Paramount Dye Tec Ltd Management Discussions

OF FINANCIAL CONDITION AND RESULT OF

OPERATIONS

You should read the following discussion of our financial condition and results of operations together with our Financial Statements as Restated which is included in this Draft Red Herring Prospectus. The following discussion and analysis of our financial condition and results of operations is based on our Financial Statements as Restated, for the period ended March 31, 2024for Company andfor the period ended January 03, 2024 andfor financial years ended March 31, 2023, 2022 and 2021 including the related notes and reports, included in this Draft Red Herring Prospectus is prepared in accordance with requirements of the Companies Act, 2013 and restated in accordance with the SEBI (ICDR) Regulations, 2018, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Our Financial Statements, as restated have been derived from our audited statutory financial statements. Accordingly, the degree to which our Financial Statements as Restated will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity with Indian GAAP, Companies Act, SEBI Regulations and other relevant accounting practices in India.

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 chapters titled "Risk Factors" and "Forward Looking Statements" beginning on pages 29 and 23, respectively of this Draft Red Herring Prospectus.

Our Financial Year ends on March 31 of each year. Accordingly, all references to a particular Financial Year are to the 12 months ended March 31 of that year.

Our Company was initially established as Partnership Firm under the Partnership Act, 1932 ("Partnership Act") in the name and style of "Paramount Dye Tec" pursuant to Deed of Partnership dated January 03, 2014, effective from January 01, 2014. Paramount Dye Tec was thereafter converted from Partnership Firm to a Public Limited Company under Part I chapter XXI of the Companies Act, 2013 with the name and style of "Paramount Dye Tec Limited" and received a Certificate of Incorporation from the Registrar of Companies, Central Registration Centre dated January 04, 2024. The Corporate Identification Number of the Company is U13997PB2024PLC060422.

We are a Ludhiana, Punjab-based company, specializing in the manufacturing of yarns by recycling waste synthetic fiber, serving the B2B segment of the textile industry. We offer a range of products including synthetic fiber and yarns which includes acrylic yarn, polyester yarn, wool yarn, hand-knitting yarn and acrylic blend yarn with quality, finer impact, and lasting excellence. We utilize synthetic waste fibers as our primary raw material, transforming them into quality yarn. This process not only enhances industry sustainability but also boosts economic efficiency. Our commitment to environmental responsibility and economic benefits is evident through our innovative approach. Through continuous R&D, we have developed advanced technology to recycle pre-consumer waste into premium yarn and fiber. This capability allows us to meet the growing demand for sustainable and circular fashion, solidifying our market presence.

Significant developments subsequent to the last financial year

In the opinion of the Board of Directors of our Company, since the date of the last financial statements disclosed in this Draft Red Hearring Prospectus, there have not arisen any circumstance that materially or adversely affect or are likely to affect the profitability of our Company or the value of its assets or its ability to pay its material liabilities within the previous twelve months except:

- Our Company was initially established as Partnership Firm under the Partnership Act, 1932 ("Partnership Act") in the name and style of "Paramount Dye Tec" pursuant to Deed of Partnership dated January 03, 2014, effective from January 01, 2014. Paramount Dye Tec was thereafter converted from Partnership Firm to a Public Limited Company under Part I chapter XXI of the Companies Act, 2013 with the name and style of "Paramount Dye Tec Limited" and received a Certificate of Incorporation from the Registrar of Companies, Central Registration Centre dated January 04, 2024. The Corporate Identification Number of the Company is U13997PB2024PLC060422.

- The Board of our Company has approved to raise funds through initial public offering in the Board Meeting held on April 16, 2024.

- The members of our Company approved proposal of Board of Directors to raise funds through initial public offering in the Extra Ordinary General Meeting held on May 08, 2024.

- The company increased itss Authorised equity share capital from ?1,00,000/- to ?1,00,00,000/- vide resolution passed in its members meeting dated May 27, 2024.

- The company increased itss Authorised equity share capital from ?1,00,00,000/- to ^12,00,00,000/- vide resolution passed in its members meeting dated February 12, 2024.

- The Company allotted 49,90,200 bonus Equity Shares in the proportion of 200:1, i.e. 200 (Two Hundred) fully paid Equity Share of ?10.00 each allotted against 1(One) Equity Shares of ?10.00 each vide resolution passed at the Board Meeting dated June 07, 2024.

- The Company allotted 5,912 Equity Shares of the Company of face value of Rs. 10/- (Rupees Ten Only) each ("Shares") at a price of Rs. 21,500/- per Share at premium of Rs. 21,490/- on Preferential Basis in consideration other than cash (Land to equity) vide resolution passed at the Board Meeting dated February 28, 2024.

^ The Company allotted 6,539 Equity Shares of the Company of face value of Rs. 10/- (Rupees Ten Only) each ("Shares") at a price of Rs. 21,500/- per Share at premium of Rs. 21,490/- on Preferential Basis in consideration other than cash (Loan to equity) vide resolution passed at the Board Meeting dated February 28, 2024.

