Shakti Polytarp Ltd Management Discussions

OF OPERATION

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the financial year ended March 31, 2025, March 31, 2024, andfor the financial year ended March 31, 2023. One should read the following discussion and analysis of ourfinancial condition and results ofoperations in conjunction with our section titled “Financial Statements” and the chapter titled “Financial Information” on page 233 of the Draft Red Herring 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 29 of this Draft Red Herring Prospectus. Actual results could differ materially from those contained in any forwardlooking statements and for further details regarding forward-looking statements, kindly refer the chapter titled “Forward-Looking Statements” on page 19 of this Draft Red Herring Prospectus. Unless otherwise stated, the financial information of our Company used in this section has been derived from the Restated Financial Information. Our financial year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular financial year are to the 12-month period ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to “we”, “us” or “our” refers to Shakti Polytarp Limited, our Company. Unless otherwise indicated, financial information included herein are based on our Restated Financial Statements for the Financial Years 2025, 2024 & 2023 included in this Draft Red Herring Prospectus beginning on page 233 of this Draft Red Herring Prospectus.

BUSINESS OVERVIEW

Our Company is engaged in the business of manufacturing of tarpaulin and other products including Shade Net. A tarpaulin is a large, strong, flexible, and water-resistant sheet used to cover and protect objects from environmental elements. Our products have diverse applications across various industries including agriculture, construction, automotive, transportation & logistics and consumer goods. We offer end-to-end services, assisting clients in selecting the right type of tarpaulin for their applications while also providing design and customization options according to the intended use.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR I.E., MARCH 31, 2025

As per mutual discussion between the Board of the Company and BRLM, in the opinion of the Board of the Company there have not arisen any circumstances since the date of the last financial statements as disclosed in the Draft Red herring Prospectus and which materially and adversely affect or is likely to affect within the next twelve months except as follows:

• The Board of Directors of our Company has approved and passed a resolution on December 18, 2024, to authorize the Board of Directors to raise the funds by way of Initial Public Offering.

• The Shareholders of our Company has approved and passed a resolution on January 13, 2025, to authorize the issue by way of Initial Public Offering.

• The board of directors appointed Mr. Ravi Singhal as Managing Director w.e.f. November 19, 2024.

• The board of directors appointed Mr. Rajesh Gupta as Non-Executive Director w.e.f. November 19, 2024.

• The board of directors appointed Ms. Ruchi Joshi Meratia as Independent Director w.e.f. November 19, 2024.

• The board of directors appointed Ms. Kumari Priya Pandey as Independent Director w.e.f. November 19, 2024.

• The board of directors appointed Ms. Aditi Vohra as Company Secretary & Compliance officer of the Company w.e.f. November 19, 2024.

• The board of directors appointed Ms. Priyal Singhal as Chief Executive Officer of the Company w.e.f. November 19, 2024.

• The board of directors appointed Mr. Manoj Kumar as Chief Financial Officer of the Company w.e.f. January 02, 2025.

• Ms. Aditi Vohra resigned from the position of Company Secretary and Compliance Officer of the Company with effect from May 23, 2025.

• The board of directors appointed Mr. Kapl Vinod Garg as Company Secretary & Compliance officer of the Company w.e.f. June 24, 2025.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled “Risk Factor” beginning on page 29 of this Draft Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

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

• Companys results of operations and financial performance;

• Performance of Companys competitors;

• Significant developments in India‘s economic and fiscal policies;

• Failure to adapt to the changing needs of industry and in particular Sector may adversely affect our business and financial condition;

• Volatility in the Indian and global capital market;

