Influx Healthtech Ltd Management Discussions

OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together with our restated financial information as of for the financial year ended March 31, 2025, 2024 and 2023, all prepared in accordance with the Companies Act and Indian GAAP and restated in accordance with the SEBI ICDR Regulations, including the schedules, annexures and notes thereto and the reports thereon, included in the section titled ‘Financial Information beginning on page 258 of this Red Herring Prospectus.

Unless otherwise stated, the financial information used in this section is derived from the restated financial statements of our Company. Our financial year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular financial year are to the 12-month period ended March 31 of that year.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in the sections titled ‘Forward Looking Statements and ‘Risk Factors beginning on page 28 and 38, respectively, of this Red Herring Prospectus.

These financial statements have been prepared in accordance with Indian GAAP and the Companies Act. Indian GAAP differs in certain significant respects from U.S. GAAP, IFRS and Ind AS. We have neither attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in this Red Herring Prospectus nor do we provide a reconciliation of our financial statements to those under U.S. GAAP or IFRS or Ind AS. Accordingly, the degree to which the Indian GAAP financial statements included in this Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with the Companies Act, Indian GAAP and the SEBI ICDR Regulations.

Any reliance on the financial disclosure in this Red Herring Prospectus, by persons not familiar with Indian Accounting Practices, should accordingly be limited.

References to the "Company", "we", "us" and "our" in this chapter refer to Influx Healthtech Limited, as applicable in the relevant fiscal period, unless otherwise stated.

OVERVIEW OF OUR BUSINESS

Influx Healthtech Limited is a Mumbai-based, healthcare focused company specialising in contract manufacturing. Since its inception in 2020, the Company has established itself as a reliable Contract Development and Manufacturing Organization (CDMO), offering specialized services to a wide range of clients across various industries.

The Company operates three manufacturing facilities located in Thane, Maharashtra, covering a total area of approximately 9,676 square feet, 13,000 square feet, and 14,000 square feet, respectively. These facilities are certified to international quality standards, including GMP (Good Manufacturing Practice), HACCP (Hazard Analysis & Critical Control Points), ISO 22000, and Halal certifications, ensuring adherence to the highest standards of safety, quality and regulatory compliance.

These certifications reflect our adherence to stringent safety, quality, and regulatory compliance standards. Equipped with advanced machinery, a dedicated quality control department, and a skilled workforce, our facilities are designed to meet diverse customer needs efficiently and effectively.

Our expertise spans the production of Dietary and Nutritional Supplements, Cosmetics, Ayurvedic/Herbal Products, Veterinary Feed Supplements, Homecare Products, Active Pharmaceutical Ingredients (APIs), and finished dosage forms, including tablets, capsules, and injectables.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our financial condition and results of operations are affected by numerous factors and uncertainties, including those discussed in the section titled ‘Risk Factors beginning on page 38 of this Red Herring Prospectus. The following are certain factors that have had, and we expect will continue to have, a significant effect on our financial condition and results of operations:

Outlook and performance of the nutraceutical and other related industry as a whole;

Companys ability to successfully implement its growth expansion plan;

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

Timely availability and/or price fluctuations of key raw materials such as vitamins and minerals, herbal extracts, amino acids, pro biotics, fiber, fatty acids, enzymes, proteins and peptides, natural flavors and sweeteners, preservatives etc.

Labour costs and availability of skilled labour;

Access to financing and capital for research and development, expansion, and investment in new technologies;

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

Failure to adapt to the changing technology in our industry of operation may adversely affect our business and financial condition;

Pricing pressures from the competitive business environment and continuous monitoring and analyzing the performance of competitors in the market to stay competitive and identification of areas for improvement;

Changes, if any, in the regulations/regulatory framework/economic policies in India and/or in foreign countries, which affect national & international finance;

Occurrence of environmental problems & uninsured losses.

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies have been applied consistently to the periods presented in the Restated Financial Statements. For details of our significant accounting policies, please refer section titled ‘Financial Information beginning on page 258 of this Red Herring Prospectus.

