M P K Steels I Ltd Management Discussions

(9) Total Annual Manpower is total number of employees engaged in the working of the company in each month of the corresponding year

(10) Average Manpower Cost provides cost incurred per employee by the company. It is calculated as Employee benefit cost divided by total annual manpower.

*As certified by B D G & Co. LLP, Chartered Accountants, pursuant to their certificate dated July 08, 2025.

For further detail on Key Performance Indicators of our company, please refer Chapter Titled “Basis of Offer Price” on page 109 of this Draft Red Herring Prospectus.

STATEMENT OF SIGNIFICANT POLICIES

(1) Corporate Information

1.1 Company Background

Our Company was initially incorporated as a private company in the name of “M P K Steels (I) Private Limited” on February 28, 2005, under the provision of Companies Act 1956 bearing Corporate Identification Number U27109AS2005PTC007674 issued by Registrar of Companies Assam, Mizoram, Manipur, Tripura, Nagaland, Arunachal Pradesh & Meghalaya, Guwahati. Subsequently, our Company was converted into Public Limited Company pursuant to Shareholders resolution passed at the Extraordinary General Meeting of our Company held on November 12, 2024, and the name of our Company was changed to “M P K Steels (I) Limited” and a Fresh Certificate of Incorporation consequent upon conversion of Company to Public Limited dated December 16, 2024 was issued by the Registrar of Companies, Central Processing Centre. The Corporate Identification Number of the Company is U27109AS2005PLC007674.

The Company is engaged in the manufacturing and trading of General Purposes Structural Steel products which includes M.S. Chanel, M.S. Joist/Beam, M.S. Angle, M.S. Square Bar, M.S. Round Bar, M.S. Flat. The channels provided by us are widely used in various structural applications. The angles manufactured by us are widely used in different sectors and only the products which are 100% flawless according to our parameters are rendered to the markets.

The registered office of the company is located at House No. 87, Rajgarh Road, Silpukhuri, Kamrup, Gmc, Assam, India- 781003 and books of accounts maintained at-A - 195, RIICO Industrial Area Extension, Phase 2 Bagru, Jaipur, Rajasthan, India - 303007.

1.2 Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with Indian GAAP, the Companies Act and restated in accordance with the SEBI (ICDR) Regulations, Guidance Note on “Reports in Company Prospectus (Revised 2019)” issued by ICAI and the Indian GAAP. The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013 read together with the Companies (Accounting Standards) Rules, 2021 and presentation requirements of Division I of Schedule III to the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for derivative financial instruments which have been measured at fair value. The accounting policies adopted in the preparation of Standalone financial statements are consistent with those of previous year, except for the change in accounting policy explained below

1.3 Financial Statements: Presentation and disclosures

Financial Statements contain the information and disclosures mandated by Revised Schedule III, applicable accounting standards, other applicable pronouncements and regulations.

All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of Services and the time between

the provision of services and the realization of the revenue in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current, non- current, classification of assets and liabilities.

1.4 Use of Estimates

The preparation of financial statements is in conformity with generally accepted accounting principles which requires managements to make judgements, estimates and assumptions that affect the application of accounting policies and reported amount of assets and liabilities, income and expenses and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Estimates and assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current and future periods.

1.5 Property, Plant & Equipment and Depreciation

Property, Plant and Equipment are stated at cost less accumulated depreciation. Cost comprises of all expenses incurred to bring the assets to its present location and condition. Borrowing cost directly attributable to the acquisition /construction are included in the cost of fixed assets. Adjustments arising from exchange rate variations attributable to the Property, Plant & Equipment are capitalized.

Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future economic benefits from the existing asset beyond its previously assessed standard of performance.

Capital assets (including expenditure incurred during the construction period) under erection / installation are stated in the Balance Sheet as “Capital Work in Progress.”

All Property, Plant & Equipment, except capital work in progress, are depreciated on WDV Method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Depreciation on additions to / deletions from fixed assets made during the period is provided on pro-rata basis from / up to the date of such addition /deletion as the case may be.

The title deeds of the following immovable properties are not held in the name of the Company:

a) The Company has taken on lease a property from RIICO, located at Plot No. A-195, Industrial Area, Bagru (Extension) Phase II, Jaipur. The lease is for a period of 99 years, commencing from 10th January 2005.

b) The Company has also taken a property on sub lease located at House No. 87, Rajgarh Road, Silpukhuri, Kamrup, GMC, Assam - 781003, for a period of 12 months starting from 01st July 2024.

1.6 Impairment of Assets

The carrying amounts of the assets are reviewed at each Balance Sheet date. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged when the asset is identified as impaired.

1.7 Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized

Sale of goods - Sales are recognized, net of returns and trade discounts, on transfer of significant risk and rewards of ownership to the buyer, which generally coincide with the delivery of goods to the customers. The Company collects Goods and Service Tax (GST) and / or Tax Collected at source on behalf of the government and, therefore, these do not form a part of economic benefits flowing to the Company.

Revenue on Interest income - Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the statement of profit and loss.

1.8 Current and Non-Current Classification

The Company presents assets and liabilities in the Balance Sheet based on current/ non-current classification. An asset is treated as current when it is:

i) Expected to be realised or intended to be sold or consumed in normal operating cycle

ii) Held primarily for the purpose of trading

iii) Expected to be realised within twelve months after the reporting period, or

iv) Cash or cash equivalent unless 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 current when:

i) It is expected to be settled in normal operating cycle

ii) It is held primarily for the purpose of trading

iii) It is due to be settled within twelve months after the reporting period, or

iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other liabilities as non-current.

