Shree Refrigerations Ltd Management Discussions

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, and for the financial year ended March 31, 2024, and 2023. 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 265 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 30 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 19 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 Shree Refrigerations Limited (Formerly Known as Shree Refrigerations Private 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 Red Herring Prospectus beginning on page 265 of this Red Herring Prospectus.

BUSINESS OVERVIEW

Our company is engaged in the business of manufacturing Chillers, refrigeration and air conditioning appliances and other parts of Heating, Ventilation, Air Conditioning (HVAC) Industry, offering array of advanced systems and equipment to industries majorly in domestic market. Our collection of products serves multiple industries including Automotive, Marine, Print Media, Chemical, Pharma and General engineering sectors. We are also actively involved in the manufacturing of marine chillers, having approved supplier registrations from various professional directorates of Indian Navy (Directorate of Electrical Engineering and backed by Directorate of Quality Assurance Warship Projects).

In the automotive industry, our products help to maintaining optimal temperature control in various systems. In the marine sector, they ensure crew comfort and operational efficiency on ships and marines and also support maintaining the electronic warfare systems to be at optimal operating temperature. Our systems also play a vital role in maintaining environmental conditions in the print media, chemical, and pharmaceutical industries, where temperature regulation is crucial for product quality, safety.

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 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 May 23, 2025, to authorize the Board of Directors to raise the funds by way of Initial Public Offering, thereby superseding the earlier resolution dated December 12, 2024

The Shareholders of our Company has approved and passed a resolution on May 29, 2025, to authorize the issue by way of Initial Public Offering, thereby superseding the earlier resolution dated December 16, 2024

The Shareholders of our company re-appointed Mr. Ravalnath Gopinath Shende as Managing Director w.e.f. April 01, 2024.

The Shareholders of our company appointed Mr. Sunil Kaushik as Whole Time Director w.e.f. November 25, 2024.

The Shareholders of our company appointed Mr. Vivek Karnawat as Independent Director w.e.f. November 25, 2024.

The board of directors appointed Ms. Ashvini Ghanashyam Godbole as Company Secretary & Compliance officer of the Company w.e.f. November 28, 2024.

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 30 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.

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

On the basis of restated consolidated financial statements:

(Amount in Lakhs)

				For the year ended
S.N.	Particulars	March 31, 2025	%age of Total Income	March 31, 2024	%age of Total Income	March 31, 2023	%age of Total Income
1	Revenue from Operations	9872.70	99.63%	8030.55	98.91%	5057.61	99.35%
II	Other Income	36.83	0.37%	88.15	1.09%	32.85	0.65%
III	Total Income (I + II)	9909.53	100.00%	8118.70	100.00%	5090.46	100.00%
IV	Expenses
	(a) Cost of Material Consumed	6116.43	61.72%	3635.76	44.78%	2572.66	50.54%
	(b) Purchases of Stock-in- Trade	0.00	0.00%	0.00	0.00%	0.00	0.00%
	"(c) Changes in Inventories of Finished Goods, work in Progress and Stock in Trade"	(1106.78)	(11.17%)	345.37	4.25%	(158.51)	(3.11%)
	(d) Employee Benefits	1431.93	14.45%	873.20	10.76%	707.31	13.89%
	Expenses
	(e) Finance Costs	454.60	4.59%	454.06	5.59%	440.71	8.66%
	(f) Depreciation and Amortisation Expenses	424.18	4.28%	382.03	4.71%	356.76	7.01%
	(g) Other Expenses	736.73	7.43%	737.79	9.09%	746.53	14.67%
	Total Expenses (IV)	8057.09	81.31%	6428.22	79.18%	4665.46	91.65%
V	Profit before exceptional and extraordinary items and tax (III-IV)	1852.44	18.69%	1690.48	20.82%	425.00	8.35%
VI	Exceptional Items	0.00	0.00%	0.00	0.00%	0.00	0.00%
VII	Profit before extraordinary items and tax	1852.44	18.69%	1690.48	20.82%	425.00	8.35%
VIII	Extraordinary Items	0.00	0.00%	0.00	0.00%	0.00	0.00%
IX	Profit before tax (VII-VIII)	1852.44	18.69%	1690.48	20.82%	425.00	8.35%
X	Tax expense:
	(a) Current Tax	559.18	5.64%	612.15	7.54%	97.85	1.92%
	(b) Mat Credit Entitlement	0.00	0.00%	0.00	0.00%	0.00	0.00%
	(c) Deferred Tax	(61.40)	(0.62%)	(74.73)	(0.92%)	69.74	1.37%
	Total Tax Expense	497.78	5.02%	537.42	6.62%	167.59	3.29%
XI	PROFIT/(LOSS)FROM THE PERIOD FROM CONTINUING OPERATIONS	1354.66	13.67%	1153.06	14.20%	257.40	5.06%
XII	Profit/ (Loss) from discontinuing operations	0.00	0.00%	0.00	0.00%	0.00	0.00%
XIII	Tax expense of discounting operations	0.00	0.00%	0.00	0.00%	0.00	0.00%

