Shakti Polytarp Ltd Management Discussions

OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion is intended to convey management’s perspective on our financial condition and results of operations for the financial year ended March 31, 2026, March 31, 2025, and for the financial year ended March 31, 2024. One should read the following discussion and analysis of our financial condition and results of operations in conjunction with our section titled "Financial Statements" and the chapter titled "Financial Information" on page 238 of the 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 22 of this Red Herring Prospectus. Actual results could differ materially from those contained in any forward-looking statements and for further details regarding forward-looking statements, kindly refer the chapter titled "Forward- Looking Statements" on page 20 of this 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 2026, 2025 & 2024 included in this Red Herring Prospectus beginning on page 238 of this 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, 2026

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 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.

Mr. Kapl Vinod Garg resigned from the position of Company Secretary and Compliance Officer of the Company with effect from April 01, 2026.

The board of directors appointed Mr. Jitenndra Kumar Gupta as Company Secretary & Compliance officer of the Company w.e.f. April 01, 2026.

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 22 of this 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.

Company’s results of operations and financial performance;

Performance of Company’s 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;

MANAGEMENT’s DISCUSSION ON RESULTS OF OPERATION

(Amount in Lakhs, except %)

	For the Financial Year Ended
S No. Particulars	March 31, 2026	%age of Total Income	March 31, 2025	%age of Total Income	March 31, 2024	%age of Total Income
I Revenue from Operations	21,564.74	99.79%	16,623.57	99.84%	6,201.12	99.66%
II Other Income	45.32	0.21%	25.95	0.16%	21.38	0.34%
III Total Income (I + II)	21,610.06	100.00%	16,649.52	100.00%	6,222.50	100.00%
IV Expenses
Cost of Material Consumed	9,530.42	44.10%	5,478.56	32.91%	4,036.28	64.87%
Purchase of stock-in- trade	9,639.29	44.61%	9,204.16	55.28%	1,041.79	16.74%
Changes in Inventories of Finished Goods,	(1,071.71)	-4.96%	(354.33)	(2.13%)	269.60	4.33%
WIP and stock-in-trade
Direct Manufacturing Expenses	552.25	2.56%	361.08	2.17%	311.41	5.00%
Employee Benefits Expenses	101.36	0.47%	73.55	0.44%	55.14	0.89%
Finance Costs	434.96	2.01%	288.52	1.73%	190.89	3.0%
Depreciation and Amortization Expenses	180.45	0.84%	116.34	0.70%	98.80	1.59%
Other Expenses	884.26	4.09%	791.75	4.76%	103.64	1.67%
Total Expenses (IV)	20,251.28	93.71%	15,959.64	95.86%	6,107.57	98.15%
V Profit before tax (III + IV)	1,358.78	6.29%	689.87	4.14%	114.94	1.85%
VI Tax expense:
Current Tax	290.39	1.34%	115.60	0.69%	19.74	0.32%
Deferred Tax	62.79	0.29%	16.06	0.10%	4.10	0.07%
MAT credit entitlement	-	-	61.60	0.37%	(7.04)	(0.11%)
Total Tax Expense (VI)	353.17	1.63%	193.26	1.16%	16.80	0.27%
VII Profit after tax for the period (V - VI)	1,005.61	4.65%	496.62	2.98%	98.13	1.58%
VIII Earning per equity share:
Basic & Diluted (Rs.)	8.00		4.09	-	0.96	-

Our Significant Accounting Policies

For Significant accounting policies please refer Significant Accounting Policies", under Chapter titled Financial Statements beginning on page 238 of the 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 2025-26, Financial Year 2025-24 & Financial Year 2024-23. Our revenue and expenses are reported in the following manner:

Total Income

Revenue from operations

Our Company’s 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 Expenses, Loading expenses, Consumables & Spare Expenses.

Employee benefit expense

The Employee benefit expense includes salary and benefits to staff, contribution to various funds, director’s 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, 2026, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2025(BASED ON RESTATED FINANCIAL STATEMENTS)

Total Income

Total Income for the Financial Year 31st March 2026, stood at Rs. 21,610.06 lakhs whereas in Financial Year 31st March 2025it stood at Rs 16,649.52 lakhs representing an increase of29.79%.

Reason: The Company Total Income increased during FY 2025-26 mainly due to increase in Revenue from Operations (Manufacturing Sales) also getting more discount on bulk purchases thereby COGS reduced and Net profit increased.