RESULTS OF OUR OPERATIONS

Influx Healthtech Limited, a healthcare product-focused company operating as a Contract Development and Manufacturing Organization (CDMO), specialize in a diverse range of products across several segments, including Dietary/Nutritional Supplements, Cosmetics, Ayurvedic/Herbal, Veterinary Feed Supplements and Homecare segment. This includes the production of Active Pharmaceutical Ingredients (APIs) and the manufacturing of finished dosage forms such as tablets, capsules, and injectable.

On a macro economic outlook, the Indian nutraceutical markets has witnessed remarkable growth in recent years. One of the primary factors driving the market is the increasing awareness of its health benefits. Further, after the global markets like USA, Japan and Europe have attained maturity, the nutraceutical organizations are now shifting to developing economies in the Asia Pacific.

The following discussion on the results of operations should be read in conjunction with the Restated Financial Statements of the Company for the financial year ended March 31, 2025, March 31, 2024 and March 31, 2023 :

( in lakhs)

	2024-25		2023-24		2022-23
Particulars	Amount	% of Total Revenue	Amount	% of Total Revenue	Amount	% of Total Revenue
Revenue From Operations	10,485.36	99.87%	9,996.51	99.95%	7,605.65	100.00%
Other Income	13.31	0.13%	5.09	0.05%	-	-
Total Revenue	10,498.67	100.00%	10,001.60	100.00%	7,605.65	100.00%
Cost of Material Consumed	6,340.78	60.40%	6,526.94	65.26%	5,274.25	69.35%
Changes in inventories	1.16	0.01%	(37.01)	-0.37%	(2.42)	-0.03%
Employee Benefits Expenses	879.45	8.38%	704.20	7.04%	515.42	6.78%
Finance Costs	0.09	0.00%	21.94	0.22%	4.97	0.07%
Depreciation and Amortization
	282.45	2.69%	185.43	1.85%	93.74	1.23%
Expense
Other Expenses	1,206.84	11.50%	1,106.82	11.07%	746.06	9.81%
Total Expenses	8,710.77	82.97%	8,508.32	85.07%	6,632.02	87.20%
Profit before tax	1,787.91	17.03%	1,493.28	14.93%	973.63	12.80%
Tax Expense
- Current Tax	440.99	4.20%	410.44	4.10%	255.41	3.36%
- Deferred Tax	10.32	0.10%	(29.96)	-0.30%	(1.41)	-0.02%
Profit (Loss) for the period	1,336.60	12.73%	1,112.80	11.13%	719.63	9.46%

Financial performance of the Company for the last three FY

In FY 2022-23, the Company achieved revenue from operations of INR 7,605.65 Lakhs, registering a significant growth of ~28.47% Y-o-Y. During the period, nutraceutical segment contributed at ~94.16% of the total revenue from operations. This significant growth in revenue is due to capacity expansion to 7,000 kg per day in FY 2022-23 from 5,000 kg per day in FY 2021-22 in nutraceuticals segment. The Company was managed to attain an EBITDA margin of ~14.10% and PAT margin of ~9.46%. The Company was able to source raw materials at a cheaper rate resulting in lower cost of material consumed. Thus, the companys profit margins increased despite increase in employee benefits, statutory depreciation and other expenses.

In FY 2023-24, the Company achieved revenue from operations of INR 9,996.51 lakhs registering a significant growth of ~31.44% Y-o-Y. During the period, nutraceuticals segment contributed to ~93.50% of the total revenue from operations. This significant growth in revenue is due to capacity expansion to

10,000 kg per day in FY 2023-24 from 7,000 kg per day in FY 2022-23 in nutraceuticals segment. The Company was managed to attain an EBITDA margin of ~16.96% and PAT margin of ~11.13%. The Company was able to source raw materials at a cheaper rate resulting in lower cost of material consumed. Thus, the companys profit margins increased despite increase in employee benefits, statutory depreciation and other expenses.