Long term benefits:

a) Defined Contribution Plan

The Company contributes to a recognised provident fund for all its employees. Contributions are recognised as an expense when employees have rendered services entitling them to such benefits.

b) Gratuity

The Company provides for its gratuity liability based on actuarial valuation as at the balance sheet date which is carried out by an independent actuary using the Projected Unit Credit Method. Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions are credited or charged to Statement of Profit and Loss in the period in which such gains or losses arise.

1.9 Related Party Transaction

Disclosure of transactions with related parties and where control exists, as required by Accounting Standard 18 "Related Party Disclosure" has been set out in a Notes to the Financial Statement. Related parties as defined under clause 3 of the Accounting Standard have been identified based on representations made by key managerial personnel and information available with the Company. For further details, please refer “Related Party Transactions” on page 232 of this Draft Red Herring Prospectus.

1.10 Preliminary Expenses

Preliminary Expenses have been written off over a period of 5 years.

1.11 Disclosure of accounting Policies

The accounting policies have been disclosed to the extent applicable to the Company.

1.12 Accounting for Taxation:

Income Tax

Income Taxes are accounted for in accordance with Accounting Standard 22 on “Accounting for Taxes on Income”. Taxes comprise both current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred Tax

Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred tax liabilities are recognized for all taxable timing differences. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. Deferred tax assets are recognized subject to prudence and only if there is reasonable certainty that they will be realized.

1.13 Earnings Per Share

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted-average number of equity shares outstanding during the year. The weighted-average number of equity shares outstanding during the year and for all years presented is adjusted for events such as bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted-average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.14 Leases

Where the company is lessee

Finance leases, which effectively transfer to the company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as finance costs in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs of lease are capitalized.

A leased asset is depreciated on a straight-line basis over the useful life of the asset. However, if there is no reasonable certainty that the company will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.

Where the company is the lessor

Leases in which the company transfers substantially all the risks and benefits of ownership of the asset are classified as finance leases. Assets given under finance lease are recognized as a receivable at an amount equal to the net investment in the lease. After initial recognition, the company apportions lease rentals between the principal repayment and interest income so as to achieve a constant periodic rate of return on the net investment outstanding in respect of the finance lease. The interest income is recognized in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss. Leases in which the company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in property, plant and equipment. Lease income on an operating lease is recognized in the statement of profit and loss on a straight-line basis over the lease term. Costs, including depreciation, are recognized as an expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

1.15 Borrowing costs

Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

1.16 Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident. Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

1.17 "Changes in Accounting Policies in the Period/Years Covered in The Restated Financial Statements”

There is no change in significant accounting policies adopted by the Company.

1.18 Other Notes on Restated Financial statements

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

Contingent liabilities and commitments (to the extent not provided for) - A disclosure for a contingent liability is also made when there is a possible obligation that may, require an outflow of the Companys resources.

Figures have been rearranged and regrouped wherever practicable and considered necessary.

The management has confirmed that adequate provisions have been made for all the known and determined liabilities and the same is not in excess of the amounts reasonably required to be provided for.

The balances of trade payables, trade receivables, loans and advances are unsecured and considered as good are subject to confirmations of respective parties concerned.

Realizations: In the opinion of the Board and to the best of its knowledge and belief, the value on realization of current assets and loans and advances are approximately of the same value as stated.

Contractual liabilities: All other contractual liabilities connected with business operations of the Company have been appropriately provided for.

Amounts in the restated financial statements: Amounts in the restated financial statements are rounded off to nearest Lakhs. Figures in brackets indicate negative values

1.19 Provisions

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Where the company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

1.20 Contingent liabilities and Contingent Assets Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

Contingent Assets

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by- the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. The Company does not recognize the contingent asset in its financial statements since this may result in the recognition of income that may never be realised. Where an inflow of economic benefits are probable, the Group disclose a brief description of the nature of contingent assets at the end of the reporting period. And give disclosures as required by AS 29. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset, and the Group recognize such assets. Contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

1.21 Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

1.22 Employee Benefits

" Short - term employee benefits are recognized as an expense at the undiscounted amount in the profit & loss account of the year in which the related service is rendered. Post-employment and other long term employee benefits are recognized as an expense in the profit & loss account for the year in which the liabilities are crystallized/accrued."

1.23 Inventory

As per Accounting Standard-2, Raw materials, Consumable Stores and Spares and Packing materials are valued at cost (Net of available Cenvat Credit) on First-in-first out basis (FIFO) or at market price whichever is lower.

WIP, Scrap and Finished goods are valued at cost of production on average cost basis or net realizable value whichever is lower.

By-Products are valued at Market Price

Traded goods are valued at lower of cost and net realizable value.

The comparison between cost and net realizable value is made on an item by item basis.

Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on First-in-first out basis (FIFO)

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

DISCUSSION ON BALANCE SHEET ITEMS

The following are the explanation of financial data from our Financial Statements as Restated Balance Sheet for the financial years ended on March 31, 2025, 2024 and 2023:

COMPARISON OF FY 2024-25 WITH FY 2023-24

Long Term Borrowings

Our Long Term Borrowings increased by Rs. 448.47 Lakhs from Rs. 610.47 Lakhs for the financial year ended March 31,2024 to Rs. 1,058.94 Lakhs for the financial year ended March 31,2025 representing an increase of 73.46%, such significant increase is on account of addition of two fresh loans taken for working capital requirements as well as a car loan.