MANAGEMENTS DISCUSSION ON RESULTS OF OPERATION

	For the Financial Year Ended
S No. Particulars	March 31, 2025	%age of Total Income	March 31, 2024	%age of Total Income	March 31, 2023	%age of Total Income
I Revenue from Operations	16,623.57	99.84%	6,201.12	99.66%	4,621.53	99.98%
II Other Income	25.95	0.16%	21.38	0.34%	1.14	0.02%
III Total Income (I + II)	16,649.52	100.00%	6,222.50	100.00%	4,622.67	100.00%
IV Expenses
Cost of Material Consumed	5,478.56	32.91%	4,036.28	64.87%	4,140.78	89.58%
Purchase of stock-intrade	9,204.16	55.28%	1,041.79	16.74%	487.38	10.54%
Changes in Inventories of Finished Goods, WIP and stock-in-trade	(354.33)	(2.13%)	269.60	4.33%	(656.30)	(14.20%)
Direct Manufacturing Expenses	361.08	2.17%	311.41	5.00%	247.92	5.36%
Employee Benefits Expenses	73.55	0.44%	55.14	0.89%	51.10	1.11%
Finance Costs	288.52	1.73%	190.89	3.0%	152.97	3.31%
Depreciation and Amortization Expenses	116.34	0.70%	98.80	1.59%	94.77	2.05%
Other Expenses	791.75	4.76%	103.64	1.67%	41.97	0.91%
Total Expenses (IV)	15,959.64	95.86%	6,107.57	98.15%	4,560.60	98.66%
V Profit before tax (III + IV)	689.87	4.14%	114.94	1.85%	62.08	1.34%
VI Tax expense:
Current Tax	115.60	0.69%	19.74	0.32%	10.18	0.22%
Deferred Tax	16.06	0.10%	4.10	0.07%	5.96	0.13%
MAT credit entitlement	61.60	0.37%	(7.04)	(0.11%)	(10.18)	(0.22%)
Total Tax Expense (VI)	193.26	1.16%	16.80	0.27%	5.96	0.13%
VII Profit after tax for the period (V - VI)	496.62	2.98%	98.13	1.58%	56.11	1.21%
VIII Earning per equity share:
Basic & Diluted (Rs.)	4.09	-	0.96	-	0.60	-

Our Significant Accounting Policies

For Significant accounting policies please refer Significant Accounting Policies", under Chapter titled Financial Statements beginning on page 233 of the Draft Red Herring Prospectus.

Overview of Revenue & Expenditure

The following discussion on results of operations should be read in conjunction with the Restated Financial statements for the financial years 2025-2024, Financial Year 2024-23 & Financial Year 2023-22. Our revenue and expenses are reported in the following manner:

Total Income

? Revenue from operations

Our Companys revenue is primarily generated from

1. Manufacturing of Tarpaulins which is a large sheet of solid, flexible and waterproof fabric or polyester wrapped in polyurethane, or made of polyethylene-like plastics customized to the bulk packaging requirements of our clients.

2. Trading of Raw Material (Granules) which is also used as major Raw material consumption to produce Tarpaulins.

? Other Income

Other Income mainly includes interest received from Deposits, rate difference and profit on sale of fixed asset.

Expenditure

Our total expenditure primarily consists of cost of materials consumed, employee benefit expense, Finance cost, Changes in inventories of finished goods, work-in-progress and stock-in-trade, Direct Manufacturing expense and other expenses.

? Cost of material consumed

The Cost of material consumed includes purchase of raw material used for manufacturing purposes.

? Purchase of stock-in-trade

The purchase of stock-in-trade includes material purchased for trading purposes.

? Changes in inventories of finished goods, work-in-progress and stock-in-trade

It includes the opening and closing balances of the inventories, i.e., WIP, finished goods and traded goods.

? Direct Manufacturing Expense

The other direct expense includes Power and Fuel, Factory labour and wages, Carriage and Freight Inward

AIQ

Expenses, Loading expenses, Consumables & Spare Expenses.

? Employee benefit expense

The Employee benefit expense includes salary and benefits to staff, contribution to various funds, directors salary gratuity of staff & director.

? Finance Cost

Finance cost expense includes Bank charges and processing fees, Interest to Bank and interest to NBFC, interest on ICDs and interest on unsecured loan from Directors and Relatives.

? Depreciation and Amortization Expenses

Depreciation and Amortization Expenses majorly include depreciation on Property/ Factory Building, Plant & Equipment, Vehicle, computer etc.

? Other Expenses

Other Expenses include major expenses on Rent, Packing charges, Insurance Expense, Legal and Professional Fees, Discount on traded goods, repair and maintenance and miscellaneous expense etc.