Factors affecting our results of operations

Our companys future results of operations could be affected potentially by the following factors:

1. Use of recycled synthetic waste as raw materials

2. Margin B enefits

3. Custom Solutions

4. Value Addition through Enhanced Spinning Capacity

5. Cost-effective products

6. Tailored solutions

7. Quality assurance

8. Simplified supply chain

The following table set forth certain key performance indicators for the years indicated:

Key Performance Indicators of Our Company

(Rs In lakhs)

Key Financial Performance	For the period ended	For the period ended	For the Financial Year ended
	March 31, 2024	January 03, 2024	March 31, 2023	March 31, 2022	March 31, 2021
	Company	Partnership Firm
Revenue from operations(1)	2,351.15	2,954.72	4,600.08	2,363.32	1,690.50
EBITDA(2)	514.43	520.77	610.44	115.75	61.74
EBITDA Margin(3)	21.88	17.63	13.27	4.90	3.65
PAT	354.09	278.65	316.14	15.94	15.94
PAT Margin14	15.06	9.43	6.87	0.67	0.94
Networth(5)	3,032.06	1.00	553.77	258.78	237.48
RoE %(6)	11.68%	-	-	-	-
RoCE% (7)	16.53%	535.20%	70.00%	12.28%	11.33%

Notes:

(1) Revenue from Operations means the Revenue from Operations as appearing in the Restated Financial Statements

(2) EBITDA is calculated as Profit before tax + Depreciation + Interest Expenses - Other Income

(3 ‘EBITDA Margin is calculated as EBITDA divided by Revenue from Operations

(4) ‘Pat Margin is calculated as PAT for the period/year divided by revenue from operations.

(5 Net worth means the aggregate value of the paid-up share capital and reserves and surplus of the company less deferred tax assets.

(6 Return on Equity is ratio of Profit after Tax and Average Shareholder Equity

Return on Capital Employed is calculated as EBIT divided by capital employed, which is defined as shareholders equity plus long term borrowings.

Explanations for KPI Metrics

KPI	Explanation
Revenue from Operation	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 in key verticals
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
PAT	Profit after tax provides information regarding the overall profitability of the business
PAT Margin (%)	PAT Margin (%) is an indicator of the overall profitability and financial performance of our business.
Net Worth	Net worth is used by the management to ascertain the total value created by the entity and provides a snapshot of current financial position of the entity.
RoE%	RoE provides how efficiently our Company generates profits from Shareholders Funds
RoCE%	ROCE provides how efficiently our Company generates earnings from the capital employed in the business.

STATEMENT OF SIGNIFICANT POLICIES

Corporate Information:

Paramount Dye Tec Limited was initially established as Partnership Firm under the Partnership Act, 1932 ("Partnership Act") in the name and style of "Paramount Dye Tec" pursuant to Deed of Partnership dated January 03, 2014, effective from January 01, 2014. Paramount Dye Tec was thereafter converted from Partnership Firm to a Public Limited Company under Part I chapter XXI of the Companies Act, 2013 with the name and style of "Paramount Dye Tec Limited" and received a Certificate of Incorporation from the Registrar of Companies, Central Registration Centre dated January 04, 2024. The Corporate Identification Number of the Company is U13997PB2024PLC060422.

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of preparation of financial statements

(a) The financial statements are prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP) under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are consistently applied by the Company.

(b) The financial statements are prepared to comply in all material respects with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and provisions of Companies Act, 2013.

(c) The preparation of the financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialize.

1.2 Revenue Recognition

(a) The company generally follows the mercantile system of accounting and recognizes Income & Expenditure on accrual basis.

(b) Revenue is recognised to the extent that it is possible that, the economic benefits will flow to the company and the revenue can be reliably estimated and collectability is reasonably assured.

(c) Revenue from sale of goods and services are recognised when control of the products being sold is transferred to our customer and then there are no longer any unfulfilled obligations. The performance obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms. Revenue from services are recognised upon rendering of services on accrual basis.

(d) Revenue is measured on the basis of sale price, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government such as goods and service tax etc. Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.

(e) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(f) In the Financial year 2022-23, the firm commenced commercial production of recycling acrylic waste into acrylic yarns, which resulted in production of recycled yarn that was expected to be used in multiple consumer end items. As per the agreements in place, once the quality of the yarn was verified and accepted, the parties agreed to pay an extra premium for it. Hence due to this reason, the firm has recorded the accrued income for the sales made during FY 2022 -23 amounting to Rs 4,93,18,612. The premium so recognised in 22-23 was conditionally recognised based on acceptance. However, the firm claimed that the recycled acrylic yarns were of a quality comparable to virgin yarn. This assertion was met with scepticism from the vendors, who required verification of the quality before agreeing to pay the premium. Consequently, the sales were conducted on a conditional basis, pending confirmation that the products met the firms quality claims. The accounting entry is henceforth reversed in 23-24.

(g) Partnership firm PARAMOUNT DYE TEC was converted into company with effect from 04-01-2024. In absence of GST number and other hardships to conduct business in the name of the company "PARAMOUNT DYE TEC LIMITED", the business was conducted in the partnership firm itself till 31-01-2024. But all the transactions have been accounted for in the of the company as the firm was converted to company with effect from 04-01-2024.

1.3 Property, Plant & Equipment and Intangible Assets & Depreciation

(a) Property, Plant and Equipment is stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. Cost of acquisition or construction of property, plant and equipment comprises its purchase price including import duties and non-refundable purchase taxes after deducting trade discounts, rebates and any directly attributable cost of bringing the item to its working condition for its intended use.

(b) Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance cost are charged to the statement of profit and loss during the period in which they are incurred.

(c) Gains or losses that arise on disposal or retirement of an asset are measured as the difference between net disposal proceeds and the carrying value of property, plant and equipment and are recognised in the statement of profit and loss when the same is derecognised.

(d) Depreciation is calculated on pro rata basis on straight line method (SLM) based on estimated useful Life as prescribed under Part C of Schedule - II of the Companies Act, 2013. Freehold land is not depreciated.

(e) Intangible asset purchased are initially measured at cost. The cost of an intangible assets comprises its purchase price including duties and taxes and any costs directly attributable to making the assets ready for their intended use. The useful lives of intangible assets are assessed as either finite or indefinite. Finite-life intangible assets are amortised on a straight- line basis over the period of their estimated useful lives.

1.4 Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of the assets net selling price and value in use, which is determined by the present value of the estimated future cash flows.