 

XIV	Profit/(Loss) from Discontinuing operations	0.00	0.00%	0.00	0.00%	0.00	0.00%
XV	Profit/ (Loss) for the period (XI + XIV)	1354.66	13.67%	1153.06	14.20%	257.40	5.06%
XVI	Earning per equity share:
	(I) Basic & Diluted (Rs.)	5.25		5.55		1.30
		5.25		5.55		1.30
	(II) Annualized (Rs.)	5.25		5.55		1.30

On the basis of restated standalone financial statements:

(Amount In Lakhs)

S.N.	Particulars	March 31, 2025	%age of Total Income	For the Financial Year March 31, 2024	ended %age of Total Income	March 31, 2023	%age of Total Income
1	Revenue from Operations	9872.70	99.63%	8030.55	98.91%	5057.61	99.35%
II	Other Income	36.43	0.37%	88.14	1.09%	32.84	0.65%
III	Total Income (I + II)	9909.13	100.00%	8118.69	100.00%	5090.45	100.00%
IV	Expenses
	(a) Cost of Material Consumed	6116.43	61.73%	3635.76	44.78%	2572.66	50.54%
	(b) Purchases of Stock- in-Trade	0.00	0.00%	0.00	0.00%	0.00	0.00%
	"(c) Changes in Inventories of Finished Goods, work in Progress and Stock in Trade"	(1106.78)	(11.17%)	345.37	4.25%	(158.51)	(3.11%)
	(d) Employee Benefits Expenses	1431.93	14.45%	873.20	10.76%	707.31	13.89%
	(e) Finance Costs	448.09	4.52%	408.94	5.04%	391.85	7.70%
	(f) Depreciation and Amortization Expenses	414.95	4.19%	382.03	4.71%	356.76	7.01%
	(g) Other Expenses	735.86	7.43%	737.64	9.09%	746.39	14.66%
	Total Expenses (IV)	8040.48	81.14%	6382.96	78.62%	4616.46	90.69%
V	Profit before exceptional and extraordinary items and tax (III-IV)	1868.65	18.86%	1735.73	21.38%	473.99	9.31%
VI	Exceptional Items	0.00	0.00%	0.00	0.00%	0.00	0.00%
VII	Profit before extraordinary items and tax	1868.65	18.86%	1735.73	21.38%	473.99	9.31%
VIII	Extraordinary Items	0.00	0.00%	0.00	0.00%	0.00	0.00%
IX	Profit before tax (VII- VIII)	1868.65	18.86%	1735.73	21.38%	473.99	9.31%
X	Tax expense:
	(a) Current Tax	559.18	5.64%	612.15	7.54%	97.85	1.92%
	(b) Mat Credit Entitlement	0.00	0.00%	0.00	0.00%	0.00	0.00%
	(c) Deferred Tax	(61.40)	(0.62%)	(96.84)	(1.19%)	69.78	1.37%
	Total Tax Expense	497.78	5.02%	515.31	6.35%	167.63	3.29%
XI	PROFIT/(LOSS)FRO M THE PERIOD FROM CONTINUING OPERATIONS	1370.87	13.83%	1220.42	15.03%	306.36	6.02%

 

XII	Profit/ (Loss) from discontinuing operations	0.00	0.00%	0.00	0.00%	0.00	0.00%
XIII	Tax expense of discounting operations	0.00	0.00%	0.00	0.00%	0.00	0.00%
XIV	Profit/(Loss) from Discontinuing operations	0.00	0.00%	0.00	0.00%	0.00	0.00%
XV	Profit/ (Loss) for the period (XI + XIV)	1370.87	13.83%	1220.42	15.03%	306.36	6.02%
XVI	Earning per equity share:
	(I) Basic & Diluted	5.31		5.87		1.55
	(Rs.)	5.31		5.87		1.55
	(II) Annualized (Rs.)	5.31		5.87		1.55

OUR SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies", under Chapter titled Financial Statements beginning on page 265 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 Year 2024-25, Financial Year 2023-24 & Financial Year 2022-23. Our revenue and expenses are reported in the following manner:

Revenues

Revenue of operations

Our Companys revenue is primarily generated from Sale of Products & Sale of Services.

Other Income

Other Income includes Interest Income, Dividend Income, LD Charges Refund, Insurance Claim Received, Rent Received.

Expenditure

Our total expenditure primarily consists of Cost of Goods Sold, Employment Benefit Expenses, Finance Cost, Depreciation and Amortization expenses and Other Expenses

Cost of Goods Sold (COGS)

Cost of Goods sold includes Cost of Materials consumed and Changes in Inventories of Finished goods and Work in Progress.

Employee benefit expense

The Employee benefit expense includes Salary of Staff, Salary of Directors, Contribution to Provident Fund, ESIC, Gratuity Fund, Contract Labor Charges, Security Contract Charges, Bonus to Workers, Other Employee Benefits and Leave Encashment

Finance Cost

Finance cost expense include interest on Working Capital Finance, Interest on Term Lons, Interest on Unsecured deposits, Loan Processing Charges and Other finance costs such as Bank Charges, BG Commission etc.