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

Revenues

? Total Income

Total Income for the Financial Year 31^st March 2025, stood at Rs. 16,649.52 lakhs whereas in Financial Year 31^st March 2024 it stood at Rs 6,222.50 lakhs representing an increase of 168.07%.

Reason: The increase in the total income of the company is due to increase in revenue from operations and other income. The increase in revenue from operations saw a jump majorly because of increase in revenue of traded goods as the company offered goods for sale at discounted rate.

? Revenue from operations

Revenue from operations for the Financial Year 31st March 2025, stood at Rs. 16,623.57 Lakhs whereas in Financial Year 31st March 2024 it stood at Rs. 6,201.12 Lakhs representing an increase of 168.07%

Reason: The increase in revenue was driven by an increase of 1,200 MTPA by purchase of an additional machinery allowing us to increase our manufacturing revenue significantly through increased efficiency and also the company entered into strategic agreements with key raw material suppliers, including Reliance Industries Limited (RIL) and Hindustan Petroleum Corporation Limited (HPCL), in line with their respective bulk purchase schemes and policies. These arrangements enabled the company to secure higher discounts on bulk purchases of (granules).

By leveraging these supplier pricing structures, the company expanded its trading activities in raw materials during the year. Competitive pricing and strong market demand contributed to a substantial increase in trading sales, thereby diversifying the companys revenue streams.

(Amount in Lakhs, except %)

PARTICULARS	For the year ended 31 March 2025	For the year ended 31 March 2024
Revenue From Sale of Mfg Goods	6,614.06	5,094.70
Revenue From Sale of Mfg Goods as %age of Revenue	39.79%	82.16%
Revenue From Trading Goods	10,009.51	1,094.42
Revenue From Trading Goods as %age of Revenue	60.21%	17.65%
Commission Receipt	-	12
TOTAL	16,623.57	6,201.12

? Other Income

Other Income for the Financial Year 31st March 2025, stood at Rs. 25.95 Lakhs whereas in the Financial Year 31st March 2024 it stood at Rs. 21.38 lakhs representing an increase of 21.38%.

Reason: The increase in other income is mainly due to the increase in interest income from fixed deposit.

(Amt in Rs. Lakhs)

Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024
Interest Received	25.95	5.31
Rate Difference & Discount	-	2.32
Profit on Sale of Fixed Assets	-	13.76
Total	25.95	21.38

? Total Expenses

Total Expenses for the Financial Year 31st March 2025 stood at Rs. 15,959.64 Lakhs whereas in the Financial Year 31st March 2024 it stood at Rs 6,107.57 Lakhs representing an increase of 161.31%.

Reason: The increase in total expenses is largely due to increase in cost of material consumed, purchase of stock-in-trade, increase in finance cost, depreciation and other expenses. However, in FY 25 total expenses as % of revenue decreased by 2.49% as compare to FY 24

? Cost of Material Consumed

Total Cost of material consumed for the Financial Year 31st March 2025, stood at Rs. 5,478.56 Lakhs whereas in the Financial Year 31st March 2024 it stood at Rs. 4,036.28 Lakhs representing an increase of 35.73%.

Reason: The cost of raw material consumed increased due to increase in the revenue from manufacturing goods.

(Amount in Rs. Lakhs)

Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024
Opening Stock of Raw Material	376.26	175.72
Add: Purchases of Material	5,396.52	4,236.83
Less: Closing Stock of Material	294.22	376.26
Total	5,478.56	4,036.28

? Purchase of stock in trade

Purchase of traded goods for the financial year 31st March 2025 stood at Rs. 9,204.16 lakhs whereas in the financial year 31st March 2024 stood at Rs. 1,041.79 lakhs an increase of 783.49%.

Reason: Increase in the purchase of traded goods is due to a gradual shift towards the sale of traded goods along with sale of manufactured goods because on bulk purchase of raw material, discount were provided by the supplier causing the company to trade the raw materials to avail bulk discount.

The company entered into strategic agreements with key raw material suppliers, including Reliance Industries Limited (RIL) and Hindustan Petroleum Corporation Limited (HPCL), in line with their respective bulk purchase schemes and policies. These arrangements enabled the company to secure higher discounts on bulk purchases of raw material (granules).

