Mittal Sections Ltd Management Discussions

You should read the following discussion of our financial position and results of operations together with our Restated Financial Statements which have been included in this Red Herring Prospectus. The following discussion and analysis of our financial position and results of operations are based on our Restated Financial Statements for the stub period ended on May 31, 2025 for the Financial Years ended on March 31, 2025, March 31, 2024 and March 31, 2023, including the related notes and reports, included in this Red Herring Prospectus prepared in accordance with requirements of the Companies Act andrestated in accordance with the SEBI Regulations, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Our Company has not attempted to explain those differences or quantify their impact on the financial data includedin this Red Herring Prospectus. It is urged that you consult your advisors regarding such differences and their impact on our Company’s financial information. Our Financial Statements, as restated have been derived from our audited financial statements for the respective period and years. Accordingly, the degree to which our Restated Financial Statements will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the reader’s level of familiarity with Ind GAAP, Companies Act, SEBI Regulations and other relevant accounting practices in India. Our fiscal year ended on March 31 of each year, so all references to a particular fiscal year ("Fiscal Year") are to the twelve-month period ended on 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 described under "Risk Factors" and "Forward-Looking Statements" on page nos. 38 and 29, respectively, and elsewhere in this Red Herring Prospectus.

In this chapter, unless the context otherwise requires, any reference to "we", "us" or "our" refers to Fine listings Technologies Limited, our Company. Unless otherwise indicated, financial information included herein are based on our "Restated Financial Statements" for the stub period ended on May 31, 2025, for the Financial Years ended on March 31, 2025, March 31, 2024 &March 31, 2023 on page no. 208 of this Red Herring Prospectus.

OVERVIEW:

Our Company was originally formed as Partnership Firm under the name and style of "Mittal Steel Industries" on November 01, 2006, bearing Firm Registration No. GUJ/AMS/37135. Subsequently, the constitution of partnership firm was changed on July 29, 2008 for admission of partners. Subsequently, the name of partnership firm was changed from "M/s. Mittal Steel Industries" to "M/s. Mittal Sections" on August 02, 2008. Subsequently, vide partnership agreement dated March 31, 2009 and pursuant to a resolution passed in the meeting of the partners held on March 31, 2009, "M/s. Mittal Sections" was converted from a partnership firm to a joint stock company with name "M/s. Mittal Sections Limited" in accordance to Part IX of the Companies Act 1956 and a Certificate of Incorporation dated April 02, 2009, was issued by Registrar of Companies, Gujarat, Dadra and Nagar Haveli. The Corporate Identity Number of our Company is U27109GJ2009PLC056527. For details of incorporation, and registered office of our Company, please refer to the chapters titled "General Information" and "History and Certain Corporate Matters‘ on page 69 and 177 respectively of this Red Herring Prospectus.

Our Company is a leading manufacturer of an extensive range of Mild Steel sections and structural steel products, including MS Flat Bars, MS Round Bars, MS Angles, and Channels. These products are produced in compliance with various BIS standards, primarily IS 2062:2011, ensuring consistent quality and high performance across all applications.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE BALANCE SHEET:

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

FACTORS AFFECTING OUR FUTURE RESULTS OF OPERATIONS:

Our Company’s future results of operations could be affected potentially by the following factors:

> Political Stability of the Country;

> World Economy;

> Government Regulation & Policies;

> Competition from existing players;

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

> Dependency on our end customers;

> Disruption in supply of Raw Materials and Labour Supply at our facilities;

> Occurrence of Environmental Problems & Uninsured Losses;

> Conflicts of interest with affiliated companies, the Promoters group and other related parties;

> The performance of the financial markets in India and Globally;

> Our ability to expand our geographical area of Operation;

> Concentration of ownership among our Promoters.

> failure to comply with regulations prescribed by authorities of the jurisdictions in which we operate;

> Our ability to make interest and principal payments on our existing debt obligations and satisfy the other covenants contained in our existing debt agreements;

> Our ability to retain our key management persons and other employees

OUR SIGNIFICANT ACCOUNTING POLICIES:

For Significant accounting policies please refer Significant Accounting Policies and Notes to accounts, under Chapter titled "Restated Financial Information" on page no. 208 of the Red Herring Prospectus.