1.5 Investments

Investments classified as long-term investments are stated at cost. Provision is made to recognize any diminution other than temporary in the value of such investments. Current investments are carried at lower of cost and fair value.

1.6 Inventories

Inventories consisting of Raw Materials, Stock-in-trade and Finished Goods are valued at lower of cost and net realizable value unless otherwise stated. Cost of inventories comprises of material cost on FIFO basis and expenses incurred in bringing the inventories to their present location and condition.

1.7 Employee Benefits

Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the provident fund is charged to the statement of profit and loss for the year when an employee renders the related services.

1.8 Borrowing Costs

(a) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use.

(b) Other Borrowing costs are recognized as expense in the period in which they are incurred.

1.9 Taxes on Income

Tax expense comprises of current tax and deferred tax.

Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the applicable tax rates and tax laws.

Deferred Tax arising on account of "timing differences" and which are capable of reversal in one or more subsequent periods is recognized, using the tax rates and tax laws that are enacted or substantively enacted. Deferred tax asset is recognized only to the extent there is reasonable certainty with respect to reversal of the same in future years as a matter of prudence.

1.10 Earnings per Share (EPS)

(a) Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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

1.11 Prior Period Items

Prior Period and Extraordinary items and Changes in Accounting Policies having material impact on the financial affairs of the Company are disclosed in financial statements if any.

1.12 Provisions / Contingencies

(a) Provision involving substantial degree of estimation in measurements is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

(b) Contingent Liabilities are shown by way of notes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable.

(c) A Contingent Asset is not recognized in the Accounts.

1.13 Segment Reporting

A. Business Segments:

Based on the guiding principles given in Accounting Standard 17 (AS - 17) on Segment Reporting issued by ICAI, the Company has only one reportable Business Segment, which is engaged in manufacture of yarn. Accordingly, the figures appearing in these financial statements relate to the Companys single Business Segment.

B. Geographical Segments:

The Company activities / operations are confined to India and as such there is only one geographical segment. Accordingly, the figures appearing in these financial statements relate to the Companys single geographical segment.

1.14 Foreign Currency Transactions

Foreign exchange transactions are recorded at the rate prevailing on the date of respective transaction. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rates on that date. Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction. Exchange differences arising on foreign exchange transactions settled during the year and on restatement as at the balance sheet date are recognized in the statement of profit and loss for the year.

1.15 Balance Confirmations

Balance of Debtors & Creditors & Loans & advances Taken & giving are subject to confirmation and subject to consequential adjustments, if any. Debtors & creditors balance has been shown separately and the advances received and paid from/to the parties is shown as advance from customer and advance to suppliers.

1.16 Regrouping

Previous years figures have been regrouped and reclassified wherever necessary to match with current year grouping and classification.

Discussion on Results of Operation

The following discussion on results of operations should be read in conjunction with the Restated Financial Results of our Company for the period ended March 31, 2024 and of our Partnership Firm for period ended January 03, 2024 and financial year ended on March, 31 2023, 2022 and 2021.

Results of Our Standalone Operations

The following table sets forth select financial data of our company from our financial statements as restated of profit and loss financial years ended on March 31, 2024

Particulars	For the year ended March 31, 2024	% of Total income
Revenue from operations	2,351.15	99.29%
Other income	16.73	0.71%
Total Income (A)	2,367.88	100.00%
Expenses:
Cost of Materials Consumed	742.23	31.35%
Purchase of Trading Goods	1,033.81	43.66%
Change in Inventory of Stock in Trade and Finished Goods	-5.44	-0.23%
Employee Benefit Expenses	24.69	1.04%
Other Expenses	41.44	1.75%
Total Expenses	1,836.72	77.57%
Earnings Before Interest, Taxes, Depreciation & Amortization	531.18	22.43%
Finance Cost	40.44	1.71%
Depreciation and Amortization Expenses	17.41	0.74%
Profit before Exceptional Items	473.32	19.99%
Exceptional Items	-	0.00%
Profit/(Loss) before Tax	473.32	19.99%
Tax Expenses:
MAT credit entitlement
Current Tax	120.74	5.10%
Deferred Tax	-1.50	-0.06%
Profit for the year	354.09	14.95%

DISCUSSION OF PERIOD ENDED March 31, 2024

Income

Our Total Income for the period ended March 31, 2024 was Rs2,367.90 lakhs which includes Revenue from Operation and Other Income.

Revenue from operations

Our Revenue from operations for the period ended March 31, 2024 was Rs2,351.15 lakhs which includes Sale of Goods and Other Operating revenue i.e. Commission Income.

Other Income

Our Other income for the period ended March 31, 2024 was Rs16.75 lakhs which includes Rent Received and Other Income.

Expenses

Our Total Expenses for the period ended March 31, 2024 was Rs1,836.72 lakhs which includes Cost of Material Consumed, Purchase of Trading Goods, Changes in Inventory, Employee Benefit Expenses and Other Expenses.

Cost of Material consumed

Our Cost of Materials Consumed for the period ended March 31, 2024 was Rs742.23 lakhs which includes Purchase of Materials and Direct Expenses such as Power & Fuel Charges, Labour and Job Work Charges, Machinery Rent and Other direct expenses.

Purchase of Trading Goods

Our Purchase of Trading Goods for the period ended March 31, 2024 was Rs1,033.81 lakhs.

Change in Inventory of Stock in Trade and Finished Goods

Our Change in Inventory for the period ended March 31, 2024 was Rs (5.44) lakhs which includes changes in Inventory of Finished Goods of Rs(41.18) Lakhs and changes in inventory of stock in trade of Rs 35.75 lakhs.

Employee benefits expenses

Our Employee Benefit Expenses for the period ended March 31, 2024 was Rs24.69 lakhs which consist of Salaries, Wages & Bonus, Partners Remuneration, Directors Remuneration, Contribution to ESI & EPF, Staff Welfare Expenses and Gratuity provision.

