-23 and FY 2021-22 is as follows:

Our revenue from operations concentrated to a few top 10 customers are aggregating to:

(Amt Rs in Lakhs)

Fiscal

Amount %

2021-22

7659.15 57.23

2022-23

9202.76 61.00

2023-24

10,953.77 56.52

February 28, 2025

12,837.68 68.43

10. Competitive conditions:

We face competition from existing and potential competitors which is common for any business. We have, over
a period, developed certain competitors who have been discussed in chapter titles " Our Business" beginning on
page no. 132 of this Red Herring Prospectus.

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Copyright © IIFL Capital Services Limited (Formerly known as IIFL Securities Ltd). All rights Reserved.

IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248, DP SEBI Reg. No. IN-DP-185-2016, BSE Enlistment Number (RA): 5016
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