Encompass Design India Ltd Management Discussions

OF FINANCIAL CONDITIONS AND

RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations for the Fiscal Years 2025, 2024, and 2023 is based on, and should be read in conjunction with, our Restated Financial Statements, including the schedules, notes and significant accounting policies thereto, included in the chapter titled "Restated Financial Statements" beginning on page 205 of this Draft Red Herring Prospectus. Our Restated Financial Statements have been derived from our audited financial statements and restated in accordance with the SEBIICDR Regulations and the ICAI Guidance Note. Our financial statements are prepared in accordance with AS.

You should read the following discussion of our financial condition and results of operations together with our restated financial statements for the financial year ended on 31st March 2025, 31st March 2024 and 31st March 2023 including the notes and significant accounting policies thereto and the reports thereon, which appear elsewhere in this prospectus. You should also see the section titled "Risk Factors" beginning on page 28 of this Draft Red Herring Prospectus, which discusses a number of factors and contingencies that could impact our financial condition and results of operations. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year are to the twelve-month period ended March 31 of that year.

These financial statements have been prepared in accordance with Ind GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditors dated June 09, 2025 which is included in this Draft Red Herring prospectus under the section titled "Financial Information as Restated" beginning on page 204 of this Draft Red Herring Prospectus. The restated financial statements have been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. We do not provide a reconciliation of our restated financial statements to US GAAP or IFRS and we have not otherwise quantified or identified the impact of the differences between Indian GAAP and U.S. GAAP or IFRS as applied to our restatedfinancial statements.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be "Forward Looking Statements" 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 incidentalfactors.

BUSINESS OVERVIEW

Our Company was originally incorporated as "Encompass Design India Private Limited" a private limited company under the provisions of the Companies Act, 1956 vide Certificate of Incorporation dated March 09, 2010 issued by Registrar of Companies, Mumbai. Further, our Company was converted from a private limited company to public limited company pursuant to special resolution passed in the Extra-Ordinary General Meeting of the company dated March 31, 2025 and consequently, the name of our Company was changed from "Encompass Design India Private Limited" to "Encompass Design India Limited" and a fresh certificate of incorporation dated May 05, 2025 was issued to our Company by the Registrar of Companies, Central Processing Centre. The Corporate Identification Number of our Company is U74210MH2010PLC200672.

Our Company is based in Mumbai, Maharashtra. The registered office is located at Shop No. A-101, Virwani Industrial Estate, Opposite Western Express Highway, Goregaon (East), Mumbai - 400063. The manufacturing unit of the Company is located at Gala No. 7 to 10, 1st Floor, Building No. I-09, Shree Arihant Compound, Bhiwandi, Thane - 421302, Maharashtra.

Encompass Design India Limited (EDIL), operating under the brand name ‘ScaleSauce, is engaged in building and scaling consumer brands in India, with a focus on the home & living and food segments tailored to the modern urban Indian consumer. The Company was incorporated in 2011 as a trading enterprise. In response to emerging market opportunities, we subsequently expanded our operations to include e-commerce support services, which we operated alongside our trading activities.

The Companys core business activities include the manufacturing of home and lifestyle products, such as bed sheets, curtains, comforters, table linens, and pillow covers, as well as food products, with a primary focus on sauces, marketed under its own brands.

In addition to its manufacturing operations, the Company is also involved in the trading of agro-based products, cotton, and fabrics. It further undertakes the sale of various other goods, primarily through gated market platforms, enabling access to niche buyers.

In addition to our product-based operations, the Company offers a comprehensive range of digital and e-commerce support services designed to enable the growth of consumer brands in the online space. These services provide end-to- end solutions across marketing, technology, and operations, catering to both direct-to-consumer (D2C) businesses and corporate clients. Through these offerings, we assist brands in enhancing visibility, expanding their digital presence, and driving sales growth.

Our company is promoted by Mr. Amit Rajendraprasad Dalmia, Mrs. Susmita Amit Dalmia, Mr. Ruman Kailash Agarwal and Mr. Yogendra Vashishta. In addition to their roles as promoters, They are actively involved in the companys management, providing strategic guidance and contributing significantly to key areas such as marketing, branding, operations, and overall business strategy. For Further details, refer to the section titled "Our Management" on page 180 of this Draft Red Herring Prospectus.

Our revenues financial year ended on Fiscals 2025, 2024 and 2023 were Rs. 5464.94 lakhs, Rs. 4004.18 lakhs, and Rs. 2169.09 lakhs respectively. Our PAT for the financial year ended on Fiscals 2025, 2024 and 2023 was Rs.1079.38 lakhs, Rs. 687.90 lakhs, and a loss of Rs. 129.46 lakhs respectively. For further details, please refer to the section titled "Financial Information" on page 204 of this Draft Red Herring Prospectus.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST AUDITED PERIOD

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

1. The Board of Directors have decided to get their equity shares listed on SME Emerge Platform of NSE Limited and pursuant to Section 62(1)(c) of the Companies Act 2013, by a resolution passed at its meeting held on June 09, 2025 proposed the Issue, subject to the approval of the shareholders and such other authorities as may be necessary.

2. The shareholders of the Company have, pursuant to Section 62(1)(c) of the Companies Act 2013, by a special resolution passed in the Extra Ordinary General Meeting held on July 03, 2025 authorized the Initial Public Offer.

3. Our Company has allotted 1,00,35,419 Equity Shares as a bonus issue in the ratio of 25.75:1 (i.e., 25.75 equity share for every 1 equity shares held by eligible shareholders).

