Panchatv Bharat Ltd Management Discussions

The following discussion of our financial condition and results of operations is based on, and should be read in conjunction with, our Restated Financial Statement (including the schedules, notes and significant accounting policies thereto), included in the section titled "Restated Financial Statement" beginning on page no. 180 of this Prospectus. This discussion contains forward-looking statements and reflects our current views with respect to future events and our financial performance and involves numerous risks and uncertainties, including, but not limited to, those described in the section entitled "Risk Factors" on page no. 17 of this Prospectus. Actual results could differ materially from those contained in any forward-looking statements and for further details regarding forward-looking statements, kindly refer the chapter titled "Forward-Looking Statements" on page no. 15 of this Prospectus. Our financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBIICDR Regulations and restated as described in the report of our Statutory Auditor J V A & Associates, which is included in this Prospectus under "Financial Information" at page no. 180 of this Prospectus. The Restated Financial Statement has been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. Our Financial Year ends on March 31 of each year, and all references to a particular Financial Year are to the twelve-month period ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers to Panchatv Bharat Limited (formerly known as Panchatv Bharat Private Limited), our Company. Unless otherwise indicated, financial information included herein are based on our Restated Financial Statement for the Financial Years 2026, 2025 and 2024 included in this Prospectus beginning on page no. 180 of this Prospectus.

Overview

Our Company was incorporated in March 2024. Prior to its incorporation, our Promoters, Mr. Sanjay Gupta and Mr. Sooraj Gupta, were engaged in the textile business through their respective proprietorship concerns. Mr. Sanjay Gupta was operating in the textile business under the name of M/s SR Fabrics since 1994, while Mr. Sooraj Gupta was managing business through M/s SG Trader since 2017 and M/s Neelmadhav Textiles since 2023, primarily engaged in third-party manufacturing and wholesale distribution of denim fabrics.

Our Company was subsequently incorporated and the Promoters, Mr. Sanjay Gupta and Mr Sooraj Gupta appointed as Directors of the Company, with the object of taking over the ongoing operations of the aforementioned proprietorship concerns and continuing their denim fabrics business under a single unified entity with formal recognition. Thereafter, the business transfer from the proprietorships to our Company was agreed, confirmed, and made effective from March 31, 2024, through the execution of three separate Business Transfer Agreements dated April 06, 2024 ("BTAs") with each of the proprietorship concerns whereby the Company acquired all assets and liabilities of the proprietorship concerns. Pursuant to the execution of the BTAs, our Company acquired all assets and liabilities relating to the respective businesses as on the effective date of the BTAs. Ms. Sanyogita Gupta was subsequently inducted on the Board of Directors of the Company as a Non-Executive Director with effect from July 20, 2024 and was thereafter categorised as a Promoter Director with effect from March 06, 2026, in accordance with applicable laws and corporate approvals.

We are engaged in the manufacturing of denim fabrics through third-party manufacturing facilities. In addition to our manufacturing activities, we are also involved in the wholesale distribution of denim fabrics across India. The fabrics for distribution are procured from various distributors and suppliers to cater to diverse market demands.

Our product offerings primarily include grey fabrics and finished denim fabrics, which are distributed across key markets in to Delhi, Uttar Pradesh, Gujarat, Haryana and Rajasthan. We manufacture denim fabrics under our own brand name through both third-party manufacturing arrangements and leased self-production facility. For outsourced production, we have partnered with manufacturing facilities located in Narol and Piplaj, Ahmedabad, which are capable of producing finished denim fabrics directly from cotton yarn using raw materials supplied by our Company.

Our manufacturers, with whom we are currently engaged with for the production process, follow standard industry norms in the fabrics manufacturing process. The manufacturers also enable us to oversee the process of manufacturing process as per our requirement, without their intervention. We further inspect the fabric prior to dispatch to ensure that the fabrics are manufactured in accordance with our requirements.