Revenue from operations

Revenue from operations for the Financial Year 31st March 2026, stood at Rs. 21,564.74 Lakhs whereas in Financial Year 31st March 2025 it stood at Rs. 16,623.57 Lakhs representing an increase of 29.72%

Reason: The increase in Revenue from Operations during FY 2025 26 was primarily attributable to the enhancement of production capacity of tarpaulin in the month of Jan 2026 by 3,000 MTPA and Capacity of Shed Net in the month of Mar 2026 by 3000 MTPA through the acquisition and installation of additional machinery. The expanded manufacturing capacity enabled the Company to significantly increase its production and sales volumes, thereby contributing to higher revenue generation.

		(Amount in Lakhs, except %)
PARTICULARS	For the year ended 31 March 2026	For the year ended 31 March 2025
Revenue From Sale of Mfg Goods	11,163.50	6,614.06
Revenue From Sale of Mfg Goods as %age of Revenue	51.77%	39.79%
Revenue From Trading Goods	10,401.23	10,009.51
Revenue From Trading Goods as %age of Revenue	48.23%	60.21%
TOTAL	21,564.74	16,623.57

Other Income

Other Income for the Financial Year 31st March 2026, stood at Rs. 45.32 Lakhs whereas in the Financial Year 31st March 2025 it stood at Rs. 25.95 lakhs representing an increase of 74.69%.

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 2026	For the year ended 31 March 2025
Interest Received	45.32	25.95
Total	45.32	25.95

Total Expenses

Total Expenses for the Financial Year 31st March 2026 stood at Rs. 20,251.28Lakhs whereas in the Financial Year 31st March 2025 it stood at Rs 15,959.64 Lakhs representing an increase of 26.89%

Reason : The total expenses increased due to increasing of sales During the FY 2026 by 29.72% but the total expenses in FY 2024-25 was 96.01% and in FY 2026 is 93.91% therefore decreased by 2.10% as compared to the total turnover increased by 29.72% in FY 2026.

Cost of Material Consumed

Total Cost of material consumed for the Financial Year 31st March 2026, stood at Rs. 9,530.42 Lakhs whereas in the Financial Year 31st March 2025 it stood at Rs. 5,478.56 Lakhs representing an increase of73.96%.

Reason : The increase in the cost of materials consumed was primarily attributable to the higher consumption of raw materials in line with the significant increase in manufacturing activity and revenue from manufactured goods during the year FY 26.

		(Amount in Rs. Lakhs)
Particulars	For the year ended 31 March 2026	For the year ended 31 March 2025
Opening Stock of Raw Material	294.22	376.26
Add: Purchases of Material	9,897.92	5,396.52
Less: Closing Stock of Material	661.73	294.22
Total	9,530.42	5,478.56

Purchase of stock in trade

Purchase of traded goods for the financial year 31st March 2026 stood at Rs. 9,639.29 lakhs whereas in the financial year 31st March 2025 stood at Rs. 9,204.16 lakhs an increase of 4.73%

Reason: The increase in purchase of traded goods during FY 26 was marginal in nature and occurred in the normal course of business operations, in line with the overall demand of traded goods and trading sales increased by 3.91% in FY2026.

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

Total Change in Inventory for the Financial Year 31st March 2026, stood at Rs.(1,071.71) Lakhs whereas in the Financial Year 31st March 2025 it stood at Rs. (354.33) Lakhs increase of 202.46%.

Reason:. The increase in inventories during FY 2025 26 was primarily attributable to higher closing balances of finished goods, raw materials, and stock-in-trade. This was mainly due to increased production levels during the year and higher inventory holding of finished goods at the year-end. Further, the Company procured additional raw materials in March 2026 as a precautionary measure in view of the prevailing war-related uncertainties, resulting in higher raw material inventories as at the end of the financial year.

		(Amount in Rs. Lakhs)
Particulars	For the year ended 31 March 2026	For the year ended 31 March 2025
Inventories at the beginning of the year	1,281.35	927.02
Inventories at the end of the year	2,353.06	1,281.35
Total	(1,071.71)	(354.33)

Direct Manufacturing Expenses

The Direct Manufacturing Expenses for the Financial Year 31st March 2026, stood at Rs.552.25Lakhs whereas in the Financial Year 31st March 2025 it stood at Rs 361.08 Lakhs representing an increase of 52.95%.

Reason:. The increase in direct manufacturing expenses in FY 26 was primarily due to the higher scale of manufacturing operations and increase in revenue from operations during the year. Since these expenses are directly linked to production activity, the rise in manufacturing volumes resulted in a proportionate increase in related direct manufacturing expenses.

		(Amounts in Rs. Lakhs)
Particulars	For the year ended 31 March 2026	For the year ended 31 March 2025
Freight Inward , Cartage & Loading Exp	104.56	55.25
Power and Fuel	264.96	212.25
Labour expense	145.81	60.54
Consumables & Spare Exp.	36.92	33.04
Total	552.25	361.08

Employment Benefit Expenses

The Employee benefit expense for the Financial Year 31st March 2026, stood at Rs.101.36 Lakhs whereas in Financial Year 31st March 2025 it stood at Rs. 73.55 Lakhs representing an increase of 37.81%.