MANAGEMENT DISCUSSION ON RESULT OF OPERATION

(Rs. in In Lakhs)

Sr. No Particulars	For the Period / Year Ended On
	May 31, 2025	% of Total Income	March 31, 2025	% of Total Income	March 31, 2024	% of Total Income	March 31, 2023	% of Total Income
Revenue from operations	2,815.15	99.93%	13,686.29	99.85%	16,148.18	99.90%	16,717.85	99.79%
II Other Income	1.95	0.07%	20.74	0.15%	16.78	0.10%	35.42	0.21%
Total Income (I+II)	2,817.10	100.00%	13,707.03	100.00%	16,164.96	100.00%	16,753.26	100.00%
Expenses:
(a) Cost of materials consumed	2,039.10	72.38%	11,757.40	85.78%	13,904.53	86.02%	15,060.74	89.90%
(b) Purchases of stock-in-trade	313.18	11.12%	47.74	0.35%	-	0.00%	-	0.00%
(c) Changes in inventories of finished goods and work-in-progress	46.82	1.66%	73.50	0.54%	467.45	2.89%	-58.50	-0.35%
(d) Employee benefits expense	23.69	0.84%	146.05	1.07%	212.03	1.31%	208.26	1.24%
(e) Finance costs	29.40	1.04%	175.48	1.28%	197.22	1.22%	177.58	1.06%
(f) Depreciation and amortisation expense	13.79	0.49%	99.47	0.73%	95.76	0.59%	89.76	0.54%
(g) Other expenses	146.09	5.19%	891.86	6.51%	1,027.52	6.36%	1,199.10	7.16%
IV Total expenses	2,612.07	92.72%	13,191.50	96.24%	15,904.51	98.39%	16,676.94	99.54%
Profit /(Loss) before tax and Exceptional Items (III-IV)	205.03	7.28%	515.52	3.76%	260.45	1.61%	76.32	0.46%
Exceptional Items	-		-		-		-
Profit /(Loss) VII before tax (V- VI)	205.03	7.28%	515.52	3.76%	260.45	1.61%	76.32	0.46%
VIII Tax expense:
(a) Current tax expense	34.22	1.21%	90.77	0.66%	46.46	0.29%	12.07	0.07%
Less: MAT Credit (Entitlement) /Utilised	25.53	0.91%	42.40	0.31%	-43.47	-0.27%	-11.91	-0.07%
(b)Short/(Excess) provision of tax for earlier years	-	0.00%	0.31	0.00%	0.16	0.00%	0.11	0.00%
(c) Deferred tax charge/(credit)	-1.48	-0.01%	20.91	0.13%	67.96	0.42%	20.20	0.12%
(d) (Less): MAT Credit Entitlement	-	-	-	-	-	-	-	-
Total Current Tax	58.27	2.07%	154.39	1.13%	71.11	0.44%	20.46	0.12%
Profit after tax IX for the year (VII- VIII)	146.75	5.21%	361.13	2.63%	189.34	1.17%	55.86	0.33%

Review of our profit and loss account based on Restated Financial Statements Income

Our total income comprises revenue from operations and other income.

Revenue from Operations

Our revenue from operations as a percentage of total income was 99.93%, 99.85%, 99.90%, and 99.79% for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. This primarily includes sales of products such as MS Angle, MS Channel, MS Rect Bars & Square Bars, MS Scrap, Ingots, Billet, and other miscellaneous items, with the majority of revenue derived from sales of "MS Angle." The consistency of revenue contribution highlights the strong reliance on core operations.

Other Income

Our other income consists mainly of interest income and other miscellaneous income. Other income as a percentage of total income was 0.07%, 0.15%, 0.10%, and 0.21% for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. Though relatively small, it provides additional revenue stability.

Expenditure

Our total expenditure includes cost of materials consumed, purchase of stock-in-trade, changes in inventories of finished goods and work-in-progress, employee benefit expenses, finance costs, depreciation and amortization expenses, and other expenses.

Cost of Material Consumed

The cost of material consumed as a percentage of total income was 72.38%, 85.78%, 86.02%, and 89.90% for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. This includes raw materials such as billets and M.S ingots, coal and fuel, consumables, and other input costs. The declining trend indicates better raw material efficiency and cost optimization in the most recent period.

Purchases of Stock-in-Trade

Purchases of stock-in-trade accounted for 11.12%, 0.35%, 0.00%, and 0.00% of total income for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. The spike in May 2025 reflects additional procurement to meet immediate demand.