In FY 2024-25, the Company achieved revenue from operations of INR 10,485.36 lakhs registering a growth of ~4.89% Y-o-Y. During the period, nutraceuticals segment contributed to ~89.69% of the total revenue from operations. This growth in revenue is due to capacity utilisation to 9,300 kg per day in FY 2024-25 from 7,300 kg per day in FY 2023-24 in nutraceuticals segment. The Company was able to achieve an EBITDA margin of ~19.62% and PAT margin of ~12.75%. The cost of the material used reduced as a result of the Companys ability to source raw materials at a cheaper cost and efficient usage of the same. Thus, despite marginal increase in employee benefit and other expense, the Company yielded an increase in profit margins of the Company.

Rationale for increase in PAT and PAT margin in FY 2024 and FY 2025

The PAT has increased from 1,112.80 lakhs in FY 2024 to 1,336.60 lakhs in FY 2025, and the PAT margin has risen from 16.96% in FY 2024 to 19.62% in FY 2025. This improvement is primarily due to the increase in sales of higher-margin products. The company has shifted its focus to products that yield higher margins, as well as low-volume products, resulting in an increased PAT margin. Furthermore, the company has efficiently improved its sales mix by concentrating on products that generate higher margins.

Number of clients (product-wise) for each of the segments of the Company for the past three preceding financial years

Year	Nutraceutical	Cosmetic	Ayurvedic	Pet Care	Homecare
FY 2025	473	90	54	14	5
FY 2024	426	70	45	10	8
FY 2023	427	58	33	10	10

PRINCIPAL COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS ACCOUNT

Income

Our total revenue for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 amounted to 10,498.67 lakhs, 10,001.60 lakhs & 7,605.65 lakhs respectively. Our revenue comprises of:

Revenue from operations

Our revenue from operations primarily comprises from sale of our products which include major category such as Dietary/Nutritional Supplement, Cosmetic, Gym/Sport Supplement, Ayurvedic, gummies & effervescent tablets, veterinary foods, liquid fill capsules, premix solutions, homecare, oral dispersible films and ice candy. Our revenue from operations accounted for 99.87%, 99.95% and 100.00% of our total income for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 respectively. The category-wise breakup of revenue from operations is presented below:

	2024-25		2023-24		2022-23
Particulars	Amount	% of Revenue from Operations	Amount	% of Revenue from Operations	Amount	% of Revenue from Operations
Nutraceuticals	9,403.82	89.69%	9,346.66	93.50%	7,161.16	94.16%
Others	1,081.54	10.31%	649.85	6.50%	444.49	5.84%
Total	10,485.36	100.00%	9,996.51	100.00%	7,605.65	100.00%

Other revenue

Other revenue primarily comprises of balance written back, reversal of provision for doubtful debt, interest, rent and other incomes. Our other income accounted for 0.13%, 0.05%, and Nil of our total income for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 respectively.

Expenses

Our total expenses for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 amounted to 8,710.77 lakhs, 8,508.32 lakhs and 6,632.02 lakhs respectively. Our expenses primarily consist of the following:

Cost of materials consumed

Cost of materials consumed consists of the consumption of raw materials such as vitamins and minerals, herbal extracts, amino acids, pro biotics, fiber, fatty acids, enzymes, proteins and peptides, natural flavors and sweeteners, preservatives, etc. which amounted to 6,340.78 lakhs, 6,526.94 lakhs and

5,274.25 lakhs for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 respectively accounting for 60.40%, 65.26% and 69.35% of the total income respectively.

Changes in inventories

Changes in inventories amounted to 1.16 lakhs, (37.01) lakhs and (2.42) lakhs for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 respectively accounting for 0.01%, (0.37)% and (0.03)% of the total income respectively.

Employee Benefits Expense

Employee Benefits expenses primarily consist of (i) Salaries, wages and allowances, (ii) Directors remuneration and commission, (iii) Contribution to Provident Fund and other funds and (iv) Staff welfare Expenses and others. Employee Benefits expenses for the financial years ended March 31, 2025,

March 31, 2024 and March 31, 2023 amounted to 879.45 lakhs, 704.20 lakhs and 515.42 lakhs respectively which accounted to 8.38%, 7.04% and 6.78% of our total income respectively.