By leveraging these supplier pricing structures, the company expanded its trading activities in raw materials during the financial year. Competitive pricing and strong market demand contributed to a substantial increase in trading sales.

? Change in Inventories of Finished Goods, WIP and Stock in Trade

Total Change in Inventory for the Financial Year 31st March 2025, stood at Rs. (354.33) Lakhs whereas in the Financial Year 31st March 2024 it stood at Rs. 269.60 Lakhs a decrease of 231.43%.

Reason: The reason for decrease in the change in inventories of finished goods, WIP and Stock in trade is due to increase in closing stock of inventories mainly in finished goods.

(Amount in Rs. Lakhs)

Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024
Inventories at the beginning of the year	927.02	1,196.62
Inventories at the end of the year	1,281.35	927.02
Total	(354.33)	269.60

? Direct Manufacturing Expenses

The Direct Manufacturing Expenses for the Financial Year 31st March 2025, stood at Rs. 361.08 Lakhs whereas in the Financial Year 31st March 2024 it stood at Rs 311.41 Lakhs representing an increase of 15.95%.

Reason: Since direct manufacturing expenses are linked to revenue from operations, the increase in revenue from operations caused an increase in these expenses, all of these expenses have increased slightly, contributing to an overall increase in the direct manufacturing expenses.

(Amounts in Rs. Lakhs)

Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024
Freight Inward, Cartage & Loading Exp	55.25	44.95
Power and Fuel	212.25	188.65
Labour expense	60.54	53.93
Consumables & Spare Exp.	33.04	23.89
Total	361.08	311.41

? Employment Benefit Expenses

The Employee benefit expense for the Financial Year 31st March 2025, stood at Rs. 73.55 Lakhs whereas in Financial Year 31st March 2024 it stood at Rs. 55.14 Lakhs representing an increase of 33.38%.

Reason: There was an increase in ‘Employee benefit expenses because of an increase in Salaries and benefit to staff, Directors remunerations & Contribution to various funds.

(Amount in Lakhs)

Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024
Salaries & Benefits to Staff	18.17	10.34
Directors Salary	49.95	39.10
Contribution to various funds	2.77	2.41
Gratuity of staff & director	2.67	3.29
Total	73.55	55.14

? Finance Cost

The Finance Cost for the Financial Year on 31st March 2025, stood at Rs. 288.52 Lakhs whereas in the Financial Year 31st March 2024 it stood at Rs. 190.89 Lakhs representing an increase of 51.15% from the previous years.

Reason: The increase was due to interest given to bank and interest towards unsecured loan, due to increased borrowings in FY25 as shown in the table below.

(Amount in Rs. Lakhs)

Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024
Finance Cost	288.52	190.89
Total borrowings	4,799.70	2,366.21

? Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Financial Year 31st March 2025, stood at Rs.116.34 Lakhs whereas in the Financial Year 31st March 2024 it stood at Rs. 98.80 Lakhs representing an increase of

17.75%.

Reason:

In the financial year 2024-25, the depreciation charged was higher because there was an addition of a new plant & machinery in that year causing depreciation charge to be higher.

(Amount in Rs. Lakhs)

Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024
Opening Balance	1236.46	1286.78
Addition	736.01	86.53
Less: Deletion	-	38.04
Less: Depreciation	116.34	98.80
Closing balance	1856.13	1236.46

? Other Expenses

The Other Expenses for the Financial Year March 31, 2025, stood at Rs. 791.75 Lakhs whereas in Financial Year 31st March 2024 it stood at Rs. 103.64 Lakhs representing an increase of 663.94%

Reason: There is an increase in ‘Other expenses because of an increase in Discount on traded good, repair and maintenance and due to miscellaneous expenses.

(Amount in Rs. Lakhs)

Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024
Discount on traded goods	706.62	29.62
Repair & Maintenance	9.24	2.79
Miscellaneous expenses	16.01	7.07

? Restated Profit before Tax

The restated profit before tax for the Financial Year 31st March 2025, stood at Rs. 689.87 Lakhs whereas in Financial Year 31st March 2024 it stood at Rs. 114.94 Lakhs representing an increase of 500.20%.

Reason: The increase in revenue from manufacturing and trading goods were the major reason for the companys increase in profits.