Changes in Inventories of finished goods and work-in- progress

Changes in inventories as a percentage of total income were 1.66%, 0.54%, 2.89%, and -0.35% for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. The variations reflect adjustments in stock levels to balance demand cycles and production planning.

Employee Benefit Expenses

Employee benefit expenses as a percentage of total income were 0.84%, 1.07%, 1.31%, and 1.24% for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. These include salaries, wages, gratuity, provident fund, ESIC, and welfare costs. Expenses have remained stable relative to income.

Finance Costs

Finance costs as a percentage of total income were 1.04%, 1.28%, 1.22%, and 1.06% for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. This reflects borrowing costs, interest charges, and bank- related expenses.

Depreciation and Amortization

Depreciation and amortization as a percentage of total income were 0.49%, 0.73%, 0.59%, and 0.54% for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. The expenses are linked to capital investments in plant, machinery, and infrastructure.

Other Expenses

Other expenses as a percentage of total income were 5.19%, 6.51%, 6.36%, and 7.16% for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. These expenses include consumptions of consumables, power & fuel, administrative costs, utilities, professional fees, machinery repairing expense, office expenses, legal & professional consultancy charges, labour charges, commission charges , and transportation expenses and other miscellaneous expense.

Profit Before Tax and Exceptional Items

Profit before tax and exceptional items as a percentage of total income was 7.28%, 3.76%, 1.61%, and 0.46% for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. The improvement in profitability is driven by revenue growth and more efficient cost management, particularly in direct costs and other expenses.

Exceptional Items

There were no exceptional items during the period.

Tax Expense

Our tax expense as a percentage of total income was 2.07%, 1.13%, 0.44%, and 0.12% for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. It includes tax expense as per the Income Tax Act, 1961, and deferred tax where applicable.

Profit After Tax

Profit after tax as a percentage of total income was 5.21%, 2.63%, 1.17%, and 0.33% for the periods ended May 31, 2025, March 31, 2025, March 31, 2024, and March 31, 2023, respectively. The improvement in PAT margins over the years highlights the company’s increasing profitability and effective expense management.

Review of our profit and loss account based on Restated Financial Statements

Financial performance highlights for the stub period ended on May 31, 2025.

Revenue from Operations

Revenue from operations stood at Rs.2,815.15 Lakhs, accounting for 99.93% of total income. This indicates that the company’s performance continues to be driven primarily by its core business activities, with sales of MS Angle and other steel products forming the bulk of revenue.

Other Income

Other income amounted to Rs.1.95 Lakhs, representing 0.07% of total income. While a relatively small component, this reflects supplementary earnings from sources such as interest income and other miscellaneous streams.

Total Income (I + II)

Total income for the period stood at Rs.2,817.10 Lakhs, with revenue from operations being the dominant contributor, reaffirming the company’s strong focus on its principal line of business.

Cost of Material Consumed

The cost of materials consumed was Rs.2,039.10 Lakhs, representing 72.38% of total income. This significant proportion reflects the raw material intensity of the industry but also shows an improvement compared to earlier periods, indicating more efficient procurement and usage.

Purchases of Stock-in-Trade

Purchases of stock-in-trade stood at Rs.313.18 Lakhs, accounting for 11.12% of total income. This figure suggests procurement to supplement in-house production capacity and meet customer demand during the period.

Changes in Inventories of Finished Goods and Work-in-Progress

Changes in inventories amounted to Rs.46.82 Lakhs, representing 1.66% of total income. This increase reflects additions to stock levels, supporting future sales requirements.

Employee Benefits Expense

Employee benefits expense total to Rs.23.69 Lakhs, accounting for 0.84% of total income. This reflects stable workforce-related costs, including salaries, benefits, and other employee welfare measures, consistent with the company’s focus on operational efficiency

Finance Costs

Finance costs were Rs.29.40 Lakhs, or 1.04% of total income. This relatively low percentage reflects a manageable level of debt and financing arrangements, suggesting that the company is not overburdened with financial obligations.

Depreciation and Amortisation Expense

Depreciation and amortization expenses amounted to Rs.13.79 Lakhs, representing 0.49% of total income. This reflects ongoing investments in fixed assets, which are essential for maintaining operational efficiency and manufacturing product quality.