Finance Costs

Finance cost consists of financing cost on secured loans, other interest costs and financial charges such as bank charges and bill discounting charges totaling to 0.09 lakhs, 21.94 lakhs and 4.97 lakhs for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 which accounted to 0.00%, 0.22% and 0.07% of our total income respectively.

Depreciation and amortization

Depreciation and amortization represent depreciation on our property, plant and equipment & intangible assets. Depreciation and amortization expenses amounted to 282.45 lakhs, 185.43 lakhs and

93.74 lakhs for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 respectively which accounted to 2.69%, 1.85% and 1.23% of our total income respectively.

Other Expenses

Other expenses primarily include manufacturing expenses such as factory expenses, factory rent, labour charges, power and fuel charges, transportation expenses; administrative & other expenses such as bad debts, provision for doubtful debts, corporate social responsibility expenses, legal & professional fees, office rent, printing & stationery, repairs & maintenance, security charges, travelling and conveyance expense and selling & marketing expenses such as commission, exhibition expense. These Manufacturing, Administrative and other and Selling & marketing expenses for the financial year ended on March 31, 2025, March 31, 2024 and March 31, 2023 amounted to 1,206.84 lakhs, 1,106.82 lakhs and 746.06 lakhs respectively accounted for 11.50%, 11.07%, and 9.81% of our total income respectively.

Financial Year 2025 compared to Financial Year 2024

Total Income

Our total income increased by 31.50% from 10,001.60 lakhs in the financial year ended March 31, 2024 to 10,498.67 lakhs in the financial year ended March 31, 2025 primarily due to an increase in revenue from operations.

Revenue from operations

Our revenue from operations increased by 31.44% from 9,996.51 lakhs in the financial year ended

March 31, 2024 to 10,485.36 lakhs in the financial year ended March 31, 2025 on account of an increase in revenue from Nutraceuticals by 0.61% and other segments by 66.43%.

Other Income

Other Income from 5.09 lakhs in financial year ended March 31, 2024 to 13.31 lakhs in financial year ended March 31, 2025. Other Income for the financial year ended March 31, 2025 mainly consists of Interest Income, Rent Income and Sundry balances written off 5.62 lakhs , 3.60 lakhs and 4.00 lakhs respectively whereas Other Income for the financial year ended March 31, 2024 mainly consists of Interest Income and Rent Income amounting to 2.32 lakhs and 2.70 lakhs respectively.

Expenses

Total expenses increased by 2.38% from 8,508.32 lakhs in financial year ended March 31, 2024 to 8,710.77 lakhs in financial year ended March 31, 2025 primarily due to decrease in cost of material consumed, changes in Inventories, finance cost and increase in employee benefit expense, depreciation and other expenses respectively.

Cost of materials consumed

Cost of materials consumed decreased by 2.85% from 6,526.94 lakhs in financial year ended March 31, 2024 to 6,340.78 lakhs in financial year ended March 31, 2025 primarily on account of increase in business volume. As a percentage to total income, cost of material decreased to 60.40%% in financial year ended March 31, 2025 from 65.26%% in financial year ended March 31, 2024.

Changes in inventories

Changes in inventories was 1.16 lakhs in financial year ended March 31, 2025 as compared to

(37.01) lakhs in financial year ended March 31, 2024.

Employee Benefits Expense

Employee Benefits Expense increased by 36.63% from 704.20 lakhs in financial year ended March 31, 2024 to 879.45 lakhs in financial year ended March 31, 2025. As a percentage to total income, employee benefits expenses increased to 8.38% in financial year ended March 31, 2025 from 7.04% in financial year ended March 31, 2024.