KEY FACTORS AFFECTING OUR RESULTS OF OPERATION

1. Our dependence on limited number of customers/suppliers/brands for a significant portion of our revenues;

2. Any failure to comply with the financial and restrictive covenants under our financing arrangements;

3. Our ability to retain and hire key employees or maintain good relations with our workforce;

4. Impact of any reduction in sales of our services/products;

5. Rapid Technological advancement and inability to keep pace with the change;

6. Increased competition in industries/sector in which we operate;

7. General economic and business conditions in India and in the markets in which we operate and in the local, regional and national economies;

8. Changes in laws and regulations relating to the Sectors in which we operate;

9. Political instability or changes in the Government in India or in the government of the states where we operate could cause us significant adverse effects;

10. Failure to obtain any applicable approvals, licenses, registrations and permits in a timely manner;

11. Occurrence of natural or man-made disasters could adversely affect our results of operations and financial condition and

12. Our inability to successfully diversify our product offerings may adversely affect our growth and negatively impact

SIGNIFICANT ACCOUNTING POLICIES:

Our significant accounting policies are described in the section entitled "Financial Statements as Restated" beginning from page 204 of the Draft Red Herring Prospectus.

FINANCIAL KPIs OF THE COMPANY:

Key F manual Performance	March 31, 2025	March 31, 2024	March 31, 2023
Revenue from Operations (1)	5,464.94	4,004.18	2,162.47
EBITDA (2)	1686.43	1121.36	56.07
EBITDA Margin (%) (3)	30.86%	28.00%	2.59%
PAT	1,079.38	687.90	-129.46
PAT Margin (%) (4)	19.75%	17.18%	-5.99%
Profit after tax growth (%)	56.91%	-631.36%	126.00%
Trade Receivables Turnover Ratio (In times) (5)	7.97	11.24	8.63
Inventory Turnover Ratio (In times) (6)	3.32	2.08	1.19
Trade Payables Turnover Ratio (In times) (7)	26.77	2.43	2.78
Net Capital Turnover Ratio (In times) (8)	4.54	8.43	4.29
Trade Receivables days (9)	46	32	42
Inventory days (10)	110	176	306
Trade Payable days (11)	14	150	131
Return on equity (%) (12)	50.26%	99.19%	-31.25%
Return on capital employed (%) (13)	40.49%	55.36%	-8.47
Debt-Equity Ratio (times) (14)	0.44	0.78	2.14
Working Capital Cycle (days) (15)	142	58	217
Net fixed asset turnover ratio (times) (16)	36.39	39.15	62.30
Current Ratio (times) (17)	2.09	2.03	1.26

As certified by our statutory auditor having peer review certificate M/sV K BESWAL & ASSOCIA TES, Chartered Accountant

vide their examination report dated Jun 14, 2025

Notes:

(1) Revenue from operation means revenue from sale of the products

(2) EBITDA is calculated as Profit before tax + Depreciation + Finance Costs - Other Income

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

(4) PAT Margin is calculated as PATfor the period/year divided by revenue from operations

(5) Trade receivable turnover is calculated Revenue from operation divided by average trade receivables

(6) Inventory turnover ratio is calculated Cost of goods sold divided by average inventory

(7) Trade Payable turnover ratio is calculated Net credit Purchase divided by average trade payable

(8) Net Capital Turnover Ratio is calculated revenue from operations divided by Average working capital (i.e. Total current assets less Total current liabilities)

(9) Trade receivable days is calculated as 365 divided by trade receivables turnover by for fiscal years

(10) Inventory days is calculated as 365 divided by Inventory turnover by for fiscal years

(11) Trade payable days is calculated as 365 divided by Trade Payable turnover by for fiscal years

(12) Return on Equity is calculated by Profitfor the year less Preference dividend (if any) divided by average total equity

(13) Return on Capital Employed is calculated as follows: Profit before tax plus finance cost divided by Total Asset - Current Liabilities (net))

(14) Debt to Equity ratio is calculated as Total Debt divided by equity

(15) Working Capital Cycle is defined as trade receivable days plus inventory days less trade payable days

(16) Net fixed asset turnover ratio is calculated by dividing net sales by the average fixed assets

(17) Current Ratio is calculated by dividing Current assets to Current Liabilities

Significant Developments After March 31, 2025 that may affect our future results of operations

After the date of last Balance sheet i.e. March 31, 2025, the following material events have occurred after the last audited period:

On 5th April 2025, the Board of Directors convened to consider and approve several key matters. These included the

appointment of a Company Secretary, the induction of Mr. Ruman Agrawal as an Additional Director, and the appointment of Mr. Shreyash Jain as Chief Human Resource Officer (CHRO). The Board also approved the remuneration payable to Mr. Yogendra Vashishta, Chief Strategy Officer (CSO), and granted approval for the issue of bonus shares.

Other significant decisions taken during the meeting included the acquisition of property, obtaining the Director Identification Number (DIN) for Mr. Tejpal Singh, and availing a cash credit facility from Union Bank of India. The Board also approved related party transactions for FY 2025-26, received declarations from Directors in Form DIR-8 and MBP-1, and authorized necessary filings and execution of agreements.

In line with these approvals, the Company completed statutory filings including Form DIR-12, DIR-3, and CHG-1.

Name of KMP	Designation	Date of Appointment on current position	Board Meeting held on
RUMAN KAILASH AGARWAL	Additional Director	05/04/2025	05/04/2025
NIKITA DINESH CHANDAK	Company Secretary	05/04/2025	05/04/2025

1. On 30th April 2025, an Extraordinary General Meeting (EGM) was held to formally consider and approve the proposal for the issue of bonus shares and accordingly the resolution was filed in form MGT-14.

