Earkart Limited Management Discussions

OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our restated financial statements for the financial year ended March 31, 2025, March 31, 2024 and March 31, 2023 prepared in accordance with the Companies Act, 2013 (to the extent notified) and /or Provisions of Companies Act, 1956 w.r.t. the sections which have not yet been replaced by the Companies Act, 2013 through any official notification and Indian GAAP and restated in accordance with the SEBI ICDR Regulations, including the schedules, annexure and notes thereto and the reports thereon, included in “Restated Financial Statements” beginning on page 190 of this Prospectus.

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

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in “Risk Factors” and “Forward-Looking Statements” beginning on pages 29 and 18 respectively, of this Prospectus

Business Overview

We manufacture and distribute modern hearing aids and related accessories at affordable prices across India. Along with our own manufactured hearing aid, we also trade in hearing aid, parts and accessories of other brands manufactured in India and abroad. In addition, we offer other products like adjustable foldable walkers and MultiSensory Integrated Educational Development (MSIED) and Teaching Learning Material (TLM) kits to support mobility and daily needs of physically challenged. Our mission is to make quality hearing care more accessible. Weve developed a smart and easy-to-use remote audiometry machine that allows people to get tested and fitted for hearing aids from anywhere in the world. By combining advanced technology with a strong focus on customer needs, we aim to improve hearing care across India.

Total income and its components are set forth in the table below:

(Rs. in lakhs)

Particulars	Fiscal 2025	As % of Total Income	Fiscal 2024	As % of Total Income	Fiscal 2023	As % of Total Income
A) Sales of Products
(i) Finished Goods
a) Hearing Aid
Domestic Sale	3,393.80	78.57%	2,368.60	74.10%	2,568.61	88.67%
Export Sale	0.91	0.02%	3.35	0.10%	0.42	0.01%
b) Others
Domestic Sale	499.26	11.56%	160.94	5.03%	-
Export Sale	-	-	-	-	-	-
(ii) Traded Goods
a) Hearing Aid
Domestic Sale	211.12	4.89%	89.72	2.81%	129.62	4.47%
Export Sale	-	-	6.60	0.21%	1.87	0.06%
b) Hearing Aid, Parts & Accessories
Domestic Sale	101.11	2.34%	463.74	14.51%	75.84	2.62%
Export Sale	33.19	0.77%	0.88	0.03%	-	-
Total Sales of Products	4,239.39	98.15%	3,093.83	96.78%	2,776.36	95.85%
B) Sales of Services
Con-version Charge	55.49	1.28%	78.13	2.44%	106.66	3.68%
Consultancy Charge	0.19	0.00%	0.59	0.02%	5.81	0.20%
Freight Charges	0.00	-	2.91	0.09%	2.81	0.10%
Franchise Fees	11.86	0.27%	-		-
Audiometry Charge	3.69	0.09%	-	-	-	-
Revenue from Services	71.24	1.65%	81.63	2.55%	115.27	3.98%

Particulars	Fiscal 2025	As % of Total Income	Fiscal 2024	As % of Total Income	Fiscal 2023	As % of Total Income
C) Other Income	8.59	0.20%	21.22	0.66%	5.05	0.17%
Total Revenue/Income (A+B)	4,319.21	100.00%	3,196.69	100.00%	2,896.68	100.00%

As certified by M/s. Timsi and Associates, Chartered Accountants, (Firm Registration No.: 020141C) Statutory Auditor have vide certificate dated September 15, 2025

For more details, refer “Our Business” on page no 138

Key Performance Indicator

in Lakhs)

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Revenue from Operations1	4,310.62	3,175.46	2,891.63
Total Income2	4,319.21	3,196.69	2,896.68
EBITDA	976.27	355.17	160.87
EBIT	942.42	357.63	150.91
EBT	901.57	324.38	145.24
PAT	688.17	305.81	131.20
EBITDA Margin3	22.65%	11.18%	5.56%
EBIT Margin4	21.82%	11.19%	5.21%
EBT Margin5	20.87%	10.15%	5.01%
PAT Margin6	15.93%	9.57%	4.53%
Share Capital	1,043.89	6.91	6.77
Other Equity	947.77	1,296.58	649.47
Net Worth	1,991.66	1,303.49	656.24
Return on Equity7	34.55%	23.46%	19.99%
Return on Capital Employed8	47.32%	27.44%	23.00%

1. Revenue from operations refers to revenue from sales of products, sale of services and other operating income.

2. Total Revenue refers to Revenue from operations plus Other Income.

3. EBITDA is an alternative way to calculate profitability thatfocuses on a companys ability to generate cash from its regular

operations.

4. EBIT Margin is an indicator use to measure the efficiency of company to generate operating profits.

5. EBT Margin used as indicator to calculate profitability before tax as percent of Total Revenue.

6. PAT Margin used as measure of calculation profit available to shareholders as percent of Total Revenue.

7. RoE measure the ability to gauge how much shareholders are earning on their investments. It exhibits how well the company has utilised the shareholders money.

8. RoCE indicates how efficiently capital is being used in the business. It provides the ability of the company to generate the returns against the capital it put to use.

9.

SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation of Financial Statement

The Restated Statement of Assets and Liabilities (Annexure I) of the company as on March 31, 2025, March 31, 2024 and March 31, 2023, the Restated Statements of Profit and Loss (Annexure II), the Restated Cash Flow Statement (Annexure III) for the financial year ended March 31, 2025, March 31, 2024 and March 31, 2023 (hereinafter collectively referred to as “Restated Financial Information”) have been extracted by the management from the audited financial statements for March 31, 2025, March 31, 2024, and March 31, 2023, approved by the respective Board of Directors of the companies.

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention, on the accrual basis of accounting, and in accordance with the applicable provisions of the Companies Act, 2013 (the ‘Act) and the accounting principles generally accepted in India (‘Indian GAAP) read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended).

1. Use of Estimates

The preparation of interim Financial Statements is in conformity with Indian GAAP requires the Management to make judgements, estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and reported income and expenses during the period.

These financial statements have been prepared to comply with Accounting Principles generally accepted in India, the Accounting Standards specified under the Companies Act 2013 read with Company (Accounting Standards) Rules, 2014 and other relevant provisions of the Companies Act, 2013. The Financial Statements are prepared on accrual basis under the historical cost convention.

The Management believes that the estimates used in preparation of interim financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between the actual results and the estimates are recognized in the periods in which the results are known/materialized.

2. Cash and Bank Balances

Cash comprises cash in hand, balance in bank accounts maintained with banks and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

3. Revenue and Expenditure recognition

Revenue is recognized only when risks and rewards incidental to ownership are transferred to the customer, it can be reliably measured and it is reasonable to expect ultimate collection. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable. Dividend income is recognized when the right to receive payment is established. Accounting of Income and Expenditure is done on accrual basis and as per above principles.

4. Employee Benefits

a) Short Term Employee Benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an expense during the period when the employees render the services. These benefits include performance incentive and compensated absences. The relevant benefits have been charged to Profit and loss account during the period under consideration.

b) Post-Employment Benefits

A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund, The Employees State Insurance (ESI) scheme and Pension Scheme. The Companys contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. The company has made contributions under The Employees Provident Funds and Miscellaneous Provisions Act, 1952 and Employees State Insurance Act, 1948.and recognized as expense during the period under consideration. The said contributions were made on timely basis.

The liability in respect of defined benefit plans and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees services. Actuarial gains and losses in respect of post-employment and other long-term benefits are charged to the Statement of Profit and Loss.

The company has made provision on account of Gratuity expense as per the Accounting Standard 15- Employees Benefits prescribed under the Companies Act, 2013 and amount is provided on the basis of Actuarial valuation of the gratuity liability for the period from 01/04/2021 to 31/12/2024.

5. Foreign Currency Transaction

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Foreign currency monetary items are reported or carried in terms of historical cost denominated in a foreign currency reported using the exchange rate at the date of the transaction. Exchange difference arising on the settlement at rates different from those at which they initially recorded during the year, or reported in previous financial statements, are recognized as income or expenses in the year in which they arise.

6. Taxes on Income

Tax expense comprises of current tax and deferred tax.

Deferred income tax reflects the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier periods.

Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. The company had claimed the deduction of an amount equal to one hundred per cent of the profits and gains derived from manufacturing business for the preceding three years under section 80-IAC of the Income tax Act, 1961 being allowed for three consecutive assessment years.

Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same. Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

Minimum Alternative Tax (MAT) is calculated in accordance with the provisions of Income Tax Act 1961, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as asset in the balance sheet.

Further Company is following ICDR requirement and Taxes has been recognized in the interim financial statement as per above mentioned principle.

7. Provision and Contingencies

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

Provisions involving substantial degree of estimation in measurement are recognized as per said principles. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are not recognized nor disclosed in this financial statement.

8. Classification of Assets and Liabilities as Current and Non-Current

All assets and liabilities are 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 time between acquisition of assets for processing and their realization in cash and cash equivalents, 12 months has been considered by the Company for the purpose of current or non-current classification of assets and Liabilities.

9. Inventory

The Company is following Weighted Average Method as a measurement of cost. The stock is valued at cost or Net Realizable Value whichever is lower.

10. Property, Plant and equipment and Intangible Assets

Fixed assets are recognized in Books at cost of acquisition and further stated at their written down value. Cost includes purchase price, taxes and duties (non-creditable), labour cost and directly attributable overhead expenditure for self-constructed assets incurred up to the date the asset is ready for its intended use. Depreciation on fixed assets is provided to the extent of depreciable amount on the Written Down Value (WDV) Method, as per the manner prescribed in Schedule II to the Companies Act, 2013.

Expenditure against Capital Assets which are not ready to use as on balance sheet date are separately shown under Fixed Asset Schedule under Capital work in progress.

11. Borrowing Cost

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

12. Impairment

The carrying value of assets at each balance sheet date are reviewed for impairment, if any indication of impairment exists. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the period in which as asset if identified as impaired. The impairment loss recognized in prior accounting period is reversed if a change in the estimates of the recoverable amount. No such relevant adjustment is required in the balance sheet for the period under consideration.

13. Segment Reporting

Company is operating under a single segment. Unless specifically stated to be otherwise, these policies are consistently followed and there is no change in significant accounting policies of the Company.

Notes on Accounts

1. Material Regrouping

The financial statements including financial information have been prepared after making such regroupings and adjustments, considered appropriate to comply with the same. As result of these regroupings and adjustments, the amount reported in the financial statements/information may not necessarily be same as those appearing in the respective audited financial statements for the relevant years.