Finance Costs

Finance costs for the financial year ended March 31, 2025 amounted to 0.09 lakhs as compared to 21.94 lakhs in financial year ended March 31, 2024 which is decrease of 99.58%. As a percentage to total income, finance costs decreased to 0.01% in financial year ended March 31, 2025 from 0.22% in financial year ended March 31, 2024.

Depreciation and amortization

Depreciation and amortization expenses was 185.43 lakhs in financial year ended March 31, 2024 as compared to 282.45 lakhs in financial year ended March 31, 2025. As a percentage to total income, depreciation and amortization expenses increased to 2.69% in financial year ended March 31, 2025 from 1.85% in financial year ended March 31, 2024.

Other Expenses

Other expenses increased by 9.04%% from 1,106.82 lakhs in financial year ended March 31, 2024 to

1,206.84 lakhs in financial year ended March 31, 2025. However, as a % of total income, other expense accounts for 11.50% for the financial year ended March 31, 2025 compared to 11.07% for the financial year ended March 31, 2024. This increase on Y-o-Y basis is primarily on account of increase in manufacturing expenses like factory expense, labour charges, transportation expense; administrative & other expenses like legal & professional fees expenses. Factory expenses increased by 16.85% from

64.19 lakhs in financial year ended March 31, 2024 to 75.00 lakhs in financial year ended March 31, 2025. Labour charges increased by 26.83% from 319.26 lakhs in financial year ended March 31, 2024 to 404.93 lakhs in financial year ended March 31, 2025. Transportation expense increased by 11.69% from 96.33 lakhs in financial year ended March 31, 2024 to 107.59 lakhs in financial year ended March 31, 2025. Legal and professional fees increased by 6.55% from 60.67 lakhs in financial year ended March 31, 2024 to 64.65 lakhs in financial year ended March 31, 2025.

Financial Year 2024 compared to Financial Year 2023

Total Income

Our total income increased by 31.50% from 7,605.65 lakhs in the financial year ended March 31, 2023 to 10,001.60 lakhs in the financial year ended March 31, 2024 primarily due to an increase in revenue from operations.

Revenue from operations

Our revenue from operations increased by 31.44% from 7,605.65 lakhs in the financial year ended March 31, 2023 to 9,996.51 lakhs in the financial year ended March 31, 2024 on account of an increase in revenue from Nutraceuticals by 30.52% and other segments by 46.20%.

Other Income

Other Income from Nil in financial year ended March 31, 2023 to 5.09 lakhs in financial year ended March 31, 2024. Other Income for the financial year ended March 31, 2023 consists of balance written back amounting to Nil.

Expenses

Total expenses increased by 28.29% from 6,632.02 lakhs in financial year ended March 31, 2023 to

8,508.32 lakhs in financial year ended March 31, 2024 primarily due to increase in cost of material consumed, changes in inventories, finance cost, employee benefit expense and other expenses.

Cost of materials consumed

Cost of materials consumed increased by 23.75% from 5,274.25 lakhs in financial year ended March 31, 2023 to 6,526.94 lakhs in financial year ended March 31, 2024 primarily on account of increase in business volume. As a percentage to total income, cost of material decreased to 65.26% in financial year ended March 31, 2024 from 69.35% in financial year ended March 31, 2023.

Changes in inventories

Changes in inventories was (37.01) lakhs in financial year ended March 31, 2024 as compared to

(2.42) lakhs in financial year ended March 31, 2023.

Employee Benefits Expense

Employee Benefits Expense increased by 36.63% from 515.42 lakhs in financial year ended March 31, 2023 to 704.20 lakhs in financial year ended March 31, 2024. As a percentage to total income, employee benefits expenses increased to 7.04% in financial year ended March 31, 2024 from 6.78% in financial year ended March 31, 2023.

Finance Costs

Finance costs for the financial year ended March 31, 2024 amounted to 21.94 lakhs as compared to

4.97 lakhs in financial year ended March 31, 2023 which is increase of 341.48%. As a percentage to total income, finance costs increased to 0.22% in financial year ended March 31, 2024 from 0.07% in financial year ended March 31, 2023.