Finance costs

Our Finance Cost for the period ended March 31, 2024 was Rs40.44 lakhs which includes Interest on Loan and Other Finance Charges.

Depreciation and amortization expenses

Our Depreciation and Amortization Expenses for the period ended March 31, 2024 was Rs17.41 lakhs.

Other expenses

Our Other Expenses for the period ended March 31, 2024 was Rs41.44 lakhs consist of Auditors remuneration, Commission Expenses, Rent Expenses, Rent Expenses, Insurance Expenses, Legal & Professional Charges, Office Expenses, Vehicle Running & Maintenance, Computer, printing and stationery expenses, Other Expense, Rent, Rate and Taxes and Travelling and Conveyance Expenses.

Profit before tax

Our Profit/(Loss) before Tax for the period ended March 31, 2024 was Rs473.32 lakhs.

Tax expenses

Our Tax expanses for the period ended March 31, 2024 was Rs119.23 lakhs which includes both Current Tax and Deferred Tax.

Profit After Tax

Our Profit for the year for the period ended March 31, 2024 was Rs3 54.09 lakhs.

The following table sets forth select financial data of Partnership Firm from our financial statements as restated of profit and loss Period ended on January 3, 2024

Particulars	For the period ended January 03,2024	% of Total income
Revenue from operations	2,92954.72	99.96%
Other income	1.19	0.04%
Total Income (A)	2,955.91	100%
Expenses:
Cost of Materials Consumed	932.52	31.55%
Purhcase of Trading Goods	2,152.15	72.81%
Change in Inventory of Stock in Trade and Finished Goods	(721.19)	(24.40)%
Employee Benefit Expenses	29.31	0.99%
Other Expenses	41.16	1.39%
Total Expenses	2,433.95	82.34%
Earnings Before Interest, Taxes, Depreciation & Amortization	521.96	17.66%
Finance Cost	52.70	1.78%
Depreciation and Amortization Expenses	40.93	1.38%
Profit before Exceptional Items	428.32	14.49%
Exceptional Items	-	-
Profit/(Loss) before Tax	428.32	14.49%
Tax Expenses:
MAT credit entitlement	-	-
Current Tax	149.67	5.06%
Deferred Tax	-	0.00%
Profit for the year	278.65	9.43%

DISCUSSION OF PERIOD ENDED January 3, 2024 Income

Our Total Income for the period ended January 3, 2024 was Rs2,955.91 lakhs which includes Revenue from Operation and Other Income.

Revenue from operations

Our Revenue from operations for the period ended January 3, 2024 was Rs2,954.72 lakhs which includes Sale of Goods and rental income.

Other Income

Our Other income for the period ended January 3, 2024 was Rs1.19 lakhs which includes Miscellaneous income. Expenses

Our Total Expenses excluding finance cost and depreciation and amortization cost for the period ended January 3, 2024 was Rs2,433.95 lakhs.

Cost of Material consumed

Our Cost of Materials Consumed for the period ended January 3, 2024 was Rs932.52 lakhs which includes Purchase of Materials and Consumables, Power & Fuel Charges, Transportation, Loading, Clearing and Shipping Expenses, Labour and Job Work Charges and Other direct expenses.

Purchase of Trading Goods

Our Purchase of Trading Goods for the period ended January 03, 2024 was Rs2,152.15 lakhs.

Change in Inventory of Stock in Trade and Finished Goods

Our Change in Inventory for the period ended January 03, 2024 was Rs (721.19) lakhs which includes Changes in Finished goods Rs(157.70) lakhs and Changes in Stock in trade Rs(563.49) lakhs.

Employee benefits expenses

Our Employee Benefit Expenses for the period ended January 3, 2024 was Rs29.31 lakhs which consist of Salaries, Wages & Bonus, Partners Remuneration, Directors Remuneration, Contribution to ESI & EPF, Staff Welfare Expenses and Gratuity Provision.

Finance costs

Our Finance Cost for the period ended January 3, 2024 was Rs52.70 lakhs which includes Interest on Loans and Other Finance Charges.

Depreciation and amortization expenses

Our Depreciation and Amortization Expenses for the period ended January 3, 2024 was Rs40.9 3 lakhs.

Other expenses

Our Other Expenses for the period ended January 3, 2024 was Rs41.16 lakhs consist of Auditors remuneration, Commission Expenses, Rent Expenses, Rent Expenses, Insurance Expenses, Legal & Professional Charges, Office Expenses, Vehicle Running & Maintenance, Computer, printing and stationery expenses, Other Expense, Rent, Rate and Taxes and Travelling and Conveyance Expenses.

Profit before tax

Our Profit/(Loss) before Tax for the period ended January 3, 2024 was Rs428.32 lakhs.

Tax expenses

Our current tax expenses for the period ended January 3, 2024 amounted to Rs 149.67 Lakhs.

Profit After Tax

Our Profit for the year for the period ended January 3, 2024 was Rs278.65 lakhs.