The process of manufacturing of our fabrics commences with procurement of raw materials, specifically cotton yarn, which is a fundamental material of our fabrics. Next step on our manufacturing is yarn warping wherein the yarn is arranged in parallel and evenly spaced on warp beams, preparing it for the subsequent weaving process. After yarn dyeing, the dyed yarn is then woven into fabric using air jet looms. Following weaving, the fabric undergoes a series of finishing treatments. These treatments may involve processes such as singeing, wet finishing, foam finishing, over-dyeing, bleach washing, etc, all aimed at achieving the desired appearance, ensuring it meets the desired hand feel. Once the finishing process is completed, the fabric is then inspected to ensure that the quality and standards of manufactured fabrics are as per the desired requirements and subsequently they are rolled onto fabric rolls and are ready for distribution.

In line with the objective of business expansion and value chain integration, our Company has recently set up a limited self-manufacturing line through leased machineries for which commercial operations are yet to commence in full, in addition to continuing with third-party manufacturing and trading operations. This strategic step enables us to partially carry out self-production of denim fabrics while maintaining supply partnerships with integrated third-party manufacturers.

Key Performance Indicators of Our Company

The key performance indicators of our Company are as below:

Particulars	FY 2025-26
Revenue from operations	5,685.11
CAGR (% of revenue)	32.47%
EBITDA	643.74
EBITDA Margin (In %)	11.32%
Profit Before Tax	546.18
PBT Margin (In % )	9.61%
Profit after tax	403.10
PAT Margin (In %)	7.09%
Return on Net Worth (In %)	31.93%
Return on Capital Employed (In %)	24.01%
Net Debt to Equity	1.12
Current Ratio	1.88
Asset Turnover Ratio	1.68
Return on Assets (%)	19.05%
Earnings Per Share - Basic and Diluted	9.84
Adjusted Earnings Per Share - Basic and Diluted	9.84
Total Borrowings	1,417.58

Notes:

Ratio	Numerator	Denominator
EBITDA Margin (%)	EBITDA	Revenue from Operations
PBT Margin (%)	Profit before Tax	Revenue from Operations
PAT Margin (%)	Profit after Tax	Revenue from Operations
Return on Net Worth	PAT	Shareholders Fund
Return on Capital Employed	EBIT	Shareholders Fund + Borrowings
Net Debt to Equity	Debts= Long-term borrowings + Deferred tax liabilities (Net) + Other Long-term liabilities + Long-term provisions + Short - Term borrowings	Shareholders Fund
Current Ratio	Current Assets	Current Liabilities
Asset Turnover Ratio	Revenue from Operations	All Assets
Return on Assets	EBIT	All Assets

Explanation for KPI Metrics is as below:

KPI	Explanation
Revenue from Operations	Revenue from Operations is used by our management to track the revenue profile of the business and in turn helps to assess the overall financial performance of our Company and volume of our business
EBITDA	EBITDA provides information regarding the operational efficiency of the business
EBITDA Margin	EBITDA Margin (%) is an indicator of the operational profitability and financial performance of our business.
Profit Before Tax	Profit earned by the Company before Income Tax and Deferred Tax.
PBT Margin	PBT Margin is a financial metric that measures the percentage of our Companys revenue that remains as profit before accounting for taxes.
Profit after Tax	PAT reflects net profit of our Company earned after deducting all expenses, including operating costs, interest, taxes, and other charges, from its total revenue.
PAT Margin	PAT Margin (%) is an indicator of the overall profitability and financial performance of our business.
Return on Net Worth	ROE (%) is measure of profitability of a business in relation to its equity.
Return on Capital Employed	ROCE (%) is used by our management to assess the Companys efficiency for utilisation of its capital to generate profits
Debt to Equity Ratio	The debt-to-equity ratio (D/E ratio) depicts how much debt the Company has compared to its assets. It is calculated by dividing the Companys total debt by total shareholder equity. Note a higher debt-to-equity ratio states the Company may have a more difficult time covering its liabilities.
Current Ratio	The current ratio measures the Companys ability to pay current, or short-term, liabilities (debts and payables) with its current, or short-term, assets, such as cash, inventory, and receivables.
Assets Turnover Ratio	ATO measures our Companys efficiency in using its total assets to generate revenue.
Return on Assets	ROA measures how efficiently our Company uses its assets to generate EBIT.