Depreciation and Amortization Expenses

Depreciation and Amortization Expenses majorly includes depreciation on Factory Building, Plant & Machinery, Computer Systems, Furniture & Fixture, Electrical Installations, Office Equipments, Motor Vehicles. Also includes Amortization of Deferred Revenue Expenses.

Other Expenses

Other Expenses include major expenses on Business Promotion, Audit Fees, Discount Allowed, Electricity Charges, Foreign Exchange Loss, Freight Outward - (Transport), Insurance Expenses, Interest on Late furnishing BG, Late Delivery Charges, Office Expenses, Professional & Consultancy, Rates & Taxes, Rent for Machinery, Repairs & Maintenance, Travelling Expenses, Warranty Expenses.

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

Revenues

Total Income

Total Income for the Financial Year ended March 31, 2024, stood at Rs. 8,118.70 Lakhs whereas in Financial Year March 31, 2025, it stood at Rs 9,909.53 Lakhs representing an increase of 22.06%.

Reason: The increase was mainly due to increase in Revenue from operations as in FY 2024 25, company have expand their operations.

Revenue of operations

Net revenue from operations for the Financial Year ended March 31, 2024, stood at Rs. 8030.55 Lakhs whereas in Financial Year ended March 31, 2025, it stood at Rs. 9872.70 Lakhs representing an increase of 22.94%.

Reason: The turnover increased from Rs. 8,030.55 Lakhs in FY 2023 24 to Rs. 9,872.70 Lakhs in FY 2024 25 mainly due to the following reasons. o New project deliveries like CTS and FPV, which added to the revenue. Apart from that, Labour hours also increased that helped in completing more work. o Revenue from Base and Depot Spares grew from 1,681.72 Lakhs to 2,495.51 Lakhs. Chiller and Value-Added Fabrication segments also earned more this year.

Other Income

Other Income for the Financial Year ended March 31, 2024, stood at Rs. 88.15 Lakhs whereas in the Financial Year ended March 31, 2025 it stood at Rs. 36.83 Lakhs.

Reason: Decrease in Other Income was due to higher Other Income in FY 23-24 due to recovery of Liquidated damages which is not receivable in FY 24-25. (Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
LD Charges Refund	-	60.87

Expenditure

Total Expenses

Total Expenses for the Financial Year ended March 31, 2024, stood at Rs. 6428.22 Lakhs whereas in the Financial Year ended March 31, 2025, it stood at Rs 8057.10 Lakhs representing an increase of 25.34%.

Reason: Increase in total expenditure was due to increased Cost of Materials consumed, Increased Employee Benefit Expenses, and increased Depreciation & Amortization Expenses.

Cost of Goods Sold (COGS)

Cost of Goods Sold for the Financial Year ended March 31, 2024, stood at Rs. 3981.14 Lakhs whereas in the Financial Year ended March 31, 2025, it stood at Rs 5009.65 Lakhs representing an increase of 25.83%.

Reason: In FY 2024 25, COGS increased as company have increased their purchases to expand their level of operations i.e. revenue from operations.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Purchases	6,451.73	4,156.25
Freight Inward	56.38	31.54

Employee benefit expense

The Employee benefit expense for the Financial Year ended March 31, 2024, stood at Rs. 873.20 Lakhs whereas in Financial Year ended March 31, 2025 it stood at Rs. 1431.93 Lakhs representing an increase of 63.99%.

Reason: Overall employee cost has been increased due to general salary increments, higher contract labour charges, and hiring of new employees. Company employee strength increased from 77 as on 31-03-2024 to 121 as on 31-03-2025, showing a 57.14% rise. Similarly, the number of contract workers increased from 89 to 130, a 46.07% rise. This additional hiring was done to handle the new orders received by the company. As a result, employee benefit expenses have increased during the year.

Finance Cost

The Finance Cost for the Financial Year ended on March 31, 2024, stood at Rs. 454.06 Lakhs whereas in the Financial Year ended March 31, 2025, it stood at Rs. 454.60 Lakhs representing an marginal increase of 0.12% from the previous years.

Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Financial Year ended March 31, 2024, stood at Rs. 382.03 Lakhs whereas in the Financial Year ended March 31, 2025, it stood at Rs. 424.18 Lakhs representing an increase of 11.03%.

Reason: Despite additions in the company fixed asset, Depreciation and Amortization have increased as Opening Fixed asset balance in FY 25 is higher as compared to FY 24.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Opening balance	620.37	562.60
Addition	806.69	109.38
Deletion	(5.54)	(1.96)
Less - Depreciation	(97.72)	(49.66)
Closing balance of fixed assets	1,323.79	620.37

Other Expenses

The Other Expenses for the Financial Year ended March 31, 2024, stood at Rs. 737.79 Lakhs whereas in Financial Year ended March 31, 2025, it stood at Rs. 736.73 Lakhs representing a decrease of (0.14%).