2. On 2nd May 2025, the Board met to allot the bonus shares approved earlier and filed form PAS-3.

3. On 05^th May 2025, the Company has received approval for name change of the Company from "Encompass Design India Private Limited" to "Encompass Design India Limited".

4. On 7th May 2025, the Board of Directors adopted the audited financial statements for the financial year 2024-25. The Board also recommended several key leadership appointments and designations, including the appointment of Mr. Amit Dalmia as Managing Director & Chairman, Mr. Ruman Agarwal and Mrs. Susmita Dalmia as Whole-Time Directors (WTDs), Ms. Himanshi Tiwari and Mr. Saahil Dugar as Independent Directors, and Mr. Tarak Nagda as Chief Financial Officer (CFO).

Additionally, the Board approved resolutions pursuant to Sections 180(1)(a), 180(1)(c), and 186 of the Companies Act, fixed the sitting fees payable to Non-Executive Directors, and resolved to convene an Extraordinary General Meeting (EGM) on 30th May 2025.

All requisite statutory filings, including Form MGT-14, MR-1, and DIR-12, were duly prepared and submitted.

5. On 19th May 2025, the Board appointed Mr. Tejpal Singh as Additional Director and recommended to regularise him as a Non-Executive Director. The MBP-1 and DIR-8 for Mr. Amit Dalmia were noted, and discussed to convene an EGM 11/06/2025.

6. On 30th May 2025, an Extraordinary General Meeting (EGM) was held to approve the appointment of key directors, including Mr. Amit Dalmia as Managing Director & Chairman, Mr. Ruman Agarwal and Mrs. Susmita Dalmia as WholeTime Directors (WTDs), and Ms. Himanshi Tiwari and Mr. Saahil Dugar as Independent Directors.

The meeting also approved the Companys borrowing and investment powers pursuant to Sections 180(1)(a), 180(1)(c), and 186 of the Companies Act, 2013.

Subsequent to the approvals, the Company completed the necessary statutory filings, including Form MGT-14 and DIR- 12, in respect of these resolutions.

Name of Director	DIN No.	Designation		Date of Appointment on current position	Date of Resignation	Shareholders/ Board Resolution passed on
AMIT DALMIA	00210919	Managing Director		30-05-2025	NA	30-05-2025
SUSMITA AMIT DALMIA	02401290	Whole-time director		30-05-2025	NA	30-05-2025
RUMAN KAILASH AGARWAL	11004779	Whole-time director		30-05-2025	NA	30-05-2025
HIMANSHI TIWARI	10545195	Independent director		30/05/2025	NA	30/05/2025
SAAHIL	01186726	Independent director		30/05/2025	NA	30/05/2025
PRAKASH DUGAR
TARAK AMRUTLAL NAGDA			CFO	07/05/2025	NA	30-05-2025

7. On 9th June 2025, two separate Board Meetings were held. In the first, the Board approved the formation of committees, various policies, and the purchase of property.. In the second meeting held later the same day, the Board approved the restated financials for the IPO, Initial Public Offering of Equity shares of the Company and convening of EGM on 03/07/2025. MGT-14 was also filed for Board Resolution and shareholders resolution passed on 09/06/2025 and 03/07/2025 respectively.

8. On 9^th June, 2025, Audit Committee Meeting was also held for approval of restated financials of IPO and KPI Certificates

9. On 11th June 2025, an EGM was held to regularize the appointment of Mr. Tejpal Singh as Non-Executive Director and accordingly form DIR-12 and MGT -14 was filed.

Name of Director	Designation	Date of Appointment on current position	Board Meeting held on
TEJPAL SINGH	Non- Executive Director	11th June 2025	19/05/2025

Statement of Significant Accounting Policies

The notes to the Restated Summary Statements included in this Draft Red Herring Prospectus contain a summary of our significant accounting policies. For details relating to our significant accounting policies, see Significant Accounting Policies - Notes 2 -Restated Financial Information" beginning on page 205 of the Draft Red Herring Prospectus.

Basis of Measurement and Basis of Preparation of our Restated Financial Statements

The restated financial information has been prepared and presented under historical cost convention on the accrual basis of accounting in accordance with the Generally Accepted Accounting Principles in India ("GAAP") and comply with the mandatory Accounting Standards ("AS") specified under section 133 of the Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act 2013 (‘the Act). 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.

The financial statements have been prepared on a historical cost convention and accrual basis. The financial statements have been prepared on a going concern basis and the accounting policies are applied consistently to all the periods presented in the financial statement.

All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle (twelve months) and other criteria set out in Division I of Schedule III to the Act.

The restated financial information has been prepared by the management to comply in all material respects with the requirements of:

a) Section 26 of Part I of Chapter III of the Act, 2013;

b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended ("ICDR Regulations"); and

c) The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered

Accountants of India (ICAI), as amended (the "Guidance Note").

Functional and Presentation Currency

The financial statements are presented in the currency INR, which is the functional and presentation currency of the Company.

Rounding of Amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest Lakhs as per the requirement of Schedule III, unless otherwise stated.

Segment Reporting

The Company is primarily engaged in the manufacturing and export of its Textile and Sauces Food brands, with additional involvement in the trading of various products. In view of above, primary and secondary reporting disclosures for business/ geographical segment as envisaged in AS -17 is not applicable to the Company.