Set forth below are some of our operational key performance indicators:

Metric	FY 2025-26	FY 2024-25	FY 2023-24
Trade Receivable Period	59	49	39
Inventory Holding Period	102	77	59
Trade Payable Period	45	56	42

Significant developments subsequent to the last Financial Year

As per mutual discussions between the Companys Board and LM, the Board confirms that, in its opinion, there have been no significant developments since the date of the last financial statements as disclosed in theProspectus, except as follows:

• The Board of Directors of our Company has recommended to revise the raising of the funds by way of Initial Public Offering in its meeting held on July 01, 2026 which was subsequently tabled before the shareholders for their approval and the shareholders in their meeting held on July 31, 2026 has passed revised resolution for raising funds through Initial Public Offering.

The Companys Board and LM further confirm that there have been no other circumstances arising since the date of the last financial statements as disclosed in the Prospectus that materially and adversely affects, or are likely to affect the Company within the next 12 months.

Principal Factors Affecting our Results of Operations and Financial Condition

1. Self-production of finished denim fabrics through leased loom machineries

2. Relationship with our existing dealers, customers and suppliers

3. Market demand plays a significant role in textiles business

4. Volatility in the Indian and global capital market

5. Terrorist attacks or war or conflicts involving India or other countries

6. Maintaining effective quality control systems

7. Growth and/or implementation of our business plan

8. Slowdown in economic growth in India

9. Competition

Items for Standalone Restated Financial Statements

Statement of Significant Accounting Policies

For details in respect of Statement of Significant Accounting Policies, please refer to "Annexure IV- Note B of Restated Financial Statements" under the section titled "Restated Financial Statements" beginning on page no. 180 of this Prospectus.

1.1 Basis of Accounting

The Restated Financial Statement of the Company comprising the summary statement of assets and liabilities of the Company for the Financial Year ended March 31, 2026, March 31, 2025 and March 31, 2024 and the related restated summary of profit and loss and cash flow for Financial Year ended March 31, 2026, March 31, 2025 and March 31, 2024 (herein collectively referred to as ("Restated Summary Statement") have been compiled by the management from the audited financial statements for Financial Year ended on March 31, 2026, March 31, 2025 and March 31, 2024. Restated Summary Statement has been prepared to comply with all material respects with the provisions of Part 1 of Chapter III of the Companies Act, read with Companies (Prospectus and Allotment of Securities) Rules, 2014, SEBI ICDR Regulations, and Guidance Note on Reports in Companies Prospectuses (Revised 2019) ("Guidance Note"). Restated Summary Statement has been prepared specifically for inclusion in the Prospectus to be filed by the Company with the BSE SME in connection with the Issue. The Companys management has recast the financial statements in the form required by Schedule III of the Companies Act for the purpose of Restated Summary Statements.

The Restated Financial Statements have been prepared under historical cost convention and evaluated on a going concern basis using the accrual system of accounting in accordance with accounting standards notified under Section 133 of the of the Companies Act, read with Rule 7 of Companies (Accounts) Rule, 2014 (as amended) and other recognised accounting practices and policies generally accepted in India (Indian GAAP) as adopted consistently by the Company.

All assets and liabilities have been classified as current and non-current as per normal operating cycle of the Company and other criteria set out in the Schedule III of the Companies Act.

The accounting policy adopted for preparing financial statements for Financial Year ending March 31, 2026 and March 31, 2025 have been applied consistently for all the other Financial Years under restatement.

For further details kindly refer section titled "Restated Financial Statement" beginning on page no. 180 of this Prospectus.

DISCUSSION ON FINANCIAL PERFORMANCE Results of Operations

Following table presents our statement of profit and loss data, with each component expressed as a percentage of total income for the respective periods.