Reason: Other Expenses has decreased mainly due to decrease in Professional & Consultancy Fess expenses and Business Promotion Expenses, rent for machinery and very less provision for debt, further increase in some other expenses like in Travelling expense which leads to net marginal decrease in the overall cost.

Particulars	FY 2024-25	FY 2023-24
Rent for Machinery	-	38.01

 

Provision for Bad Debts	4.23	57.04
Professional & Consultancy	156.67	204.29
Business Promotion	27.16	52.82
Travelling Expenses	202.84	125.32

Restated Profit before Tax

The restated profit before tax for the Financial Year ended March 31, 2024, stood at Rs. 1690.48 Lakhs whereas in Financial Year ended March 31, 2025, it stood at Rs. 1852.44 Lakhs representing an increase of 9.58%.

Tax Expense

Tax Expense for the Financial Year ended March 31, 2024, stood at Rs. 537.42 lakhs out of which Current Tax being Rs. 612.15 lakhs and Deferred Tax being Rs. (74.73) lakhs whereas in Financial year ended March 31, 2025 it stood at Rs. 497.78 Lakhs out of which Current Tax being Rs. 559.18 and Deferred Tax being Rs. (61.40) Lakhs representing as decrease of 7.38%.

Restated Profit after Tax

The restated profit after tax for the Financial Year ended March 31, 2024, stood at Rs. 1153.06 Lakhs whereas in Financial Year March 31, 2025 it stood at Rs. 1354.66 Lakhs representing an increase of 17.48%.

Reason: Profit After Tax (PAT) increased mainly because their sales increased from Rs. 8,030.55 Lakhs in FY 2023 24 to Rs. 9,872.70 Lakhs in FY 2024 25, a growth of 22.94%. o This higher revenue helped cover fixed costs better and improved overall profit. The cost of goods sold rise up slightly from 49.57% to 50.74% of sales, but remained under control, despite the increase in revenue, which helped maintain good profit margins. o Our finance cost increased only a little from 454.06 Lakhs to 454.60 Lakhs showing that company used their funds wisely and managed borrowing costs well. o Operating efficiency also improved, which helped reduce employee cost per unit of revenue. o Other expenses stayed almost the same, going slightly down from 737.79 Lakhs to 736.73 Lakhs, even with higher revenue.

PERIOD ENDED MARCH 31, 2024, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2023 (BASED ON RESTATED CONSOLIDATED FINANCIAL STATEMENTS)

Revenues

Total Income

Total Income for the period ended March 31, 2023, stood at Rs. 5090.46 Lakhs whereas in Financial Year March 31, 2024 it stood at Rs 8118.70 Lakhs representing an increase of 59.49%.

Reason: The increase was mainly due to increase in Revenue from operations.

Revenue of operations

Net revenue from operations for the period ended March 31, 2023, stood at Rs. 5057.61 Lakhs whereas in Financial Year March 31, 2024 it stood at Rs. 8030.55 Lakhs representing an increase of 58.78%.

Reason: The significant increase in turnover from 5057.61 Lakhs in FY 22-23 to 8030.55 Lakhs in FY 23-24 can be attributed to:-

1. Operational Efficiency Gains from the Learning Curve

The company successfully delivered 9 P17A plants in FY 21-22 (Revenue of Rs. 2,131.63 Lakhs) and an additional 9 P17A plants in FY 22-23 (Revenue of Rs. 1,949.33 Lakhs). These consecutive deliveries created a steep learning curve in the manufacturing process, resulting in reduced production times, optimized resource utilization, and improved output to 12 quantity in FY 23-24 (Revenue of Rs. 2,532.34 Lakhs). This operational enhancement significantly contributed to the timely and efficient execution of projects during the year, thereby boosting revenue.

2. Increase in Production Hours and Capacity Utilization

The total labour hours worked increased from 1,19,972 hours in FY 22-23 to 1,74,164 hours in FY 23-24, indicating a 45% rise in workforce engagement and operational capacity. The higher deployment of labour resources facilitated the faster manufacturing of projects.

3. Revenue Contribution from Base and Depot (B&D) Spares

Of the total revenue of 8030.55 Lakhs for FY 23-24, 1681.72 Lakhs was generated from the supply of Base and Depot (B&D) Spares. Unlike manufactured products, these spares do not require significant production efforts but represent a valuable revenue stream.

4. Customs Duty Reimbursement: -

We are entitled to get customs duty reimbursement as per P 17 A project order. In the year 2023-24 revenue of Customs duty reimburse is Rs. 225.20 Lakhs as compared to Rs. 46.60 lakhs in the year FY 2022-23.

5. QAE Inspection Points Reduction:-

The increase in turnover in FY 23-24 can also be attributed to operational streamlining achieved through the reduction in QAE (Quality Assurance and Engineering) inspection points for P-17A ships, as documented in the Record of Discussions. The revision of inspection protocols, which reduced redundant checkpoints without compromising quality standards, significantly expedited the manufacturing process.

