You should read the following discussion in conjunction with the Restated Financial Information. The Restated Financial Information has been prepared by our management as required under the SEBIICDR Regulations read with the ICAI Guidance Note. For more information, see Risk Factors - 81. Significant differences exist between Ind AS and other accounting principles, such as U.S. GAAP and IFRS, which may be material to investor s assessments of our financial condition on page 76.
This Draft Red Herring Prospectus also contains forward-looking statements that involve risks, assumptions, estimates and uncertainties. Our actual results could differ materially from those anticipated in these forward looking statements as a result of certain factors, including but not limited to the considerations described below. For details, see Forward-Looking Statements on page 26.
Unless otherwise indicated or the context otherwise requires, the financial information for the Fiscal 2025, Fiscal 2024, and Fiscal 2023, included herein is derived from the Restated Financial Information included in this Draft Red Herring Prospectus. For details, please see Restated Financial Information on page 263. The Restated Financial Information is based on our auditedfinancial statements and is restated in accordance with the Companies Act, 2013, and the SEBI ICDR Regulations. Our financial year ends on March 31 of each year, and references to a particular Fiscal are to the twelve months ended March 31 of that year.
Certain non-GAAP financial measures and certain other statistical information relating to our operations and financial performance have been included in this section and elsewhere in this Draft Red Herring Prospectus. Such non-GAAP financial measures should be read together with the nearest GAAP measure. See Risk Factors - We have included certain Non-GAAP Measures, industry metrics and key performance indicators related to our operations and financial performance in this Draft Red Herring Prospectus that are subject to inherent measurement challenges. These Non-GAAP Measures, industry metrics and key performance indicators may not be comparable with financial, or industry-related statistical information of similar nomenclature computed and presented by other companies. Such supplemental financial and operational information is therefore of limited utility as an analytical tool for investors and there can be no assurance that there will not be any issues, or such tools will be accurate going forward.
The industry-related information contained in this section is derived from the industry titled Assessment of the market for fire protection equipment in India, with focus on fire suppression dated September, 2025 (the CRISIL Report ). We have exclusively commissioned and paid for the CRISIL Report for the purposes of confirming our understanding of the industry exclusively in connection with the Offer. We officially engaged CRISIL in connection with the preparation of the CRISIL Report pursuant to an engagement letter dated May 19, 2025. CRISIL is not, and has not in the past, been engaged or interested in the formation, or promotion, or management, of our Company. Further, it is an independent agency and neither our Company, nor our Directors, Promoters, KMPs, SMPs, and Subsidiaries, nor the BRLMs are a related party to CRISIL as per the definition of related party under the Companies Act, 2013. A copy of the CRISIL Report shall be available on the website of our Company at https://www.hdfire.com/wp-content/uploads/2025/09/Industry-report.pdf from the date of this Draft Red Herring Prospectus until the Bid/Offer Closing Date. Unless otherwise indicated, the industry-related information contained in this section is derived from the CRISIL Report (extracts of which have been appropriately incorporated as part of Industry Overview on page 131).
Overview
OVERVIEW
We are an Indian manufacturer and supplier of fire protection equipment and systems, offering a comprehensive portfolio spanning water, foam, and gas-based fire suppression systems, which are also generally known as fire fighting products. We develop majority of our products in-house with proprietary designs to meet national and international standards, serving high- hazard industrial applications as well as residential and commercial sectors. According to the CRISIL Report, we were the second-largest manufacturer of fire protection equipment and systems in India in terms of operating income (revenue from operations) in Fiscal 2024 and the largest exporter by value (equipment) in Fiscal 2024. We have export sales in more than 90 countries as of Fiscal 2025. With more than three decades of experience, we have established ourselves as a globally recognized and reliable brand.
In the early 1990s, critical fire protection equipment and systems such as deluge valves, alarm valves, and medium velocity water spray nozzles were generally imported, with lack of Indian manufacturers offering high-quality alternatives like UL Listed and FM Approved products (Source: CRISIL Report). Our Company is the first Indian fire protection equipment and systems manufacturer to receive UL Listing for deluge valves (1996) (Source: CRISIL Report). Since the commencement of our business, we have consistently focused on providing locally manufactured fire protection equipment and systems as import- substitutes. We are also the first Indian fire protection equipment and systems manufacturer to receive FM approval for range of products used in low expansion foam system namely foam concentrates, bladder tanks, proportioners, topside discharge
devices and foam water sprinkler discharge devices (Source: CR1SIL Report). Further, we are also the first Indian company focused on fire protection equipment and systems manufacturing to receive ASME U (pressure vessels) stamp certification (Source: CR1S1L Report). With 22 and 87 UL Listed and FM Approved certifications, as per UL product certifications and FM product certifications respectively, we have the highest number of UL Listed and FM Approved product certifications amongst the fire protection equipment focused peers in India as of September 2025 (Source: CR1SIL Report).
Our business was originally carried on under the name H.D. Fire Protect Company, which was established by Harish Dharamshi as a partnership firm on April 27, 1990. Our Company was incorporated on April 24, 1997. Thereafter, on April 1, 2005, our Company acquired H.D. Fire Protect Company, as a going concern along with all its assets and liabilities, and the business was consolidated under a single corporate entity.
As of March 31, 2025, our offerings are spread across 8 product categories, namely - (a) sprinklers, alarm valves and accessories, (b) deluge valves, deluge skids and pre-action systems, (c) foam equipment and suppression systems, (d) monitors and monitor nozzles, (e) systems valves and accessories, (f) water spray nozzles, (g) custom engineered systems, and (h) gas suppression systems, covering a wide spectrum of (a) industrial end use in sectors such as industrials, heavy engineering, aerospace, oil & gas, refining and petrochemicals, power & energy, pharmaceuticals, data centres, warehousing amongst others; and (b) residential and commercial end use in sectors such as hospitality, healthcare, retail, education, banking and warehousing. We are also empanelled with various customers across sectors where we have presence.
We operate two manufacturing facilities in Maharashtra, Jalgaon MIDC and Thane MIDC, spanning a combined area of 8.50 acres. We are also constructing a new production facility and warehouse at Wagle Estate, Thane, and expanding our Jalgaon facility, with one unit for manufacturing and another for a dedicated fire test laboratory, industrial warehouse and R&D centre, all of which are expected to be completed by March 2026. In addition to our in-house production, we also undertake contract manufacturing of off-the-shelf products as well as white labelling to cater to diverse customer requirements. In Fiscal 2025, 2025, we supplied our fire protection equipment and systems to 2,179 and as of March 31, 2025 we have supplied our fire protection equipment and systems across 90 countries, supported by a distributor-led supply chain for international markets and a stockist model for India.
We maintain a strong focus on quality, reflected in the absence of product recalls and a replacement rate of just 0.01% over the past three fiscals. Our R&D initiatives are directed toward next-generation technologies that enhance performance, ensure environmental compliance, and meet global certification standards. We also specialize in custom-engineered fire protection skids tailored to client-specific requirements and are the only Indian manufacturer to offer certain advanced systems, such as a next-generation pre-action system. Our innovation pipeline includes a new deluge valve design which is currently under patent process. As on the date of this DRHP, we hold 3 patents, one each in the United States of America, India and Saudi Arabia for pressure operated fluid valve with configurable diaphragm arrangement and two design registrations in India for diaphragm of fire protection valve , with 2 patent applications also made in UAE, and Turkey.
We have supplied products at some of the key sites including master stream nozzle installations at Indias space launch pad at Sriharikota, fire protection equipment (alarm valve, monitor, master stream nozzle) at Indias largest refinery at Jamnagar, fire protection equipment (drain valve, water flow detectors etc.) for the new Indian parliament building, fire protection systems (deluge valves) at Saudi Aramcos Ras Tanura Sea Island site and fire protection equipment (deluge valves, sprinklers etc.) for
Omans Integrated Power & Water Plant Project (Source: CR1SIL Report). These projects highlight both the global acceptability and trust placed in our equipment and systems.
We are both India focused and export oriented, with a balanced revenue mix across domestic and international markets. The following table sets forth our revenue from operations from domestic and export markets for Fiscal 2025, 2024, and 2023, respectively:
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| Revenue from operations \u2019 ^Rs million) | % of revenue from operations* | Revenue from operations* (Rs million) | % of revenue from operations* | Revenue from operations* (Rs million) | % of revenue from operations* | |
| Domestic revenue | 2,731.69 | 63.76 | 2,465.79 | 66.67 | 2,064.12 | 64.43 |
| Exports revenue | 1,552.62 | 36.24 | 1,232.84 | 33.33 | 1,139.30 | 35.57 |
| Total | 4,284.31 | 100.00 | 3,698.63 | 100.00 | 3,203.42 | 100.00 |
*Revenue from Operations excluding other operating revenue i.e. export incentives and scrap sales
Our key export destinations include UAE, Saudi Arabia, Brazil, Turkey, Malaysia, and Indonesia. The map below details the destinations we export to as on the date of this DRHP:
We are guided by a group of seasoned promoters and accomplished industry professionals whose collective experience forms the foundation of our sustained growth and operational excellence. Harish Narshi Dharamshi, one of our Promoters as well as the Chairman and Managing Director provides strategic leadership and brings over 40 years of experience in the fire protection industry. Similarly, our other Promoters, namely, Miheer Sadanand Ghotikar, Anik Narendra Dharamshi, and Parika Miheer Ghotikar, oversee various business functions and each of them bring over 15 years of experience, respectively, in the fire protection industry.