Material Adjustments in Restated Profit & Loss Account has been mentioned in Annexure V of the enclosed restated financial information. Prior period items have been adjusted in the year to which it relates. Other than this there is no material adjustment.

2. Provisions, Contingent Liabilities and Contingent Assets

There are no contingent liabilities as on March 31, 2025 except a bank guarantees amounting to Rs 7.66 lacs (PY: Nil) in favor of Artificial Limbs Manufacturing Corporation of India (ALIMCO) have been issued in towards after-sales support and warranty obligations under supply contracts.

3. Related Party Disclosure

Related party transactions are reported as per AS-18 of Companies (Accounting Standards) Rules, 2006, as amended, in the Note 25 of the enclosed restated financial information.

DISCUSSION ON RESULT OF OPERATION

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

PRINCIPAL COMPONENT OF INCOME AND EXPENDITURE Total Income

Total income comprises of (a) Revenue from Operations and (b) Other Income.

Revenue from Operations

Revenue from operations includes, revenue from sale of products, revenue from sale of services and other operating income. Revenue from operations represents 99.80%, 99.34% and 99.83% of the total income for Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively.

Sale of products comprises of (i) Revenue from sale of finished goods which includes hearing aids (Domestic/Exports) and Others (Domestic/Exports), (ii) Revenue from sale of traded goods which includes hearing aids (Domestic/Exports) and Hearing Aids, Parts & Accessories (Domestic/Exports). Sale of Products represents, 98.15%, 96.78% and 95.85% of the total income for the Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively.

Sale of Services includes income generated from (i) Conversion Charge, (ii) Consultancy Charges, (iii) Freight Charges, (iv) Franchisee Fees and (v) Audiometry Charges. Sale of Services represents 1.65%, 2.55% and 3.98% of the total income for Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively.

Other Income

Other income comprises of Conversion Charge, Consultancy Charge, Freight Charges, Franchise Fees and Audiometry Charge. Other income represents 0.20%, 0.66% and 0.17% of the total income for Fiscal 2025, Fiscal 2024, Fiscal 2023 respectively.

Expenses

Total expenses comprise of (i) Cost of Materials Consumed, (ii) Purchases of Stock-in-Trade, (iii) Changes in Inventories, (iv) Employee Benefits Expense, (v) Finance Costs, (vi) Depreciation and amortization Expense and (vii) Other expenses. Total Expenses represents 79.13%, 89.85% and 94.99% of the total income for Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively.

Cost of Materials Consumed

Cost of Materials Consumed comprise of purchase of raw material (domestic/export), Custom Agency Charges, Custom Handling Expenses, Freight Inward, Impression Material, Custom Duty & GST, Consumable Stores, Laser Printing Expenses. Cost of material consumed represents 49.22%, 63.19% and 64.96% of the total income for Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively.

Purchases of Stock-in-Trade

Purchases of Stock-in-Trade comprise purchases of finished goods of other brands for trading. Purchases of Stock- in-Trade represents 10.96%, 19.07% and 6.50% of the total income for Fiscal 2025, Fiscal 2024 and Fiscal 2023.

Employee Expenses

Employee expenses comprise of Salaries and wages, Contribution to Provident Fund, Gratuity Expense and Staff Welfare Expenses. Employee expense represents 9.40%, 10.68% and 10.26% of the total income for Fiscal 2025, Fiscal 2024 and Fiscal 2023.

Finance Cost

Finance cost comprise of interest expenses on borrowings and other borrowings costs. Finance cost represents 0.95%, 1.04% and 0.20% of the Total income for the fiscal 2025, fiscal 2024 and fiscal 2023.

Depreciation and Amortization Expenses

Depreciation and Amortization Expenses consists of Depreciation on Tangible Assets and Amortization of Intangible Assets. Depreciation and Amortization Expenses represents 0.98%, 0.59% and 0.52% of the total income for Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively.

Other Expenses

Other Expenses comprises of Advertisement expenses, Business Promotion, Legal and professional fees, Subscription, License & Registration Fees, Hearing Aid Development Cost- R&D, Tours & Travels, Conveyance, Power & Fuel, Repair and maintenance, Telephone, Office expenses, Insurance, Printing and stationery, GEM Transaction Charges, Recruitments Expenses, Selling Discount, Miscellaneous Expenses, Provision for Doubtful debts, Commission & Brokerage Expenses and Preliminary Expenses Written Off. Other expenses represent 8.49%, 10.68% and 13.02% of the total income for Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively.

SUMMARY OF RESULTS OF OPERATIONS

(Rs. in lakhs)