? Tax Expense

Tax Expense for the Financial Year 31st March 2025, stood at Rs. 193.26 lakhs out of which Current Tax being Rs. 115.60 lakhs, Deferred Tax being Rs. 16.06 lakh and MAT credit entitlement being Rs. 61.60 lakhs whereas in financial year 31st March 2024 it stood at Rs 16.80 Lakhs out of which Current Tax being Rs. 19.74 Lakhs, Deferred Tax being Rs. 4.10 Lakhs and MAT credit entitlement being Rs. (7.04) lakhs and representing as increase of 1050.36%

Reason: The tax expenses increased over the financial year due to an increase in profit before tax causing more provision for tax to be made in the financial year 2024-25 as compared to the financial year 2023-24.

? Restated Profit after Tax

The restated profit after tax for the Financial Year 31st March 2025, stood at Rs. 496.62 Lakhs whereas in Financial Year 31st March 2024 it stood at Rs. 98.13 Lakhs representing an increase of 406.08%

Reason: Increase in profit in FY25 is mainly because of the following reasons:

(Amount in Lakhs)

Particulars	31st March 2025	31st March 2024
Revenue from operation	16,623.57	6,201.12
Revenue from Sale of Manufacturing Goods	6,614.06	5,094.70
Revenue from Sale of Traded Goods	10,009.51	1,094.42
Commission Receipt	-	12.00
Total Cost of Goods Sold	14,689.47	5,659.09
COGS for Manufacturing Goods	5,515.28	4624.29
% of COGS of manufacturing goods	83.39%	90.77%
COGS for Trading Goods	9,174.19	1,034.78
% of COGS of Trading Goods	91.65%	94.55%
PAT	496.62	98.13
PAT Margin	2.99%	1.58%

Justification of PAT Margin

? In FY25, the company reported an increase in Profit After Tax (PAT), primarily driven by the strategic procurement of raw materials (granules) and traded goods in bulk. These bulk purchases of granules enabled the company to secure higher volume-based discounts and scheme-related credit notes from key suppliers, resulting in a significant reduction in the overall cost of goods sold. The improved cost efficiency, coupled with steady sales performance, contributed to a higher gross margin. This, in turn, positively impacted the companys bottom line, leading to a notable increase in PAT for the financial year.

? The company entered into strategic arrangements with key raw material suppliers, primarily Reliance Industries Limited (RIL) and Hindustan Petroleum Corporation Limited (HPCL), in accordance with their bulk purchase schemes and policies for granules. These agreements enabled the company to benefit from volume- based discounts and scheme-related credit notes on bulk procurement.

? The granules procured were utilized both for in-house manufacturing of tarpaulins and for trading activities, allowing the company to capitalize on bulk purchase advantages across both business segments. As a result, the COGS for bith Manufacturing Goods and Traded Goods decreased resulting in increase in PAT margin.

? Additionally, direct expenses declined, supported by revenue growth and improved operational efficiency. Other operating expenses did not increase in proportion to revenue, further contributing to improved cost management. Consequently, the company achieved an overall increase in PAT margin during the financial year.

? As per our suppliers policy we receive discount on the basis of the quantity of raw material purchased by us. Since we have purchased almost 7.83 times more raw material for traded goods in FY25 than FY24 we were provided with a greater discount, therefore reducing our cost of goods sold that is used for both trading and manufacturing purposes, ultimately reducing our expenses.

FISCAL YEAR MARCH 31, 2024, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2023

(BASED ON RESTATED FINANCIAL STATEMENTS)

? Total Income

Total Income for the Financial Year 31^st March 2024, stood at Rs. 6,222.50 lakhs whereas in Financial Year 31^st

March 2023 it stood at Rs 4,622.67 lakhs representing an increase of 34.61%.

Reason: The increase in the total income of the company is due to increase in revenue from operations and other income. The increase in revenue from operations saw a jump majorly because of increase in revenue from manufacturing as well as traded goods.

? Revenue from operations

Net revenue from operations for the Financial Year 31^st March 2024, stood at Rs. 6,201.12 Lakhs whereas in

Financial Year 31^st March 2023 it stood at Rs. 4,621.53 Lakhs representing an increase of 34.18%.