This change allowed smoother workflows by minimizing production halts associated with frequent inspections. Additionally, it optimized resource allocation, reducing delays in approvals and enabling the timely delivery of projects.

Other Income

Other Income for the Period ended March 31, 2023, stood at Rs. 32.85 Lakhs whereas in the Financial Year March 31, 2024 it stood at Rs. 88.15 Lakhs representing a increase of 168.34%.

Reason: Increase in Other Income was due to receipt of Refund of Liquidated Damages of Rs 60.87 Lakhs

Expenditure

Total Expenses

Total Expenses for the Period ended March 31, 2023, stood at Rs. 4,665.46 Lakhs whereas in the Financial Year March 31, 2024 it stood at Rs 6428.22 Lakhs representing an increase of 37.78%.

Reason: Increase in total expenditure was due to increased Cost of Materials consumed, Increased Employee Benefit Expenses, and Increased Depreciation & Amortization Expenses.

Cost of Goods Sold (COGS)

Cost of for the Period ended March 31, 2023, stood at Rs. 2414.15 Lakhs whereas in the Financial Year March 31, 2024 it stood at Rs 3981.14 Lakhs representing an increase of 64.91%.

Reason: COGS increased due to increased level of operations i.e. revenue from operations.

Employee benefit expense

The Employee benefit expense for the Period ended March 31, 2023, stood at Rs. 707.31 Lakhs whereas in Financial Year March 31, 2024 it stood at Rs. 873.20 Lakhs representing an increase of 23.45%.

Reason: Overall employee cost has increased due to increase in general increment in salary to employees and contract labour charges and hiring of New Employees.

Finance Cost

The Finance Cost for the period ended on March 31, 2023, stood at Rs. 440.71 Lakhs whereas in the Financial Year March 31, 2024, it stood at Rs. 454.06 Lakhs represent an increase of 3.03% from the previous years.

Reason: Overall finance cost has marginally increased due to increase in Interest on Term Loans and increase in other finance cost.

Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Period ended March 31, 2023, stood at Rs. 356.76 Lakhs whereas in the Financial Year March 31, 2024, it stood at Rs. 382.03 Lakhs representing an increase of 7.08%.

Reason: Increased in depreciation and amortisation is due to increase in property, plant and equipment.

Other Expenses

The Other Expenses for the Period ended March 31, 2023, stood at Rs. 746.53 Lakhs whereas in Financial Year March 31, 2024, it stood at Rs. 737.79 Lakhs representing a decrease of 1.17%.

Reason: Other Expenses has decreased mainly due decrease Professional & Consultancy Fess expenses and travelling expenses.

Restated Profit before Tax

The restated profit before tax for the Period ended March 31, 2023, stood at Rs. 425.00 Lakhs whereas in Financial Year March 31, 2024, it stood at Rs. 1690.48 Lakhs representing an increase of 297.76%.

Tax Expense

Tax Expense for the period ended March 31, 2023, stood at Rs. 167.59 lakhs out of which Current Tax being Rs. 97.85 lakhs and Deferred Tax being Rs. 69.74 lakhs whereas in Financial year March 31, 2024 it stood at Rs. 537.43 Lakhs out of which Current Tax being Rs. 612.15 Lakhs and Deferred Tax being Rs. (74.73) Lakhs representing as increase of 220.68%.

Restated Profit after Tax

The restated profit after tax for the Period ended March 31, 2023, stood at Rs. 257.40 Lakhs whereas in Financial Year March 31, 2024 it stood at Rs. 1,153.06 Lakhs representing an increase of 347.95%.

Reason: Profit After Tax has been increased mainly due to the following reason: -

1. Significant Growth in Revenue:

Revenue from operations increased substantially from 5,057.61 Lakhs in FY 2022-23 to 8,030.55 lakhs in FY 2023-24 (growth of approximately 58.80%).

Higher revenue contributes to better absorption of fixed costs, improving EBITDA margins.

2. Controlled Cost of Goods Sold (COGS):

Although the COGS percentage increased slightly from 47.73% to 49.57%, it remained relatively stable despite significant revenue growth. This has helped maintain profitability at the gross margin level.

3. Lower Growth in Finance Costs:

Finance costs grew modestly from 440.71 Lakhs in FY 2022-23 to 454.06 Lakhs in FY 2023-24 (an increase of 3.03%), even though revenue and profitability expanded significantly. This indicates efficient capital utilization and potentially better negotiation of borrowing costs.

4. Improved Operating Efficiency:

Operative efficiency has been improved, due to economies of scale, this has resulted in reduced employee benefits costs per unit of revenue.

5. Control Over Other Expenses:

Other expenses remained stable, with a slight reduction from 746.53 Lakhs in FY 2022-23 to 737.79 Lakhs in FY 2023-24, despite a significant increase in revenue.