Particulars	March 31, 2026	% of total income	Difference F.Y. 25-26	March 31, 2025	% of total income	Difference F.Y. 24-25	March 31, 2024	% of total income	Difference F.Y. 23-24
INCOME:
I. Revenue from operations:	5,685.11	99.96%	16.04%	4,899.33	100.00%	24.63%	3,931.25	100.00%	60.76%
II. Other Income	2.17	0.04%	-	-	-	-	-	-	-
III. Total Income (I + II)	5,687.28	100.00%	16.08%	4,899.33	100.00%	24.63%	3,931.25	100.00%	60.76%
IV. Expenses:
Cost of Material Consumed	866.18	15.23%	(17.08%)	1,044.59	21.32%	20.53%	866.64	22.04%	379.79%
Purchase of Stock- in- Trade	4,417.04	77.67%	26.58%	3,489.66	71.23%	16.59%	2,993.01	76.13%	42.08%
Changes in Inventory of Finished Goods, Work- in - Progress and Stock- In- Trade	(369.97)	(6.51%)	87.78%	(197.02)	(4.02%)	-33.67%	(297.04)	(7.56%)	(1021.58 %)
Employee Benefit Expense	68.95	1.21%	15.07%	59.92	1.22%	220.33%	18.71	0.48%	89.87%
Finance Costs	117.39	2.06%	33.53%	87.91	1.79%	80.94%	48.59	1.24%	31.64%
Depreciation and Amortization Expense	2.52	0.04%	(50.19%)	5.06	0.10%	5.86%	4.78	0.12%	75.74%
Other Expenses	38.99	0.69%	4.98%	37.14	0.76%	56.67%	23.70	0.60%	(19.60%)
Total Expenses	5,141.10	90.40%	13.56%	4,527.26	92.41%	23.75%	3,658.39	93.06%	52.54%
V. Profit before exceptional items Tax	546.18	9.60%	46.79%	372.07	7.59%	36.36%	272.86	6.94%	481.02%
VI. Exceptional Items	-	-		-	-	-	-	-	-
IX. Profit before Tax	546.18	9.60%	46.79%	372.07	7.59%	36.36%	272.86	6.94%	481.02%
X. Tax Expenses:	-	-							-
(1) Current Tax	138.26	2.43%	46.52%	94.36	1.93%	33.04%	70.93	1.80%	425.07%
(2) Deferred Tax	4.82	0.08%	(194.49% )	(5.10)	-0.10%	2922.39%	(0.17)	0.00%	-46.14%
XI. Profit (Loss) for the period from continuing operations	403.10	7.09%	42.54%	282.81	5.77%	39.93%	202.11	5.14%	498.52%

Revenue and expenses are reported in the following manner:

Revenues

• Revenue from operations

Our Companys source of revenue is primarily generated from sale of supply of our product i.e., selling and supplying denim fabrics.

• Other Income

Other income includes Interest earned on Fixed Deposit.

• Expenditure

Our total expenditure primarily consists of the Cost of Material Consumed, Purchase of Stock- in- Trade including Changes in Inventory of Finished Goods, Work- in - Progress and Stock- In- Trade, Employee Benefit Expense, Finance Costs, Depreciation and Amortization Expense, and Other Expenses.

• Cost of Material Consumed

Our Cost of Services primarily includes Purchase of Raw Material and direct expenses, and adjustment between Opening Stock of Raw Material and Less: Closing Stock of Raw Material.

• Purchase of Stock- in- Trade including Changes in Inventory of Finished Goods, Work- in - Progress and Stock- In- Trade

Purchase of stock in trade include cost pertaining to purchase of denim fabrics and the change in inventory consists adjustment between opening and closing stock of stock in trade as well as opening and closing stock of finished goods.

• Employment Benefit Expenses

Our employee benefits expense primarily comprises of Salary & Wages towards employees, Director Remuneration and Staff Welfare.

• Finance Costs

Our Finance Cost majority involve Interest on Loan as well as Processing Charges and Bank Charges.

• Depreciation and Amortization Expense

Depreciation is the value on depreciation on Furniture & Fixtures, Office Equipment, Computer & Computer Software and Motor vehicles wherever applicable as per Schedule II of Companies Act.