Reason: The increase in revenue was driven by an increase in revenue from both manufacturing goods and trading goods. Additionally, it earned Rs. 12.00 lakhs as commission by selling 12,00,000 KG of trading goods, charging Rs. 1 per KG.

(Amount in Rs. lakhs)

PARTICULARS	For the year ended 31 March 2024	For the year ended 31 March 2023
Revenue From Sale of Mfg Goods	5,094.69	4,134.15
Revenue From Sale of Mfg Goods as %age of Revenue	82.16%	89.45%
Revenue From Trading Goods	1,094.42	487.38
Revenue From Trading Goods as %age of Revenue	17.65%	10.55%
Commission Receipt	12.00	-
TOTAL	6,201.11	4,621.53

? Other Income

Other Income for the Financial Year 31^st March 2024, stood at Rs. 21.38 Lakhs whereas in the Financial Year 31^st March 2023 it stood at Rs. 1.14 lakhs representing an increase of 1775.44%

Reason: The increase in other income is mainly due to the increase in interest received from fixed deposit and profit booked on sale of a fixed asset.

(Amount in Rs. Lakhs)

Particulars	For the year ended 31 March 2024	For the year ended 31 March 2023
Interest Received	5.31	1.14
Rate Difference & Discount	2.32	-
Profit on Sale of Fixed Assets	13.76	-
Total	21.38	1.14

Expenditure

? Total Expenses

Total Expenses for the Financial Year 31^st March 2024, stood at Rs. 6,107.57 Lakhs whereas in the Financial Year 31^st March 2023 it stood at Rs 4,560.60 Lakhs representing an increase of 33.92%.

Reason: The increase in total expenses is largely due to increase in purchase of stock-in-trade and increase in Changes in inventories of finished goods, work-in-progress and stock-in-trade and other expenses. However, in FY 24 total expenses as % of revenue decreased by 0.51% as compare to FY 23.

? Cost of Raw Material Consumed

Total Cost of material consumed for the Financial Year 31^st March 2024, stood at Rs. 4,036.28 Lakhs whereas in the Financial Year 31^st March 2023 it stood at Rs. 4,140.78 Lakhs representing a decrease of 2.52%.

Reason: The reason for decrease is that we received discount on bulk purchase of raw material causes decrease in the total cost of raw material.

(Amount in Rs. Lakhs)

Particulars	For the year ended 31 March 2024	For the year ended 31 March 2023
Opening Stock of Raw Material	175.72	256.99
Add: Purchases of Material	4,236.83	4,059.52
Less: Closing Stock of Material	376.26	175.72
Total	4,036.28	4,140.78

? Purchase of traded goods

Purchase of traded goods for the financial year 31^st March 2024 stood at Rs. 1,041.79 lakhs whereas in the financial year 31^st March 2023 stood at Rs.487.38 lakhs an increase of 113.76%.

Reason: Increase in the purchase of traded goods is due to a gradual shift towards the sale of traded goods along with sale of manufactured goods because on bulk purchase of raw material discount were provided by the supplier causing the company to trade the raw materials to avail bulk discount.

? Change in Inventories of Finished Goods, WIP and stock-in-trade.

Total Change in Inventory for the Financial Year 31^st March 2024, stood at Rs. 269.60 Lakhs whereas in the Financial Year 31^st March 2023 it stood at Rs. (656.30) Lakhs an increase of 141.08%.

Reason: The reason for increase is due to the fact that the company received advanced booking of tarpaulins in FY23 (Q4) that had to be supplied in Q1 & Q2 of FY24 causing closing inventory of FY23 to inflate.

(Amount in Rs. Lakhs)

Particulars	For the year ended 31 March 2024	For the year ended 31 March 2023
Inventories at the beginning of the year	1,196.62	540.32
Inventories at the end of the year	927.02	1,196.62
Total	269.60	(656.30)

? Direct Manufacturing Expenses

The Direct Manufacturing Expenses for the Financial Year 31^st March 2024, stood at Rs. 311.41 Lakhs whereas in the Financial Year 31^st March 2023 it stood at Rs 247.92 Lakhs representing an increase of 25.61%.