6. Increase in Other Income:

Other Income has been increased from Rs 32.85 Lakhs to 88.15 Lakhs. The increase in mainly attributable to the receipt of Refund of Liquidated damages of Rs. 60.87 Lakhs under Vivad se Vishwas I -Relief for MSMEs scheme Government of India.

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

Revenues

Total Income

Total Income for the Financial Year ended March 31, 2024, stood at Rs. 8,118.69 Lakhs whereas in Financial Year ended March 31, 2025 it stood at Rs 9,909.13 Lakhs representing an increase of 22.05%.

Reason: The increase was mainly due to higher revenue from operations due to expand their operations.

Revenue from operations

Net revenue from operations for the Financial Year ended March 31, 2024, stood at Rs. 8,030.55 Lakhs whereas in Financial Year ended March 31, 2025 it stood at Rs. 9,872.70 Lakhs representing an increase of 22.94%.

Reason: The turnover increased from Rs. 8,030.55 Lakhs in FY 2023 24 to Rs. 9,872.70 Lakhs in FY 2024 25 mainly due to the following reasons. o New project deliveries like CTS and FPV, which added to the revenue. Apart from that, Labour hours also increased that helped in completing more work. o Revenue from Base and Depot Spares grew from 1,681.72 Lakhs to 2,495.51 Lakhs. Chiller and Value-Added Fabrication segments also earned more this year.

Other Income

Other Income for the Financial Year ended March 31, 2024, stood at Rs. 88.14 Lakhs whereas in the Financial Year ended March 31, 2025, it stood at Rs. 36.43 Lakhs representing a decrease of 58.67%.

Reason: Other income decrease in FY 24-25 because last year company received money from liquidated damages, which was not received this year.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
LD Charges Refund	-	60.87

Expenditure

Total Expenses

Total Expenses for the Financial Year ended March 31, 2024, stood at Rs. 6,382.96 Lakhs whereas in the Financial Year ended March 31, 2025 it stood at Rs 8,040.48 Lakhs representing an increase of 25.97%.

Reason: Total expenditure increased mainly because of increase in cost of materials, employee benefit expenses, finance costs, and rise in depreciation and amortization expenses during the year.

Cost of Goods Sold (COGS)

Cost of Goods Sold for the Financial Year ended March 31, 2024, stood at Rs. 3,981.14 Lakhs whereas in the Financial Year March 31, 2025 it stood at Rs 5,009.65 Lakhs representing an increase of 25.83%.

Reason: COGS (Cost of Goods Sold) increased because the company have expand their business and got more orders during the year, due to which company purchases and freight cost has been increased.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Purchase	6,451.73	4,156.25
Freight Inward	56.38	31.54

Employee Benefit Expenses

The Employee benefit expense for the Financial Year ended March 31, 2024, stood at Rs. 873.20 Lakhs whereas in Financial Year ended March 31, 2025 it stood at Rs. 1431.93 Lakhs representing an increase of 63.99%.

Reason: Overall employee cost increased due to salary increments, higher contract labour charges, and hiring of new employees. This additional hiring was necessary to manage the new orders received by the company, leading to a rise in employee benefit expenses.

Finance Cost

The Finance Cost for the Financial Year ended on March 31, 2024, stood at Rs. 408.94 Lakhs whereas in the Financial Year ended March 31, 2025 it stood at Rs. 448.09 Lakhs representing an increase of 9.57% from the previous years.

Reason: Company term loan outstanding was Rs. 388.45 Lakhs as on 31-03-2024, which increased to Rs. 907.16 Lakhs as on 31-03-2025. Due to this rise in loan amount, interest payments also became higher, leading to an overall increase in finance cost.

Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Financial Year ended March 31, 2024, stood at Rs. 382.03 Lakhs whereas in the Financial Year ended March 31, 2025 it stood at Rs. 414.95 Lakhs representing an increase of 8.62%.

Reason: Depreciation and Amortization have increased as Opening Fixed asset balance in FY 25 is higher as compared to FY 24 and in FY 2025, company made more additions in their fixed assets and also there is very less sales made in FY 24 due to which depreciation remained high.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Opening balance	480.90	423.12
Addition	1,375.69	109.38
Deletion	(5.54)	(1.96)
Less - Depreciation	(97.72)	(49.66)
Closing balance of fixed assets	1753.32	480.90

Other Expenses

The Other Expenses for the Financial Year ended March 31, 2024, stood at Rs. 737.64 Lakhs whereas in Financial Year ended March 31, 2025 it stood at Rs. 735.86 Lakhs representing a decrease of 0.24%.

Reason: Other expenses have decreased mainly because of spending on professional and consultancy fees and business promotion was reduced. Also, there was very little provision made for bad debts, and no rental expense was incurred for machinery during the year. These factors together helped reduce overall other expenses.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Business Promotion	27.16	52.82
Professional & Consultancy	156.22	204.29
Rent for Machinery	-	38.01
Provision for Bad Debts	4.23	57.04
Total	187.61	352.16

Restated Profit before Tax

The restated profit before tax for the Financial Year ended March 31, 2024, stood at Rs. 1735.73 Lakhs whereas in Financial Year ended March 31, 2025 it stood at Rs. 1868.65 Lakhs representing an increase of 7.66%.