Principle Components of our Restated Statement of Assets & Liabilities Fiscal 2025 Compared with Fiscal 2024:

Particulars	For the year ended March 31,		Increase/ (Decrease)
	2025	2024	Amount	%
Liabilities
Long-Term Borrowings	308.69	593.26	-284.57	-47.97%
Short-Term Borrowings	1,117.25	212.14	905.11	426.66%
Trade Payables	90.74	141.05	-50.31	-35.67%
			-
Assets			-
Non-current investments	0.10		0.10	0.00%
Long-term loans and advances	37.15	36.46	0.70	1.91%
Inventories	1,086.87	509.38	577.50	113.37%
Trade Receivables	894.25	476.94	417.31	87.50%

Long-Term Borrowings

Long-term borrowings decreased from Rs.593.26 lakhs in FY 2024 to Rs.308.69 lakhs in FY 2025, registering a decline of Rs.284.57 lakhs (-47.97%). This reduction is due to repayment of loan.

Short-Term Borrowings

Short-term borrowings increased significantly from Rs.212.14 lakhs in FY 2024 to Rs.1,117.25 lakhs in FY 2025, showing a rise of Rs.905.11 lakhs (426.66%). This change is primarily attributed to fresh ICD borrowings of Rs.1,100 lakhs during the year for purchasing the assets and inventories.

Trade Payables

Trade payables decline from Rs.141.05 lakhs in FY 2024 to Rs.90.74 lakhs in FY 2025, registering a decline of Rs.50.31 lakhs (35.67%). The company has focused on strengthening supplier relationships by shortening the payment cycle and availing early payment discounts where feasible. Additionally, better inventory planning and a calibrated procurement strategy led to reduced outstanding payables at year-end.

Particulars	For the year ended March 31,
	2025	2024
Purchases of Stock in Trade	3,102.71	996.14
Average Trade Payable	115.89	410.24
Trade Payables Turnover Ratio	26.77	2.43
Trade Payables Days	14.00	150.00

Assets

Non-Current Investments

Non-current investments stood at Rs.0.10 lakhs in FY 2025, compared to Nil in FY 2024, reflecting a small investment made during the year.

Long-Term Loans and Advances

These slightly decreased from Rs.36.46 lakhs to Rs.37.15 lakhs, showing a marginal reduction of Rs.0.70 lakhs (1.91%). Inventories

Inventories increased from Rs.509.38 lakhs in FY 2024 to Rs.1,086.87 lakhs in FY 2025, representing a significant rise of Rs.577.50 lakhs (113.37%). The increase was in line with business expansion and a strategy to maintain broader stock availability.

T rade Receivables

Trade receivables grew from Rs.476.94 lakhs to Rs.894.25 lakhs, recording an increase of Rs.417.31 lakhs (87.50%), aligning with higher credit sales and growth in revenue from operations.

Particulars	For the year ended March 31
	2025	2024
Revenue from operations	5,464.94	4,004.18
Trade receivables	894.25	476.94
Average trade receivables	685.60	356.21
Trade Receivables Days	46.00	32.00

 

Fiscal 2024 Compared with Fiscal 2023:
Particulars	For the year ended March 31,		Increase/ (Decrease)
	2024	2023	Amount	%
Liabilities
Long-Term Borrowings	593.26	716.90	-123.64	-17.25%
Short-Term Borrowings	212.14	30.16	181.98	603.36%
Trade Payables	141.05	679.42	-538.37	-79.24%
			-
Assets			-
Long-term loans and advances	36.46	15.08	21.38	141.75%
Inventories	509.38	1286.13	-776.75	-60.39%
Trade Receivables	476.94	235.48	241.46	102.54%

Liabilities

Long-TermBorrowings

Long-term borrowings decreased from Rs.716.90 lakhs in FY 2023 to Rs.593.26 lakhs in FY 2024, reflecting a reduction of 123.64 lakhs, or 17.25%. This reduction is primarily due to loan repayments.

Short-Term Borrowings

Short-term borrowings increased significantly from Rs.30.16 lakhs in FY 2023 to Rs.212.14 lakhs in FY 2024, marking a rise of Rs.181.98 lakhs or 603.36%, The increase suggests enhanced reliance on short-term working capital funding.

Trade Payables

Trade payables declined from Rs.679.42 lakhs in FY 2023 to Rs.141.05 lakhs in FY 2024, showing a significant reduction of Rs.538.37 lakhs, or -79.24%. This sharp decline indicates stronger cash flow management, early settlements, or reduction in outstanding supplier dues.

Particulars	For the year ended March 31,
	2024	2023
Purchases of Stock in Trade	996.14	1,656.58
Average Trade Payable	410.24	595.71
Trade Payables Turnover Ratio	2.43	2.78
Trade Payables Days	150.00	131.00

Assets

Long-Term Loans and Advances

Long-term loans and advances increased from Rs.15.08 lakhs in FY 2023 to Z36.46 lakhs in FY 2024, reflecting an increase of Rs.21.38 lakhs, or 141.75%. This rise may be attributed to increased security deposit paid for new lease premises.

Inventories

Inventories decreased from Rs.1,286.13 lakhs in FY 2023 to Rs.509.38 lakhs in FY 2024, reflecting a reduction of Rs.776.75 lakhs, or -60.39%. The drop may be due to faster inventory turnover, reduction in slow-moving goods, or realignment of stock levels with demand.

T rade Receivables

Trade receivables increased from Rs.235.48 lakhs in FY 2023 to Rs.476.94 lakhs in FY 2024, representing a rise of Rs.241.46 lakhs, or 102.54%. This increase aligns with higher credit sales and growth in operations.

Particulars	For the year ended March 3	1,
	2024	2023
Revenue from operations	5,464.94	4,004.18
Trade receivables	894.25	476.94
Average trade receivables	685.60	356.21
Trade Receivables Days	46.00	32.00

SUMMARY OF THE RESULTS OF OPERATION:

The following table sets forth select financial data from restated profit and loss accounts for the financial years ended on 31st March 2025, 31st March 2024 and 31st March 2023 and the components of which are also expressed as a percentage of total income for such periods.