We have demonstrated strong and consistent financial performance across last 3 fiscals. Our Revenue from Operations stood at Rs3,240.78 million, Rs3,729.53 million, and Rs4,327.99 million for Fiscal 2023, Fiscal 2024, and Fiscal 2025, respectively, reflecting a CAGR of 15.56% over the period. Our Operating EBITDA for the respective years stood at Rs899.41 million, Rs1,066.32 million, and Rs1,380.08 million, translating to Operating EBITDA margins of 27.75%, 28.59%, and 31.89%. Similarly, our PAT was Rs702.25 million in Fiscal 2023, Rs879.20 million in Fiscal 2024, and Rs1,095.46 million in Fiscal 2025, translating to PAT margins of 21.04%, 22.43%, and 24.31%. As of the end of Fiscal 2025, 2024, and 2023, our order book stood at Rs703.45 million, Rs752.92 million, and Rs608.73 million, respectively, providing strong visibility for future growth.
The following table presents certain key performance indicators for the periods indicated:
| KPIs | Unit | As of and for periods | ||
| March 31, 2025 | March 31, 2024 | March 31, 2023 | ||
| Revenue from Operations | Rs in Million | 4,327.99 | 3,729.53 | 3,240.78 |
| Domestic Revenue | Rs in Million | 2,731.69 | 2,465.79 | 2,064.12 |
| Exports Revenue | Rs in Million | 1,552.62 | 1,232.84 | 1,139.30 |
| Operating EBITDA (1) | Rs in Million | 1,380.08 | 1,066.32 | 899.41 |
| Operating EBITDA Margin (2) | % | 31.89% | 28.59% | 27.75% |
| PAT | Rs in Million | 1,095.46 | 879.20 | 702.25 |
| PAT Margin (3) | % | 24.31% | 22.43% | 21.04% |
| RoE (4) | % | 29.59% | 28.41% | 25.29% |
| RoCE (5) | % | 39.64% | 37.61% | 33.59% |
| Fixed Asset Turnover Ratio (6) | Times | 5.18 | 4.86 | 5.07 |
| Inventory Days (7) | Days | 77 | 85 | 97 |
| Trade Receivable Days (8) | Days | 45 | 48 | 47 |
| Trade Payable Days (9) | Days | 39 | 37 | 35 |
| Cash Conversion Cycle (10) | Days | 83 | 96 | 110 |
| Number of Customers | No. of Customers | 2,179 | 2,114 | 1,922 |
Notes:
(1) Operating EBITDA is calculated as restated profit before tax plus finance costs, depreciation and amortization expense less other income.
(2) Operating EBITDA margin is calculated as Operating EBITDA divided by Revenue from Operations
(3) PAT Margin is calculated as profit after tax (PAT) as a percentage of Total Income.
(4) Return on equity (RoE) is calculated as PAT divided by Average Tangible Net worth. Tangible Net worth is calculated as Total Equity subtracted by Intangible Assets
(5) Return on capital employed (RoCE) is calculated as earnings before interest and tax (EBIT) divided by the Average capital employed. EBIT is calculated as the restated profit after tax for the year/ period plus total tax expense plus finance costs and capital employed is calculated as the sum of Tangible Net worth and total borrowings
(6) Fixed Asset Turnover Ratio is calculated as Revenue from Operations divided by Average Property, plant and equipment, Capital work-in-progress and Right-to-use assets.
(7) Inventory days is calculated as average inventory divided by Cost of Sales, multiplied by 365. Cost of Sales is calculated as total expenses less Finance cost and Depreciation and amortization
(8) Trade Receivable days is calculated as average trade receivable divided by Revenue from Operations, multiplied by 365
(9) Trade payable days is calculated as average trade payable divided by Cost of Goods Sold (COGS), multiplied by 365. COGS is calculated as the sum of Cost of materials consumed, Purchase of stock-in-trade and change in inventories of finished goods, stock-in-trade and work-in-progress.
(10) Cash conversion cycle is calculated as the sum of trade receivable days and inventory days, less trade payable days
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION
In our opinion, the following factors have a significant influence on the operational and financial performance:
Dependence on new projects and order book prediction
Our business is dependent on new capital project developments across diverse sectors, including infrastructure, industrial manufacturing, oil and gas, power, warehousing, and commercial construction. Given that our fire protection equipment and systems are long-life assets with an average service life of 15-20 years, recurring demand from existing installations is generally limited to spare parts, replacements, and system expansions. Consequently, the majority of our product demand is driven by new construction and greenfield developments.
Our Order Book as at a particular date is calculated based on the aggregate contract value of our confirmed purchase orders as of such date reduced by the value of goods and services invoiced by us until such date (Order Book). The table below sets forth the size of our Order Book as of March 31, 2025, 2024, and 2023:
| Particulars | As of March 31, 2025 (in Rs million) | As of March 31, 2024 (in Rs million) | As of March 31, 2023 (in Rs million) |
| Order Book | 703.45 | 752.92 | 608.73 |
We cater to small and mid-sized projects, which typically follow more predictable procurement and execution schedules. However, larger and high-value projects, such as oil terminals, refineries, large warehouses, airports, and industrial parks, are often subject to uncertainties related to site readiness, regulatory approvals, or modifications in project scope. In such cases, even technically confirmed orders may face delays, which can subsequently impact delivery timelines and revenue recognition.
While it reflects the business we expect to execute in the foreseeable future, it is not a guarantee of future operating performance or financial results. Our ability to convert Order Book into revenue is subject to multiple factors, including timely execution, customer satisfaction, fulfilment of contractual obligations, and timely payment by customers.
Customer relationships, supply terms, and pricing dynamics
Our business is primarily based on short-term purchase orders or delivery schedules, and we do not typically enter into longterm or committed volume agreements with our customers, nor do we have exclusive arrangements with them.
The table below sets forth the revenue derived from repeat customers and new customers for the periods indicated:
| Particular | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 | |||
| Amount (Rs million)* | Percentage of revenue from operations* (%) | Amount (Rs million)* | Percentage of revenue from operations* (%) | Amount (Rs million)* | Percentage of revenue from operations* (%) | |
| Revenue from repeat customers | 3,697.45 | 86.30 | 3,256.62 | 88.05 | 2,754.77 | 85.99 |
| Revenue from new customers | 586.86 | 13.70 | 442.01 | 11.95 | 448.66 | 14.01 |
| Revenue from operations | 4,284.31 | 100.00 | 3,698.63 | 100.00 | 3,203.43 | 100.00 |
*Revenue from Operations excluding other operating revenue i.e. export incentives and scrap sales
Our ability to secure orders is strongly influenced by our relationships with fire protection contracting companies, project consultants, engineering, procurement and construction (EPC) contractors, system integrators, and end-users. These stakeholders play a decisive role in product selection, specification approvals, and brand recommendations. In many projects, particularly within highly regulated sectors, the list of approved vendors is finalised at the design stage, after which product substitution becomes difficult. Consequently, early engagement with project stakeholders during the design phase is critical to our success.
Commercial terms, including pricing, delivery timelines, warranty support, and credit conditions, also play a significant role in winning contracts. In competitive tenders or high-volume orders, aggressive pricing by global competitors can exert downward pressure on our margins. Therefore, our ability to optimise costs, nurture relationships, and deliver a competitive yet value- driven proposition remains essential.
Raw material price volatility
Our production processes depend on the uninterrupted supply and affordability of specific primary raw materials, namely ductile iron, cast iron and cast steel castings, which are integral to the functionality and quality of our fire protection equipment and systems, from multiple vendors across various geographies. While our diversified sourcing approach reduces dependence on any single supplier, disruptions in the availability, quality, or pricing of ductile iron castings could adversely impact our production schedules and operational efficiency.
Raw materials represent a substantial component of our cost structure. Our primary inputs include pig iron, copper (impacting brass and bronze components), stainless steel, mild steel, rubber, and other related materials. The prices of these commodities are subject to frequent fluctuations driven by international market trends, global supply-demand dynamics, and currency volatility.
A significant portion of our raw materials is sourced from our top 10 suppliers. To mitigate supply disruption risks, we maintains a minimum raw material inventory of 45 to 90 days, and supplier quotations are typically valid for 45 days. For more details on risks relating to supplier concentration please see Risk Factors - 3. As of Fiscals 2025, 2024 and 2023, our top 10 suppliers contributed to 42.90%, 35.59%, and 40.97% of the total expenses, respectively. We rely on a limited number of third-party suppliers to meet our raw material and contract manufactured goods requirements, and we do not have any long-term purchase agreements or firm commitments with our suppliers. As a result, any loss of or reduced supportfrom one or more such suppliers could adversely impact our business, results of operations, and financial condition on page 31.