Short Term Borrowings

Our Short Term Borrowings increased by Rs. 5.69 Lakhs from Rs. 783.79 Lakhs for the financial year ended March 31,2024 to Rs. 789.48 Lakhs for the financial year ended March 31,2025 representing a nominal increase of 0.73% as per the usage of sanctioned limits.

Trade Receivables

Our Trade Receivables increased by Rs. 1,093.67 Lakhs from Rs. 623.07 Lakhs for the financial year ended March 31,2024 to Rs. 1,716.74 Lakhs for the financial year ended March 31,2025 representing an increase of 175.53%, such significant increase is on account of increase in revenue from operations.

Trade Payables

Our Trade Payables decreased by Rs. 282.95 Lakhs from Rs. 2,065.46 Lakhs for the financial year ended March 31,2024 to Rs. 1,782.51 Lakhs for the financial year ended March 31,2025 representing a decrease of 13.70%, such decrease is on account of payment made to creditors in order to reduce the interest cost.

Inventories

Our Inventory increased by Rs. 360.43 Lakhs from Rs. 2,973.79 Lakhs for the financial year ended March 31,2024 to Rs. 3,334.22 Lakhs for the financial year ended March 31,2025 representing an increase of 12.12%, such increase is on account of increase in production.

Investments

Our investments decreased by Rs. 2.44 Lakhs from Rs. 4.90 Lakhs for the financial year ended March 31,2024 to Rs. 2.46 Lakhs for the financial year ended March 31,2025 representing a decrease of 49.80%, such decrease is on account of sale of investments in group companies.

Loans and Advances given

Our loans and advances given decreased by Rs. 588.27 Lakhs from Rs. 1,220.11 Lakhs for the financial year ended March 31,2024 to Rs. 631.84 Lakhs for the financial year ended March 31,2025 representing a decrease of 48.21%, such significant decrease is on account of repayment of unsecured loan given to our group company.

COMPARISON OF FY 2023-2024 WITH FY 2022-23

Long Term Borrowings

Our Long Term Borrowings increased by Rs. 248.87 Lakhs from Rs. 361.60 Lakhs for the financial year ended March 31,2023 to Rs. 610.74 Lakhs for the financial year ended March 31,2024 representing an increase of 68.82%, such significant increase is on account of addition of a loan towards working capital requirements and a car loan.

Short Term Borrowings

Our Short Term Borrowings decreased by Rs. 308.48 Lakhs from Rs. 1,092.27 Lakhs for the financial year ended March

31.2023 to Rs. 783.79 Lakhs for the financial year ended March 31,2024 representing a decrease of 28.24%, this is on account of repayment of loan taken from directors and related parties.

Trade Receivables

Our Trade Receivables increased by Rs. 31.92 Lakhs from Rs. 591.15 Lakhs for the financial year ended March 31,2023 to Rs. 623.07 Lakhs for the financial year ended March 31,2024 representing a nominal increase of 5.40%.

Trade Payables

Our Trade Payables increase by Rs. 769.92 Lakhs from Rs. 1,295.54 Lakhs for the financial year ended March 31,2023 to Rs. 2,065.46 Lakhs for the financial year ended March 31,2024 representing an increase of 59.43%, such increase is on account of increase in purchases made.

Inventories

Our Inventory increased by Rs. 1,024.53 Lakhs from Rs. 1,949.26 Lakhs for the financial year ended March 31,2023 to Rs. 2,973.79 Lakhs for the financial year ended March 31,2024 representing an increase of 52.56%, such increase is on account of significant increase in production and revenue from operations.

Investments

There was no change in our investments for the financial year ended March 31,2024 and for the financial year ended March 31,2023.

Loans and Advances given

Our loans and advances given increased by Rs. 23.38 Lakhs from Rs. 1,196.73 Lakhs for the financial year ended March

31.2023 to Rs. 1,220.11 Lakhs for the financial year ended March 31,2024 representing a nominal increase of 1.95%.

DISCUSSION ON RESULTS OF OPERATIONS

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

Results of Our Operations

The following table sets forth select financial data from our Financial Statements as Restated Profit and Loss for the financial years ended on March 31 2025, 2024 and 2023 the components of which are also expressed as a percentage of total revenue for such periods:

Overview of Revenue and expenditure

Total Income: Our total income comprises of revenue from operations and other income.

Revenue from operations: Our revenue from operations comprises of Sales of Manufactured Finish Goods, Sale of Traded Goods and Other Operating Revenue which consist of revenue from scrap sale, Sale of Raw Material and Other Revenue.

Other Income: Our Other Income consists of Interest Income from Loan, Fixed Deposits & Income tax refund, Sundry Balances written back, Bad-Debts Recovered, Capital gain on Sale of Investments and Profit on Sale of Fixed Assets.

Expenses: Our Expenses comprise of Cost of Material Consumed, Purchase of Trading Goods, Change in Inventories of work in progress and finished goods, Employee Benefit Expenses, Finance Cost, Depreciation & Amortisation Expenses and Other Expenses.