Depreciation and amortization

Depreciation and amortization expenses was 93.74 lakhs in financial year ended March 31, 2023 as compared to 185.43 lakhs in financial year ended March 31, 2024. As a percentage to total income, depreciation and amortization expenses increased to 1.85% in financial year ended March 31, 2024 from 1.23% in financial year ended March 31, 2023.

Other Expenses

Other expenses increased by 48.36%% from 746.06 lakhs in financial year ended March 31, 2023 to

1,106.82 lakhs in financial year ended March 31, 2024. However, as a % of total income, other expense accounts for 11.07% for the financial year ended March 31, 2024 compared to 9.81% for the financial year ended March 31, 2023. This increase on Y-o-Y basis is primarily on account of increase in manufacturing expenses like factory expense, labour charges, transportation expense; administrative & other expenses like legal & professional fees and repairs and maintenance expenses. Factory expenses increased by 65.00% from 38.90 lakhs in financial year ended March 31, 2023 to 64.19 lakhs in financial year ended March 31, 2024. Labour charges increased by 41.29% from 225.97 lakhs in financial year ended March 31, 2023 to 319.26 lakhs in financial year ended March 31, 2024. Transportation expense increased by 55.48% from 61.96 lakhs in financial year ended March 31, 2023 to 96.33 lakhs in financial year ended March 31, 2024. Legal and professional fees increased by

242.55% from 17.71 lakhs in financial year ended March 31, 2023 to 60.67 lakhs in financial year ended March 31, 2024. Repairs and maintenance expense increased by 384.73% from 14.47 lakhs in financial year ended March 31, 2023 to 70.13 lakhs in financial year ended March 31, 2024.

CASH FLOWS

The following table sets forth our cash flows for the period indicated:

Particulars	March 31, 2025	March 31, 2024	March 31, 2023
Net cash flow from/(used in) operating activities	705.62	894.25	682.24
Net cash flow from/(used in) investing activities	(864.47)	(835.73)	(487.96)
Net cash flow from/(used in) financing activities	(10.66)	(52.67)	13.91
Net increase/(decrease) in cash and cash equivalents	(169.50)	5.86	208.19
Opening Balance of Cash and Cash Equivalents (Restated)
Cash and cash equivalents	290.56	354.71	146.52
Short term bank deposits	70.00	-	-
Closing Balance of Cash and Cash Equivalents	191.06	360.57	354.71

Operating Activities

Financial Year 2024-25

Our net cash generated in operating activities was 705.62 lakhs Financial Year 2024-25. Our operating profit before changes in working capital items was 2,069.32 lakhs which was adjusted against changes in trade payables, other current liabilities, provision, trade receivables, inventories, loans and advances and other current and non-current assets by 1,543.92 lakhs, 59.69 lakhs, (10.94) lakhs, (1,656.99) lakhs, (776.11) lakhs, (11.64) lakhs and (67.45) lakhs respectively and Income Tax Adjustments of (444.18) lakhs.

Financial Year 2023-24

Our net cash generated in operating activities was 894.25 lakhs for the financial year ended March 31, 2024. Our operating profit before changes in working capital items was 1,721.35 lakhs which was adjusted against changes in trade payables, other current liabilities, provision, trade receivables, inventoriesand loans and advances by 54.23 lakhs, (19.22) lakhs, 12.39 lakhs, (232.18) lakhs, (349.43) lakhs and 2.57 lakhs respectively and Income Tax Adjustments of (295.45) lakhs.

Financial Year 2022-23

Our net cash generated in operating activities was 682.24 lakhs for the financial year ended March 31, 2023. Our operating profit before changes in working capital items was 1,073.88 lakhs which was adjusted against changes in trade payables, other current liabilities, provision, trade receivables, inventories, loans and advances and other long term liabilities by 248.68 lakhs, 75.63 lakhs, 9.46 lakhs, (352.99) lakhs, (20.70) lakhs, (103.72) lakhs and 5.26 respectively and Income Tax Adjustments of (253.27) lakhs.