We have historically sourced raw materials as well as contract manufactured products from suppliers outside India. The following table sets forth the breakup of our cost of raw materials and contract manufactured products imported and procured domestically, for the periods indicated:
| Particular | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| Amount (in Rs million) | As a % of the total raw material expense | Amount (in Rs million) | As a % of the total raw material expense | Amount (in Rs million) | As a % of the total raw material expense | |
| Domestic raw material cost | 1,073.70 | 47.53 | 901.88 | 49.37 | 972.82 | 52.50 |
| Imported raw material cost | 182.23 | 8.07 | 116.59 | 6.38 | 113.27 | 6.11 |
| Domestic contract manufactured cost | 137.87 | 6.10 | 95.86 | 5.25 | 78.52 | 4.24 |
| Imported contract manufactured cost | 865.13 | 38.30 | 712.54 | 39.00 | 688.38 | 37.15 |
Our primary raw materials include bronze ingots, brass rod hexes, C.S. plates, angle valve, MV nozzle housing brass, among others. The table below details the breakup of the cost of each of these raw materials against the total cost of raw materials consumed:
| Particular | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| Amount (in Rs million) | As a % of the total raw material expense | Amount (in Rs million) | As a % of the total raw material expense | Amount (in Rs million) | As a % of the total raw material expense | |
| Bronze Ingots | 47.19 | 3.76 | 53.94 | 5.30 | 40.96 | 3.77 |
| Brass Rod Hex 30.5 mm | 17.62 | 1.40 | 14.00 | 1.37 | 11.29 | 1.04 |
| C.S. Plate 6 mm | 22.36 | 1.78 | 15.62 | 1.53 | 8.76 | 0.81 |
| Angle Valve | 45.60 | 3.63 | 23.87 | 2.34 | 38.47 | 3.54 |
| MV Nozzle Housing Brass | 26.30 | 2.09 | 32.53 | 3.19 | 29.23 | 2.69 |
| Others* | 1,096.86 | 87.33 | 878.51 | 86.26 | 957.39 | 88.15 |
| Total cost of raw materials consumed | 1,255.93 | 100.00 | 1,018.47 | 100 | 1,086.10 | 100.00 |
*Others includes casting made from cast iron, ductile iron, pipes, sheets, etc
The table below sets forth the change in price for our primary raw materials for the past three Fiscals:
| Particulars | Price as on March 31, 2025 (Rs/Kg) | Change in price year-on-year | Price as on March 31, 2024(Rs/Kg) | Change in price year-on-year | Price as on March 31, 2023(Rs/Kg) | Change in price year on year |
| Bronze Ingots | 730 | 12.30% | 650 | 3.18% | 630 | N/A |
| Brass Rod Hex 30.5 mm | 653 | 7.40% | 608 | -2.25% | 622 | N/A |
| C.S. Plate 6 mm | 64 | -7.25% | 69 | -15.85% | 82 | N/A |
For more details on the risks relating to raw material price volatility see Risk Factors - 4. Any disruption in the availability, timely delivery, or price volatility of raw materials and contract manufactured goods may adversely affect our business, financial condition, and results of operations on page 32.
To mitigate these risks, we maintain three to four months of inventory and foster long-term relationships with reliable suppliers. However, price movements beyond a certain threshold can materially impact profitability, particularly under fixed-price contracts. For instance, a sharp increase in copper prices directly raises production costs for nozzles, valves, and monitors manufactured from brass or bronze. When customer pricing has already been finalised, absorbing such cost increases becomes challenging. In such situations, our ability to respond swiftly, adapt procurement strategies, and optimise sourcing plays a critical role in safeguarding margins.
Exposure to global economic conditions and trade relationships
Our international business accounts for approximately 30-40% of revenue from operations and extends across multiple geographies. Performance in export markets is influenced by global capital expenditure trends, industrial growth cycles, and macroeconomic conditions in key regions such as the Middle East, Southeast Asia, Europe, and Africa. A significant portion of our international customers operate in infrastructure, oil and gas, and logistics sectors, industries that are inherently sensitive to geopolitical developments, regulatory changes, and funding constraints.
We operate in a competitive environment that includes multinational corporations (MNCs) in both domestic and international markets. These companies often benefit from strong global branding, extensive reference projects, and regional warehousing capabilities. For instance, in projects such as international data centres in India, product approvals are governed by global standards and customer-specific compliance protocols. Similarly, in the Middle East, many government projects require Civil Defence approval, which entails product listing and adherence to local fire safety regulations. Sustaining our relevance in such scenarios demands continuous engagement, technical agility, and strict alignment with customer documentation and standards.
The table below sets out the details of our revenue from customers with geographical location outside India:
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Revenue from operations (in Rs million)* | 4,284.31 | 3,698.63 | 3,203.42 |
| Revenue from outside India (in Rs million) | 1,552.62 | 1,232.84 | 1,139.30 |
| Revenue from outside India as a % of revenue from operations* | 36.24 | 33.33 | 35.57 |
*Revenue from Operations excluding other operating revenue i.e. export incentives and scrap sales
The table below sets forth the breakdown of our income from sale of goods across geographic markets, as a percentage of our revenue from operations in the last three Fiscals:
| Name of the Country | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| Revenue from operations* (f in million) | % of revenue from operations* | Revenue from operations* (f in million) | % of revenue from operations* | Revenue from operations* (f in million) | % of revenue from operations* | |
| India | 2,731.69 | 63.76 | 2,465.79 | 66.67 | 2,064.12 | 64.43 |
| Middle East | 637.06 | 14.87 | 565.15 | 15.28 | 596.65 | 18.63 |
| Rest of Asia | 532.66 | 12.43 | 341.47 | 9.23 | 287.39 | 8.97 |
| South America | 130.11 | 3.04 | 91.72 | 2.48 | 122.53 | 3.82 |
| Europe | 124.60 | 2.91 | 89.07 | 2.41 | 56.57 | 1.77 |
| North America | 67.85 | 1.58 | 70.09 | 1.90 | 27.95 | 0.87 |
| Africa | 54.21 | 1.27 | 71.35 | 1.93 | 42.52 | 1.33 |
| Oceania | 6.13 | 0.14 | 3.98 | 0.11 | 5.69 | 0.18 |
| Total | 4,284.31 | 100.00 | 3,698.63 | 100.00 | 3,203.42 | 100.00 |
*Revenue from Operations excluding other operating revenue i.e. export incentives and scrap sales
Despite our global presence, the success of our products in different geographies remains inherently unpredictable. A product that performs well in one region may fail to generate traction in another, due to variations in fire safety norms, climate, end-use industries, price sensitivity, and customer preferences. Product acceptance varies across geographies, influenced by local regulatory frameworks and market preferences. For instance, AR-SFFF foam systems are mandated in certain markets where the use of fluorinated surfactants is being phased out or prohibited.
India s diplomatic relations and trade policies with individual countries further shape our international operations. Any imposition of import restrictions, sanctions, or changes in bilateral agreements can materially impact our ability to conduct business in these markets.
Brand development and marketing investments
As a specialist in life-saving fire protection systems, brand reputation and customer trust are central to our success. While we have built a strong presence in both domestic and export markets, maintaining and expanding this presence requires consistent investment in brand-building and customer outreach. Our participation in global exhibitions, industry seminars, technical webinars, and digital platforms helps us stay visible and relevant in a competitive market.
Our Company extensively invests in the marketing and promotion of our brand and products, both in India and overseas. The table below details our marketing expense over Fiscal 2025, Fiscal 2024, and Fiscal 2023:
| Particular | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| Amount (Rs million) | Percentage of Revenue from Operations (%) | Amount (Rs million) | Percentage of Revenue from Operations (%) | Amount (Rs million) | Percentage of Revenue from Operations (%) | |
| Marketing expenses | 40.25 | 0.93 | 37.03 | 0.99 | 28.97 | 0.89 |
Our branding and marketing activities include participation in industry exhibitions and trade shows (both domestic and international), advertising through print media (catalogues, brochures, and trade magazines), digital marketing through email campaigns, LinkedIn and technical blogs, and direct marketing to consultants and EPC contractors.
Marketing activities are carried out by the in-house team in coordination with third-party marketing and creative agencies. These agencies primarily assist in managing our digital presence across platforms such as Facebook, LinkedIn, Instagram, and YouTube.
For our international markets, we rely on a marketing strategy that includes participation in various fire protection exhibitions, in collaboration with distributors, and targeted campaigns across digital platforms and trade media. These initiatives collectively play a key role in strengthening and sustaining our brand presence across export geographies.
These initiatives also help in showcasing new product launches, technical upgrades, and certifications. However, they involve ongoing expenditure which can influence short-term margins. We continuously assess the return on these investments and align them with our strategic focus on customer acquisition, consultant engagement, and international growth.
Order Book influenced by product approvals, brand strength, and compliance capabilities
Our order acquisition is strengthened by our ability to meet international and project-specific compliance requirements. Over the years, we have built a wide portfolio of internationally certified and approved products. These certifications are critical for participation in projects that demand high compliance and traceability.
Our technical team consistently monitors updates in codes and fire safety standards in India and overseas. We also proactively adapt our designs and testing procedures to meet revised requirements. This is essential to remain eligible for participation in technically demanding and time-sensitive projects. For instance, in high-security projects like hyperscale data centres, oil refineries, or metro stations, the pre-qualification requirements can be extremely specific and often evolve based on the latest global trends in fire protection engineering.
Although these strengths improve our chances of securing new orders, the actual conversion of leads into confirmed business continues to depend on multiple external variables. These include customer project timelines, budget approvals, logistics, and site readiness, all of which must align before revenue can be recognised.
These are some of the key factors that significantly influence our operational and financial performance. While we actively manage these aspects through strategic planning and ongoing improvements, various other internal and external elements may also affect our results from time to time.