Cost of Raw Material Consumed: Our Raw Material consumed consists of Change in Stock of Raw Material, Purchase of Raw Material & Consumption of Stores net of discounts received and Direct Expenses which further includes Power & Fuel, Water expenses, Repairs and Maintenances and Wages.

Purchase of Trading Goods: Our Purchase of trading goods comprises of Purchase of Finished Goods and Melting Scrap.

Changes in Inventories: Our Changes in Inventories comprises of Change in Stock of Finished goods, Traded Goods, Scrap and Iron Dust.

Employee Benefit Expenses: Our employee benefit expense consists of Salaries, Wages & Bonus, Directors Remuneration, Gratuity and Contribution to Provident and Other Funds and Other Allowances.

Finance Cost: Our finance costs comprise of Bank Charges & Processing Charges, Interest on Term Loan, Working capital term loan & other unsecured borrowings.

Depreciation and amortisation expenses: Tangible assets are depreciated over periods corresponding to their estimated useful lives. Depreciation includes depreciation charged on Property, Plant & Equipment excluding freehold land.

Other expenses: Other expenses includes Audit fees - Refer note 28 (a), Bad debts, Balance Written off, Brokerage & commission, Compensation Cess - Exp., Donation, Fees & subscriptions, Freight outward, GST Demand, Interest & Late Fees on GST, Interest on TDS , Interest on income tax, Interest on Late Payment of Creditors, Motor Car Expenses, Office Expenses, Packing & Delivery expenses, Professional & Consultancy charges, Provision for Doubtful Advances, Rates & taxes, Rent , Repair & Maintenance - others, Telephone & Internet Expenses and Travelling Expenses.

Tax Expenses: Income taxes are accounted for in accordance with Accounting Standard - 22 on “Accounting for Taxes on Income” (“AS-22”), prescribed under the Companies (Accounting Standards) Rules, 2006. Our Company provides for current tax as well as deferred tax, as applicable.

Provision for current taxes is made at the current tax rates after taking into consideration the benefits available to our Company under the provisions of the Income Tax Act, 1961.

Deferred tax arises from the timing differences between book profits and taxable profits that originate in one period and are capable of reversal in one or more subsequent periods and is measured using the tax rates and laws applicable as of the date of the financial statements. Our Company provides for deferred tax asset / liability on such timing differences subject to prudent considerations in respect of deferred tax assets.

COMPARISON OF FY 2024-25 WITH FY 2023-24

Total Income

Our Total Income increased by Rs. 1,885.47 Lakhs from Rs. 18,917.33 Lakhs for the financial year ended March 31, 2024 to Rs. 20,802.80 Lakhs for the financial year ended March 31, 2025, representing a growth of 9.97 % due to the factors described below:

Revenue from Operations

Our Revenue from operations increased by Rs. 1,997.65 Lakhs from Rs. 18,660.54 Lakhs for the financial year ended March 31, 2024 to Rs. 20,658.20 Lakhs for the financial year ended March 31, 2025 representing a growth of 10.71%, such significant growth is on account of addition of new customers, new products and repetitive orders from existing customers.

Other Income

Our Other Income decreased by Rs. 112.18 Lakhs, from Rs. 256.79 Lakhs for the financial year ended March 31, 2024, to Rs. 114.61 Lakhs for the financial year ended March 31, 2025, representing a decrease of 43.69% majorly because of no recovery of Bad-debts and decrease in sundry balances written back.

Expenses

Our Total Expenses excluding Finance cost, Depreciation and Tax Expenses increased by Rs. 1,455.98 Lakhs from Rs. 18,332.97 Lakhs for the financial year ended on March 31, 2024 to Rs. 19,788.95 Lakhs for the financial year ended on March 31, 2025 representing an increase of 7.94%, due to the factors described below:

Cost of Raw Materials Consumed

Our Cost of Materials Consumed increased by Rs. 2,754.92 Lakhs from Rs. 16,814.09 Lakhs for the financial year ended on March 31, 2024 to Rs. 19,569.00 Lakhs for the financial year ended on March 31, 2025 representing an increase of 16.38%.

Analysis for increase in Raw Material Consumed is as follows:

The increase in Cost of Material Consumed is mainly attributable to opening stock and increase in material purchases. Purchase of Trading Goods

Our purchase of Trading goods has increased by Rs. 39.85 Lakhs from Rs. 530.74 Lakhs for the financial year ended March 31, 2024 to Rs. 570.59 Lakhs for the financial year ended March 31, 2025 due to increased trading activity in normal course of business during the Financial Year 2024-25.

Change in Inventory of Stock in Trade and Finished Goods

Our Net Change in Inventory of Finished Goods decreased by Rs. 1,265.03 lakhs, from Rs. 559.25 Lakhs for the financial year ended March 31, 2024 to Rs. (705.78) Lakhs for the financial year ended March 31, 2025 due to increase in closi ng inventory of finished goods as the closing inventory as on March 31, 2024 was because of maximum supply of ready to sale goods taken place towards the year end.

Employee Benefit Expenses

Our Employee Benefit Expenses increase by Rs. 35.75 Lakhs from Rs. 188.31 Lakhs for the financial year ended on March 31, 2024 to Rs. 224.06 Lakhs for the financial year ended on March 31, 2025. This was due to an increase in directors remuneration, salaries and other employee-related expenses on account of expansion of operational growth.