Other Expenses

Other expenses stood at Rs.146.09 Lakhs, accounting for 5.19% of total income. These include various operational and administrative expenses such as utilities, transportation, and maintenance, which remain under effective control relative to revenue.

Total Expenses

Total expenses for the period were Rs.2,612.07 Lakhs, or 92.72% of total income. This efficient cost structure demonstrates effective management of input costs and overheads while maintaining production and operational capacity.

Profit / (Loss) Before Tax and Exceptional Items

Profit before tax (PBT) stood at Rs.205.03 Lakhs, accounting for 7.28% of total income. This reflects a strong operating performance and a significant improvement in profitability compared to earlier fiscal years.

Exceptional Items

There were no exceptional items during the period.

Profit Before Tax

Profit before tax (PBT) remained at Rs.205.03 Lakhs, or 7.28% of total income, indicating a stable and recurring earnings base without extraordinary fluctuations.

Tax Expense

The total tax expense was Rs.58.27 Lakhs, representing 2.07% of total income. This included current tax, adjustments for MAT credit entitlement/utilisation, and deferred tax provisions.

Profit After Tax

Profit after tax (PAT) for the period was Rs.146.75 Lakhs, accounting for 5.21% of total income. This solid net margin highlights the company’s improved profitability, efficient cost management, and effective operational strategies in the short -term reporting period.

Fiscal 2025 compared with Fiscal 2024 Revenue from Operations

Revenue from operations decreased by Rs.2,461.89 lakhs or 15.25%, from Rs.16,148.18 lakhs in FY 2024 to Rs.13,686.29 lakhs in FY 2025. The decline reflects softer demand and lower sales volumes, likely driven by weaker market conditions and reduced order flows compared to the previous year.

Other Income

Other income increased by Rs.3.96 lakhs or 23.61%, from Rs.16.78 lakhs in FY 2024 to Rs.20.74 lakhs in FY 2025. This increase is primarily attributable to higher miscellaneous earnings, including interest and other non-operational income sources.

Total Income (I+II)

Total income for FY 2025 stood at Rs.13,707.03 lakhs, a decrease of Rs.2,457.93 lakhs or 15.20% compared to Rs.16,164.96 lakhs in FY 2024. The decline was largely driven by reduced operational revenue despite the slight increase in other income.

Cost of Material Consumed

The cost of materials consumed decreased by Rs.2,147.13 lakhs or 15.44%, from Rs.13,904.53 lakhs in FY 2024 to Rs.11,757.40 lakhs in FY 2025. The reduction aligns with the lower sales volume and reflects cost savings achieved in raw material procurement and utilization.

Purchases of Stock-in-Trade

Purchases of stock-in-trade amounted to Rs.47.74 lakhs in FY 2025, compared to Rs.0.00 lakhs in FY 2024. This indicates a minor increase in reliance on traded goods to supplement in-house production during the year.

Changes in Inventories of Finished Goods and Work-in-Progress

Changes in inventories decreased by Rs.393.95 lakhs or 84.27%, from Rs.467.45 lakhs in FY 2024 to Rs.73.50 lakhs in FY 2025. The decline suggests reduced stock accumulation and tighter inventory management practices.

Employee Benefits Expense

Employee benefits expense decreased by Rs.65.98 lakhs or 31.11%, from Rs.212.03 lakhs in FY 2024 to Rs.146.05 lakhs in FY 2025. This decline reflects rationalization of manpower costs and lower provisioning for employee-related benefits.

Finance Costs

Finance costs decreased by Rs.21.74 lakhs or 11.02%, from Rs.197.22 lakhs in FY 2024 to Rs.175.48 lakhs in FY 2025. This was mainly due to reduced borrowing requirements and efficient debt servicing.

Depreciation and Amortisation Expense

Depreciation and amortization expenses increased by Rs.3.71 lakhs or 3.87%, from Rs.95.76 lakhs in FY 2024 to Rs.99.47 lakhs in FY 2025. The rise is attributable to incremental additions to fixed assets and ongoing capital investments.

Other Expenses

Other expenses decreased by Rs.135.66 lakhs or 13.20%, from Rs.1,027.52 lakhs in FY 2024 to Rs.891.86 lakhs in FY 2025. The decline reflects tighter control over administrative, operational, and overhead costs.