Material Accounting Policies to the Restated Financial Information 1. Company Overview and Material Accounting Policies:
A. Corporate Information
HD Fire Protect Limited (formerly HD Fire Protect Private Limited) ( our Company ) is a Public Limited Company incorporated in India having its registered office at Mumbai, Maharashtra and manufacturing facility at Jalgaon and Thane, Maharashtra, India. Our Company is primarily engaged in the business of manufacturing and trading of various Fire Fighting Equipment. Our Company sells its products across India and international markets.
B. Statement of Compliance and Basis of Preparation
(i) Basis of Preparation
The Restated Financial Information have been prepared in accordance with Indian Accounting Standards ( Ind AS ) as notified under the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter, the relevant provisions of the Companies Act, 2013 ( the Act ) as applicable. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except if compliance with other statutory promulgations require a different treatment.
(ii) Statement of Compliance
The Restated Financial Information comprise the Restated Statement of Assets and Liabilities as at March 31, 2025, March 31, 2024 and March 31, 2023; the related Restated Statement of Profit and Loss (including Other Comprehensive Income), the Restated Statement of Changes in Equity, and the Restated Statement of Cash Flows for the year ended March 31, 2025, March 31, 2024 and March 31, 2023 and the material accounting policies and Restated Other Financial Information (together referred to as Restated Financial Information).
The Restated Financial Information have been prepared on a going concern basis on the basis of relevant Ind AS that are effective as at March 31, 2025. These restated financial information have been approved by the Board of Directors on September 9, 2025.
The Restated financial information comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act), Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and other relevant provisions of the Act.
These Restated Financial Information have been prepared by the management as required under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended issued by the Securities and Exchange Board of India (SEBI), in pursuance of the Securities and Exchange Board of India Act, 1992, for the purpose of inclusion in the Draft Red Herring Prospectus in connection with the proposed initial public offering of equity shares of our Company comprising an offer for sale of equity Shares held by the Selling shareholders (the Offer), prepared by the in terms of the requirements of:
- Section 26 of Part I of Chapter III of the Companies Act, 2013 (the Act);
- The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (ICDR Regulations); and
- The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India as amended from time to time (the Guidance Note)
The Restated Financial Information has been compiled by our Company from Audited Financial Statements of our Company as at and for the years ended March 31, 2025 ,March 31, 2024 and March 31, 2023 prepared in accordance with Indian Accounting Standard (referred to Ind AS ) as prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India which has been approved by the Board of Directors at their meeting held on July 10, 2025 , August 20, 2024 and September 8, 2023 respectively.
The accounting policies have been consistently applied by our Company in preparation of the Restated Financial Information and are consistent with those adopted in the preparation of financial statements for the year ended 31 March, 2025. This Restated Financial Information does not reflect the effects of events that occurred subsequent to the respective dates of board meeting held to approve and adopt the Audited Ind AS Financial Statements.
The Restated Financial Information have been prepared so as to contain information/disclosures and incorporating adjustments set out below in accordance with the SEBI ICDR Regulations:
a. Adjustments to the profits or losses of the earlier periods and of the period in which the change in the accounting policy has taken place, recomputed to reflect what the profits or losses of those periods would have been if a uniform accounting policy was followed in each of these periods, if any;
b. Adjustments for reclassification of the corresponding items of income, expenses, assets and liabilities, in order to bring them in line with the groupings as per the Restated Financial Information of our Company for the year ended March 31, 2025 and the requirements of the SEBI ICDR Regulations, if any;
c. The resultant impact of tax due to the aforesaid adjustments, if any.
d. do not require any adjustments for modifications as there is no modification in the underlying audit reports.
(iii) Basis of Preparation and presentation
Basis of Preparation:
The Restated financial information have been prepared on a historical cost basis, except the following assets and liabilities which have been measured at fair value
• Certain financial assets and liabilities (refer accounting policy regarding financial instruments)
• Employee s Defined Benefit Plan as per actuarial valuation
• Derivative Financial instruments measured at fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using another valuation technique. In determining the fair value of an asset or a liability, our Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
Functional and Presentation Currency:
The financial information are presented in Indian Rupees, and all values are rounded to the nearest Million (INR 000,000), except otherwise indicated.
C. Summary of Material Accounting Policies
Classification of Assets and Liabilities into Current/Non-Current:
Our Company has ascertained its operating cycle as twelve months for the purpose of Current/ Non-Current classification of its Assets and Liabilities.
For the purpose of Balance Sheet, an asset is classified as current if:
a) It is expected to be realised, or is intended to be sold or consumed, in the normal operating cycle; or
b) It is held primarily for the purpose of trading; or
c) It is expected to realise the asset within twelve months after the reporting period; or
d) The asset is a cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current. A liability is classified as current if:
a) It is expected to be settled in the normal operating cycle; or
b) It is held primarily for the purpose of trading; or
c) It is due to be settled within twelve months after the reporting period; or
d) Our Company does not have an unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could result in its settlement by the issue of equity instruments at the option of the counterparty does not affect this classification.
All other liabilities are classified as non-current.
Property, Plant and Equipment (PPE):
The initial cost of PPE comprises its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing an asset to working condition and location for its intended use, including relevant borrowing costs and any expected costs of decommissioning. Following initial recognition, items of PPE are carried at its cost less accumulated depreciation and accumulated impairment losses, if any. Gross carrying amount of all PPE are measured using cost model. Expenditure incurred after the PPE have been put into operation, such as repairs and maintenance, are charged to the Statement of Profit and Loss in the period in which the costs are incurred. PPE are eliminated either on disposal or when retired from active use. Capital work-in-progress comprises of cost incurred on property, plant and equipment under construction / acquisition that are not yet ready for their intended use at the Balance Sheet Date.
If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items (major components) of PPE. Material items such as spare parts, stand-by equipment and service equipment are classified as PPE when they meet the definition of PPE as specified in Ind AS 16 - Property, Plant and Equipment.
Expenditure during construction period:
a) Expenditure / Income during construction period (including financing cost related to borrowed funds for construction or acquisition of qualifying PPE) is included under Capital Work-in-Progress and the same is allocated to the respective PPE on the completion of their construction.
Advances given towards acquisition or construction of PPE outstanding at each reporting date are disclosed as Capital Advances under Other non-current Assets .
b) Property, plant and equipment are eliminated either on disposal or when retired from active use. Profit/Losses arising in case of retirement of property, plant and equipment and gains or losses arising from disposal of property, plant and equipment are recognized in the statement of profit and loss in the year of occurrence.
Depreciation:
a) . Depreciation on the property, plant and equipment (other than freehold land and capital work in progress) is provided
on a Written Down method (WDV) over their useful lives which is in consonance of useful life mentioned in Schedule II to the Act.
b) The useful lives of the property, plant and equipment are in accordance with Schedule II and are as follows:
| Particulars | Useful Life |
| Factory buildings | 30 years |
| Other buildings (RCC structure) | 60 years |
| Other Plant and Machinery | 15 years |
| Computers | 3 years |
| Furniture & fittings | 10 years |
| Office & Plant Equipment | 5 years |
| Motor vehicles | 8 years |
c) In case of assets purchased, sold or discarded during the year, depreciation on such assets is calculated on pro-rata basis from the date of such addition or as the case may be, up to the date on which such asset has been sold or discarded.
d) Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted prospectively.
e) Leasehold lands are amortized over the period of lease or useful life whichever is lower. Buildings constructed on leasehold land are depreciated over its useful life which matches with the useful life mentioned in Schedule II.
Intangible Assets and Amortization:
a) Intangible assets are recognized only if it is probable that the future economic benefits attributable to asset will flow to our Company and the cost of asset can be measured reliably. Intangible assets are stated at cost of acquisition/development less accumulated amortization and accumulated impairment loss if any.
b) Cost of an intangible asset includes purchase price including non - refundable taxes and duties, borrowing cost directly attributable to the qualifying asset and any directly attributable expenditure on making the asset ready for its intended use.
c) Class of intangible assets and their estimated useful lives are as under:
| Assets | Estimated useful life amortized on WDV basis |
| Computer software | 5 years |
d) Amortization methods and useful lives are reviewed at each financial year end and adjusted prospectively.
e) In case of assets purchased during the year, amortization on such assets is calculated on pro-rata basis from the date of such addition.
Impairment of Non-Financial Assets:
At the end of each reporting period, our Company reviews the carrying amounts of non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, our Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in the Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Inventories:
The inventories are valued at lower of cost and net realizable value after providing for cost of obsolescence wherever considered necessary. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
The cost comprises of costs of purchase, duties and taxes (other than those subsequently recoverable), conversion cost and other costs incurred in bringing the inventories to their present location and condition. The cost of raw materials including Stock in Trade is computed on weighted average basis.
In case of work in progress and finished goods, the costs of conversion include costs directly related to the units of production and systematic allocation of fixed and variable production overheads. The cost of Work in Progress and Finished Goods is computed on Weighted average basis
Borrowing Costs:
Borrowing costs that are directly attributable to the acquisition, construction or development of a qualifying asset are capitalized as part of the cost of the respective asset till such time the asset is ready for its intended use. A qualifying asset is an asset which necessarily takes a substantial period of time (12 months or more) to get ready for its intended use. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest, amortization of discounts, hedge related cost incurred in connection with foreign currency borrowings and exchange difference arising from foreign currency borrowings to the extent they are treated as an adjustment to the borrowing cost and other costs that an entity incurs in connection with the borrowing of funds.
Government Grants and Subsidies:
Government grants and subsidies are recognized when there is reasonable assurance that our Company will comply with the conditions attached thereto and that the grants will be received. Grants/Subsidy related to specific PPE are recognized in statement of Profit and Loss as other Income on systematic basis over the useful use of assets. Grants/Subsidy related to revenue are credited to Profit/Loss and presented as other income.
Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized when our Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognized in the Statement of Profit and Loss as a finance cost.
Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.
A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of our Company.
Claims against our Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities.
A contingent asset is disclosed, where an inflow of economic benefits is probable. Contingent assets are not recognized in financial information since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognized.
Revenue Recognition:
a) Revenue from contracts from customers
• Revenue is recognized on the basis of approved contracts regarding the transfer of goods or services to a customer for an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
• Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold, and services rendered is net of variable consideration and outgoing taxes on sale. Any amounts receivable from the customer are recognised as revenue after the control over the goods sold are transferred to the customer which is generally on dispatch/delivery of goods.
• Variable consideration - This includes incentives, volume rebates, discounts etc. It is estimated at contract inception considering the terms of various schemes with customers and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. It is reassessed at end of each reporting period.
• Significant financing component - Generally, our Company receives short term advances from its customers. Using the practical expedient in Ind AS 115, our Company does not adjust the promised amount of consideration for the effects of a significant financing component if it expects, at contract inception, that the
period between the transfer of the promised good or service to the customer and when the customer pays for that good or service will be one year or less.
b) Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
c) Dividend income on investment is accounted for in the period/year in which the right to receive the same is established.
d) Service income is recognized upon rendering of services. Service income is recorded net of GST.
e) Revenue from Sale of Power from Solar Power System is accounted when the same is transmitted to and confirmed by Electric Board to whom it is sold.
f) Export incentives principally comprises of Duty Drawback, merchandise exports from India scheme (MEIS) and RODTEP based on guidelines formulated for the respective scheme by the government authorities. These incentives are recognized as income on accrual basis in Statement of Profit and Loss only to the extent that realisation/utilisation is certain.
Leases:
Our Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, our Company assesses whether: (i) the contract involves the use of an identified asset (ii) our Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) our Company has the right to direct the use of the asset (ROU).
Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated on a straight-line basis over the lease term. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if our Company changes its assessment if whether it will exercise an extension or a termination option.
Derivative Financial Instruments and Hedge Accounting:
Our Company enters into forward contracts to hedge the foreign currency risk of firm commitments and highly probable forecast transactions. Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period.
Hedge Accounting:
Our Company designates certain hedging instruments in respect of foreign currency risk as cash flow hedges. At the inception of the hedge relationship, our Company documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, our Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk.
The effective portion of changes in the fair value of the designated portion of derivatives that qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading of cash flow hedging reserve. The gain or loss relating to the ineffective portion is recognized immediately in the statement of profit and loss.
Amounts previously recognized in other comprehensive income and accumulated in equity relating to (effective portion as described above) are reclassified to the Statement of Profit and Loss in the periods when the hedged item affects profit or loss. However, when the hedged forecast transaction results in the recognition of a nonfinancial asset or a non-financial liability,
such gains and losses are transferred from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognized in other comprehensive income and accumulated in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the statement of profit and loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in the statement of profit and loss.
Employees Benefits:
a) Short term employee benefits
All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss in the period in which the employee renders the related service.
b) Other Long term benefits:
Long-term compensated absences are provided for on the basis of an actuarial valuation at the end of each financial year. Actuarial gains/losses, if any, are recognised immediately in the Statement of Profit and Loss.
c) Post-employment benefits
i) Defined contribution plan
The defined contribution plan is post-employment benefit plan under which our Company contributes fixed contribution to a government administered fund and will have no obligation to pay further contribution. Our Company s defined contribution plan comprises of Provident Fund, Employee State Insurance Scheme and Labour Welfare Fund. Our Company s contribution to defined contribution plans are recognized in the Statement of Profit and Loss in the period in which employee renders the related service.
ii) Defined benefit plan
Our Company s obligation towards gratuity liability is funded to an approved gratuity fund, which fully covers the said liability under Cash Accumulation Policy of Life Insurance Corporation of India (LIC). The present value of the defined benefit obligations is determined based on actuarial valuation using the projected unit credit method. The rate used to discount defined benefit obligation is determined by reference to market yields at the Balance Sheet date on Indian Government Bonds for the estimated term of obligations. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and fair value of plan assets. Re-measurement gains or losses arising from experience adjustments changes in actuarial assumptions is reflected immediately in the Balance Sheet with a charge or credit recognized in Other Comprehensive Income (OCI) in the period in which they occur. Re-measurement recognized in OCI is reflected immediately in retained earnings and will not be reclassified to Statement of Profit and Loss in the subsequent period.
Income Taxes:
a) Tax expenses comprise of current tax, deferred tax charge or credit and adjustments of taxes for earlier years. In respect of amounts adjusted against securities premium or retained earnings or other reserves, the corresponding tax effect is also adjusted against the securities premium or retained earnings or other reserves, as the case may be, as per the announcement of Institute of Chartered Accountant of India.
b) Current Tax is measured on the basis of estimated taxable income for the current accounting period in with the applicable tax rates and the provisions of the Income-tax Act, 1961 and other applicable tax laws.
c) Deferred tax is provided, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date.
Tax relating to items recognized directly in equity or OCI is recognized in equity or OCI and not in the Statement of Profit and Loss. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority, but they intend to settle current tax liabilities and assets on a net basis, or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable.
Earnings per Share:
Basic earnings per share (EPS) are calculated by dividing the net profit or loss (after tax) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue and share split if any.
For the purpose of calculating diluted earnings per share, the net profit or loss (after tax) for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
Foreign Currency Transactions:
a) Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
b) As at balance sheet date, foreign currency monetary items are translated at closing exchange rate. Foreign currency non-monetary items carried at fair value are translated at the rates prevailing at the date when the fair value was determined. Foreign currency non-monetary items measured in terms of historical cost are translated using the exchange rate as at the date of initial transactions.
c) Exchange difference arising on settlement or translation of foreign currency monetary items are recognized as income or expense in the year in which they arise.
Financial Instruments:
a. Initial recognition
Our Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss are added to the fair value on initial recognition.
b. Subsequent measurement
(i) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Our Company has made an irrevocable election for its investments which are classified as equity instruments & trust funds to present the subsequent changes in fair value in other comprehensive income based on not held for trading.
(iii) Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
(iv) Financial liabilities
Financial liabilities are subsequently carried at amortised cost using the effective interest rate method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
c. De-recognition of financial instruments
Our Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset, and the transfer qualifies for de-recognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognised from our Company s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.
d. Fair value of financial instruments
In determining the fair value of its financial instruments, our Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include available quoted market prices and discounted cash flow analysis. All methods of assessing fair value result in general approximation of value and such value may never actually be realised.
Cash Flow Statement and Cash and Cash Equivalents:
Cash and cash equivalents include cash in hand, bank balances, deposits with banks and all short term highly liquid investments (with zero exit load at the time of investment) that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value. Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated.
Dividend distribution:
Final equity dividends on shares are recorded as a liability on the date of approval by the shareholders and interim equity dividends are recorded as a liability on the date of declaration by our Companys Board of Directors.
Segment Reporting:
Operating segments have been identified taking into account the nature of the products / services, geographical locations, nature of risks and returns, internal organization structure and internal financial reporting system. These operating results are regularly reviewed by our Company s Board of Directors.
Critical accounting judgements and key sources of estimation uncertainty:
The preparation of our Company s financial information requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Critical judgements and estimates in applying accounting policies:
1) Property, Plant and Equipment:
Property, Plant and Equipment represent a significant proportion of the asset base of our Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset s expected useful life. The useful lives of our Company s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.
2) Estimation of Defined benefit obligation:
The costs of providing post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 Employee benefits over the period during which benefit is derived from the employees services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in Note 37.
3) Fair value measurement of Financial Instruments (Refer Note 45):
The management assessed that cash and bank balances, trade receivables, trade payables and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
Our Company has established the following fair value hierarchy that categorises the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:
• Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The fair value of all equity investments, bonds. NCD, mutual funds which are traded in the stock exchanges is valued using the closing price or NAV or dealer quotations as at the reporting date.
• Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
• Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
Principal Components of Statement of Profit and Loss Total income
Our total income comprises Revenue from Operations and Other Income.
Revenue from Operations
Our revenue from operations primarily includes revenue from sale of products, sale of services and other operating revenue consisting of export incentives and scrap sales. We generate majority of our revenue from Sale of Products from our product offerings namely (a) sprinklers, alarm valves and accessories, (b) deluge valves, deluge skids and pre-action systems, (c) foam equipment and suppression systems, (d) monitors and monitor nozzles, (e) systems valves and accessories, (f) water spray nozzles, (g) custom engineered systems, and (h) gas suppression systems
Other Income
Our other income primarily includes (i) exchange gain (net), (ii) interest income, (iii) subsidy from state government, (iv) profit on sale of non-current investments, (v) fair valuation gain/(loss) on instruments through profit or loss, (vi) profit on sale of property, plant and equipment, (vii) dividend received, (viii) rent income, (ix) sale of power from solar power plants, (x) other income, and (xi) insurance claim
Expenses
Our total expenses include the below mentioned expenses:
Purchase of Stock In Trade
Our purchases of stock-in-trade consist of sprinklers, flexi drop, butterfly valve, gate valve, foam concentrate, etc
Cost of materials consumed
Our cost of materials consumed consists of opening stock and purchases, less the closing stock.