The following table sets forth select financial data of Partnership Firm from our financial statements as restated of profit and loss for the financial years ended on March 31, 2023, 2022 and 2021, the components of which are also expressed as a percentage of total revenue for such periods:

Particulars	31-03-2023	% of total income	31-03-2022	% of total income	31-03-2021	% of total income
Revenue from Operations	4,600.08	99.08%	2,363.32	51.37%	1,690.50	100.00%
Other income	0.15	0.02%	3.99	0.17%		0.00%
Total Revenue (A)	4,600.23	100%	2,367.31	100%	1,691.50	100%
Expenses:
Cost of Materials Consumed	1,856.52	40.36%	596.46	25.20%	379.64	22.46%
Purhcase of Trading Goods	2,153.46	46.81%	1,530.85	64.67%	1,230.03	72.76%
Change in Inventory of Stock in Trade and Finished Goods	-208.62	-4.54%	46.08	1.95%	-30.75	-1.82%
Employee Benefit Expenses	36.79	0.80%	33.21	1.40%	26.92	1.59%
Other Expenses	151.48	3.29%	40.96	1.73%	22.93	1.36%
Total Expenses (B)	3,989.63	86.73%	2,247.57	94.94%	1,628.77	96.35%
Earnings Before Interest, Taxes, Depreciation & Amortization(C=A-B)	610.60	13.27%	119.74	5.06%	61.74	3.65%
Finance costs (D)	29.99	0.65%	47.41	2.00%	20.33	1.20%
Depreciation and amortization expenses (E)	59.43	1.29%	54.89	2.32%	16.87	1.00%
Profit before exceptional items, extraordinary items and tax (F=C-D-E)	521.17	11.33%	17.44	0.74%	24.54	1.45%
Exceptional Items	-	0.00%	-	0.00%	-	0.00%
Profit before tax (F=C-D- E)	521.17	11.33%	17.44	0.74%	24.54	1.45%
Tax Expenses
MAT credit entitlement			-2.18	-0.09%	0.00	0.00%
- Current Tax	205.20	4.46%	3.77	0.16%	8.69	0.51%
- Deferred Tax	-0.16	0.00%	-0.09	0.00%	-0.09	-0.01%
Tax Expense For The Year(G)	205.03	4.46%	1.50	0.06%	8.60	0.51%
Profit after tax (H=F-G)	316.14	6.87%	15.94	0.67%	15.94	0.94%

Overview of Revenue and expenditure

Total Revenue: Our total revenue comprises of revenue from operations and Other Income.

Revenue from operations: Our revenue from operations comprises of Sale of finished goods and traded goods and other operating revenue.

Expenses: Our expenses comprise of Cost of Materials Consumed, Purchase of Trading Goods, Changes in Inventories Of Finished Goods and Stock-in-trade, Employee Benefits Expense, Finance Costs Depreciation and Amortisation Expense and Other Expenses.

Cost of Material: Our Cost of Materials comprises of sales of goods.

Purchase of Trading Goods: Our Purchase of Trading Goods includes Purchases of goods

Change in Inventory of Stock in Trade and Finished Goods: Our Change in Inventory of Stock in Trade and Finished Goods includes change in Opening and Closing stock of Goods

Employee Benefit Expenses: Our employee benefit expense consists of Salaries, Wages & Bonus, Partners Remuneration, Contribution to ESI & EPF, Staff Welfare Expenses and Gratuity.

Finance Cost: Our finance costs comprise of Interest on Loans and Other Finance charges.

Depreciation and amortisation expenses: Tangible assets are depreciated over periods corresponding to their estimated useful lives. Depreciation includes depreciation charged on tangible assets.

Other expenses: Other expenses include Auditors remuneration, Commission Expenses, Rent Expenses, Rent Expenses, Insurance Expenses, Legal & Professional Charges, Office Expenses, Vehicle Running & Maintenance, Computer, printing and stationery expenses, Other Expense, Rent, Rate and Taxes and Travelling and Conveyance Expenses.

Provision for Tax: 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 I. T. Act.

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 2022-23 WITH FY 2021-22

Total Income

Our Total Income increased by Rs 2,232.92 lakhs, from Rs 2,367.31 lakhs for the financial year ended March 31, 2022 to Rs 4,600.23 lakhs for the financial year ended March 31, 2023, due to the factors described below:

Revenue from operations

Our Revenue from operations increased by Rs 2,236.76 lakhs from Rs 2,363.32 lakhs for the financial year ended March 31, 2022, to Rs 4,600.08 lakhs for the financial year ended March 31, 2023, representing a growth of 94.64% on account of increase in of sale of finished goods and traded goods.

Other Income

Our Other income decreased by Rs 3.84 lakhs, from Rs 3.99 lakhs for the financial year ended March 31, 2022, to Rs 0.15 lakhs for the financial year ended March 31, 2023, representing a decline of 96.19% due to decrease in Other Income.

Expenses

Our Total Expenses excluding finance cost, depreciation and tax expenses was t 3,989.63 lakhs for the year ended March 31, 2023 as compared to t 2,247.57 Lakhs for the financial year March 31, 2022, representing increase of 77.51% due to the factors described below: -

Cost of Materials Consumed

Our Cost of Materials Consumed increased by t 1,260.06 lakhs, from t 596.46 lakhs for the financial year ended March 31, 2022, to t 1,856.52 lakhs for the financial year ended March 31, 2023 due to increase in production of goods.

Purchase of Trading Goods

Our Purchase of Trading Goods increased by t 622.60 lakhs, from t 1,530.85 lakhs for the financial year ended March 31, 2022, to t 2,153.46 lakhs for the financial year ended March 31, 2023 which represents increase of 40.67% which is due to increase in purchase to meet higher demand as there is increase in sales.

Change in Inventory of Stock in Trade and Finished Goods

Our Net Change in Inventory of Stock in Trade and Finished Goods decreased by t 254.71 lakhs, from t 46.08 lakhs for the financial year ended March 31, 2022 to t(208.62) lakhs for the financial year ended March 31, 2023.

Employee benefits expenses

Our Employee Benefit Expenses increased by t 3.59 lakhs, from t 33.21 lakhs for the financial year ended March 31, 2022, to t 36.79 lakhs for the financial year ended March 31, 2023 which is due to increase in Salaries, Wages and Bonus, Contribution to ESI & EPF, Gratuity which was partially set off by decrease in Partners Remuneration and Staff Welfare Expenses.