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

		(Amount in Lakhs)
Particulars	For the year ended 31 March 2026	For the year ended 31 March 2025
Salaries & Benefits To Staff	40.90	30.17
Directors Remuneration and Sitting Fees	51.19	37.95
Contribution to provident and other fund	4.77	2.77
Gratuity	4.50	2.67
Total	101.36	73.55

Finance Cost

The Finance Cost for the Financial Year on 31st March 2026, stood at Rs.434.96Lakhs whereas in the Financial Year 31st March 2025 it stood at Rs.288.52Lakhs representing an increase of 50.75% from the previous years.

Reason: The increase in finance costs during FY 2025 26 was primarily attributable to higher interest expenses on bank borrowings. The Company availed additional borrowings during the year to finance the acquisition of plant and machinery and the construction of building infrastructure, undertaken to support business growth and capacity expansion. Consequently, finance costs increased during the year.

		(Amount in Rs. Lakhs)
Particulars	For the year ended 31 March 2026	For the year ended 31 March 2025
Finance Cost	434.96	288.52
Total borrowings	7251.23	4799.70

Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Financial Year 31st March 2026, stood at 180.45 Lakhs whereas in the Financial Year 31st March 2025 it stood at Rs.116.34Lakhs representing an increase of 55.10%

Reason: The increase in depreciation and amortization expenses was mainly due to the addition of new plant & machinery and Factory building construction during FY 26. The capitalization of these assets pursuant to the capacity expansion resulted in a higher depreciation charge as compared to the previous financial year.

		(Amount in Rs. Lakhs)
Particulars	For the year ended 31 March 2026	For the year ended 31 March 2025
Opening Balance	1856.13	1236.46
Addition	2,956.64	736.01
Less: Subsidy	61.70
Less: Deletion	-	-
Less: Depreciation	180.45	116.34
Closing balance	4570.62	1856.13

Other Expenses

The Other Expenses for the Financial Year March 31, 2026, stood at Rs.884.26 Lakhs whereas in Financial Year 31st March 2025 it stood at Rs. 791.75 Lakhs representing an increase of 11.68%.

Reason:. The increase in other expenses during FY 2025 26 was primarily due to higher discounts on sales, increased job work charges, write-off of MAT credit (due to change corporate tax regime), and an increase in miscellaneous expenses.

		(Amount in Rs. Lakhs)
Particulars	For the year ended 31 March 2026	For the year ended 31 March 2025
Discount on Traded/Manufacturing Sales	751.71	706.62
Job Work Charges	13.13	3.39
MAT Written Off	15.27	0.00
Miscellaneous expenses	29.59	16.01

Restated Profit before Tax

The restated profit before tax for the Financial Year 31st March 2026, stood at Rs.1,358.78 Lakhs whereas in Financial Year 31st March 2025 it stood at Rs. 689.87 Lakhs representing an increase of 96.96%.

Reason: The significant increase in profit before tax during FY 2025 26 was primarily driven by higher revenue generated from manufacturing operations, supported by increased production capacity and improved operational performance, reduced COGS and total expenses during the year.

Tax Expense

Tax Expense for the Financial Year 31st March 2026, stood at Rs. 353.17 lakhs out of which Current Tax being Rs 290.39 lakhs, Deferred Tax being Rs. 62.79 lakh whereas in financial year 31st March 2025 it stood at Rs 193.26 Lakhs out of which Current Tax being Rs.115.60 Lakhs, Deferred Tax being Rs.16.06 Lakhs and MAT credit entitlement being Rs. 61.60 lakhs representing as increase of 82.75%.

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 2025-26 as compared to the financial year 2024-25.

Restated Profit after Tax

The restated profit after tax for the Financial Year 31st March 2026, stood at Rs. 1,005.61 Lakhs whereas in Financial Year 31st March 2025 it stood at Rs. 496.62 Lakhs representing an increase of 102.49%

Reason: Increase in profit in FY26 is mainly because of the following reasons:

		(Amount in Lakhs)
Particulars	31st March 2026	31st March 2025
Revenue from operation	21,564.74	16,623.57
Revenue from Sale of Manufacturing	11,163.50	6,614.06
Goods
Revenue from Sale of Traded Goods	10,401.23	10,009.51
total Cost of Goods Sold	18,650.25	14,689.47
COGS for Manufacturing Goods	90,43.55	5,515.28
% of COGS of manufacturing goods	81.00%	83.39%
COGS for Trading Goods	9,606.70	9,174.19
% of COGS of Trading Goods	92.36%	91.65%
PAT	1,005.61	496.62
PAT Margin	4.66%	2.99%

Justification of PAT Margin

The increase in PAT during FY 2025 26 was primarily attributable to the significant growth in manufacturing operations and improved operational efficiencies during the year. Revenue from operations increased from Rs. 16,623.57 Lakhs in FY 2024 25 to Rs. 21,564.74 Lakhs in FY 2025 26, mainly driven by higher sales of manufactured goods, which increased from Rs. 6,614.06 Lakhs to Rs. 11,163.50 Lakhs.