Investing Activities

Financial Year 2024-25

Our net cash used in investing activities was 864.47 lakhs Financial Year 2024-25. It was on account of purchase of property, plant and equipment and intangible assets of 821.11 lakhs, inflow due to interest income of 6.64 lakhs and outflow due to increase in fixed deposit of 50.00 lakhs.

Financial Year 2023-24

Our net cash used in investing activities was 835.73 lakhs for the financial year ended March 31, 2024. It was on account of purchase of property, plant and equipment and intangible assets of 835.96 lakhs and inflow due to interest income of 0.23 lakhs.

Financial Year 2022-23

Our net cash used in investing activities was 487.96 lakhs for the financial year ended March 31, 2023 on account of purchase of property, plant and equipment and intangible assets.

Financing Activities

Financial Year 2024-25

Net cash used in financing activities Financial Year 2024-25 was 10.66 lakhs which was on account of repayment of short term borrowings amounting to 10.56 lakhs and finance cost of 0.09 lakhs.

Financial Year 2023-24

Net cash used in financing activities for the financial year ended March 31, 2023 was 52.67 lakhs which was on account of repayment of long term borrowings and short term borrowings amounting to

3.29 lakhs and 44.08 lakhs respectively and finance cost of 5.30 lakhs.

Financial Year 2022-23

Net cash generated in financing activities for the financial year ended March 31, 2023 was 13.91 lakhs which was on account of repayment of long term borrowings of 4.56 lakhs, increase in short term borrowings amounting to 23.41 lakhs and finance cost of 4.94 lakhs.

Contingent Liabilities

As on March 31, 2025, there is nil contingent liability on the Company.

Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss related to adverse changes in market prices, including interest rates. In the normal course of business, we are exposed to certain market risks including interest rate risk, liquidity risk and credit risk. We aim to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on our financial performance.

Interest rate risk

Interest rate risk arises from changes in prevailing market interest rates, which can cause a change in the fair value of fixed-rate instruments and affect the interest payments of the variable-rate instruments. Our operations are funded to a certain extent by borrowings. While our current loan facilities do not carry interest cost, we may avail the interest-bearing borrowings in future. We mitigate the risk by structuring our borrowings to achieve a reasonable and competitive cost of funding. There can be no assurance that we will be able to do so on commercially reasonable terms, that our counterparties will perform their obligations, or that these agreements, if entered into, will adequately protect us against interest rate risks.

Liquidity risk

Liquidity risk is the risk that our Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk is managed by us through effective fund management of the Companys short, medium and long-term funding and liquidity management requirements. Our Company employee prudent liquidity risk management practices by maintaining adequate reserves, banking facilities and other committed borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Credit Risk

Credit risk is the risk of financial loss to our Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. It primarily arises from our Companys trade and other receivables, cash and cash equivalents and other bank balances. To manage this, we periodically assesses financial creditworthiness of customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts receivable. The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their respective carrying amount. However, there can be no assurance that our counterparties may not default on their obligations, which may adversely affect our business and financial condition.

Trade and other receivables from customers

Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to whom the Company grants credit terms in the normal course of business. Our Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates.

Cash and cash equivalents

The cash and cash equivalents are held with bank that have good credit ratings and financial institution counterparties with good market standing.

Material Frauds

There are no material frauds committed against our Company in the last three financials year.

Disclosure under Item (II)(C)(iv) of Part A of Schedule VI to the SEBI Regulations

A. Unusual or infrequent events or transactions including unusual trends on account of business activity, unusual items of income, change of accounting policies and discretionary reduction of expenses etc.

Except as described elsewhere in this Red Herring Prospectus, there have been no events or transactions to our knowledge which may be described as "unusual" or "infrequent"

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

Government policies governing the sector in which we operate as well as the overall growth of the Indian economy has a significant bearing on our operations. Major changes in these factors can significantly impact income from continuing operations.

There are no significant economic changes that materially affected our Companys operations or are likely to affect income except as mentioned in the section titled ‘Risk Factors beginning on page 38 of this Red Herring Prospectus.