Other Expenses

Our Other Expenses decreased by Rs. 109.51 lakhs, from Rs. 240.59 Lakhs for the financial year ended March 31, 2024, to Rs. 131.08 Lakhs for the financial year ended March 31, 2025. This decrease in other expenses was primarily attributed to several factors, including decrease in Balance Written Off to Rs. 25.68 Lakhs in F.Y. 2024-25 as compared to Rs. 67.80 Lakhs in F.Y. 2023-24, Interest on Late payment of Creditors from Rs. 58.58 Lakhs to Rs. 25.56 Lakhs, Compensation Cess - Expenses from Rs. 46.22 Lakhs to nil and other marginal changes in Other Expenses.

Finance Cost

Our Finance Cost was Rs. 178.04 Lakhs for the year ended March 31, 2025 as compared to Rs. 112.01 Lakhs for the financial year March 31, 2024. This increase was due to interest paid on various secured and unsecured term loans.

Depreciation & Amortisation Expenses

Our Depreciation and Amortization Expenses increased by Rs. 3.43 Lakhs from Rs. 40.63 Lakhs for the financial year ended March 31, 2024 to Rs. 44.06 Lakhs for the financial year ended March 31, 2025. This increase was due to the company adding depreciable fixed assets worth Rs. 148.33 Lakhs during financial year 2024-25, resulting in a jump in depreciation compared to financial year 2023-24.

Profit Before Tax

Our Profit before Tax increased by Rs. 360.03 Lakhs from Rs. 431.72 Lakhs for the financial year ended March 31, 2024 to Rs. 791.75 Lakhs for the financial year ended March 31, 2025. This increase was influenced by the following factors:

a) Rise in Revenue

The companys top line volumes increased significantly, adding Rs. 1,997.65 Lakhs more in revenue in FY 2024-25.

b) Change in Inventory of WIP and Finished Goods

There has been decrease in change in inventory of WIP and Finished goods because of increase on closing stock of finished goods of Rs. 1,208.11 Lakhs in FY 2024-25 as compared to Rs. 386.81 Lakhs in FY 2023-24.

Exceptional Items

There were no Exceptional Items during the year

Tax Expenses

Our Tax expenses increased by Rs. 65.56 Lakhs from Rs. 120.84 Lakhs for the financial year ended March 31, 2024 to Rs. 186.40 Lakhs for the financial year ended March 31, 2025, due to changes in Current tax provision, deferred tax liabilities and MAT Credit written off.

Profit After Tax (PAT)

Our Profit increased by Rs. 294.47 Lakhs from Rs. 310.88 Lakhs for the financial year ended March 31, 2024 to Rs. 605.35 Lakhs for the financial year ended March 31, 2025. This increase was mainly due to increased revenue, improved operational efficiency and increase in closing stock of finished goods.

The PAT Margin for the financial year ended March 31, 2025 is 2.93% as compared to 1.67% for financial year ended March 31, 2024 and hence there is an increase of 1.26% in the PAT Margin.

COMPARISON OF FY 2023-24 WITH FY 2022-23

Total Income

Our Total Income increased by Rs. 5,032.67 Lakhs from Rs. 13,884.66 Lakhs for the financial year ended March 31, 2023 to Rs. 18,917.33 Lakhs for the financial year ended March 31, 2024, representing a growth of 36.25 % due to the factors described below:

Revenue from Operations

Our Revenue from operations increased by Rs. 4,905.87 Lakhs from Rs. 13,754.67 Lakhs for the financial year ended March 31, 2023 to Rs. 18,660.54 Lakhs for the financial year ended March 31, 2024 representing a growth of 35.67%, such significant growth is on account of addition of new customers and repetitive orders from existing customers. Sales of finished goods had increased to Rs. 18,252.46 Lakhs in FY 2023-24 as compared to Rs. 13,252.69 Lakhs in FY 2022-23 on account of additional orders executed.

Other Income

Our Other Income increased by t 126.80 Lakhs, from t 129.99 Lakhs for the financial year ended March 31, 2023, to t 256.79 Lakhs for the financial year ended March 31, 2024, representing an increase of 97.55% due to increase in Bad- debts Recovered and increase in Interest income from loans given and sundry balances written back.

Expenses

Our Total Expenses excluding Finance cost, Depreciation and Tax Expenses increased by t 4,769.01 Lakhs from t 13,563.96 Lakhs for the financial year ended on March 31, 2023 to t 18,332.97 Lakhs for the financial year ended on March 31, 2024 representing an increase of 35.16%, due to the factors described below:

Cost of Raw Materials Consumed

Our Cost of Materials Consumed increased by t 2,925.22 Lakhs from t 13,888.87 Lakhs for the financial year ended on March 31, 2023 to t 16,814.09 Lakhs for the financial year ended on March 31, 2024 representing an increase of 21.06%.

Analysis for increase in Raw Material Consumed is as follows:

The increase in Cost of Material Consumed is mainly attributable to increase in material purchases and increase in other direct expenses, which is partially offset by an increase in closing stock of materials.

Purchase of Trading Goods

Our purchase of Trading goods has increased by t 257.60 Lakhs from t 273.15 Lakhs for the financial year ended March 31, 2023 to t 530.74 Lakhs for the financial year ended March 31, 2024 due to increased trading activity in normal course of business during the Financial Year 2023-24.