Finance costs

Our Finance Cost t 29.99 lakhs for the year ended March 31, 2023 as compared to t 47.41 Lakhs for the financial year March 31, 2022, representing decreased of 36.75% due to decrease in interest expenses.

Depreciation and amortization expense

Our Depreciation and Amortization Expense increased by t 4.55 lakhs, from t 54.89 lakhs for the financial year ended March 31, 2022, to t59.43 lakhs for the financial year ended March 31, 2023 due to increase in assets.

Other expenses

Our Other Expenses increased by t 110.52 lakhs, from t 40.96 lakhs for the financial year ended March 31, 2022, to t 151.48 lakhs for the financial year ended March 31, 2023, which is 1.73% and 3.29% of the total revenue of respective years. The increase is due to increase in Auditors remuneration, Commission Expenses, Insurance Expenses, Repairs and Maintenance Expenses, Vehicle Running & Maintenance, Rebate and Discount, and Travelling and Conveyance Expenses, Research and Development Expenses and Travelling and Conveyance Expenses which was partially set off by decrease in Rent Expenses, Legal & Professional Charges, Computer, printing and stationery expenses, Other Expense, Rent, Rate and Taxes, Sales Promotion Expenses.

Exceptional Items

There were no exceptional items in Financial Year 2021-22 and 2022-23.

Profit before tax

Our Profit before Tax increased by t 503.74 lakhs, from t 17.44 lakhs for the financial year ended March 31, 2022, to t 521.17 lakhs for the financial year ended March 31, 2023 on account of increase in sale of products.

Tax expenses

Our tax expenses for the financial year 2022-23 amounted to t205.03 Lakhs as against tax expenses of t 1.50 Lakhs for the financial year 2021-22. The net increase is on account of increase in Current tax and Deferred Tax.

Profit After Tax

Our Profit for the year increased by Rs 300.20 lakhs, from Rs 15.94 lakhs for the financial year ended March 31, 2023, to Rs 316.14 lakhs for the financial year ended March 31, 2023 representing a growth of 1883.55%.

COMPARISON OF FY 2021-22 WITH FY 2020-21

Total Income

Our Total Income increased by Rs 676.8 lakhs, from Rs 1,690.50 lakhs for the financial year ended March 31, 2021, to Rs 2,367.31 lakhs for the financial year ended March 31, 2022, representing a growth of 40.04% on account of increase in revenue from operation and other income.

Revenue from operations

Our Revenue from operations increased by Rs 672.81 lakhs, from Rs 1,690.50 lakhs for the financial year ended March 31, 2021, to Rs 2,363.32 lakhs for the financial year ended March 31, 2022, representing a growth of 39.80% on account of increase in sale of finished goods and Trading products along with rental income.

Other Income

Our Other income increased by Rs 3.99 lakhs, as there was no other income in financial year ended March 31, 2021, as compared to Rs 3.99 lakhs for the financial year ended March 31, 2022.

Expenses

Our Total Expenses excluding Finance cost and Depreciation and Amortization Expenses increased by Rs 618.80 lakhs, from Rs 1,628.77 lakhs for the financial year ended March 31, 2021, to Rs 2,247.57 lakhs for the financial year ended March 31, 2022, representing a growth of 37.99% due to the factors described below:

Cost of Material consumed

Our Cost of Materials Consumed increased by Rs 216.82 lakhs, from Rs 379.64 lakhs for the financial year ended March 31, 2021, to Rs 596.46 lakhs for the financial year ended March 31, 2022, representing a growth of 57.11% on account of increase in production to meet the increased demand.

Purchase of Trading Goods

Our Purchase of Trading Goods increased by Rs 300.82 lakhs, from Rs 1,230.03 lakhs for the financial year ended March 31, 2021, to Rs 1,530.85 lakhs for the financial year ended March 31, 2022, representing a growth of 24.46% on account of increase in purchases in line with increase in sales.

Change in Inventory of Stock in Trade and Finished Goods

Our Change in Inventory of Stock in Trade and Finished Goods increased by Rs 76.84 lakhs, from Rs (30.75) lakhs for the financial year ended March 31, 2021, to Rs 46.08 lakhs for the financial year ended March 31, 2022, representing a growth of 249.86%.

Employee benefits expenses

Our Employee Benefit Expenses increased by Rs 6.29 lakhs, from Rs 26.92 lakhs for the financial year ended March 31, 2021, to Rs 33.21 lakhs for the financial year ended March 31, 2022, representing a growth of 23.35% on account of increase in Salaries, Wages and Bonus, Contribution to ESI & EPF.

Finance costs

Our Finance Cost increased by Rs 27.08 lakhs, from Rs 20.33 lakhs for the financial year ended March 31, 2021, to Rs 47.41 lakhs for the financial year ended March 31, 2022, representing a growth of 133.18% on account of increase in Interest on Loans and Other Finance charges.

Depreciation and amortization expense

Our Depreciation and Amortization Expenses increased by Rs 38.02 lakhs, from Rs 16.87 lakhs for the financial year ended March 31, 2021, to Rs 54.89 lakhs for the financial year ended March 31, 2022, representing a growth of 225.42% on account of increase in assets.

Other expenses

Our Other Expenses increased by Rs 18.03 lakhs, from Rs 22.93 lakhs for the financial year ended March 31, 2021, to Rs 40.96 lakhs for the financial year ended March 31, 2022, representing a growth of 78.63% on account of increase in Rent Expenses, Legal & Professional Charges, Office Expenses, Repairs & Maintenance Expenses, Vehicle Running and Maintenance Expenses, Computer, Printing & Stationery Expenses, Other Expenses, Rent, Rates and Taxes, Sales Promotion, Website Expenses, Travelling & Conveyance Expenses which was partially set off by decrease in Commission Expenses, Insurance Expenses, Rebate & Discount.