Total Expenses

Total expenses decreased by Rs.2,713.01 lakhs or 17.06%, from Rs.15,904.51 lakhs in FY 2024 to Rs.13,191.50 lakhs in FY 2025.

This reduction mirrors the overall decline in revenues and reflects effective cost management strategies.

Profit / (Loss) Before Tax and Exceptional Items

Profit before tax increased by Rs.255.07 lakhs or 97.91%, from Rs.260.45 lakhs in FY 2024 to Rs.515.52 lakhs in FY 2025. This improvement, despite lower revenue, was driven by disciplined cost control and reductions in major expense categories.

Exceptional Items

There were no exceptional items during FY 2025.

Tax Expense

Tax expenses increased by Rs.83.28 lakhs or 117.11%, from Rs.71.11 lakhs in FY 2024 to Rs.154.39 lakhs in FY 2025. The rise is a direct result of higher profitability during the year.

Profit After Tax

Profit after tax (PAT) increased by Rs.171.79 lakhs or 90.74%, from Rs.189.34 lakhs in FY 2024 to Rs.361.13 lakhs in FY 2025. The improvement reflects strong bottom-line growth, achieved through significant cost optimization despite the revenue decline.

Fiscal 2024 compared with Fiscal 2023 Revenue from Operations

Revenue from operations decreased by Rs.569.67 lakhs or 3.41%, from Rs.16,717.85 lakhs in FY 2023 to Rs.16,148.18 lakhs in FY 2024. This decline is primarily attributed to a significant reduction in sales volume due to operational disruptions and delays in securing new contracts. The impact of the pandemic in previous years caused a slower recovery in the awarding of contracts, resulting in lower revenue generation.

Other Income

Other income decreased by Rs.18.64 lakhs or 52.57%, from Rs.35.42 lakhs in FY 2023 to Rs.16.78 lakhs in FY 2024. This is due to reduce in other income was driven by higher earnings from interest, other sources during FY 2024.

Total Income (I+II)

Total income for FY 2024 decreased by Rs.588.30 lakhs or 3.51%, from Rs.16,753.26 lakhs in FY 2023 to Rs.16,164.96 lakhs in FY 2024. This decline was largely driven by the reduction in revenue from operations, despite the slight increase in other income.

Cost of Material Consumed

The cost of materials consumed decreased by Rs.1,156.21 lakhs or 7.68%, from Rs.15,060.74 lakhs in FY 2023 to Rs.13,904.53 lakhs in FY 2024. This reduction is aligned with the decrease in sales volume, as lower sales necessitate a decrease in the corresponding costs of materials, production, and operational charges.

Purchases of Stock-in-Trade

Purchases of stock-in-trade remained at Rs.0.00 lakhs in both FY 2024 and FY 2023, indicating no additional procurement of traded goods during the period.

Changes in Inventories of Finished Goods and Work-in-Progress

Inventory changes showed an increase of Rs.525.95 lakhs, from a negative change of Rs.-58.50 lakhs in FY 2023 to a positive change of Rs.467.45 lakhs in FY 2024. This shift reflects a more efficient management of inventories compared to FY 2023.

Employee Benefits Expense

Employee benefits expense increased by Rs.3.77 lakhs or 1.81%, from Rs.208.26 lakhs in FY 2023 to Rs.212.03 lakhs in FY 2024.. This growth reflects incremental increases in salaries and additional hires to meet the demands of the contracts awarded during the period.

Finance Costs

Finance costs increased by Rs.19.64 lakhs or 11.06%, from Rs.177.58 lakhs in FY 2023 to Rs.197.22 lakhs in FY 2024The decline is attributed to lower borrowing levels and reduced interest expenses due to the company scaling down its operational activities.

Depreciation and Amortisation Expense

Depreciation and amortization expenses increased by Rs.6.00 lakhs or 6.68%, from Rs.89.76 lakhs in FY 2023 to Rs.95.76 lakhs in FY 2024. This reduction is a result of the lower additions to fixed assets in FY 2024, coupled with the amortization of older assets.

Other Expenses

Other expenses decreased by Rs.171.58 lakhs or 14.31%, from Rs.1,199.10 lakhs in FY 2023 to Rs.1,027.52 lakhs in FY 2024. The decrease is primarily due to lower spending in administrative, operational, and labour expenses in line with the company’s overall reduction in activity.