Change in Inventory of Stock in Trade and Finished Goods

Our Net Change in Inventory of Finished Goods increased by t 1,372.51 lakhs, from t (813.26) Lakhs for the financial year ended March 31, 2023 to t 559.25 Lakhs for the financial year ended March 31, 2024 due to decrease in closing inventory of finished goods as the closing inventory as on 31.03.2024 was because of maximum supply of ready to sale goods taken place towards the year end.

Employee Benefit Expenses

Our Employee Benefit Expenses increase by t 63.83 Lakhs from t 124.48 Lakhs for the financial year ended on March 31, 2023 to t 188.31 Lakhs for the financial year ended on March 31, 2024. This was due to an increase in d irectors remuneration, salaries and other employee-related expenses on account of expansion of operational growth.

Other Expenses

Our Other Expenses increased by t 149.86 lakhs, from t 90.72 Lakhs for the financial year ended March 31, 2023, to t 240.59 Lakhs for the financial year ended March 31, 2024. This increase in other expenses was primarily attributed to several factors, including increment in Balance Written Off to t 67.80 Lakhs in F.Y. 2023-24 as compared to nil in F.Y. 2022-23, Interest on Late payment of Creditors t 18.50 Lakhs to t 58.58 Lakhs, Compensation Cess - Expenses from nil to t 46.22 Lakhs and Motor car Expenses from t 21.34 Lakhs to t 32.19 Lakhs and other marginal changes in Other Expenses.

Finance Cost

Our Finance Cost was t 112.01 Lakhs for the year ended March 31, 2024 as compared to t 46.25 Lakhs for the financial year March 31, 2023 . This significant increase was primarily due to the company taking on various secured and unsecured term loans for additions to fixed assets and to meet working capital requirements, resulting in higher interest costs and bank processing charges.

Depreciation & Amortisation Expenses

Our Depreciation and Amortization Expenses increased by t 11.77 Lakhs from t 28.86 Lakhs for the financial year ended March 31, 2023 to t 40.63 Lakhs for the financial year ended March 31, 2024. This increase was due to the company adding depreciable fixed assets worth t 36.48 Lakhs during financial year 2023-24, resulting in a jump in depreciation compared to financial year 2023-24.

Profit Before Tax

Our Profit before Tax increased by Rs. 186.13 Lakhs from Rs. 245.59 Lakhs for the financial year ended March 31, 2023 to Rs. 431.72 Lakhs for the financial year ended March 31, 2024. This increase was influenced by the following factors:

a) Rise in Revenue

The companys top line volumes increased significantly, adding Rs. 4,905.87 Lakhs more in revenue in FY 2023-24 compared to FY 2022-23.

b) Other Income

There has been abnormal gain because of Bad Debt recovered of Rs. 1,40.24 Lakhs in FY 2023-24 as compare to Rs. 35.18 Lakhs in FY 2022-23.

Exceptional Items

There were no Exceptional Items during the year Tax Expenses

Our Tax expenses increased by Rs. 56.01 Lakhs from Rs. 64.84 Lakhs for the financial year ended March 31, 2023 to Rs. 120.84 Lakhs for the financial year ended March 31, 2024, due to changes in deferred tax liabilities and MAT Credit written off.

Profit After Tax (PAT)

Our Profit increased by Rs. 130.12 Lakhs from Rs. 180.75 Lakhs for the financial year ended March 31, 2023 to Rs. 310.88 Lakhs for the financial year ended March 31, 2024. This increase was mainly due to increased revenue and improved operational efficiency, which outpaced the growth in expenses.

The PAT Margin for the financial year ended March 31, 2024 is 1.67% as compared to 1.31% for financial year ended March 31, 2023 and hence there is a nominal increase of 0.35% in the PAT Margin.

CHANGES IN CASH FLOWS

The table below summaries our cash flows from our Restated Financial Statements for the financial years ended on March 31, 2025, 2024 and 2023:

Cash Flow from Operating Activities:

For the financial year ended on March 31, 2025:

Our net cash used in operating activities for the financial year ended on March 31, 2025, was Rs.1,398.72 Lakhs. This was primarily driven by an operating profit before working capital changes of Rs.895.16 Lakhs, which was adjusted due to changes in working capital. The significant changes included (i) an increase in inventories of Rs.360.42 Lakhs due to increased production which result into higher inventory days, (ii) an increase in trade receivables of Rs.1,09 8.71 Lakhs as a result of increase in revenue from operations, (iii) increase in short-term loans and advances by Rs.644.58 Lakhs mainly due to increase in advances to suppliers and others, (iv) decrease in other current assets of Rs.251.82 Lakhs due to decrease in interest accrued on loans and advances, (v) decrease in Trade payables of Rs.282.94 Lakhs due to payment made to creditors, (vi) decrease in other current liabilities & provisions by Rs.159.04 Lakhs mainly due to decrease in advances from customers.

For the financial year ended on March 31, 2024:

Our net cash generated from operating activities for the financial year ended on March 31, 2024, was Rs.168.24 Lakhs. The operating profit before working capital changes stood at Rs.484.49 Lakhs, which was adjusted for changes in working capital. The changes in working capital includes (i) increase in inventories of Rs.1,024.54 Lakhs due to increased production which result into higher inventory days, (ii) increase in trade receivables of Rs.31.91 Lakhs as result of increase in revenue, (iii) increase in short-term loans and advances by Rs.46.85 Lakhs due to increase in loans and advances from related parties and others, (iv) increase in other current assets by Rs.53.37 Lakhs due to increase in interest receivables on the loan given,

(v) increase in trade payables by Rs.769.92 Lakhs due to higher purchases, (vi) an increase in other current liabilities & provisions by Rs.70.49 Lakhs mainly due to increase in advances from customers and statutory dues payable.