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Revenue from Operations	4,310.62	3,175.46	2,891.63
As % of Total Income	99.80%	99.34%	99.83%
Other Income	8.59	21.22	5.05
As % of Total Income	0.20%	0.66%	0.17%
Total Income	4,319.21	3,196.69	2,896.68
Expenses
Cost of Materials Consumed	2,126.04	2,019.90	1,881.69
As % of Total Income	49.22%	63.19%	64.96%
Purchases of Stock-in-Trade	473.49	609.63	188.35
As % of Total Income	10.96%	19.07%	6.50%
Changes in inventories	(37.90)	(492.15)	(13.56)
As % of Total Income	-0.88%	-15.40%	-0.47%
Employee Benefits Expense	406.19	341.48	297.20
As % of Total Income	9.40%	10.68%	10.26%
Finance Costs	40.86	33.25	5.66
As % of Total Income	0.95%	1.04%	0.20%
Depreciation and amortization Expense	42.43	18.76	15.02
As % of Total Income	0.98%	0.59%	0.52%
Other Expenses	366.53	341.43	377.07
As % of Total Income	8.49%	10.68%	13.02%
Total Expenses	3,417.64	2,872.31	2,751.44
As % of Total Income	79.13%	89.85%	94.99%
Exceptional Items	-	-	-
Profit before Extraordinary Items and Tax	901.57	324.38	145.24
Extraordinary Items	-	-	-
Profit Before Tax	901.57	324.38	145.24
As % of Total Income	20.87%	10.15%	5.01%
Taxes:
(a) Current tax	174.48	55.08	25.25
(b) Earlier Tax/Prior Period Tax	(5.48)	0.11	0.22
(c) Deferred Tax	(5.70)	(1.40)	(2.88)
(d) MAT Credit	50.10	(35.22)	(8.54)
Total Taxes	213.40	18.57	14.04
As % of Total Income	4.94%	0.58%	0.48%
Profit for the year period	688.17	305.81	131.20
As % of Total Income	15.93%	9.57%	4.53%
Earnings per equity share:
(a) Basic EPS	6.59	2.03	0.87
(b) Diluted EPS	6.59	1.46	0.63

Product & Services Wise Revenue Breakup

(Rs. in lakhs)

Particulars	Fiscal 2025	As % of Revenue from Operations	Fiscal 2024	As % of Revenue from Operations	Fiscal 2023	As % of Revenue from Operations
Hearing Aid	3,605.83	83.65%	2,468.27	77.73%	2,700.52	93.39%
Hearing Aid, Parts & Accessories	134.30	3.12%	464.63	14.63%	75.84	2.62%
Others*	499.26	11.58%	160.94	5.07%	-	0.00%
Sale of Services	71.23	1.65%	81.63	2.57%	115.27	3.99%
Total Revenue from Operations	4,310.62	100.00%	3,175.46	100.00%	2,891.63	100.00%

*Others includes sale of MSIED & TLM learning material kit

Geography Wise Sale of Products

(Rs. in lakhs)

Particulars	Fiscal 2025	As % of Revenue from Sale of Products	Fiscal 2024	As % of Revenue from Sale of Products	Fiscal 2023	As % of Revenue from Sale of Products
Domestic	4,205.28	99.20%	3,083.00	99.65%	2,774.07	99.92%
Export	34.11	0.80%	10.83	0.35%	2.28	0.08%
Revenue from Sale of Products	4,239.39	100.00%	3,093.83	100.00%	2,776.36	100.00%

Fiscal 2025 Compared to fiscal 2024 Total Income

Total income for fiscal 2025 amounted to Rs. 4,319.21 lakhs which increased by 35.12% compared to total income of Rs. 3,196.69 lakhs in fiscal 2024. This increase in in total income was primarily driven by increase in revenue from operations which increased by 35.75% to Rs. 4,310.62 lakhs compared to 3,175.46 lakhs in fiscal 2024.

Revenue from Operations

Revenue from operations for fiscal 2025 has increased by 35.75% to Rs. 4,310.62 lakhs from Rs. 3,175.46 lakhs in fiscal 2024. This was primarily due to increase in revenue from sales of products which has increased by 37.03% to Rs. 4,239.39 lakhs in fiscal 2025 compared to Rs. 3,093.83 lakhs. Higher revenue from sale of products were driven by higher volumes Hearing Aids and Other products (MSIED & TLM learning material kit).

Under Sale of products, primary driver to the segment was revenue from sale of hearing aids which increased by 46.48% to Rs. 3,605.83 lakhs in fiscal 2025 compared to Rs. 2,461.67 lakhs in Fiscal 2024. Also, rise in selling price of hearing aids has contributed to surge in revenue.

Revenue from operation represents 99.80% of the total income, of which 98.15% of the total income is contributed from sale of products. Under sale of products, sale of own manufactured hearing aids, parts accessories and others contributed 92.21% of the total income while sale of third party brands contributed only 5.94% of the total income.

Sale of services in fiscal 2025 decreased by 12.74% to Rs. 71.24 lakhs (represents 1.65% of the total income) compared to Rs. 81.63 lakhs in fiscal 2024, this was primarily due to decline in Conversion charges by 28.98% to Rs. 55.49 lakhs compared to Rs. 78.13 lakhs last year.

Other Income

Other income decreased from Rs. 21.22 lakhs in fiscal 2024 to Rs. 8.59 lakhs in fiscal 2025, the decrease was primarily due to increase in Exchange fluctuation differences which fell from Rs. 16.46 lakhs in fiscal 2024 to Rs. 5.10 lakhs in fiscal 2025. Other income represents 0.20% of the total income.

Expenses

For the fiscal 2025, the total expenses stood at Rs. 3,417.64 lakhs (represents 79.13% of the total income) which increased by 18.99% compared to Rs. 2,872.31 lakhs in fiscal 2024. This was primarily due to increase in cost of material consumed, Employee expenses and Other expenses.

Cost of Material Consumed

For the fiscal 2025, cost of material consumed increased by 5.25% to Rs. 2,126.04 lakhs from Rs. 2,019.90 lakhs in fiscal 2024. Increase in cost of material consumed increased primarily due to increase in purchases of raw material which increased by 15.74% to Rs. 2,063.46 lakhs compared to Rs. 1,782.91 lakhs in fiscal 2024. Cost of material consumed represents 49.22% of the total income.