Total Expenses

Total expenses decreased by Rs.772.43 lakhs or 4.63%, from Rs.16,676.94 lakhs in FY 2023 to Rs.15,904.51 lakhs in FY 2024., reflecting the overall decline in operational activities, including cost of Material Consumed, employee benefits, and other related expenses.

Profit/(Loss) before Tax and Exceptional Items

Profit before tax and exceptional items increased by Rs.184.13 lakhs or 241.23%, from Rs.76.32 lakhs in FY 2023 to Rs.260.45 lakhs in FY 2024. This increase is attributed to the efficient cost management and reduction in expenses despite the decrease in revenue.

Exceptional Items

There were no exceptional items during the period.

Tax Expenses

Tax expenses increased by Rs.50.65 lakhs or 247.59%, from Rs.20.46 lakhs in FY 2023 to Rs.71.11 lakhs in FY 2024. This rise is due to higher tax liabilities resulting from the slight increase in profitability during FY 2024, though the overall profit was significantly lower than in previous periods

Profit after Tax

Profit after tax increased by Rs.133.48 lakhs or 238.86%, from Rs.55.86 lakhs in FY 2023 to Rs.189.34 lakhs in FY 2024. The increase in profit after tax despite the decline in revenue is mainly due to stringent cost control measures and optimized expenses.

Cashflow Analysis

(Rs. in Lakhs)

Particulars	May 31, 2025	March 31, 2025	March 31, 2024	March 31, 2023
Net Cash (used in)/ Generated from operating activities	74.70	14.76	747.26	(433.21)
Net Cash (used in)/ Generated from investing activities	(5.97)	(449.15)	(10.88)	(76.24)
Net Cash (used in)/ Generated from finance activities	(68.83)	434.01	(736.32)	507.07
Net increase/ (decrease) in cash and cash equivalents	(0.10)	(0.39)	0.06	(2.38)
Cash and Cash Equivalents at the beginning of the period	2.95	3.34	3.28	5.66
Cash and Cash Equivalents at the end of period	2.85	2.95	3.34	3.28

Cash Flows from Operating Activities

For the period ended May 31, 2025, net cash generated from operating activities was Rs.74.70 lakhs, compared to Rs.14.76 lakhs for the period ended March 31, 2025. This improvement demonstrates stronger operating efficiency over the shorter period, supported by better working capital management and higher operating inflows.

In the fiscal year ended March 31, 2025, net cash generated from operating activities stood at Rs. 14.76 lakhs, a steep decline from Rs.747.26 lakhs in March 31, 2024. This reduction was mainly due to lower operating inflows and increased working capital requirements, which placed pressure on operational cash generation.

For the fiscal year ended March 31, 2024, net cash generated from operating activities was Rs.747.26 lakhs, reflecting a turnaround from a net cash outflow of Rs.-433.21 lakhs in March 31, 2023. The positive shift was attributable to the company’s efforts to streamline receivables, optimize working capital, and enhance cash flow discipline.

In March 31, 2023, net cash used in operating activities was Rs.-433.21 lakhs, reflecting a strain on operational liquidity compared to prior periods, largely due to increased costs, higher receivables, and unfavorable working capital adjustments.

Cash Flows from Investing Activities

For the period ended May 31, 2025, net cash used in investing activities was Rs.-5.97 lakhs, a significant improvement compared to the higher outflow of Rs.-449.15 lakhs in March 31, 2025. The lower outflow reflects limited capital expenditure during the shorter reporting period.

In the fiscal year ended March 31, 2025, net cash used in investing activities was Rs.-449.15 lakhs, a substantial increase compared to Rs.-10.88 lakhs in March 31, 2024. This was primarily driven by higher investments in long-term assets and infrastructure expansion.

In March 31, 2024, the net cash used in investing activities was Rs.-10.88 lakhs, lower than Rs.-76.24 lakhs in March 31, 2023. The decline indicates reduced capital spending, as the company prioritized asset optimization over fresh investments.

For the fiscal year ended March 31, 2023, net cash used in investing activities stood at Rs.-76.24 lakhs, higher than prior years, reflecting the company’s investments in expanding and modernizing its operational base.

Cash Flows from Financing Activities

For the period ended May 31, 2025, net cash used in financing activities was Rs.-68.83 lakhs, compared to a significant inflow of Rs.434.01 lakhs for the year ended March 31, 2025. The outflow during the shorter period reflects repayments of borrowings and reduced financing inflows.