Particulars	March 31, 2025	% of Total Income	March 31, 2024		% of Total Income	March 31, 2023	% of Total Income
Revenue from operations	5,464.94	99.34%	4,004.18		99.74%	2,162.47	99.70%
Other income	36.25	0.66%	10.56		0.26%	6.61	0.30%
Total Income	5,501.19	100.00%	4,014.74		100.00%	2,169.09	100.00%
Expenses
Purchase of stock in trade	2,569.76	46.71%	1,052.76		26.22%	1,875.89	86.48%
Change in Inventories of work in progress, finished goods and Stock in Trade	83.19	1.51%	813.07		20.25%	-609.66	-28.11%
Employee Benefit Expenses	466.83	8.49%	401.75		10.01%	392.45	18.09%
Finance Costs	31.63	0.57%	31.30		0.78%	6.50	0.30%
Depreciation and Amortisation	227.73	4.14%	172.69		4.30%	153.84	7.09%
Other Expenses	658.74	11.97%	615.24		15.32%	447.73	20.64%
Total expenses	4,037.86	73.40%	3,086.81		76.89%	2,266.74	104.50%
Profit/(Loss) Before Exceptional & extraordinary items	1,463.32	26.60%	927.94		23.11%	-97.66	-4.50%
Profit/(Loss) Before Tax	1,463.32	26.60%	927.94		23.11%	-97.66	-4.50%
Tax Expense:
Tax Expense for Current Year	368.65	6.70%	61.57		1.53%	-	0.00%
Deferred Tax	15.29	0.28%	178.47	4.45%		31.81	1.47%
Short/(excess) provision for income tax of earlier year	-	0.00%	-	0.00%		-	0.00%
Net Current Tax Expenses	383.94	6.98%	240.04	5.98%		31.81	1.47%
Profit/(Loss) for the Year	1,079.38	19.62%	687.90	17.13%		-129.46	-5.97%

As certified by our statutory auditor having peer review certificate M/sV K BESWAL & ASSOCIA TES, Chartered Accountant vide their examination report dated Jun 09, 2025.

For the financial year ended 31st March 2025, we generated a total income of INR 5,501.19 Lakhs, EBITDA (operating profit) of INR 1,686.43 Lakhs and net profit after tax of INR 1,079.38Lakhs. In the Fiscal 2024 and Fiscal 2023 we generated total income of 4,014.74 Lakhs and 2,169.09 Lakhs respectively, EBITDA (operating profit) of ^1121.36 Lakhs and Rs.56.07 Lakhs respectively and net profit after tax of Rs.687.90lakhs and Rs.(-129.46) Lakhs respectively. We have reported Return on Net Worth of 33.13%, 66.30 % and (37.03) for the Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively Revenue from operations grew from Rs.4,014.74 Lakhs in FY 2023-24 to Rs.5,464.94 Lakhs in FY 2024-25, marking an increase of Rs.1486.45 Lakhs (37.02% for the said period). Correspondingly, Profit after Tax (PAT) surged from Rs.687.90Lakhs to Rs.1,079.38Lakhs, as per the restated financial statements. This growth was primarily driven by higher revenue from operations. Additionally, the company implemented cost-reduction measures.

MAIN COMPONENTS OF PROFIT AND LOSS ACCOUNT Total Income

Our total income comprises of Revenue from Operations and Other Income.

Revenuefrom Operations

The Company is primarily engaged in the manufacturing and export of its Textile and Sauces Food brands, with additional involvement in the trading of various products

Other Income

Our other income primarily comprises interest income on Fix Deposit, commission & Other Misc income.

Expenditure

Our total expenditure primarily consists of Purchase of Stock-in-Trade, Change in Inventories, Employee Benefit Expenses, Other Expenses, Depreciation & Amortisation Expenses and Financial Charges.

Purchase of Stock-in-Trade

The purchase of stock-in-trade refers to the acquisition of goods or products that is acquired for the purpose of selling them in the ordinary course of business.

Change in Inventories

"Change in Inventories" refers to the difference between the opening and closing balances of inventory within a specific period.

Employee Benefit Expenses

Employee benefit expenses comprise of Directors Remuneration, Salaries, Wages & Bonus, ESI & PF Contributions and Provision for Gratuity.

Other Expenses

During the financial year, the Company incurred various operational and administrative expenses essential for the smooth execution of projects and ongoing business operations. These other expenses include a wide range of cost heads such as Rent, Rates & Taxes, Business Promotion and Advertising, Office Expenses, Printing & Stationery, Professional Fees, Travelling Expenses, and Electricity Charges. Further, expenses were also recorded under Interest on MSME, Repairs and Maintenance, Mobile & Internet Charges, Postage & Courier Services, Software Licensing and Certifications, Insurance, and Foreign Exchange Gain/Loss. Additionally, the Company incurred costs towards Commission & Brokerage, Audit Fees, Labour Loading & Unloading Charges, Miscellaneous Expenses, and Sundry Balances Written Off.

Depreciation and Amortization Expenses

Depreciation and Amortization Expenses comprises of depreciation on the Tangible/Intangible assets of our company. Financial Charges

Financial Charges comprises of Interest on Secured Loan, Interest On Unsecured Loan and Loan Processing charges.

Provision for Taxation

The provision for current tax is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.