The increase in profitability was supported by the enhancement of production capacity by 3000 MTPA during FY 2025 26, which resulted in higher production volumes as compared to the previous year. Consequently, the Company achieved improved absorption of fixed costs and operational leverage resulting in decrease in COGS from Manufacturing operation.

Further, the bulk procurement of raw materials (granules), enabling it to avail higher volume-based discounts and scheme-related credit notes from key suppliers. This led to improved cost efficiencies and reduction in the overall cost of goods sold.

As a result of the above factors, the PAT Margin improved from 2.99% in FY 2024 25 to 4.66% in FY 2025 26.

Long Term Borrowings

The Long-term borrowings for the Financial Year March 31, 2026, stood at Rs. 3,195.76 Lakhs whereas in Financial Year 31st March 2025 it stood at Rs 1,751.56 Lakhs representing an increase of 82.45%.

		(Amount in Lakhs)
Particulars	FY 26	FY25
From bank & financial Institutions	3,155.76	1243.88
Unsecured loans (From Directors & ICD)	40.00	507.68
Total	3,195.76	1751.56

Reason: During FY 2026, the Company incurred capital expenditure towards expansion and capacity enhancement, including additions of Rs. 2167.67 Lakhs in Plant & Machinery and Rs. 782.45 Lakhs in Factory Building construction. Consequently, the long-term borrowings increased during the year.

Short-term Borrowings

The Short-term borrowings for the Financial Year March 31, 2026, stood at Rs. 4,055.47 Lakhs whereas in Financial Year 31st March 2025 it stood at Rs. 3,048.14 Lakhs representing an increase of 33.05%

The details of short-term borrowings are as follows:

		(Amount in Lakhs)
Particulars	FY 26	FY25
Cash credit limit from union bank	2,873.55	2299.02
Overdraft from Yes bank	382.00	486.53
From Financial Institution	295.67
Current Maturities of Long-Term Borrowings	504.26	262.59
Total	4,055.47	3,048.14

Reason: During FY 2026, the Company’s manufacturing sales increased significantly from Rs. 6614.06 Lakhs in FY 2025 to Rs. 11163.50 Lakhs in FY 2026, representing a growth of 68.77%. The increase in business operations required higher working capital led to an increase in short-term borrowings during the year.

Trade Payable

The Tread payable for the Financial Year March 31, 2026, stood at Rs. 174.01 Lakhs whereas in Financial Year 31st March 2025 it stood at Rs. 192.45 Lakhs representing a decrease of 9.58%.

Reason: During FY 2026, the Company received discounts on bulk purchases and accordingly made payments either in advance or immediately after delivery of goods, resulting in a reduction in trade payables. Further, the Company enhanced and utilized its cash credit limits for timely payments to suppliers, which also contributed to the decrease in trade payables during the year.

Trade Receivable

The Tread receivable for the Financial Year March 31, 2026, stood at Rs. 834.85 Lakhs whereas in Financial Year 31st March 2025 it stood at Rs. 1,479.93 Lakhs representing a decrease of 43.59%.

Reason: The Company offered trade discounts to customers to encourage quicker payment cycles. As a result, the collection efficiency of trade receivables improved, leading to a reduction in the outstanding trade receivables during the year.

Advance from customers

The Advance from customer for the Financial Year March 31, 2026, stood at Rs. 209.04 Lakhs whereas in Financial Year 31st March 2025 it stood at Rs. 66.42 Lakhs representing an increase of 214.72%.

Reason: The Company received higher advances from customers in the ordinary course of business against orders scheduled for execution in the subsequent months. This resulted in an increase in customer advances outstanding as on March 31, 2026.

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 31st March 2025, stood at Rs. 16,649.52 lakhs whereas in Financial Year 31st 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 company’s 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, Director’s 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 company’s 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 company’s 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 supplier’s 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.

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 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 22 of this 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 Red Herring Prospectus, particularly in the sections Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations on page 22 and 240, 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 Company’s 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 Company’s 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 126 of this 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 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 171 of this Red Herring Prospectus.