Reason: Since direct manufacturing expenses are linked to revenue from operations, the increase in revenue from operations caused an increase in these expenses, all of these expenses have increased slightly, contributing to an overall increase in the direct manufacturing expenses.

(Amounts in Rs. Lakhs)

Particulars			For the year ended 31 March 2024		For the year ended 31 March 2023
Freight Inward, Cartage & Loading Exp			44.95		31.39
Power and Fuel			188.65		162.53
Labour expense			53.93		37.12
Consumables & Spare Exp.		23.89		16.88
Total		311.41		247.92

? Employee benefit expense

The Employee benefit expense for the Financial Year 31^st March 2024, stood at Rs. 55.14 Lakhs whereas in Financial Year 31^st March 2023 it stood at Rs. 51.10 Lakhs representing an increase of 7.91%.

Reason: There was an increase in ‘Employee benefit expenses because of an increase in Directors remunerations & contribution to various funds.

(Amount in Lakhs)

Particulars	For the year ended 31 March 2024	For the year ended 31 March 2023
Salaries & Benefits to Staff	10.34	12.41
Directors Salary	39.10	33.70
Contribution to various funds	2.41	1.83
Gratuity of staff & director	3.29	3.16
Total	55.14	51.10

? Finance Cost

The Finance Cost for the Financial Year on 31^st March 2024, stood at Rs. 190.89 Lakhs whereas in the Financial Year 31^st March 2023 it stood at Rs. 152.97 Lakhs representing an increase of 24.79% from the previous years.

Reason: The increase was due to the interest given to bank and interest towards unsecured loan, due to increased borrowings in FY24 as shown in the table below.

(Amount in Rs. Lakhs)

Particulars	For the year ended 31 March 2024	For the year ended 31 March 2023
Finance Cost	190.89	152.97
Total borrowings	2,366.21	1,676.62

? Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Financial Year 31^st March 2024, stood at Rs. 98.80 Lakhs whereas in the Financial Year 31^st March 2023 it stood at Rs. 94.77 Lakhs representing an increase of 4.25%.

Reason:

• In the financial year 2023-24, the depreciation charged was higher because there was an addition of a new vehicle in that year causing depreciation charge to be higher.

• The closing balance of depreciation in the year 2023-24 was lower because there was a disposal in plant & machinery totaling to Rs. 38.04 lakhs.

(Amount in Rs. Lakhs)

Particulars	For the year ended 31 March 2024	For the year ended 31 March 2023
Opening Balance	1286.78	1373.11
Addition	86.53	8.43
Less: Deletion	38.04	-
Less: Depreciation	98.80	94.77
Closing balance	1236.46	1286.78

? Other Expenses

The Other Expenses for the Financial Year March 31, 2024, stood at Rs. 103.64 Lakhs whereas in Financial Year 31^st March 2023 it stood at Rs. 41.97 Lakhs representing an increase of 146.94%.

Reason: There is an increase in ‘Other expenses because of an increase in discount on traded goods, increase in Legal & professional fees, increase in packing charges due to better quality of packaging materials used and job work charges because some products were outsourced for job work.

(Amount in Rs. Lakhs)

Particulars	For the year ended 31 March 2024	For the year ended 31 March 2023
Discount on traded goods	29.62	-
Legal & Professional Fees	6.99	1.76
Rent expense	18.25	20.96
Job Work	17.07	-

? Restated Profit before Tax

The restated profit before tax for the Financial Year 31^st March 2024, stood at Rs. 114.94 Lakhs whereas in Financial Year 31^st March 2023 it stood at Rs. 62.08 Lakhs representing an increase of 85.15%.

Reason: The increase in revenue from manufacturing and trading goods was the major reason for the companys increase in profits.

? Tax Expense

Tax Expense for the Financial Year 31^st March 2024, stood at Rs. 16.80 lakhs out of which Current Tax being Rs. 19.74 lakhs, Deferred Tax being Rs. 4.10 and MAT credit entitlement being Rs. (7.04) lakhs whereas in financial year 31^st March 2023 it stood at Rs 5.96 Lakhs out of which Current Tax being Rs.10.18 Lakhs, Deferred Tax being Rs. 5.96 Lakhs and MAT credit entitlement being Rs. (10.18) lakhs and representing as increase of 181.87%.