Exceptional Items

There were no exceptional items in Financial Year 2020-21 and 2021-22.

Profit before tax

Our Profit before Tax is decreased by Rs 7.10 lakhs, from Rs 24.54 lakhs for the financial year ended March 31, 2021 to Rs 17.44 lakhs for the financial year ended March 31, 2022 representing a decline of 28.93% due to factors mentioned above.

Tax expenses

Our tax expenses for the financial year 2021-22 amounted to Rs1.50 Lakhs as against tax expenses of Rs8.60 Lakhs for the financial year 2020-21. The net decrease is on account of decrease in Current tax and Deferred Tax.

Profit After Tax

Our Profit for the year for the F.Y.(s) 2021-22 and 2020-21 were same i.e. Rs 15.94 lakhs.

CHANGES IN CASH FLOWS

The table below summaries our cash flows of company from our Restated Financial Statements for the year ended March 31, 2024:

Particulars	For the year ended March 31, 2024
Net cash (used in)/ generated from operating Activities	510.82
Net cash (used in)/ generated from investing Activities	(42.00)
Net cash (used in)/ generated from financing Activities	745.05
Net increase/ (decrease) in cash and cash Equivalents	1,213.87
Cash and Cash Equivalents at the beginning of the period	24.79
Cash and Cash Equivalents at the end of the Period	1,238.66

Operating Activities

Our net cash generated in operating activities was Rs510.82 Lakhs for the year ended 31 March 2024. Our operating profit before working capital changes was Rs 523.43 Lakhs for the period ended March 31, 2024 which was primarily adjusted against decrease in trade receivables by Rs 708.76 Lakhs, increase in Inventory by Rs62.44 Lakhs, increase in Short Term Loans & Advances Rs 210.10 Lakhs, decrease in Other Current Assets by Rs 26.04 Lakhs, decrease in Trade payable Rs465.75 Lakhs, decrease in other current liabilities by Rs 9.13 Lakhs, increase in short term provision by Rs 120.75 Lakhs which was further decreased by payment of Income Tax of Rs 120.74 Lakhs.

Investing Activities

Our net cash utilised in investing activities was Rs 42.00 Lakhs for the period ending March 31,2024. These were on account of purchase of Fixed Asset of Rs 50.02 lakhs (on Net basis), Decrease in Non-current Assets of Rs 2.78 Lakhs and Rental Income of Rs 10.80 lakhs.

Financing Activities

Net cash generated in financing activities for the financial year ended March 31, 2024 was Rs 745.05 Lakhs which was primarily on account of Issue of share capital by Rs1,405.89 Lakhs (on Net basis), Repayment of long term borrowing of Rs13.06 lakhs, Repayment of short term borrowings of Rs607.34 lakhs and payment of Finance cost of Rs40.44 lakhs.

The table below summaries our cash flows of Partnership firm from our Restated Financial Statements for the period ended January 03, 2024 and financial years ended March 31, 2023, 2022 and 2021:

(Rs in Lakh)

Particulars	For the year ended January 3, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022	For the year ended March 31, 2021
Net cash (used in)/ generated from operating Activities	(393.29)	20.84	(202.03)	(51.83)
Net cash (used in)/ generated from investing Activities	10.70	(31.65)	(189.46)	(238.81)
Net cash (used in)/ generated from financing Activities	394.46	19.87	304.63	372.72
Net increase/ (decrease) in cash and cash Equivalents	11.87	9.06	(86.87)	82.09
Cash and Cash Equivalents at the beginning of the period	12.93	3.86	90.73	8.64
Cash and Cash Equivalents at the end of the Period	24.79	12.92	3.86	90.73

Operating Activities Period ended January 3, 2024

Our net cash used in operating activities was Rs 393.29 Lakhs for the period ended January 3, 2024. Our operating profit before working capital changes was Rs 521.96 Lakhs for the period ended January 3, 2024 which was primarily adjusted against increase in trade receivables by Rs 646.84 Lakhs, increase in Inventory by Rs1,067.18 Lakhs, increase in Short Term Loans & Advances Rs 4.03 Lakhs, decrease in Other Current Assets by Rs 9.99 Lakhs, increase in Trade payable Rs 943.91 Lakhs, increase in other current liabilities by Rs 26.50 Lakhs, decrease in short term provision by Rs 35.99 Lakhs which was further decreased by payment of Income Tax of Rs 149.67 Lakhs.

Financial year 2022-23

Our net cash used in operating activities was Rs20.84 Lakhs for the period ended March 31, 2023. Our operating profit before working capital changes was Rs611.09 Lakhs for the financial year 2022-23 which was primarily adjusted against increase in Inventories by Rs53.81 Lakhs, increase in trade receivables by Rs462.80 Lakhs, decrease in Short Term Loans & Advances by Rs 111.54 Lakhs, decrease in Other Current Assets by Rs15.22 Lakhs , decrease in Trade Payable by Rs190.86 lakhs, decrease in Other Current Liabilities by Rs3.60 Lakhs, increase in Short term provision by Rs199.25 Lakhs, which was further decreased by payment of Income Tax of Rs205.20 Lakhs.

Financial year 2021-22

Our net cash used in operating activities was Rs202.03 Lakhs for the period ended March 31, 2022. Our operating profit before working capital changes was Rs 120.05 Lakhs for the financial year 2021-22 which was primarily adjusted against increase in Inventories by Rs335.84 Lakhs, increase in trade receivables by Rs29.20 Lakhs, increase in Short Term Loans & Advances by Rs55.12 Lakhs, increase in Other Current Assets by Rs48.74 Lakhs , increase in Trade Payable by Rs142.88 Lakhs, increase in Other Current Liabilities by Rs10.45 Lakhs, decrease in Short term provision by Rs4.92 Lakhs, which was further decreased by payment of Income Tax of Rs1.59 Lakhs.