Tax Expense

Tax Expense for the Financial Year ended March 31, 2024, stood at Rs. 515.31 lakhs out of which Current Tax being Rs. 612.15 lakhs and Deferred Tax being Rs. (96.84) lakhs whereas in Financial year ended March 31, 2025 it stood at Rs. 497.78 Lakhs out of which Current Tax being Rs. 559.18 and Deferred Tax being Rs. (61.40) Lakhs representing a decrease of 3.40%.

Restated Profit after Tax

The restated profit after tax for the Financial Year ended March 31, 2024, stood at Rs. 1,220.42 Lakhs whereas in Financial Year March 31, 2025 it stood at Rs. 1,370.87 Lakhs representing an increase of 12.33%.

Reason: Major reason for increase Profit After Tax are as follow:- o The revenue from operation increased from Rs. 8,030.55 Lakhs to Rs. 9,872.70 Lakhs, a growth of 22.94%. This helped cover fixed costs better and increased profit. o The cost of making goods (COGS) changed only a little from 49.57% to 50.74% of sales and stayed mostly steady, which helped keep profit margins strong. o Finance costs also increased slightly from Rs. 408.94 Lakhs to Rs. 448.09 Lakhs. But since their income grew more, this small increase was well managed. o They worked more efficiently. As they handled more work, the cost per unit for employees became lower, which helped improve profit. o Other expenses stayed almost the same, with a small decrease from Rs. 737.64 Lakhs to Rs. 735.86 Lakhs, even though their revenue increased. This also helped increase overall profit.

PERIOD ENDED MARCH 31, 2024, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2023 (BASED ON RESTATED STANDALONE FINANCIAL STATEMENTS)

Revenues

Total Income

Total Income for the period ended March 31, 2023, stood at Rs. 5090.45 Lakhs whereas in Financial Year March 31, 2024, it stood at Rs 8118.69 Lakhs representing an increase of 59.49%.

Reason: The increase was mainly due to increase in Revenue from operations.

Revenue of operations

Net revenue from operations for the period ended March 31, 2023, stood at Rs. 5057.61 Lakhs whereas in Financial Year March 31, 2024, it stood at Rs. 8030.55 Lakhs representing an increase of 58.78%.

Reason: The significant increase in turnover from 5057.61 Lakhs in FY 22-23 to 8030.55 Lakhs in FY 23-24 can be attributed to:-

1. Operational Efficiency Gains from the Learning Curve

The company successfully delivered 9 P17A plants in FY 21-22 (Revenue of Rs. 2,131.63 Lakhs) and an additional 9 P17A plants in FY 22-23 (Revenue of Rs. 1,949.33 Lakhs). These consecutive deliveries created a steep learning curve in the manufacturing process, resulting in reduced production times, optimized resource utilization, and improved output to 12 quantity in FY 23-24 (Revenue of Rs. 2,532.34

Lakhs). This operational enhancement significantly contributed to the timely and efficient execution of projects during the year, thereby boosting revenue.

2. Increase in Production Hours and Capacity Utilization

The total labour hours worked increased from 1,19,972 hours in FY 22-23 to 1,74,164 hours in FY 23-24, indicating a 45% rise in workforce engagement and operational capacity. The higher deployment of labour resources facilitated the faster manufacturing of projects.

3. Revenue Contribution from Base and Depot (B&D) Spares

Of the total revenue of 8030.55 Lakhs for FY 23-24, 1681.72 Lakhs was generated from the supply of Base and Depot (B&D) Spares. Unlike manufactured products, these spares do not require significant production efforts but represent a valuable revenue stream.

4. Customs Duty Reimbursement: -

We are entitled to get customs duty reimbursement as per P 17 A project order. In the year 2023-24 revenue of Customs duty reimburse is Rs. 225.20 Lakhs as compared to Rs. 46.60 in the year FY 2022-23.

5. QAE Inspection Points Reduction:-

The increase in turnover in FY 23-24 can also be attributed to operational streamlining achieved through the reduction in QAE (Quality Assurance and Engineering) inspection points for P-17A ships, as documented in the Record of Discussions. The revision of inspection protocols, which reduced redundant checkpoints without compromising quality standards, significantly expedited the manufacturing process.

This change allowed smoother workflows by minimizing production halts associated with frequent inspections. Additionally, it optimized resource allocation, reducing delays in approvals and enabling the timely delivery of projects.

Other Income

Other Income for the Period ended March 31, 2023, stood at Rs. 32.84 Lakhs whereas in the Financial Year March 31, 2024, it stood at Rs. 88.14 Lakhs representing a increase of 168.38%.

Reason: Increase in Other Income was due to receipt of Refund of Liquidated Damages of Rs 60.87 Lakhs

Expenditure

Total Expenses

Total Expenses for the Period ended March 31, 2023, stood at Rs. 4616.46 Lakhs whereas in the Financial Year March 31, 2024 it stood at Rs 6382.96 Lakhs representing an increase of 38.27%.