In the fiscal year ended March 31, 2025, net cash generated from financing activities was Rs.434.01 lakhs, marking a reversal from an outflow of Rs.-736.32 lakhs in March 31, 2024. This was largely supported by fresh borrowings and financing arrangements during the year.

In March 31, 2024, net cash used in financing activities was Rs.-736.32 lakhs, compared to a net inflow of Rs.507.07 lakhs in March 31, 2023. The sharp decline was mainly due to higher repayments of borrowings and a reduction in financing activities.

For the fiscal year ended March 31, 2023, net cash generated from financing activities was Rs.507.07 lakhs, reflecting higher borrowings, in contrast to the significant repayments and outflows that marked earlier periods.

Net Increase/ (Decrease) in Cash and Cash Equivalents

For the period ended May 31, 2025, there was a marginal net decrease in cash and cash equivalents of Rs.-0.10 lakhs, compared to a decrease of Rs.-0.39 lakhs in March 31, 2025. The minor change highlights a balance between operational inflows and financing/investing outflows during the period.

In the fiscal year ended March 31, 2025, the net decrease in cash and cash equivalents was Rs.-0.39 lakhs, compared to a marginal increase of Rs.0.06 lakhs in March 31, 2024. This reflects the pressure of higher investing outflows despite financing inflows.

For the fiscal year ended March 31, 2024, there was a net increase in cash and cash equivalents of Rs.0.06 lakhs, compared to a net decrease of Rs.-2.38 lakhs in March 31, 2023, indicating better overall cash management and positive operating cash flows.

In March 31, 2023, the net decrease in cash and cash equivalents was Rs.-2.38 lakhs, reflecting the combined impact of operating outflows and higher investing and financing activities during the year.

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 risk.

Interest rate risk

Interest rate risk results from changes in prevailing market interest rates, which can cause a change in the fair value of fixed-rate instruments and changes in the interest payments of the variable-rate instruments. Our operations are funded to a certain extent by borrowings. Our current loan facilities carry interest at variable rates as well as fixed rates. We mitigate risk by structuring our borrowings to achieve a reasonable, 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 protect us adequately against interest rate risks.

Liquidity risk

Adequate and timely cash availability for our operations is the liquidity risk associated with our operations. Our Company’s objective is to all time maintain optimum levels of liquidity to meet its cash and collateral requirements. We employee prudent liquidity risk management practices which inter-alia means maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities.

Credit Risk

We are exposed to the risk that our counterparties may not comply with their obligations under a financial instrument or customer contract, leading to a financial loss. We are exposed to credit risk from our operating activities, primarily from trade receivables. We consider our customers to be creditworthy counterparties, which limits the credit risk, however, there can be no assurance that our counterparties may not default on their obligations, which may adversely affect our business and financial condition.

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

Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations’ and the uncertainties described in the section entitled "Risk Factors" beginning on page no. 38 Error! Bookmark not defined. of the Red Herring Prospectus. To our knowledge, except as we have described in the Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

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

Apart from the risks as disclosed under Section titled "Risk Factors " beginning on page no. 38, in this Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

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.

Our Company’s future costs and revenues will be determined by demand/supply situation, government policies and other economic factor.

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

Increases in our revenues are by and large linked to increases in the volume of business.

Total turnover of each major industry segment in which the issuer company operates.

The Company is operating in steel industry. Relevant industry data, as available, has been included in the chapter titled "Industry Overview" on page Error! Bookmark not defined. of this Red Herring Prospectus.

Status of any publicly announced new products or business segment.

Our Company has not announced any new services and product and segment / scheme, other than disclosed in this Red Herring Prospectus.

The extent to which business is seasonal.

Our Company’s business is not seasonal. However, the business of the Company does depend on country’s economy situation and inflation.

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

Our Company was significantly dependent on top 10 customers. For further details refer the chapter titled "Risk factor" and "Business Overview" on page 38 and 143 Error! Bookmark not defined. of Red Herring Prospectus.

Competitive conditions:

We face competition from existing and potential competitors which is common for any business. We have, over a period of time, developed certain competitors who have been discussed in section titles "Business Overview" beginning on page no. 143 , of this Red Herring Prospectus.