Purchases of Stock-in-Trade

Purchase of traded goods for fiscal 2025 amounted to Rs. 473.49 lakhs which represents 10.96% of the total income. Purchase of traded goods has declined by 22.33% in fiscal 2025 compared to fiscal Rs. 609.63lakhs in fiscal 2024.

Changes in Inventories

Change in inventory increased to the extent of Rs. 37.90 lakhs in fiscal 2025 compared to Rs. 492.15 lakhs in fiscal 2024. Opening inventory for finished goods and stock in trade was Rs. 435.14 lakhs and Rs. 143.37 lakhs while closing inventory for finished goods and stock in trade increased to Rs. 482.45 lakhs and Rs. 133.96 lakhs, this resulted in net increase in inventory of Rs. 37.90 lakhs in fiscal 2025.

Employee Benefits Expense

Employee expenses for the fiscal increased by 18.95% to Rs. 406.19 lakhs in fiscal 2025 compared to Rs. 341.48 lakhs in fiscal 2043. Employee expenses represents 9.40% of the total income in fiscal 2025. Increase in employee cost was resulted from primarily increase in Salaries and wages by 19.27% to Rs. 373.91 lakhs, increase in Gratuity expenses by 66.64% to Rs. 7.04 lakhs and increase in staff welfare expenses by 60.79% to Rs. 7.59 lakhs.

Finance Costs

Finance cost represents 0.95% of the total income, company has incurred Rs. 40.86 lakhs towards the finance cost in fiscal 2025, which increased by 22.86% compared to Rs. 33.25 lakhs in fiscal 2024. Net Short term borrowings from banks has increased from Rs. 400.11 lakhs in fiscal 2024 to Rs. 495.93 lakhs in fiscal 2025 which has resulted in higher finance cost.

Depreciation and Amortization Expense

For the fiscal 2025, depreciation and amortization expenses has increased by 126.13% to Rs. 42.43 lakhs compared to Rs. 18.76 lakhs in fiscal 2024. This was primarily on account of increase in depreciation on tangible assets and intangible assets by 149.74% and 90.56% respectively. Company has added Rs. 54.11 lakhs in tangible assets in fiscal 2025.

Other Expenses

Company has reported Rs. 366.53 lakhs of other expenses in fiscal 2025 which accounted for 8.49% of the total income. The other expenses have increased by 7.35% compared to fiscal 2024 primarily due to increase in followings expenses:

Business Promotion: Our business promotion expenses increased by 118.73% to Rs. 53.76 lakhs compared to Rs. 24.58 lakhs in fiscal 2024.

Rent Expenses: Our business promotion expenses increased by 39.96% to Rs. 42.16lakhs compared to Rs. 30.12 lakhs in fiscal 2024.

Legal and professional fees: Legal expenses has increased by 18.49% to Rs. 66.76 lakhs compared to Rs. 56.34 lakhs in fiscal 2024.

Freight & Courier: During fiscal 2025, Freight & Courier have increased by 63.59% to Rs. 40.69 lakhs compared to Rs. 24.88 lakhs in fiscal 2024.

GEM Transaction Charges: Company have reported increase by 42.17% to Rs. 6.84 lakhs compared to Rs. 4.81 lakhs in fiscal 2024.

Total Tax Expenses

Total tax expenses have increased by 1049.33% to Rs. 213.40 lakhs compared to Rs. 18.57 lakhs in fiscal 2024. Increase in tax expenses have resulted from higher profit before tax. Current taxes have increased by 118.15% to Rs. 174.48 lakhs compared to Rs. 55.08 lakhs in fiscal 2024..

Profit for the Year

Profit after tax for fiscal 2025 have increased by 125.03% to Rs. 688.17 lakhs from Rs. 305.81 lakhs in fiscal 2024. Profit margin have improved to 15.93% of the total income compared to 9.57% in fiscal 2024. Higher profits were primarily on account of increase in total income resulted from increase in selling price of products and simultaneous increase in sales volume.

Fiscal 2024 Compared to Fiscal 2023

Total Income

Total income for fiscal 2024 amounted to Rs. 3,196.69 lakhs which increased by 10.36% compared to total income of Rs. 2,896.68 lakhs in fiscal 2023. This increase in in total income was primarily driven by increase in revenue from operations which increased by 9.82% to Rs. 3,175.46 lakhs compared to 2,891.63 lakhs in fiscal 2023.

Revenue from Operations

Revenue from operations for fiscal 2024 has increased by 9.82% to Rs. 3,175.46 lakhs from Rs. 2,891.63 lakhs in fiscal 2023. This was primarily due to increase in revenue from sales of products which has increased by 11.44% to Rs. 3,093.83 lakhs in fiscal 2024 compared to Rs. 2,776.36 lakhs. Higher revenue from sale of products were driven by higher volumes of Hearing Aids Parts & Accessories and Hearing Aids.

Under Sale of products, primary driver to the segment was revenue from sale of hearing aids parts and accessories which increased to Rs. 464.63 lakhs in fiscal 2024 compared to Rs. 75.84 lakhs in fiscal 2023. Also, company has generated revenue from sale of MSIED and TLM kits amounted to Rs. 160.94 lakhs. Sales from own manufactured hearing aid declined by 7.67% to Rs. 2,371.95 lakhs in fiscal 2024 compared to Rs. 2,569.02 lakhs in fiscal 2023.