Changes in Inventories of Finished Goods, Stock-in-Trade and Work-in-Progress
Our changes in inventories of finished goods, stock-in-trade and work-in-progress comprises difference between the closing and the opening inventory of finished goods, work-in-progress and stock-in-trade.
Employee benefits expense
Our employee benefits expense primarily include (i) salaries, wages, bonus & allowances, (ii) contribution to provident and other funds, and (iii) staff welfare expenses.
Finance costs
Our finance costs primarily include (i) interest on loan, and (ii) interest on income tax
Depreciation and Amortization expense
Our depreciation and amortization primarily include (i) depreciation on property, plant and equipment, (ii) amortisation of intangible assets, and (iii) amortisation of lease hold land.
Other Expenses
Our other expenses primarily include (i) freight & forwarding charges, (ii) power & fuel, (iii) job work & contract labour charges, (iv) advertisement expenses, (v) commission, (vi) business promotion expenses, (vii) auditors remuneration, (viii) legal and professional fees, (ix) insurance & ECGC premium, (x) inspection, testing & approval fees, (xi) rent, (xii) rates & taxes, (xiii) repair & maintenance of building, plant & machinery, and others, (xiv) travelling & conveyance expenses, (xv) corporate social responsibility expenses, (xvi) provision for expected credit loss, and (xvii) miscellaneous expenses
Tax Expenses
Our tax expenses primarily include current tax, and deferred tax.
Profit after tax for the period
Profit after tax for the period includes the profit for the year after tax expenses and exceptional items.
Results of Operations based on our Restated Financial Information
The following table sets forth select financial data from our statement of profit and loss for the Fiscal 2025, Fiscal 2024 and Fiscal 2023, the components of which are also expressed as a percentage of total income for such periods.
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| (In Rs million) | (As a % of total income) | (In Rs million) | (As a % of total income) | (In Rs million) | (As a % of total income) | |
| Revenue | ||||||
| Income | ||||||
| Revenue from Operations | 4,327.99 | 96.03% | 3,729.53 | 95.14% | 3,240.78 | 97.10% |
| Other income | 178.76 | 3.97% | 190.66 | 4.86% | 96.95 | 2.90% |
| Total income (I) | 4,506.75 | 100.00% | 3,920.19 | 100.00% | 3,337.73 | 100.00% |
| Expenditure | ||||||
| Cost of materials consumed | 1,193.65 | 26.49% | 1,118.96 | 28.54% | 974.72 | 29.20% |
| Purchases of stock-in-trade | 1,003.00 | 22.26% | 808.41 | 20.62% | 766.9 | 22.98% |
| Changes in Inventories of Finished Goods, Stock-in-Trade and Work-in-Progress | -85.07 | -1.89% | 39.49 | 1.01% | -20.70 | -0.62% |
| Employee benefits expense | 420.02 | 9.32% | 354.17 | 9.03% | 309.54 | 9.27% |
| Finance costs | 0.26 | 0.01% | 0.07 | 0.00% | 0 | 0.00% |
| Depreciation and amortisation expenses | 91.43 | 2.03% | 93.38 | 2.38% | 63.61 | 1.91% |
| Other expenses | 416.31 | 9.24% | 342.18 | 8.73% | 310.91 | 9.32% |
| Total expenses (II) | 3,039.61 | 67.45% | 2,756.66 | 70.32% | 2,404.98 | 72.05% |
| Profit before exceptional items and taxes (I-II) | 1,467.14 | 32.55% | 1,163.53 | 29.68% | 932.75 | 27.95% |
| Exceptional items | 0 | 0.00% | 0 | 0.00% | 0 | 0.00% |
| Profit before tax after exceptional items | 1,467.14 | 32.55% | 1,163.53 | 29.68% | 932.75 | 27.95% |
| Tax Expense | ||||||
| (i) Current tax | 364.89 | 8.10% | 280.31 | 7.15% | 240.24 | 7.20% |
| (ii) Deferred tax | 6.79 | 0.15% | 4.02 | 0.10% | -9.74 | -0.29% |
| Total tax expenses | 371.68 | 8.25% | 284.33 | 7.25% | 230.5 | 6.91% |
| Profit for the year | 1,095.46 | 24.31% | 879.2 | 22.43% | 702.25 | 21.04% |
| Other Comprehensive Income | ||||||
| Items that will not be reclassified to Statement of Profit and Loss | ||||||
| Remeasurement of Defined Benefit Plans | -1.27 | -0.03% | -5.11 | -0.13% | -1.08 | -0.03% |
| Equity Instruments through other comprehensive income | 5.28 | 0.12% | 106.04 | 2.70% | -6.76 | -0.20% |
| Income Tax relating to items that will not be reclassified to profit & loss | -1.48 | -0.03% | -12.16 | -0.31% | 0.7 | 0.02% |
| Items that will be reclassified to Statement of Profit and Loss | ||||||
| The effective portion of gains and loss on hedging instruments in a cash flow hedge | 0.01 | 0.00% | 0 | 0.00% | -0.64 | -0.02% |
| Income Tax relating to items that will be reclassified to profit & loss | 0 | 0.00% | 0 | 0.00% | 0.16 | 0.00% |
| Other Comprehensive Income for the year (IV) | 2.54 | 0.06% | 88.77 | 2.26% | -7.62 | -0.23% |
| Total Comprehensive Income for the year (III + IV) | 1,098.00 | 24.36% | 967.97 | 24.69% | 694.63 | 20.81% |
| Earnings per equity share of face value of Rs.5/- each | ||||||
| Basic & Diluted (in Rs.) | 6.25 | 5.01 | 3.99 | |||
COMPARISON OF THE RESULTS OF OPERATIONS
Fiscal 2025 Compared to Fiscal 2024
Total Income
Our total income increased by 14.96% to Rs4,506.74 million for Fiscal 2025 from Rs 3,920.19 million for Fiscal 2024, on account of the factors discussed below.
Revenue from operations
Our revenue from operations increased by 16.05% to Rs4,327.99 million for Fiscal 2025 from Rs3,729.53 million for Fiscal 2024, primarily due to (i) increase in the revenue from sale of products to Rs 4,277.09 million for Fiscal 2025 from Rs 3,694.90 million for Fiscal 2024, (ii) increase in the service income to Rs 7.22 million in Fiscal 2025 from Rs3.73 million in Fiscal 2024, and (iii) increase in other operating revenue to Rs 43.68 million in Fiscal 2025 from Rs 30.90 million in Fiscal 2024. The aforementioned increase was primarily due to the increase in domestic market demand, driven by regulatory compliance, significantly contributed to overall sales growth. Additionally, we strategically strengthened global footprint by appointing new distributors in key international markets, which resulted in rise in export volumes. We also strengthened our field service support team, which led to increase in services income.
Other income
Our other income decreased by 6.24% to Rs178.76 million for Fiscal 2025 from Rs190.66 million for Fiscal 2024, primarily due to a decrease in the fair valuation gain on instruments through profit or loss to Rs 37.44 million for Fiscal 2025 from Rs 70.21 million in Fiscal 2024, decrease in the subsidy from state government to Rs 0.21 million for Fiscal 2025 from Rs 6.16 million in Fiscal 2024 and decrease in the dividend received to Rs 4.66 million for Fiscal 2025 from Rs 4.97 million in Fiscal 2024.
Expenses
Our total expenses increased by 10.26% to Rs3,039.61 million for Fiscal 2025 from Rs2,756.66 million for Fiscal 2024, on account of the factors discussed below.
Purchase of stock-in-trade
Our purchases of stock in trade increased by 24.07% to 1,003.00 million in Fiscal 2025 from 808.41 million in Fiscal 2024, primarily due to due to procurement of inventory to ensure uninterrupted operations and meet sales requirements.
Cost of materials consumed
Our cost of material consumed has increased by 6.67% to Rs1,193.65 million for Fiscal 2025 from ^1,118.95 million for Fiscal 2024, primarily due to higher production volumes, aligned with growing sales demand. However, raw material prices themselves remained relatively stable, and no significant price escalation was observed during the period.
Changes in Inventories of Finished Goods, Stock-in-Trade and Work-in-Progress
Our cost of changes in inventories of finished goods, stock-in-trade and work-in-progress decreased by 315.42% to Rs(85.07) million for Fiscal 2025 from Rs39.49 million for Fiscal 2024, primarily due to an increase in the volume of business conducted.
Employee Benefits Expense
Our employee benefits expense increased by 18.59% to Rs420.03 million for Fiscal 2025 from Rs354.17 million for Fiscal 2024, primarily due to increase in the number of employees to 261 as at March 31, 2025 from 242 as at March 31, 2024 and the corresponding increase in the salaries, wages, staff welfare expenses, gratuity and contribution to provident and other funds.
Finance Costs
Our finance costs increased by 271.43% to Rs0.26 million for Fiscal 2025 from Rs0.07 million for Fiscal 2024, primarily due to increase in interest income tax to Rs0.26 million for Fiscal 2025 from Rs0.00 million for Fiscal 2024.
Depreciation and Amortization expense
Our depreciation and amortization expense decreased by 2.09% to Rs91.43 million for Fiscal 2025 from Rs93.38 million for Fiscal 2024, primarily because a significant portion of the capex incurred during Fiscal 2025 was capitalized toward the end of the financial year, resulting in only a partial depreciation impact in the current period.