• Other Expenses

Other Expenses majorly consists and includes Office Rent, Vehicle Running & Maintenance Expenses, Audit Fee, Late Fees, Interest & Penalty, Travelling Expenses and other miscellaneous expenses.

REVIEW OF RESTATED FINANCIAL STATMENTS

FISCAL YEAR ENDED MARCH 31, 2026, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2025 (BASED ON RESTATED FINANCIAL STATEMENTS):

Total Income

Total income, comprising Revenue from Operations and Other Income, increased by 16.08% from Rs.4,899.33 Lakhs in Fiscal 2025 to Rs. 5,687.28 Lakhs in Fiscal 2026, primarily on account of an increase in Revenue from Operations to ^5,685.11 Lakhs in Fiscal 2026, and marginally on account of Other Income, details of the same are given as follows:

Revenue from operations

Revenue from operations increased by 16.04% from Rs. 4,899.33 Lakhs in Fiscal 2025 to Rs. 5,685.11 Lakhs in Fiscal 2026 on account of an increase in sales volume. This has been driven by higher demand and sales volume for the Companys products as described below:

Reason: The increase in demand for the Companys products was primarily driven by higher revenue from the existing states in which the Company operates. Although revenue from Delhi, the largest contributor to the Companys turnover, declined marginally by (7.62%), this was more than offset by significant growth in Gujarat and Uttar Pradesh. Turnover from Gujarat increased by 573.96%, while turnover from Uttar Pradesh increased by 266.76%. Consequently, Uttar Pradesh being the second-highest contributor to the Companys turnover in Fiscal 2026, compared with the fourth-highest position in Fiscal 2025. Details of our geographical wise changes is given as follows:

State	Financial Year
	2025-26		2024-25		Year on
	Revenue	% of revenue from operation	Revenue	% of revenue from operation	Year Change
Delhi	3842.36	67.59%	4159.26	84.89%	(7.62%)
Uttar Pradesh	1404.94	24.71%	383.07	7.82%	266.76%
Haryana	234.83	4.13%	320.45	6.54%	(26.72%)
Gujarat	201.58	3.55%	29.91	0.61%	573.96%
Rajasthan	1.4	0.02%	3.37	0.07%	(58.46%)
Odisha	-	-	3.26	0.07%	(100.00%)

The Company has seen the increased in demand from its existing State i.e., Uttar Pradesh and Gujarat. Further the reason for exponential increase in revenue from Uttar Pradesh and Gujarat is on account of higher demands from existing distributors.

Expenses

Total expenses increased by 13.56%, rising from Rs.4,527.26 Lakhs in Fiscal 2025 (which was 92.41% of total income) to Rs.5,141.10 Lakhs in Fiscal 2026 (90.40% of total income).

The increase in total expenses in absolute terms was primarily because of increase in cost towards Purchase of Stock- in- Trade, Employee Benefits and Finance Cost. However, as a percentage of total income, our expenses has declined significantly by 2.01%, mainly due to a reduction in the Cost of Material Consumed and increase in change in inventory which arose by 26.58% and 87.78% respectively, which contributes 16.58% and (7.20%) of our total expenditure.

Cost of raw materials consumed

Cost of raw materials consumed has decreased by 17.08% from Rs. 1,044.59 Lakhs in Fiscal 2025 to Rs. 866.18 Lakhs in Fiscal 2026 primarily on account of decrease in purchase of raw materials for production of fabrics.

Changes in inventories of finished goods and stock-in-trade

For Fiscal 2026, the Company recorded a significant increase of Rs.4,417.04 Lakhs in Purchase of Stock- in- Trade and decrease of ( Rs.369.97) lakhs in stock-in-trade as compared to Fiscal 2026. During Fiscal 2025, Purchase of Stock- in- Trade was accounted for 77.08% of total expenses of our company while Changes in Inventory of Finished Goods, Work- in - Progress and Stock- In- Trade is accounted for -4.35% which is now increased by 8.84% and -2.85% respectively.