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

Other than as described in the section titled ‘Risk Factors and ‘Managements Discussion and Analysis of Financial Conditions and Results of Operations beginning on page 38 and 263, respectively of this Red Herring Prospectus, to our knowledge there are no known trends or uncertainties that have or are expected to have a material adverse impact on our income from continuing operations.

D. Expected future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known

Other than as described in the section titled ‘Risk Factors and ‘Managements Discussion and Analysis of Financial Conditions and Results of Operations beginning on page 38 and 263, respectively of this Red Herring Prospectus, there are no known factors to our knowledge which would have a material adverse impact on the relationship between costs and income of our Company.

Our Companys future costs and revenues will be determined by demand/supply situation, availability of skilled labours, government policies and other economic factors.

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

For details, please see the section titled Revenue from operations under the section ‘Principal Components of our Statement of Profit and Loss Account on page 266 of this Red Herring Prospectus.

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

For details, please see the section titled Revenue from operations under the section ‘Principal Components of our Statement of Profit and Loss Account on page 266266 of this Red Herring Prospectus.

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

Except as disclosed in this Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new products/services or business segment.

H. The extent to which business is seasonal

Our Company is a healthcare product-focused company operating as a Contract Development and Manufacturing Organization (CDMO), specialize in a diverse range of products across several segments, including Dietary/Nutritional Supplements, Cosmetics, Ayurvedic/Herbal, Veterinary Feed Supplements and Homecare segment. This includes the production of Active Pharmaceutical Ingredients (APIs) and the manufacturing of finished dosage forms such as tablets, capsules, and injectable. Our Companys business is not seasonal in nature.

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

Revenues from any particular customer may vary between financial reporting periods depending on the nature and term of ongoing contracts with such customer. The table below sets forth our revenue from our top 10 customers of our Company as a percentage of our revenue from operations for the financial year period ended March 31, 2025, March 31, 2024 and March 31, 2023 are as below:

( in lakhs)

	March 31, 2025		March 31, 2024		March 31, 2023
Particulars	Amt.	% of Revenue from Operations	Amt.	% of Revenue from Operations	Amt.	% of Revenue from Operations
Top 10 Customers	5,020.11	47.89%	5,009.10	50.10%	3,522.78	46.29%

The table set forth our supplier dependence of top 10 supplier of our Company as a percentage of Total Supplies for the financial year period ended March 31, 2025 and for the financial year ended March 31, 2024 and March 31, 2023 are as below:

( in lakhs)

	March 31, 2025		March 31, 2024		March 31, 2023
Particulars	Amt.	% of Total Supplies	Amt.	% of Total Supplies	Amt.	% of Total Supplies
Top 10 Suppliers	2,590.03	36.38%	2,698.44	39.44%	2,055.57	38.84%

J. Competitive conditions

We expect competition in our business to intensify from existing and potential competitors. We face competition from both organised and unorganised players in the market. We believe that our expertise, quality offerings and distinguished experience will be key to overcoming competition posed by such players. We believe that the principal factors affecting competition in our business include client relationships, reputation, and the quality and pricing of our products.

Related Party Transactions

We have entered into transactions with certain related parties, including directors, chief financial officer, company secretary and group entities. In particular, we have engaged in various transactions with these parties in relation to, amongst others, remuneration, commission, rent expense, loans, other advances, Sale & purchase of product, etc.

For further information relating to our related party transactions see ‘Financial Information on page 258 of this Red Herring Prospectus.

Material Developments subsequent to last Audited Balance Sheet

After the date of Audited accounts i.e. March 31, 2025, the Directors of our Company confirm that there have not been any significant material developments except mentioned below:

1. Our Company has approved Audited Financial Statements for the financial year ended 2024-25 in the Board Meeting held on May 28, 2025.

2. Our Company has approved Restated Financial Statements for the financial year ended March 31, 2025, 2024 and 2023 in the Board Meeting held on May 28, 2025.