For the financial year ended on March 31, 2023:

Our net cash used in operating activities for the financial year ended on March 31, 2023, was Rs.354.93 Lakhs. The Operating profit before working capital changes stood at Rs.231.88 Lakhs, which was significantly adjusted by changes in working capital. The changes in working capital included (i) increase in inventories by Rs.745.54 Lakhs due to increased production, (ii) decrease in trade receivables of Rs.99.08 Lakhs as a result of improved collection efficiency, (iii) decrease in short-term loans and advances of Rs.36.97 Lakhs due to decrease in advance paid to suppliers, (iv) increase in other current assets by Rs.73.22 Lakhs due to increase in interest receivable on loan given, (v) trade payables increased by Rs.838.44 Lakhs due to increased purchases, (vi) other current liabilities & provisions decreased by Rs.742.54 Lakhs mainly due to decrease in advance from customers.

Cash Flow from Investing Activities:

For the financial year ended on March 31, 2025:

Our net cash generated in investing activities was Rs. 1,200.91 Lakhs for the financial year ended March 31, 2025. This was primarily due to purchases of Property, Plant & Equipment amounting to Rs. 148.33 Lakhs, Proceed from Sale of Property, Plant & Equipment amounting to Rs. 44.00 Lakhs, decrease in short terms loans and advances by Rs. 1,176.93 Lakhs, decrease in other non-current assets by Rs. 20.38 Lakhs, Proceed of Non-Current Investment amounting to Rs. 3.72 Lakhs, Purchase of Non-Current Investment amounting to Rs. 1.28 Lakhs and Interest Received amounting to Rs. 105.50 Lakhs.

For the financial year ended on March 31, 2024:

Our net cash generated in investing activities was Rs. 42.97 Lakhs for the financial year ended March 31, 2024. This was primarily due to Purchases of Property, Plant & Equipment amounting to Rs. 36.48 Lakhs, Increase in Other Non-Current Assets of Rs. 2.71 Lakhs, Increase in Short-term Loans and Advances of Rs. 13.87 Lakhs, and Interest Income of Rs. 96.04 Lakhs.

For the financial year ended on March 31, 2023:

Our net cash used in investing activities was Rs. 76.09 Lakhs for the financial year ended March 31, 2023. This was primarily due to Purchases of Property, Plant & Equipment amounting to Rs. 41.79 Lakhs, Increase in Short-term Loans and Advances of Rs. 118.34 Lakhs and Interest Income of Rs. 84.04 Lakhs.

Cash Flow from Financing Activities:

For the financial year ended on March 31, 2025:

Net cash generated in financing activities for the financial year ended March 31, 2025, was Rs. 243.01 Lakhs, which was primarily due to Proceeds of Long-term Borrowings of Rs. 531.60 Lakhs, Repayment of Long-term Borrowings of Rs. 83.41 Lakhs, Repayment of Non-Current Liabilities of Rs. 44.00 Lakhs, Proceeds of Short-term borrowings of Rs. 5.70 Lakhs and Interest cost of Rs. 167.15 Lakhs.

For the financial year ended on March 31, 2024:

Net cash used in financing activities for the financial year March 31, 2024, was Rs. 162.07 Lakhs, which was primarily due to Proceeds of Long-term Borrowings of Rs. 323.61 Lakhs, Repayment of Long-term Borrowings of Rs. 74.74 Lakhs Repayment of Short-term Borrowings of Rs. 308.48 Lakhs and Interest Cost of Rs. 102.45 Lakhs.

For the financial year ended on March 31, 2023:

Net cash generated in financing activities for the financial year March 31, 2023, was Rs. 452.00 Lakhs, which was primarily due to Proceeds from Issuance of Equity Shares of Rs. 200.00 Lakhs, Proceeds of Long-term Borrowings of Rs. 391.25 Lakhs, Repayment of Long-term Borrowings of Rs. 29.65 Lakhs, Repayment of Non-current Liabilities of Rs. 5.00 Lakhs, Repayment of Short-term Borrowings of Rs. 65.34 Lakhs and Interest Cost of Rs. 39.26 Lakhs.

OTHER KEY RATIOS

The table below summaries key ratios in our Restated Financial Statements for the financial years ended on March 31, 2025, 2024 and 2023:

Fixed Asset Turnover Ratio: This is defined as revenue from operations divided by total fixed assets based on Financial Statements as Restated.

Current Ratio: This is defined as current assets divided by current liabilities, based on Financial Statements as Restated.

Debt Equity Ratio: This is defined as total debt divided by total shareholder funds. Total debt is the sum of long-term borrowings, short-term borrowings and current maturities of long-term debt, based on Financial Statements as Restated.

Inventory Turnover Ratio: This is defined as cost of goods sold divided by average inventory based on Financial Statements as restated.

Financial Indebtedness

As on March 31, 2025, the total outstanding borrowings of our Company is as below. For further details, refer to the chapter titled “Statement of Financial Indebtedness” beginning on page 252 of this Draft Red Herring Prospectus.