Employee benefits expense

Employee benefits expense increased by 15.07% from being Rs. 59.92 Lakhs in Fiscal 2025 to Rs. 68.95 Lakhs in Fiscal 2026, on account of increase in Salaries and Wages as well as increase of Staff Welfare which is increased by 23.47% and 45.21% respectively. Details of the same is given as follows:

Particulars	Financial Year
	2025-26		2024-25		Year on
	Amount	% of employee benefit expenses	Amount	% of employee benefit expenses	Year Change
Salary & Wages	40.94	59.38%	33.16	55.34%	23.47%
Staff Welfare	4.01	5.81%	2.76	4.61%	45.21%
Director Remuneration	24.00	34.81%	24.00	40.05%	-
Total	68.95	100.00%	59.92	100.00%	15.07%

Finance costs

Finance costs increased by 33.53% from Rs. 87.91 Lakhs in Fiscal 2025 to Rs. 117.39 Lakhs in Fiscal 2026, primarily on account of increase in short terms borrowing which consists of higher percentage as compared to long term borrowings. Short term borrowings for the given comparison which in Fiscal Year 2025 stood at Rs. 369.65 Lakhs and currently stood at Rs. 971.34 Lakhs i.e., increase of 162.77%.

Depreciation and amortization expense

Depreciation and Amortization Expenses decreased significantly by (50.19%) from Rs. 5.06 Lakhs in Fiscal 2025 to Rs. 2.52 Lakhs in Fiscal 2026 primarily on account of lesser depreciation charged on Motor vehicles as compared to previous year.

Other expenses

Other Expenses marginally increased by 4.98% from Rs. 37.14 Lakhs in Fiscal 2025 to Rs. 38.99 Lakhs in Fiscal 2026, primarily due to increase in audit fees, Legal & Professional Charges, Office Expenses, Repair & Maintenance etc.

Profit before Tax

Profit before Tax Profit before tax was Rs. 546.18 Lakhs in Fiscal 2026 compared to profit before tax of Rs. 372.07 Lakhs in Fiscal 2025 due to the reasons enumerated above.

Tax expense

Tax expenses comprise of previous year tax, current tax and deferred tax.

Profit for the year

Profit for the year was Rs. 403.10 Lakhs in Fiscal 2026 compared to profit after tax of Rs. 282.81 Lakhs in Fiscal 2025 which was primarily due to the increase in revenue from operation of the Company.

FISCAL YEAR ENDED MARCH 31, 2025, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2024 (BASED ON RESTATED FINANCIAL STATEMENTS):

Total income

Total income increased by 24.63% from Rs. 3,931.25 Lakhs in Fiscal 2024 to Rs. 4,899.33 Lakhs in Fiscal 2025 on account of an increase in revenue from operations for reasons indicated below:

Revenue from operations

Revenue from operations increased by 24.63% from Rs. 3,931.25 Lakhs in Fiscal 2024 to Rs. 4,899.33 Lakhs in Fiscal 2025 on account of an increase in sales volume. This has been driven by higher demand and sales volume for the Companys products as described below:

Reason: The increased demand for the products was due to addition of new customers and increase in order from existing customers primarily from the existing states where the Company is operating. The Company has increased its revenue by 28.75% from Delhi which contributed the highest turnover and from Haryana where the Company has achieved maximum growth for the given comparison period of 337.53%. Details of our geographical wise changes is given as follows:

	Financial Year
State	2024-25		2023-24		Year on year change
	Revenue	% of revenue from operation	Revenue	% of revenue from operation
Delhi	4159.26	84.89%	3230.53	82.18%	28.75%
Uttar Pradesh	383.07	7.82%	484.59	12.33%	(20.95%)
Haryana	320.45	6.54%	73.24	1.86%	337.53%
Gujarat	29.91	0.61%	122.97	3.13	(75.68%)
Rajasthan	3.37	0.07%	1.11	0.03%	203.60%
Odisha	3.26	0.07%	-	-	100.00%*
Jharkhand	-	-	17.45	0.44%	(100.00%)
West Bengal	-	-	1.35	0.03%	(100.00%)
Total	4,899.32	100.00%	3,931.25	100.00%	24.63%

* Nil for previous year

The Company has seen the increased in demand from its existing number of distributor as well as new distributors in Delhi region. Further the reason for increase in revenue in Haryana is primarily because of increase in demand by existing distributors.