Other Expenses
Our other expenses increased by 21.66% to Rs416.31 million for Fiscal 2025 from Rs342.19 million for Fiscal 2024, primarily due to increase in the job work & contract labour charges to Rs 111.27 million for Fiscal 2025 from Rs 91.47 million for Fiscal 2024, legal and professional fees to Rs 25.31 million in Fiscal 2025 from Rs 16.60 million in Fiscal 2024 and inspection, testing & approval fees to Rs 27.61 million for Fiscal 2025 from Rs 18.74 million for Fiscal 2024.
Tax Expense
Our tax expense increased by 30.72% to Rs371.67 million for Fiscal 2025 from Rs284.33 million for Fiscal 2024, primarily due to increase in the revenue from operations of our Company. The profit before tax for Fiscal 2025 was Rs1,467.14 million as against profit before tax of Rs1,163.53 million for Fiscal 2024.
Profit after tax for the period
As a result of the foregoing factors, our profit after tax for the period increased by 24.60% to Rs1,095.46 million for Fiscal 2025 from Rs 879.20 million for Fiscal 2024.
Fiscal 2024 Compared to Fiscal 2023
Total Income
Our total income increased by approximately 17.45% to Rs3,920.19 million for Fiscal 2024 from Rs3,337.73 million for Fiscal 2023.
Revenue from Operations
Our revenue from operations saw an increase of approximately 15.08% to Rs3,729.53 million for Fiscal 2024 from Rs3,240.78 million for Fiscal 2023. This increase was primarily driven by (i) an increase in revenue from the sale of products to Rs3,694.90 million for Fiscal 2024 from Rs3,199.18 million for Fiscal 2023, and (ii) an decrease in service income to Rs3.73 million for Fiscal 2024 from Rs4.24 million for Fiscal 2023, supplemented by a decrease in other operating revenue to Rs 30.90 million in Fiscal 2024 from Rs 37.36 million in Fiscal 2023 The aforementioned increase was primarily due to higher domestic demand, expansion in international markets through new distributor appointments, and improved product mix focused on high-value offerings.
Other Income
Our other income increased significantly by approximately 96.66% to Rs190.66 million for Fiscal 2024 from Rs96.95 million for Fiscal 2023. This was primarily due to an increase in interest income to Rs61.08 million for Fiscal 2024 from Rs37.65 million for Fiscal 2023, a decrease in exchange gain (net) to Rs23.39 million for Fiscal 2024 from Rs25.75 million for Fiscal 2023, a decrease in profit on the sale of non-current investments to Rs23.83 million for Fiscal 2024 from Rs63.87 million for Fiscal 2023, and an increase in dividend received to Rs4.97 million for Fiscal 2024 from Rs3.78 million for Fiscal 2023.
Expenses
Our total expenses increased by approximately 14.62% to Rs2,756.66 million for Fiscal 2024 from Rs2,404.98 million for Fiscal 2023.
Purchase of stock-in-trade
Our purchases of stock in trade increased by 5.41% to Rs808.41 million in Fiscal 2024 from Rs766.9 million in Fiscal 2023, primarily due to due to procurement of inventory to ensure uninterrupted operations and meet sales requirements.
Cost of materials consumed
Our cost of material consumed has increased by 14.80% to Rs 1,118.95 million for Fiscal 2024 from Rs 974.73 million for Fiscal 2023, primarily due to higher production volumes, aligned with growing sales demand. However, raw material prices themselves remained relatively stable, and no significant price escalation was observed during the period.
Changes in Inventories of Finished Goods, Stock-in-Trade and Work-in-Progress
Our changes in inventory of finished goods, stock-in-trade, and work-in-progress showed a change from a decrease in Fiscal
2023 to an increase in Fiscal 2024, moving from -Rs20.71 million in Fiscal 2023 to Rs39.49 million in Fiscal 2024, primarily due to optimization of inventory levels.
Employee Benefits Expense
Our employee benefits expense increased by approximately 14.42% to Rs354.17 million for Fiscal 2024 from Rs309.54 million for Fiscal 2023. This increase was primarily due to increase in the number of employees to 242 as at March 31, 2024 from 226 as at March 31, 2023 and the corresponding increase in the salaries, wages, staff welfare expenses, gratuity and contribution to provident and other funds
Finance Costs
Our finance costs increased from nil million in Fiscal 2023 to Rs0.07 million in Fiscal 2024. This increase was primarily attributable to interest on loans, which was Rs0.07 million in Fiscal 2024 compared to nil million in Fiscal 2023.
Depreciation and Amortisation Expense
Our depreciation and amortisation expenses increased by approximately 46.80% to Rs93.38 million for Fiscal 2024 from Rs63.61 million for Fiscal 2023.
Other Expenses
Our other expenses increased by approximately 10.06% to Rs342.19 million for Fiscal 2024 from ^310.91 million for Fiscal 2023. Key factors contributing to this change include freight & forwarding charges increasing to ^31.73 million for Fiscal 2024 from Rs30.21 million for Fiscal 2023, travelling & conveyance expenses decreasing to Rs16.08 million for Fiscal 2024 from Rs18.32 million for Fiscal 2023, and provision for expected credit loss changing from a negative expense (reduction) of Rs-0.59 million in Fiscal 2023 to a negative expense of -Rs0.46 million in Fiscal 2024.
Tax Expense
Our total tax expenses increased by approximately 23.35% to Rs284.33 million for Fiscal 2024 from Rs230.50 million for Fiscal 2023. This increase is primarily linked to the rise in our Companys profit before tax, which was Rs1,163.53 million for Fisca l
2024 compared to Rs932.75 million for Fiscal 2023.
Profit for the Year
As a result of the aforementioned factors, our profit for the year increased by approximately 25.20% to Rs879.20 million for Fiscal 2024 from Rs702.25 million for Fiscal 2023.
Liquidity and Capital Resources
We have historically financed the expansion of our business and operations through owned funds and funds generated from our operations. Further, we believe that after taking into account the expected cash to be generated from our business and operations, we will have sufficient capital to meet our anticipated capital requirements for our working capital and capital expenditure requirements. As of March 31, 2025, we had Rs 698.75 million in inventories, Rs 577.79 million trade receivables, cash and cash equivalents of Rs 174.66 million and other current assets of Rs 73.89 million.
For the Fiscals 2025, 2024, and 2023, our total liabilities based on our Restated Financial Statements amounted to Rs 528.50 million, Rs 492.19 million, and Rs 442.69 million, respectively.
Cash Flows based on Restated Financial Information
The table below summarizes the statement of cash flows, as per our cash flow statements, for the periods indicated:
| Particulars | Fiscal | ||
| 2025 | 2024 | 2023 | |
| Net cash generated from / (used in) operating activities | 983.15 | 637.71 | 533.53 |
| Net cash generated from / (used in) investing activities | (525.59) | (329.81) | 195.80 |
| Net cash generated from / (used in) financing activities | (492.03) | (228.95) | (699.88) |
| Cash and cash equivalents | 174.66 | 209.13 | 130.18 |
Operating Activities
In Fiscal 2025, our net cash generated from operating activities was Rs983.15 million. This was primarily derived from a profi t before tax of Rs1,467.14 million, which was adjusted for non-cash items such as depreciation and amortisation expenses of ^91.43 million, a loss on sale of property, plant, & equipment of Rs1.01 million, and a provision for expected credit loss of Rs8.47 million. These adjustments were partially offset by unrealised gain on investments of Rs37.44 million, interest income of Rs69.76 million, realised gain on investments of Rs35.87 million, and dividend income of Rs4.66 million. Our operating profit before working capital changes amounted to Rs1,420.58 million. Adjustments in working capital included an outflow from trade receivables of Rs106.69 million and inventories of Rs147.35 million, partially offset by an inflow from other receivables of Rs154.32 million and trade payables & other liabilities of Rs32.88 million. Cash generated from operations totalled Rs1,353.73 million, and income tax paid was Rs370.59 million.
For Fiscal 2024, our net cash generated from operating activities was Rs637.71 million. Our profit before tax was Rs1,163.53 million, which was adjusted for depreciation and amortisation expenses of Rs93.38 million, and a loss on sale of property, plant, & equipment of Rs1.09 million. These adjustments were partially offset by unrealised gain on investments of Rs70.21 million, interest income of Rs61.08 million, provision for expected credit loss of Rs0.46 million, realised gain on investments of Rs23.8 3 million, and dividend income of Rs4.97 million. Our operating profit before working capital changes was Rs1,097.52 million. Working capital adjustments included an inflow from trade receivables of Rs28.98 million and inventories of Rs139.97 million, offset by an outflow from other receivables of Rs376.66 million and an inflow from trade payables & other liabilities of Rs46.69 million. Cash generated from operations amounted to Rs936.50 million, and income tax paid was Rs298.79 million.
In Fiscal 2023, our net cash generated from operating activities was Rs533.53 million. This stemmed from a profit before tax of Rs932.75 million, which was adjusted for depreciation and amortisation expenses of Rs63.61 million, offset by a profit on sale of property, plant, & equipment of Rs2.16 million, provision for expected credit loss of Rs0.59 million, unrealised gain on investments of Rs39.91 million, interest income of Rs37.65 million, realised gain on investments of Rs63.87 million, and dividen d income of Rs3.78 million. Our operating profit before working capital changes was Rs928.22 million. Working capital adjustments included an outflow from trade receivables of Rs181.78 million and inventories of Rs132.08 million, partially offset by an infl ow from other receivables of Rs35.93 million and trade payables & other liabilities of Rs110.55 million. Cash generated from operations totalled Rs760.84 million, and income tax paid was Rs227.31 million.