Financial year 2020-21

Our net cash used in operating activities was ^51.83 Lakhs for the period ended March 31, 2021. Our operating profit before working capital changes was Rs62.10 Lakhs for the financial year 2020-21 which was primarily adjusted against increase in Inventories by Rs107.65 Lakhs, decrease in trade receivables by Rs41.56 Lakhs, increase in Short Term Loans & Advances by Rs57.81 Lakhs, increase in Other Current Assets by Rs33.09 Lakhs , increase in Trade Payable by Rs20.63 Lakhs, increase in Other Current Liabilities by Rs22.43 Lakhs, increase in Short term provision by Rs8.69 Lakhs, which was further decreased by payment of Income Tax of Rs8.69 Lakhs.

Investing Activities Period ended January 3, 2024

Our net cash generated in investing activities for period ended January 03, 2024 was Rs 10.70 Lakhs. These were on account of sale of Fixed Asset of Rs 10.70 Lakhs.

Financial year 2022-23

Our net cash used in investing activities was Rs 31.65 Lakhs for the period ending March 31, 2023. These were on account of Addition in Fixed Asset of Rs 38.22 Lakhs, decrease in Other Non current assets of Rs 2.82 Lakhs, Interest Income of Rs0.15 Lakhs and Loss on Sale of Fixed Assets of Rs 3.59 Lakhs.

Financial year 2021-22

Our net cash utilised in investing activities was Rs 189.46 Lakhs for the period ending March 31, 2022. These were on account of Addition in Fixed Asset of Rs 182.35 Lakhs, Decrease in Other Non current assets of Rs 7.18 Lakhs, Interest Income of Rs0.06 Lakhs and Loss on Sale of Fixed Assets of Rs 0.01.

Financial year 2020-21

Our net cash utilised in investing activities was Rs 238.81 Lakhs for the period ending March 31, 2021. These were on account of Addition in Fixed Asset of Rs 236.62 Lakhs and Decrease in Other Non current assets of Rs 2.19.

Financing Activities

Period ended January 3, 2024

Net cash generated in financing activities for the period ending January 3, 2024 was Rs 394.46 Lakhs which was primarily on account of Decrease in share capital by Rs 831.42 Lakhs, Repayment from long term borrowing of Rs144.73, Net proceeds short term borrowings of Rs 1,423.31 lakhs and Payment of Finance cost of Rs 52.70 lakhs.

Financial year 2022-23

Net cash generated in financing activities for the financial year ended March 31, 2023 was Rs 19.87 Lakhs which was primarily on account of decrease in Partners capital by ^21.15 Lakhs, Repayment of long term borrowings Rs 35.72 lakhs, Net proceeds of short term borrowings of Rs 106.73 lakhs and Finance cost of Rs 29.99 lakhs.

Financial year 2021-22

Net cash generated in financing activities for the financial year ended March 31, 2022 was Rs304.63 Lakhs which was primarily on account of increase in Partners capital of Rs5.37 Lakhs, Net Proceeds of long term borrowings Rs 110.90 lakhs, Net proceeds of short term borrowings of Rs 235.77 lakhs and Finance cost of Rs 47.41 lakhs.

Financial year 2020-21

Net cash generated in financing activities for the financial year ended March 31, 2021 was Rs372.72 Lakhs which was primarily on account of Increase in Partners capital of Rs8.02 Lakhs, Repayment of long term borrowings Rs 8.05 lakhs, Net proceeds of short term borrowings of Rs 393.08 lakhs and Finance cost of Rs 20.33 lakhs.

Other Key Ratios

The table below summaries key ratios in our Restated Financial Statements for the year ended March 31, 2024 and period ended January 03, 2024 and financial years ended March 31, 2023, 2022 and 2021:

	Company	Partnership Firm
	For the year ended March 31, 2024	For the year ended January 03, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022	For the year ended March 31, 2021
Fixed Asset Turnover Ratio	1.40	7.87	10.77	5.23	5.21
Current Ratio	1.58	0.91	1.34	1.07	1.12
Debt Equity Ratio	0.54	-	-	-	-
Inventory Turnover Ratio	1.01	1.39	6.06	3.79	6.64

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 inventory based on Financial Statements as restated.

Financial Indebtedness

As on January 03, 2024, the total outstanding borrowings of our Company is Rs 1,609.38 Lakhs. For further details, refer to the chapter titled "Statement of Financial Indebtedness" beginning on page 202 of this Draft Red Herring Prospectus.

(Rs in Lakh)

Particulars	As at March 31, 2024
Loans from Banks & Financial Institutions	1,627.37
Unsecured Loans from directors	-
Total	1,627.37

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 182 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 182 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 Debentures 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 182 of this Draft Red Herring Prospectus, there have been no defaults in payment of statutory dues or repayment of debentures 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 29 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

The Company is a Ludhiana, Punjab-based company, specializing in the manufacturing of yarns by recycling waste synthetic fiber, serving the B2B segment of the textile industry. The Company offers a range of products including synthetic fiber and yarns which includes acrylic yarn, polyester yarn, wool yarn, hand-knitting yarn and acrylic blend yarn with quality, finer impact, and lasting excellence. The details have been included in the chapter titled "Industry Overview " beginning on 95 of this Draft Red Herring Prospectus.

Competitive Conditions

We have competition with Indian and international manufacturing companies and our results of operations could be affected by competition in the manufacturing industry in India and international market in the future. 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 29 of this Draft Red Herring Prospectus.

Increase in income

Increases in our income are due to the factors described above in in this chapter under "Factors Affecting Our Results of Operations" and chapter titled "Risk Factors" beginning on 29 of this Draft Red Herring Prospectus.

Status of any Publicly Announced New Business Segments

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