Expenses

Total expenses increased by 23.75%, rising from Rs.3,658.39 Lakhs in Fiscal 2024 (which was 93.06% of total income) to Rs.4,527.26 Lakhs in Fiscal 2025 (92.41% of total income).

The increase in total expenses in absolute terms was primarily because of increase costs towards materials consumed, employee benefits, and other expenses. However, as a percentage of total income, our expenses has declined by 0.65%, mainly due to a reduction in the Purchase of Stock-in-Trade, which contributes significantly to our total expenditure. This component accounted for 81.81% of total expenses in Fiscal 2024 but dropped to 77.08% in Fiscal 2025.

Cost of raw materials consumed

Cost of raw materials consumed increased by 20.53% from Rs. 866.64 Lakhs in Fiscal 2024 to Rs. 1,044.59 Lakhs in Fiscal 2025 primarily on account of increase in consumption and purchase of raw materials for production of fabrics whose sales volume increased significantly in Fiscal 2025.

Changes in inventories of finished goods and stock-in-trade

For Fiscal 2025, the Company recorded a increase of Rs.197.02 Lakhs in inventories of finished goods and stock- in-trade compared to a increase of Rs.297.04 Lakhs in Fiscal 2024. Specifically, during Fiscal 2024, inventory of stock in trade & finished goods increased from Rs. 334.80 Lakhs at the beginning of the year to Rs.828.86 Lakhs at year-end. In contrast, in Fiscal 2025, inventory of stock in trade & finished goods increased from Rs.631.84 Lakhs at the beginning of the year to Rs.828.86 Lakhs at year-end, representing a year-on-year increase of 31.18% in closing inventory levels.

This significant decline in inventory during Fiscal 2024-25 primarily reflects increased demand for the Companys products, resulting in higher sales and lower year-end inventory levels.

Employee benefits expense

Employee benefits expense increased exponentially by 220.33% from being Rs. 18.71 Lakhs in Fiscal 2024 to Rs. 59.92 Lakhs in Fiscal 2025, on account of increase in salaries and wages which is increased by 89.76% and director remuneration which was nil in previous Fiscal Year. Details of the same is given as follows:

	Financial Year
	2024-25		2023-24		Year on
Particulars	Amount	% of employee benefit expenses	Amount	% of employee benefit expenses	year change
Salary & Wages	33.16	55.34%	17.48	93.42%	89.76%
Staff Welfare	2.76	4.61%	1.23	6.58%	124.32%
Director Remuneration	24.00	40.05%	-	-	100.00%
Total	59.92	100.00%	18.71	100.00%	220.33%

Finance costs

Finance costs increased by 80.94% from Rs. 48.59 Lakhs in Fiscal 2024 to Rs. 87.91 Lakhs in Fiscal 2025, primarily on account of increase in short terms borrowing which consists of higher percentage as compared to long term borrowings. Short term borrowings for the given comparison which in Fiscal Year 2024 stood at Rs. 346.12 Lakhs and currently stood at Rs. 487.44 Lakhs i.e., increase of 40.83%.

Depreciation and amortization expense

Depreciation and amortization expense increased by 5.86% from Rs. 4.78 Lakhs in Fiscal 2024 to Rs. 5.06 Lakhs in Fiscal 2025 primarily on account of no material addition of fixed assets in Fiscal 2024 which was off-set by of fully depreciated assets.