COMPARISON OF THE FINANCIAL PERFORMANCE OF FISCAL 2025 WITH FISCAL 2024 Total Income:

The company achieved a total income of Rs.5,501.19 lakhs, representing a substantial increase of approximately 37.02% over the previous years total income of Rs.4,014.74 lakhs. This remarkable growth was driven by the expansion in domestic manufacturing activities, where the company enhanced its production capacity and broadened its product offerings. Additionally, trading operations expanded significantly due to a wider market outreach and on boarding of new clients. A substantial rise in service income, especially from domestic projects, indicated greater diversification of revenue streams. The company also benefitted from improved operational efficiency, timely execution of contracts, and a more focused approach to business development through strategic partnerships and enhanced brand visibility.

Revenue from Operations:

Revenue from Operation Rose to Rs.5,464.94 lakhs in FY 2025 from Rs.4,004.18 lakhs in FY 2024, registering an impressive increase of 36.48%. This growth was led by a rise in domestic manufacturing sales, which reached Rs.1,400.14 lakhs in FY 2025 compared to Rs.854.42 lakhs in the previous year, reflecting expanded capacity and the launch of new products. Trading revenues also increased to Rs.2,791.87 lakhs from Rs.2,200.36 lakhs, while the gated market segment contributed Rs.762.70 lakhs, up from Rs.685.05 lakhs. Furthermore, service income surged to Rs.510.23 lakhs from Rs.264.35 lakhs, driven by successful project executions and increased billing from ongoing contracts.

Other Income:

For FY 2025 stood at Rs.36.25 lakhs, showing a steep rise of 243.28% over Rs.10.56 lakhs in FY 2024. The growth was attributed to a significant jump in commission income, which increased to Rs.15.01 lakhs from a negligible Rs.0.03 lakhs, due to higher earnings from agency and brokerage activities. Additionally, the company reversed MSME interest provisions worth Rs.4.55 lakhs, and other miscellaneous income rose to Rs.14.44 lakhs from Rs.1.56 lakhs, reflecting one-time recoveries and sundry receipts.

Total Expenses:

For FY 2025 were Rs.4,037.86 lakhs, up 30.81% from Rs.3,086.81 lakhs in FY 2024. The primary reason for this increase was the sharp rise in the cost of materials consumed, which grew to Rs.2,569.76 lakhs from Rs.1,052.76 lakhs, driven by increased procurement to meet higher production demand. Employee benefit expenses also rose to Rs.466.83 lakhs from Rs.401.75 lakhs, due to workforce expansion, salary revisions, and higher welfare costs. Depreciation and amortization expenses climbed to Rs.227.73 lakhs from Rs.172.69 lakhs, owing to the capitalization of new property, plant, and equipment, as well as intangibles. Other operating expenses grew moderately to Rs.658.74 lakhs from Rs.615.24 lakhs, reflecting increased expenditure on rent, marketing, professional fees, and other day-to-day operations. Finance costs increased slightly to ^31.63 lakhs from ^31.30 lakhs, mainly due to incremental interest on borrowings raised for working capital and capital expenditures.

Purchases:

Purchases for the financial year 2024-25 amounted to Rs.3,102.71 lakhs, as compared to Rs.996.14 lakhs in FY 2023-24, representing an increase of 211.47%. This sharp rise was driven by higher raw-material procurements to support the expanded scale of manufacturing operations.

Changes in Inventories of Finished Goods, WIP & Stock in Trade:

For FY 2024-25, the net increase in inventories of finished goods, work in progress, and stock in trade was Rs.83.19 lakhs, compared with Rs.813.07 lakhs in FY 2023-24, reflecting an 89.77% reduction; this decline was driven by stronger sales off take of finished goods, accelerated conversion of WIP into saleable output, and tighter better inventory management that prevented the build-up of excess stock.

Employee benefits expense:

For FY 2024-25, employee benefit expense stood at Rs.466.83 lakhs, up from Rs.401.75 lakhs in FY 2023-24, representing an increase of 16.20%, which was primarily driven by salary revisions and increments, expansion of the workforce to support higher operational volumes, increased provisions for gratuity and staff welfare, and higher performance linked incentives.

Finance costs:

For FY 2024-25, finance costs amounted to Rs.31.63 lakhs, compared with ^31.30 lakhs in FY 2023-24, representing a modest increase of 1.05%, which was chiefly due to incremental interest on short term and long term borrowings taken to fund working capital requirements and capital expenditures.

Depreciation and Amortization Expenses:

For FY 2024-25, depreciation and amortization expense amounted to Rs.227.73 lakhs, up from Rs.172.69 lakhs in FY 2023-24, representing an increase of 31.85%, primarily due to the capitalization of new property, plant and equipment, as well as higher amortization of newly recognized intangible assets (including brand-related intangibles and software) commissioned during the year

Other Expenses:

For FY 2024-25, other expenses totalled Rs.658.74 lakhs, up from Rs.615.24 lakhs in FY 2023-24, representing an increase of 7.08%, which was mainly driven by higher rent, rate & taxes to support expanded facilities; increased commission & brokerage on higher sales volumes; elevated postage & courier charges reflecting greater dispatch activity; higher software and certification costs; and incremental spending on business promotion, professional fees, repairs & maintenance, and miscellaneous sundry expenses as the Company scaled up operations.

Restated Profit/ (Loss) before tax:

For FY 2024-25, the restated profit before tax stood at Rs.1,463.32 lakhs, as against Rs.927.94 lakhs in FY 2023-24, marking an increase of Rs.535.38 lakhs or 57.70%. This significant growth was driven by higher revenue from operations, improved gross margins, and better cost efficiency, despite a moderate rise in total expenses associated with the expansion of business activities.