Investing Activities
Our net cash used in investing activities was Rs525.59 million in Fiscal 2025. This was primarily due to payments for the purchase of property, plant, and equipment of Rs159.90 million, capital work-in-progress of Rs80.54 million, and investment in shares & mutual funds of Rs346.35 million. These outflows were partially offset by proceeds from the sale of property, plant & equipment of Rs0.48 million, realised gain on investments of Rs56.06 million, and dividend income of Rs4.66 million.
In Fiscal 2024, our net cash used in investing activities was Rs329.81 million. This was primarily due to payments for the purchase of property, plant & equipment of Rs72.41 million, capital work-in-progress of Rs9.52 million, and investment in shares & mutual funds of Rs286.73 million. These outflows were partially offset by proceeds from the sale of property, plant & equipment of Rs0.17 million, realised gain on investments of Rs33.71 million, and dividend income of Rs4.97 million.
For Fiscal 2023, our net cash generated from investing activities was Rs195.80 million. This was primarily due to significant investment in shares & mutual funds amounting to Rs451.75 million, along with proceeds from the sale of property, plant & equipment of Rs2.98 million, realised gain on investments of Rs70.79 million, and dividend income of Rs3.78 million. These inflows were partially offset by payments for the purchase of property, plant & equipment of Rs189.79 million and capital work- in-progress of Rs143.71 million.
Financing Activities
Our net cash used in financing activities was Rs492.03 million in Fiscal 2025. This was primarily driven by dividend paid of ^561.53 million and interest expense of Rs0.26 million, partially offset by interest income of Rs69.76 million.
In Fiscal 2024, our net cash used in financing activities was Rs228.95 million. This was primarily due to the buyback of share s with tax amounting to Rs288.06 million, dividend paid of Rs1.90 million, loan repaid of Rs1.00 million and interest expense of Rs0.07 million. These outflows were partially offset by interest income of Rs61.08 million and a loan taken of Rs1.00 million.
For Fiscal 2023, our net cash used in financing activities was Rs699.88 million. This was primarily due to the buyback of shar es with tax of Rs735.16 million and dividend paid of Rs2.37 million, partially offset by interest income of Rs37.65 million.
Indebtedness
As of March 31, 2025, we had non fund based borrowings of Rs 57.94 million, with a debt -to-equity ratio of nil as per the Restated Financial Information. For further information on our agreements governing our outstanding indebtedness, see
Financial Indebtedness on page 321.
Contractual Obligations
The following table sets forth the details regarding our contractual maturities (representing undiscounted contractual cashflows) of financial liabilities as on March 31, 2025
| Particulars | Less than 1 year (Amount) | 1 to 5 years (Amount) | More than 5 Years (Amount) | Total (Amount) |
| Trade payables | 247.78 | - | - | 247.78 |
| Other financial liabilities | 51.64 | - | - | 51.64 |
| Total | 299.42 | - | - | 299.42 |
Contingent Liabilities
The following table sets forth the principal components of our contingent liabilities as of March 31, 2025, as per the Restated Financial Information:
in million)
| Particulars | As at 31 st March 2025 | As at 31 st March 2024 | As at 31 st March 2023 |
| Outstanding Bank guarantees (fully secured against Fixed Deposits) | 57.94 | 45.23 | 27.66 |
| Export promotion capital goods scheme | |||
| - Duty Saved | - | 4.44 | 16.40 |
| Export Obligation | |||
| - Oblisation vet to be fulfilled | - | 26.67 | - |
Off-Balance Sheet Arrangements
Our Company has no off balance sheet arrangements as on the date of this Draft Red Herring Prospectus.
Related Party Transactions
We enter into various transactions with related parties. For further information see Restated Financial Information - Annexure VI - Note 38: Related party disclosure on page 302.
Quantitative and Qualitative Disclosures about Market Risk
Our Company s principal financial liabilities, other than derivatives, comprise trade and other payables. The main purpose of these financial liabilities is to finance our Company s operations. Our Company s principal financial assets include trade an d other receivables, investments and cash & cash equivalents that derive directly from its operations.
Our Company is exposed to market risk, credit risk and liquidity risk. Our Company s senior management oversees the management of these risks. It is our Company s policy that no trading in derivatives for speculative purposes may be undertak en. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:
a) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: (i) interest rate risk and (ii) currency risk. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings. The sensitivity analyses in the following sections relate to the position as at 31st March, 2025, 31st March, 2024 and 31st March 2023.
The analyses exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations; provisions.
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31st March, 2025 and 31st March, 2024 and 31st March, 2023.
(i) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our Company does not any borrowings. Hence interest rates risk is not applicable.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Our Company transacts business in local currency and in foreign currency, primarily in USD.
Disclosure regarding Derivative Instrument and Unhedged Foreign Currency Exposure:
The year-end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:
| Particulars | Currency | As at 31st March, 2025 | As at 31st March, 2024 | As at 31 st March 2023 | |||
| Amt. in Foreign Currency | Amount | Amt. in Foreign Currency | Amount | Amt. in Foreign Currency | Amount | ||
| Amount Receivable | USD | 1.34 | 114.91 | 0.66 | 55.02 | 20.00 | 164.03 |
| EURO | - | - | - | - | 0.00 | 0.13 | |
| Amount Payable | USD | 0.39 | 33.34 | 0.35 | 28.89 | 1.16 | 95.23 |
| EURO | 0.01 | 1.09 | 0.06 | 5.66 | 0.01 | 1.11 | |
| SGD | 0.01 | 0.76 | 0.01 | 0.70 | - | - | |
| Cash & Bank | USD | 0.76 | 64.95 | 1.28 | 106.54 | 0.01 | 0.88 |
| EURO | 0.00 | 0.64 | 0.01 | 0.97 | 0.45 | 36.89 | |
| AED | 0.01 | 0.05 | - | - | - | - | |
| Total | 145.36 | 127.29 | 103.83 | ||||
Derivatives for hedging currency are as under:
| Particulars | Hedged Item | Currency | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 | Cross Currency |
| Forward Contracts | Receivables | USD | 0.07 | 0.50 | 0.05 | INR |
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in rate of USD, with all other variables held constant. The impact on our Companys profit before tax is due to changes in the fair value of monetary assets and liabilitie s. Our Companys exposure to foreign currency changes for all other currencies is not material.
| Basis Points | As at 31 st March, 2025 | As at 31 st March, 2024 | As at 31 st March 2023 | |||
| 2% increase | 2% decrease | 2% increase | 2% decrease | 2% increase | 2% decrease | |
| Effect on profit before tax (Amount) | 2.90 | (2.90) | 2.55 | (2.55) | 2.08 | (2.08) |
b) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Our Company is exposed to credit risk from its operating activities (primarily trade receivables).
Our Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase
in credit risk our Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition.
Financial assets are written off when there are no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with our Company.
Balances with Banks is subject to low credit risk due to good credit rating assigned to these banks. As per simplified approach, our Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provision at each reporting date whenever outstanding is for longer period and involves higher risk. As per our Companys policy, trade receivables are classified into different ageing buckets based on the period of overdue, ranging from 6 months to more than 3 years. In accordance with the provisioning norms, receivables that are overdue for more than one year are considered impaired and a provision for impairment loss is recognized accordingly.
Trade receivables ageing schedule for the year ended as on March 31, 2025, March 31, 2024 and March 31, 2023
| As at 31 st March, 2025 | Not Due | Less than 6 months (Amount) | 6 months to 1 years (Amount) | 1 to 2 years (Amount) | 2 to 3 years (Amount) | More than 3 Years (Amount) | Total (Amount) |
| Undisputed Trade receivables - considered good | 313.78 | 257.60 | 3.99 | 1.60 | 0.76 | 0.06 | 577.79 |
| Undisputed Trade Receivables - which have significant increase in credit risk | |||||||
| Undisputed Trade Receivables - credit impaired | 9.12 | 0.30 | 0.01 | 9.42 | |||
| Disputed Trade Receivables considered good | |||||||
| Disputed Trade Receivables - which have significant increase in credit risk | |||||||
| Disputed Trade Receivables - credit impaired | 0.77 | 0.77 | |||||
| Total | 313.78 | 257.60 | 3.99 | 10.72 | 1.06 | 0.84 | 587.98 |
| Less: Provision for Doubtful Debts (based on Expected Credit Loss model) | (9.12) | (0.29) | (0.78) | (10.19) | |||
| Net Total | 313.78 | 257.60 | 3.99 | 1.60 | 0.76 | 0.06 | 577.79 |
There are no unbilled trade receivables, hence the same is not disclosed in the ageing schedules.
| As at 31 st March, 2024 | Not Due | Less than 6 months (Amount) | 6 months to 1 years (Amount) | 1 to 2 years (Amount) | 2 to 3 years (Amount) | More than 3 Years (Amount) | Total (Amount) |
| Undisputed Trade receivables - considered good | 260.62 | 214.65 | 1.59 | 2.63 | 0.07 | 479.56 | |
| Undisputed Trade Receivables - which have significant increase in credit risk | |||||||
| Undisputed Trade Receivables - credit impaired | 0.96 | 0.00 | 0.96 | ||||
| Disputed Trade Receivables considered good | |||||||
| Disputed Trade Receivables - which have significant increase in credit risk |
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