Other expenses

Other expenses increased by 56.67% from Rs. 23.7 Lakhs in Fiscal 2024 to Rs. 37.14 Lakhs in Fiscal 2025, primarily due to increase in office rent, vehicle running and maintenance expenses, audit fee, late fees, interest and penalty, software and website expenses. Comparison of the same is given below:

	Financial Year
	2024-25		2023-24		Year on year change
Particulars	Amount	% of total other expenses	Amount	% of total other expenses
Office Rent	8.10	21.81%	6.20	26.16%	30.65%
Vehicle Running & Maintenance Expenses	6.79	18.28%	-	-	100.00*
Audit Fee	5.00	13.46%	1.35	5.70%	270.37%
Late Fees, Interest & Penalty	3.24	8.72%	0.04	0.18%	7508.85%
Travelling Expenses	3.13	8.43%	3.40	14.36%	(8.03%)
Office Expenses	2.08	5.60%	3.82	16.12%	(45.55%)
Software & Website Expenses	1.98	5.32%	-	-	100.00%*
Other remaining expenses**	6.82	18.37%	8.89	37.51%	(23.28%)

* Nil for previous year

**other remaining expenses which are lower than 5% of total other expenses which are Conveyance Expenses, Telephone & Internet Expenses, Electricity Charges, Insurance Exp, Legal & Professional Charges, Business Promotion Expenses etc.

Profit before Tax

Profit before tax was Rs. 372.07 Lakhs in Fiscal 2025 compared to profit before tax of Rs. 272.86 Lakhs in Fiscal 2024 due to the reasons enumerated above.

Tax expense

Tax expenses comprise of previous year tax, current tax and deferred tax.

Profit for the year

Profit after tax was Rs. 282.81 Lakhs in Fiscal 2025 compared to profit after tax of Rs. 202.11 Lakhs in Fiscal 2024 which was primarily due to the increase in revenue from operation of the Company.

INFORMATION REQUIRED AS PER ITEM (I) (C) (IV) OF PART A OF SCHEDULE VI TO THE SEBI ICDR REGULATIONS

1. Unusual or infrequent events of transactions

Except as described in this Prospectus, during the period under review there have been no other events or transactions that, to our knowledge, may be described as "unusual" or "infrequent".

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

Other than as described in the section titled "Risk Factors" beginning on page no. 17 of this Prospectus, to our knowledge there are no known significant economic changes that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

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

Other than as described in this Prospectus, particularly in the section "Risk Factors" and "Managements Discussion and Analysis of Financial Condition and Results of Operations " starting on page nos. 17 and 221, respectively, to our knowledge, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on our sales, revenues or income from continuing operation.

4. Future relationship between cost and revenue

To the best of our knowledge, there are no future relationship between cost and revenue that would be expected to have a material adverse impact on our operations and revenues. However, increase in the cost of the products 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 products to the customers in full and this can be offset through cost reduction.

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

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

6. Total turnover of each major industry segment in which the Company operated

The Company operates in the textile industry. Relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page no. 110 of this Prospectus. Further, other than as disclosed in the Restated Financial Statement, we do not have any separate reportable business segments. For further details, please see section titled "Restated Financial Statement on page no. 180 of this Prospectus.

7. Status of any publicly announced new products or business segments

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

8. The extent to which business is seasonal

Our business, engaged in denim fabric manufacturing and wholesale distribution, is not subject to seasonal fluctuations typically seen in consumer-driven markets.

9. Dependence on single or few customers

Our revenue has been dependent upon few customers. For instance, our top ten customers for Financial Years ended March 31, 2026, March 31, 2025 and March 31, 2024 accounted for 54.67%, 47.02% and 73.51%, respectively, of our revenue from operations for the said period. Our reliance on a selected group of customers for our business exposes us to risks, that may include, but are not limited to, reductions, delays or cancellation of orders from our significant customers, failure to negotiate favorable terms or the loss of these customers, all of which would have a material and adverse effect on the business, financial position and future prospects of our Company. For further details, refer to the risk factor "We depend on the success of our relationships with our top customers, from whom we derive a significant portion of our revenue. We do not have long term contracts with such customers. If one or more of such customers choose not to source their requirements from us, our business, financial condition and results of operations may be adversely affected. " on page no. 25 of this Prospectus.

10. Competitive conditions

We expect to continue to compete with existing and potential competitors. We have, over a period of time, developed certain competitive strengths. For details, please refer to the discussions of our competition in the sections "Risk Factors", "Industry Overview" and "Our Business" starting on page nos. 17, 110 and 129, respectively.