Restated Profit/ (Loss) after tax:

For FY 2024-25, the restated profit after tax stood at Rs.1,079.38 lakhs, compared to Rs.687.90 lakhs in FY 2023-24, representing an increase of Rs.391.48 lakhs or 56.91%. This improvement was primarily attributable to higher operating income, effective cost management, and stable finance costs, which together contributed to stronger net profitability for the year.

COMPARISON OF THE FINANCIAL PERFORMANCE OF FISCAL 2024 WITH FISCAL 2023 Total Income:

Restated Total Income for the financial year 2023-24 stood at Rs.4,014.74 lakhs, as compared to Rs.2,169.09 lakhs in 2022-23. This represents a year-on-year increase of Rs.1,845.65 lakhs, or 85.09%

Revenue from Operations:

Revenue from Operation Rose to Rs.4,004.18 lakhs in FY 2024 from Rs.2162.4 lakhs in FY 2023, registering an impressive increase of 85.17%. This growth was led by a rise in domestic manufacturing sales, which reached. Own Brand Revenue more than doubled (+177.79%) due to enhanced in-house manufacturing and stronger demand for proprietary products. Trading Revenue grew by 79.95%, reflecting broader distribution, diversified sourcing, and strong client orders. Service Income grew by 5.13%, as the focus shifted toward product-based revenue streams. Export Sales contributed Rs.237.84 lakhs in FY 202324, highlighting the Companys successful entry into international markets (not present in FY 2022-23).

Other Income:

Other income for FY 2023-24 stood at Rs.10.56 lakhs, as against Rs.6.61 lakhs in FY 2022-23, marking a growth of 59.76%.The increase was primarily driven by: A sharp rise in interest income to Rs.8.98 lakhs from Rs.0.54 lakhs, due to better fund deployment and interest earned on deposits.

Total Expenses:

Total Expenses for the financial year 2023-24 stood at Rs.3,086.81 lakhs, as compared to Rs.2,266.74 lakhs in FY 2022-23, marking a significant increase of Rs.820.07 lakhs or 36.19%. This growth in expenses was primarily attributed to a higher cost of materials consumed, driven by increased project execution and greater production volumes. Employee benefit expenses also rose due to expansion of the workforce and the implementation of annual salary revisions. In addition, depreciation and amortization expenses increased on account of new additions to both fixed assets and intangible assets. Other expenses, including administrative, operational, and project-related costs, grew in tandem with the companys expanding scale of operations and overall business growth.

Purchases:

During the financial year 2023-24, the Company recorded purchases of stock-in-trade amounting to Rs.996.14 lakhs, as compared to Rs.1656.58 lakhs in 2022-23, reflecting a marginal increase of Rs.5.06 lakhs or 0.51%. Despite the substantial growth in revenue, the purchases remained largely stable, indicating improved procurement efficiency and better inventory

management. The minimal increase suggests a strategic shift towards greater reliance on in-house manufacturing and cost optimization in sourcing, which contributed to maintaining profitability while scaling operations.

Employee benefits expense:

During the financial year 2023-24, the Company incurred employee benefits expense amounting to Rs.401.75 lakhs, as compared to Rs.392.45 lakhs in the previous financial year 2022-23, reflecting a growth of 31.13%. The increase was primarily attributable to annual salary revisions, performance-linked incentives, and a strategic expansion in the workforce to support the Companys growing operations. Additionally, higher provisions for gratuity and employee welfare expenses contributed to the overall increase. This upward trend underscores the Companys continued investment in talent and human capital aligned with its business growth trajectory.

Finance costs:

During the financial year 2023-24, the Companys finance costs stood at ^31.30 lakhs, marginally higher than Rs.6.50 lakhs incurred in 2022-23, reflecting an increase of 10.37%. This rise was primarily due to higher utilization of working capital facilities and short-term borrowings to support the increased scale of operations. Despite the growth in business volumes, the finance costs remained well-managed, indicating prudent financial planning and effective cost control on interest-bearing obligations.

Depreciation and Amortization Expenses:

During the financial year 2023-24, the Company incurred depreciation and amortization expenses of Rs.172.69 lakhs, compared to Rs.153.84 lakhs in 2022-23, representing an increase of 39.51%. This rise was primarily due to capitalization of new property, plant and equipment as well as intangible assets, including software and brand-related assets, in line with the expansion of operations. The increase reflects the Companys ongoing investments in infrastructure and digital assets to support future scalability and operational efficiency.

Other Expenses:

During the financial year 2023-24, the Company incurred other expenses amounting to Rs.615.24 lakhs, as against Rs.484.95 lakhs in 2022-23, registering an increase of 26.84%. This increase was primarily driven by higher spending on rent, rates and taxes, business promotion, professional fees, and travel-related costs, in line with the overall growth in business operations. Additionally, increased repairs and maintenance, utility charges, and software and certification expenses contributed to the rise. The escalation in other expenses reflects the Companys continued focus on expanding operational capabilities while maintaining compliance and service standards.

Restated Profit/ (Loss) before tax:

Profit before tax for FY 2023-24 stood at Rs.927.94 lakhs, as compared to Rs.(97.66) lakhs in FY 2022-23.This reflects a year- on-year increase of Rs.1025.60 lakhs, or 1050.17% The growth was primarily due to: Substantial increase in revenue from operations, supported by expanded business activity. Improved gross margins from better cost efficiencies and project execution. Controlled growth in operating and finance costs, despite a higher scale of operations.