Revenue from operation represents 99.34% of the total income, of which 96.78% of the total income is contributed from sale of products. Under sale of products, sale of own manufactured hearing aids contributed 74.20% of the total income while sale of third party brands contributed only 3.01% of the total income. Also, Sale of third party brand hearing aid part and accessories contributed 14.53% of the total income.

Sale of services in fiscal 2024 decreased by 29.18% to Rs. 81.63 lakhs (represents 2.55% of the total income) compared to Rs. 115.27 lakhs in fiscal 2023, this was primarily due to decline in conversion charges by 26.75% to Rs. 78.13 lakhs compared to Rs. 106.66 lakhs in fiscal 2023.

Other Income

Other income increased from Rs. 5.05 lakhs in fiscal 2023 to Rs. 21.22 lakhs in fiscal 2024, the increase was primarily due to increase in Exchange fluctuation differences which rose from Rs. 4.09 lakhs in fiscal 2023 to Rs. 16.46 lakhs in fiscal 2024. Other income represents 0.66% of the total income.

Expenses

For the fiscal 2024, the total expenses stood at Rs. 2,872.31 lakhs (represents 89.85% of the total income) which increased by 4.39% compared to Rs. 2,751.44 lakhs in fiscal 2023. This was primarily due to increase in cost of material consumed, Employee expenses and Purchase of stock in trade.

Cost of Material Consumed

For the fiscal 2024, cost of material consumed increased by 7.34% to Rs. 2,019.90 lakhs from Rs. 1,881.69 lakhs in fiscal 2023. Increase in cost of material consumed increased primarily due to increase in freight inwards and Custom Duty & GST. Freight inwards has increased to Rs. 19.01 lakhs in fiscal 2024 compared to Rs. 2.88 lakhs in fiscal 2023. Also, Custom Duty & GST has increased to Rs. 95.42 lakhs in fiscal 2024 compared to Rs. 49.97 lakhs in fiscal 2023. Cost of material consumed represents 63.19% of the total income.

Purchases of Stock-in-Trade

Purchase of traded goods for fiscal 2024 amounted to Rs. 609.63 lakhs which represents 19.07% of the total income. Purchase of traded goods has increased by 223.66% in fiscal 2024 compared to fiscal Rs. 188.35 lakhs in fiscal 2023.

Changes in Inventories

Change in inventory increased to the extent of Rs. 492.15 lakhs in fiscal 2024 compared to Rs. 13.56 lakhs in fiscal 2023. Opening inventory for finished goods and stock in trade was Rs. 62.94 lakhs and Rs. 23.42 lakhs while closing inventory for finished goods and stock in trade increased to Rs. 435.14 lakhs and Rs. 143.37 lakhs, this resulted in net increase in inventory of Rs. 492.15 lakhs in fiscal 2024.

Employee Benefits Expense

Employee expenses for the fiscal increased by 14.90% to Rs. 341.48 lakhs in fiscal 2024 compared to Rs. 297.20 lakhs in fiscal 2023. Employee expenses represents 10.68% of the total income in fiscal 2024. Increase in employee cost was resulted from primarily increase in Salaries and wages by 14.73% to Rs. 313.50 lakhs, increase in Contribution to Provident Fund by 9.61% to Rs. 19.04 lakhs and increase in staff welfare expenses by 97.02% to Rs. 4.72 lakhs. During the year number of employee increased to 38 from 27 in fiscal 2023.

Finance Costs

Finance cost represents 1.04% of the total income, company has incurred Rs. 33.25 lakhs towards the finance cost in fiscal 2024, which increased by 487.28% compared to Rs. 5.66 lakhs in fiscal 2023. Short term borrowings from banks has increased from Rs. 121.42 lakhs in fiscal 2023 to Rs. 400.11 lakhs in fiscal 2024 which has resulted in higher finance cost.

Depreciation and Amortization Expense

For the fiscal 2024, depreciation and amortization expenses has increased by 24.94% to Rs. 18.76 lakhs compared to Rs. 15.02 lakhs in fiscal 2023. This was primarily on account of increase in depreciation on tangible assets and intangible assets by 122.80% and 128.29% respectively. Company has added Rs. 72.25 lakhs in tangible assets in fiscal 2024.

Other Expenses

Company has reported Rs. 341.43 lakhs of other expenses in fiscal 2024 which accounted for 10.68% of the total income in fiscal 2024. The other expenses have declined by 9.45% compared to fiscal 2023 primarily due to decrease in followings expenses:

Advertisement expenses: Advertisement expenses have declined by 57.00% to Rs. 96.84 lakhs in fiscal 2024 compared to Rs. 225.23 lakhs in fiscal 2023.

Business Promotion: Our business promotion expenses declined marginally by 4.77% to Rs. 24.58 lakhs compared to Rs. 25.81 lakhs in fiscal 2023.

Repair and maintenance: During fiscal 2024, repairs and maintenance have declined by 35.63% to Rs. 7.23 lakhs compared to Rs. 11.23 lakhs in fiscal 2023.

GEM Transaction Charges: Company have reported fall in GEM charges by 65.46% to Rs. 4.81 lakhs compared to Rs. 13.94 lakhs in fiscal 2023.