Related Party Transactions

Related party transactions with our promoters, directors and their entities and relatives primarily relate to purchase and sale of products and services. For further information, please refer to the chapter titled “Financial Statements as Restated” on page 233 of this Draft Red Herring Prospectus.

Off-Balance Sheet Items

We do not have any other off-balance sheet arrangements, derivative instruments or other relationships with any entity that have been established for the purposes of facilitating off-balance sheet arrangements.

Qualitative Disclosure about Market Risk

Financial Market Risks

Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk. We are exposed to interest rate risk, inflation and credit risk in the normal course of our business.

Interest Rate Risk

Our financial results are subject to changes in interest rates, which may affect our debt service obligations and our access to funds.

Effect of Inflation

We are affected by inflation as it has an impact on the raw material cost, wages, etc. In line with changing inflation rates, we rework our margins so as to absorb the inflationary impact.

Credit Risk

We are exposed to credit risk on monies owed to us by our customers. If our customers do not pay us promptly, or at all, we may have to make provisions for or write-off such amounts.

Reservations, Qualifications and Adverse Remarks

Except as disclosed in chapter titled “Financial Statements as Restated beginning on page 233 of this Draft Red Herring Prospectus, there have been no reservations, qualifications and adverse remarks.

Details of Default, if any, including therein the Amount Involved, Duration of Default and Present Status, in Repayment of Statutory Dues or Repayment of Deposits or Repayment of Loans from any Bank or Financial Institution.

Except as disclosed in chapter titled financial Statements as Restated" beginning on page 233 of this Draft Red Herring Prospectus, there have been no defaults in payment of statutory dues and interest thereon or repayment of deposits and interest thereon or repayment of loans from any bank or financial institution and interest thereon by the Company.

FACTORS THAT MAY AFFECT THE RESULTS OF THE OPERATIONS

Unusual or infrequent events or transactions

There are no transactions or events, which in our best judgment, would be considered unusual or infrequent that have significantly affected operations of the Company.

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

There are no significant economic changes that materially affected Companys operations or are likely to affect income from continuing operations. Any slowdown in the growth of Indian economy or future volatility in global commodity prices, could affect the business including the future financial performance, shareholders funds and ability to implement strategy and the price of the Equity Shares.

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 disclosed in the chapter titled “Risk Factors beginning on page 36 of this Draft Red Herring Prospectus to our knowledge, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

Future changes in relationship between costs and revenues in case of events such as future increase in labour or material cost or prices that will cause material change

According to our knowledge, there are no future relationship between cost and income that would be expected to have a material adverse impact on our operations and revenues. However, increase in the cost of the goods in which the Company deals, will affect the profitability of the Company. Further, the Company may not be able to pass on the increase in prices of the services to the customers in full and this can be offset through cost reduction.

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 prices

The increase in revenue is by and large linked to increase in volume of all the activities carried out by the Company. Total turnover of each major industry segment in which the Issuer Company operates

Our Company deals in structural steel products which includes M.S. Chanel, M.S. Joist/Beam, M.S. Angle, M.S. Square Bar, M.S. Round Bar, M.S. Flat.

Relevant industry data, as available, has been included in the chapter titled “Our Industry” beginning on page 121 of this Draft Red Herring Prospectus.

Status of any Publicly Announced New Business Segments

Except as disclosed elsewhere in the Draft Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new business segments.

Seasonality of the Business

The business of our company is not seasonal, hence there is no impact of seasonality on our turnover and operations. However, one of the industries that we cater to, i.e., construction industry slows down its operations typically during monsoon due to unfavourable weather conditions.

Any significant dependence on a single or few suppliers or customers

We depend on external suppliers for all the raw materials required and typically purchase raw materials on a purchase order basis and place such orders with them in advance based on our projected requirements. As a result, the success of our business is significantly dependent on maintaining good relationships with our suppliers. The absence of long-term supply contracts subjects us to risks such as price volatility caused by various factors viz. commodity market fluctuations,

currency fluctuations, climatic and environmental conditions, transportation cost, changes in domestic regulatory changes and trade sanctions. If we cannot fully offset the increase in raw material prices with an increase in the prices for our products, we will experience lower profit margins, which in turn may have a material adverse effect on our results of operations, and financial condition and ultimately lead to a liquidity crunch. In the absence of such contracts, we are also exposed to the risk of unavailability of raw materials in desired quantities and qualities, in a timely manner.

Competitive Conditions

We have competition with domestic and international bedding essentials manufacturers who may vertically integrate their supply chains by acquiring or establishing their own distribution operation which reduces the need for independent distributors and create additional competition in the market. We expect competition to intensify due to possible new entrants in the market, existing competitors further expanding their operations and our entry into new markets where we may compete with well-established unorganized companies/ entities. This we believe may impact our financial condition and operations. For details, please refer to the chapter titled “Risk Factors ” beginning on page 36 of this Draft Red Herring Prospectus.

STATEMENTS OF FINANCIAL INDEBTEDNESS

Brief details on the financial indebtedness of the “M P K Steels (I) LIMITED” as on March 31, 2025 are as under: SECURED LOAN FROM BANKS AND FINANCIAL INSTITUTIONS:

Note: End-use of above loans has been certified by NLA & Associates Chartered Accountants, pursuant to their certificate dated July 08, 2025.