Restated Profit/ (Loss) after tax:

Profit after tax for FY 2023-24 stood at Rs.687.90 lakhs, compared to Rs.(129.46) lakhs in FY 2022-23.This represents a growth of Rs.817.36 lakhs, or 631.36% year-on-year. The increase was primarily driven by: Strong revenue growth from core business segments (own brand and trading) Improved gross margins through efficient procurement and execution. Better operational cost control despite the rise in overall expenses.

Cash Flow Data based on our Restated Financial Statements

The following table presents our cash flow data for the years ended March 31, 2025, 2024 and 2023 from our Restated Financial Statements

Particulars	March 31, 2025	March 31, 2024	March 31, 2023
Profit before tax	1463.32	927.94	(97.66)
Operating Profit Before Working Capital Changes	1722.67	1131.93	62.68
Income taxes paid	(142.55)	(61.56	0.00
Net Cash from Operating Activities	473.80	650.29	312.08
Net Cash from Investing Activities	(991.18)	(656.55)	(71.89)
Net Cash from Financing Activities	1738.03	29.89	(283.79)

Cash Flows from Operating Activities For the year ended March 31, 2025,

The company reported a net cash outflow of Rs.473.80lakhs from operating activities. Profit before tax of Rs.1463.32 lakhs and operating profit before working capital changes of Rs.1722.67 lakhs, the business experienced significant working capital pressure. This was largely due to a substantial increase in current assets such as inventories, trade receivables, and loans & advances. Additionally, higher income tax payments amounting to Rs.142.55lakhs further reduced the operating cash flow. Overall, the increase in operational requirements outpaced the company s profitability, resulting in negative cash flow.

For the year ended March 31, 2024,

The company generated a positive cash flow from operating activities amounting to Rs.650.29 lakhs. With a profit before tax of Rs.927.94 lakhs and operating profit before working capital changes of ^1131.93 lakhs, the company benefited from more efficient working capital management. Lower income tax payments of just Rs.61.56 lakhs and a reduction in loans and advances helped in improving liquidity. This year reflected an optimal balance between profitability and operational efficiency.

For the year ended March 31, 2023,

The company recorded a modest net cash inflow of Rs.312.08 lakhs from operating activities. Although loss before tax was (Rs.97.66) lakhs, the operating profit before working capital changes stood at Rs.62.68 lakhs. The low scale of operations resulted in minimal working capital changes. While the business operated on a smaller scale, it maintained a stable cash position from core operations.

Cash Flowsfrom Investment Activities

For the year ended March 31, 2025,

The company reported a net cash outflow of Rs.991.18 lakhs from investing activities. This was primarily due to the purchase of property, plant, and equipment along with intangible assets amounting to Rs.990.48 lakhs. However, the impact of this capital expenditure was partially offset by the realization of long-term loans amounting to Rs.0.70 lakhs to security deposit for leased warehouse premises.

For the year ended March 31, 2024,

The company reported a net cash outflow of Rs.656.55 lakhs from investing activities. This was primarily due to the purchase of property, plant, and equipment along with intangible assets amounting to Rs.635.17 lakhs. However, the impact of this capital expenditure was partially offset by the realization of long-term loans amounting to Rs.21.37 to security Deposit of leased office premises.

For the year ended March 31, 2023,

The company reported a net cash outflow of Rs.71.89 lakhs from investing activities. This was primarily due to the purchase of property, plant, and equipment along with intangible assets amounting to Rs.58.94 lakhs. However, the impact of this capital expenditure was partially offset by the realization of long-term loans amounting to Rs.12.95 paid to security Deposit of leased office premises

Cash Flows from Financing Activities For the year ended March 31, 2025,

The company reported a net cash outflow of Rs.1738.08 lakhs from financing activities. This was primarily due to the repayment of long-term borrowings amounting to Rs.284.57 lakhs and interest payments of ^31.63 lakhs. Although the company raised Rs.905.11 lakhs through short-term borrowings during the year, it was not sufficient to offset the overall financing outflows. The interest burden and debt repayments led to a significant cash drain from financing sources. On the inflow side, the company received Rs.1140.79 lakhs from the issue of share capital.

For the year ended March 31, 2024,

The company reported a net cash outflow of Rs.29.89 lakhs from financing activities. This was primarily due to the repayment of long-term borrowings amounting to Rs.123.64 lakhs interest payments of ^31.30 lakhs although the company raised Rs.181.98 lakhs through short-term borrowings during the year.

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

Except as disclosed in the Chapter "Our Business" on page 128, our Company has not announced any new product or service.

7. Seasonality of business

Our business is not subject to seasonality however comparatively more sales are booked in quarter 3^rd and quarter 4^th For further information, see "Industry Overview" and "Our Business" on pages 112 and 128 , respectively.

8. Dependence on single or few customers

Substantial portion of our revenues has been dependent upon few customers. For the fiscal 2025, 2024, 2023, our top ten customers have contributed 66.53%, 77.92%, 81.88% of our revenues respectively. However, our top customers may vary from period to period depending on the demand and thus the composition and revenue generated from these customers might change as we continue to add new customers in normal course of business. Since our business is concentrated among relatively few significant customers, we could experience a reduction in our results of operations, cash flows and liquidity if we lose one or more of these customers or the amount of business, we obtain from them is reduced for any reason, including but not limited on account of any dispute or disqualification. For further details, refer Risk Factor "Our top ten customers contribute majority of our revenues from operations. Any loss of business from one or more of them may adversely affect our revenues and profitability." In our business section beginning on page 128 of this Draft Red Herring Prospectus.

9. Competitive conditions

Competitive conditions are as described under the Chapters "Industry Overview" and "Our Business" beginning on pages 112 and 128 respectively of this Draft Red Herring Prospectus.