Total Tax Expenses

Total tax expenses have increased by 32.21% to Rs. 18.57 lakhs compared to Rs. 14.04 lakhs in fiscal 2023. Increase in tax expenses have resulted from higher profits. Current taxes have increased by 118.15% to Rs. 55.08 lakhs.

Profit for the Year

Profit after tax for fiscal 2024 have increased by 133.08% to Rs. 305.81 lakhs from Rs. 131.20 lakhs in fiscal 2023. Profit margin have improved to 9.57% of the total income compared to 4.53% in fiscal 2023. Higher profits were primarily on account of increase in total income and decline in total expenses as percent of total income from 94.99% in fiscal 2023 to 89.85% in fiscal 2024.

Discussion on Cash Flow Statement

(Rs in lakhs)

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Cash (Used in)/Generated from Operating Activities	71.13	(99.73)	(29.64)
Cash (Used in)/Generated from Investing Activities	(131.50)	(128.79)	39.88
Cash (Used in)/Generated from Financing Activities	(40.86)	308.19	40.70
Net Increase/(Decrease) in Cash & Equivalents	(101.23)	79.67	50.94
Cash & Equivalents at the Beginning	137.87	58.20	7.27
Cash & Equivalents at the End of the Period	36.64	137.87	58.21

Fiscal 2025

Net Cash (Used in)/Generated from Operating Activities:

Profit before tax was reported at Rs. 901.57 lakhs which was adjusted by amortization, depreciation, interest on borrowings and other adjustment totalling to Rs. 84.54 lakhs resulting in operating cash flow of Rs. 986.11 lakhs. However, negative working capital was primarily resulted from net increase in current assets by Rs. 1,109.98 lakhs which was adjusted for net increase in current liabilities of Rs. 415.82 lakhs, resulting in net cash used in working capital amounting to Rs. 694.16 lakhs. Post adjustment of taxes amounting to Rs. 220.83 lakhs the net cash generated in operating activities was Rs. 71.13 lakhs

Cash from Investing Activities:

Net cash used investing activities Rs. 131.50 lakhs during fiscal 2025. This was primarily on account of net purchase of fixed asset amounting to Rs. 53.45 lakhs, purchase of investment of Rs. 63.82 lakhs and others of Rs. 13.96 lakhs.

Cash from Financing Activities:

Cash used in financing activities amounted to Rs. 40.86 lakhs on account of payment of interest on borrowings. Fiscal 2024

Net Cash (Used in)/Generated from Operating Activities:

Our company have generated profit before tax of Rs. 324.38 lakhs which was adjusted for Amortisation expense, Depreciation, Interest on borrowings and Interest Income collectively amounting to Rs. 51.03 lakhs. Also, the profits have been adjusted for change in working capital where in current assets collectively increased by Rs. 259.94 lakhs and current liabilities decreased by Rs. 194.68 lakhs, generating net cash outflow on working capital of Rs. 454.62 lakhs, resulting in net cash used in operations of Rs. 79.21 lakhs. Post adjustment of taxes of Rs. 20.52 lakhs, Cash used for operating activities amounted to Rs. 99.73 lakhs.

Cash from Investing Activities:

Cash used in investing activities was Rs. 128.79 lakhs, which was primarily due to purchase of net fixed assets amounting to Rs. 99.11 lakhs, investment in FD worth Rs. 8.30 lakhs, Interest income received of Rs. 1.79 lakhs and Other payment of Rs. 23.17 lakhs.

Cash from Financing Activities:

During the fiscal 2024, share capital increased by Rs. 341.44 lakhs and company has paid Interest on borrowings amounting to Rs. 33.25 lakhs, these adjustments have resulted in Cash generated from financing activities amounting to Rs. 308.19 lakhs.

Fiscal 2023

Net Cash (Used in)/Generated from Operating Activities:

Our company have generated profit before tax of Rs. 145.24 lakhs which was adjusted for Amortisation expense, Depreciation, Interest on borrowings, Interest Income and other adjustments collectively amounting to Rs. 22.03 lakhs. Also, the profits have been adjusted for change in working capital where in current assets collectively increased by Rs. 870.90 lakhs and current liabilities increased by Rs. 675.76 lakhs, generating net cash outflow on working capital of Rs. 195.14 lakhs, resulting in net cash used in operations of Rs. 27.87 lakhs. Post adjustment of taxes of Rs. 1.77 lakhs, Cash used for operating activities amounted to Rs. 29.64 lakhs.

Cash from Investing Activities

Cash generated from investing activities was Rs. 39.88 lakhs, which was primarily due to purchase of net fixed assets amounting to Rs. 18.24 lakhs, sale of investment in FD worth Rs. 135.75 lakhs, Interest income received of Rs. 0.25 lakhs and Other payment of Rs. 77.88 lakhs.

Cash from Financing Activities:

During the fiscal 2023, share capital increased by Rs. 46.36 lakhs and company has paid Interest on borrowings amounting to Rs. 5.66 lakhs, these adjustments have resulted in Cash generated from financing activities amounting to Rs. 40.70 lakhs.

Non - GAAP financial Measures

In addition to our results determined in accordance with Accounting Standards, the following non-GAAP measures are useful to investors in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. the non-GAAP financial information, when taken collectively with financial measures prepared in accordance with Accounting Standards, may be helpful to investors because it provides an additional tool for investors to use in evaluating our ongoing operating results and trends and in comparing our financial results with other companies in our industry because it provides consistency and comparability with past financial performance.