Reason: The tax expenses increased over the financial year due to an increase in profit before tax causing more provision for tax to be made in the financial year 2023-24 as compared to the financial year 2022-23.

? Restated Profit after Tax

The restated profit after tax for the Financial Year 31^st March 2024, stood at Rs. 98.13 Lakhs whereas in Financial Year 31^st March 2023 it stood at Rs.56.11 Lakhs representing an increase of 74.88%.

Reason: Increase in profit in FY24 is mainly because of the following reasons:

(Amount in Rs. Lakhs)

Particulars	FY2024	FY 2023
Revenue from operation	6,201.12	4,621.53
Revenue from Sale of Manufacturing Goods	5,094.70	4,134.16
Revenue from Sale of Traded Goods	1,094.42	487.38
Commission Receipt	12.00	-
Total Cost of Goods Sold	5,659.09	4,219.78
COGS for Manufacturing Goods	4624.29	3,738.34
% of COGS of manufacturing goods	90.77%	90.43%
COGS for Trading Goods	1,034.78	481.44
% of COGS of Trading Goods	94.55%	98.78%
PAT	98.13	56.11
PAT Margin	1.58%	1.21%

? Revenue from operations

Our revenue for the FY2024 was Rs. 6,201.12 Lakhs and in the FY2023 it was Rs. 4,621.53 Lakhs an increase of 34.18%. The increase in revenue was driven by an increase in both trading and manufacturing activity.

a. In FY2024 the revenue from manufacturing activity was Rs. 5,094.70 Lakhs and in FY2023 it was at Rs.4,134.16 Lakhs representing an increase of 23.23% which was mainly driven by an increase in capacity utilization of our manufacturing unit and increase in state-wise revenue. In FY23 the capacity utilization was 2,525 MTPA which was later increased to 2,715 MTPA in FY24.

b. In FY2024 the revenue from trading activity grew almost 2 times as compared to FY2023, an increase of Rs. 607.05 Lakhs, which was mainly due to the reason that by making bulk purchases from our suppliers we were able to receive higher purchase discounts.

c. Additionally, we have trading of granules from this party regularly and consistently, during the year we have made sale of granules directly handled by the third party and received commission of Rs. 12 Lacs (Total Qty 1200000 KG and commission @ Rs 1/- per KG).

? Profit after Tax

There was an increase of 0.37% of profit after tax margins in FY24 as compare to FY 23 which was mainly because of higher revenue and proportionally a lower increase in the expense due to effective utilization of Fixed assets and saved cost on the purchase of raw materials through discounts on bulk purchase.

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

1. Unusual or infrequent events or transactions

Except as described in this Draft Red Herring Prospectus, during the periods under review there have been no transactions or events, which in our best judgment, would be considered 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 29 of this Draft Red Herring 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 Draft Red Herring Prospectus, particularly in the sections Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations on page 29 and 235, respectively, to our knowledge, there are no known trends or uncertainties that are expected to have a material adverse impact on our revenues or income from continuing operations.

4. Income and Sales on account of major product/main activities

The income and sales of our Company on account of major activities derives from the business is manufacturing of tarpaulins and trading of raw materials.

5. Future changes in the relationship between costs and revenues, in case of events such as future increase in cost of service and freight & forwarding expenses that will cause a material change are known.

Our Companys future costs and revenues can be indirectly impacted by an increase in the cost of services and freight & forwarding expenses.

6. Future relationship between Costs and Income

Our Companys future costs and revenues will be determined by competition, demand/supply situation, interest rates quoted by banks & others.

7. 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.

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

The Company operates in the Plastic Industry. Relevant industry data, as available, has been included in the chapter titled “Our Industry” beginning on page 116 of this Draft Red Herring Prospectus.

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

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

10. The extent to which the business is seasonal.

Our business is not seasonal in nature.

11. Competitive Conditions

We face competition from existing and potential competitors, which is common for any business. We have, over a period of time, developed certain competitive strengths which have been discussed in the section titled Our Business on page 165 of this Draft Red Herring Prospectus.