However, our management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with Accounting Standards. Non-GAAP financial information is presented for supplemental informational purposes only, as it has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with Accounting Standards.

Non-GAAP financial information may be different from similarly titled non-GAAP measures used by other companies. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by Accounting Standards to be recorded in our financial statements, as further detailed below. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these Non- Accounting Standards financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure prepared in accordance with Accounting Standards. Investors are encouraged to review the related Accounting Standards financial measure and the reconciliation of non-GAAP

financial measures to their most directly able Accounting Standards financial measures included below and to not rely on any single financial measure to evaluate our business.

Profit for The Period/Year Margin, EBIT, EBIT (Excluding Other Income), EBITDA (Excluding Other Income), EBIT Margin and EBITDA Margin (Excluding Other Income)

(Rs. in lakhs)

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Revenue from Operations	4,310.62	3,175.46	2,891.63
Total Income	4,319.21	3,196.69	2,896.68
Profit for the Period / Year	688.17	305.81	131.20
Add: Taxes	213.40	18.57	14.04
Profit Before Tax	901.57	324.38	145.24
Add: Finance Cost	40.86	33.25	5.66
EBIT	942.42	357.63	150.91
Less Other Income	8.59	21.22	5.05
EBIT (Excluding Other Income)	933.84	336.41	145.85
Add: Depreciation and amortization Expense	42.43	18.76	15.02
EBITDA (Excluding Other Income)	976.27	355.17	160.87
Profit for the Period / Year Margin	15.93%	9.57%	4.53%
EBIT Margin	21.82%	11.19%	5.21%
EBITDA Margin (Excluding Other Income)	22.65%	11.18%	5.56%

• Profit for the Period/Year Margin is defined as profit for the Period/Year as a percentage of total income.

• EBIT is calculated as profit for the period / year plus total Tax expense plus Finance costs.

• EBIT (Excluding Other Income) is calculated as profit for the period / year plus total tax expense plus finance costs less other income.

• EBITDA (Excluding Other Income) is calculated as profit for the period / year plus total tax expense plus finance costs plus depreciation and amortisation expense less other income.

• EBIT Margin is calculated as EBIT as a percentage of Total Income.

• EBITDA Margin (Excluding Other Income) is calculated as EBITDA (Excluding Other Income) as a percentage of revenue from operations.

Capital Employed and Return on Capital Employed

Capital employed is calculated as total assets less current liabilities less long term provisions and return on capital employed is calculated as EBIT as percent of capital employed.

Reconciliation of Capital Employed and Return on Capital Employed to Total equity and Profit for the period / year for the periods as given below:

(Rs. in lakhs)

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Total Assets	3,029.38	1,925.39	1,472.80
Less Current Liabilities	1,020.31	611.50	810.38
Less Long-Term Provision	17.40	10.39	6.18
Capital Employed	1,991.67	1,303.49	656.24
Profit for the Period / Year	688.17	305.81	131.20
Add: Taxes	213.40	18.57	14.04
Profit Before Tax	901.57	324.38	145.24
Add: Finance Cost	40.86	33.25	5.66
EBIT	942.42	357.63	150.91
Return on Capital Employed	47.32%	27.44%	23.00%

Net Worth and Return on Net Worth

Net worth is calculated as Total share capital add general reserves and retained earnings, return on net worth is calculated as Profit for the Period/Year as percent of Net Worth.

Reconciliation of Net Worth and Return on Net Worth is given in below table:

(Rs. in Lakhs)

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Share Capital	1,043.89	6.91	6.77
Reserves & surplus	947.77	1,296.58	649.47
Net Worth	1,991.66	1,303.49	656.24
Profit for the Period / Year	688.17	305.81	131.20
Return on Net Worth	34.55%	23.46%	19.99%

FINANCIAL INDEBTEDNESS

Our Company has certain loans sanctioned in the ordinary course of its business for the purposes of meeting working capital requirements and capital expenditure requirements. Our Board is empowered to borrow monies as may be required for the purpose of the business of our Company, in accordance with Section 179 and Section 180 of the Companies Act and our Articles of Association.

The following table sets forth details of the aggregate outstanding borrowings of our Company, on a restated financial statement, as on March 31, 2025.

(Rs. in lakhs)

Category of Borrowings	Sanctioned Amount	Institution Name	Loan Type	Sanction Date	Tenure	ROI	As on March 31, 2025
Secured Loans
Working Capital Loan	500.00	Punjab National Bank	Working Capital Loan	November 25, 2022	Due for renewal on Annual basis	9.60 %	495.92
Working Capital Loan	65.93	Bajaj Finance Limited	Working Capital Loan	March 19, 2025	Due for renewal on Annual basis	16.00 %	Negligible
Total	565.93		495.92

Principle terms of borrowing availed by us:

Security:

Borrower shall hypothecate entire book debts, present & Future arising out of genuine credit sale transaction.

Negative Covenants:

a. In the event of default, or where signs, of inherent weaknesses are apparent. The bank shall have right to securities the assets charged and the event of such securitization, the bank will suitably inform the borrower(s) and Guarantor(s)

b. Undertake any guarantee or letter of comfort in the nature of guarantee on behalf of any other company.

c. Undertake any trading activity other than the sale of products arising out of its own manufacturing operations.

d. Permit any transfer or controlling interest or make any drastic change in the management including resignation of promoter director.