Reason: Increase in total expenditure was due to increased Cost of Materials consumed, Increased Employee Benefit Expenses, and Increased Depreciation & Amortization Expenses.

Cost of Goods Sold (COGS)

Cost of Goods Sold for the Period ended March 31, 2023, stood at Rs. 2414.16 Lakhs whereas in the Financial Year March 31, 2024, it stood at Rs 3981.14 Lakhs representing an increase of 64.91%.

Reason: COGS increased due to increased level of operations i.e. revenue from operations.

Employee benefit expense

The Employee benefit expense for the Period ended March 31, 2023, stood at Rs. 707.31 Lakhs whereas in Financial Year March 31, 2024, it stood at Rs. 873.20 Lakhs representing an increase of 23.45%.

Reason: Overall employee cost has increased due to increase in general increment in salary to employees and contract labour charges and hiring of New Employees.

Finance Cost

The Finance Cost for the period ended on March 31, 2023, stood at Rs. 391.85 Lakhs whereas in the Financial Year March 31, 2024, it stood at Rs. 408.94 Lakhs representing an increase of 4.36% from the previous years.

Reason: Overall finance cost has marginally increased due to increase in Interest on Term Loans and increase in other finance cost.

Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Period ended March 31, 2023, stood at Rs. 356.76 Lakhs whereas in the Financial Year March 31, 2024, it stood at Rs. 382.03 Lakhs representing an increase of 7.08%.

Reason: Increased in depreciation and amortisation is due to increase in property, plant and equipment.

Other Expenses

The Other Expenses for the Period ended March 31, 2023, stood at Rs. 746.39 Lakhs whereas in Financial Year March 31, 2024, it stood at Rs. 737.64 Lakhs representing a decrease of 1.17%.

Reason: Other Expenses has decreased mainly due decrease Professional & Consultancy Fess expenses and travelling expenses.

Restated Profit before Tax

The restated profit before tax for the Period ended March 31, 2023, stood at Rs. 473.99 Lakhs whereas in Financial Year March 31, 2024, it stood at Rs. 1735.73 Lakhs representing an increase of 266.20%.

Tax Expense

Tax Expense for the period ended March 31, 2023, stood at Rs. 167.63 lakhs out of which Current Tax being Rs. 97.85 lakhs and Deferred Tax being Rs. 69.78 lakhs whereas in Financial year March 31, 2024 it stood at Rs. 515.31 Lakhs out of which Current Tax being Rs. 612.15 Lakhs and Deferred Tax being Rs. (96.84) Lakhs representing as increase of 207.42%.

Restated Profit after Tax

The restated profit after tax for the Period ended March 31, 2023, stood at Rs. 306.36 Lakhs whereas in Financial Year March 31, 2024, it stood at Rs. 1220.42 Lakhs representing an increase of 298.36%.

Reason: Profit After Tax has been increased mainly due to following reason:-

1. Significant Growth in Revenue:

Revenue from operations increased substantially from 5,057.61 Lakhs in FY 2022-23 to 8030.55 Lakhs in FY 2023-24 (growth of approximately 58.80%).

Higher revenue contributes to better absorption of fixed costs, improving EBITDA margins.

2. Controlled Cost of Goods Sold (COGS):

Although the COGS percentage increased slightly from 47.73% to 49.57%, it remained relatively stable despite significant revenue growth.

This has helped maintain profitability at the gross margin level.

3. Lower Growth in Finance Costs:

Finance costs grew modestly from 391.85 Lakhs in FY 2022-23 to 408.94 Lakhs in FY 2023-24 (an increase of 4.36%), even though revenue and profitability expanded significantly. This indicates efficient capital utilization and potentially better negotiation of borrowing costs.

4. Improved Operating Efficiency:

Operative efficiency has been improved, due to economies of scale, this has resulted in reduced employee benefits costs per unit of revenue.

5. Control Over Other Expenses:

Other expenses remained stable, with a slight reduction from 746.39 Lakhs in FY 2022-23 to 737.64 Lakhs in FY 2023-24, despite a significant increase in revenue.

6. Increase in Other Income:

Other Income has been increased from Rs 32.84 Lakhs to 88.14 Lakhs. The increase in mainly attributable to the receipt of Refund of Liquidated damages of Rs. 60.87 Lakhs under Vivad se Vishwas I -Relief for MSMEs scheme Government of India.

INFORMATION REQUIRED AS PER ITEM (II) (C) (IV) 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 30 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 Managements Discussion and Analysis of Financial Condition and Results of Operations on pages 30 and 267, 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:

Income and sales of our Company on account of major activities derives from the business of Manufacturing Chillers and other reacted components.

5. Future changes in relationship between costs and revenues, in case of events such as future increase in marketing or advertisement costs or prices that will cause a material change are known:

Our Companys future costs and revenues may be indirectly affected by rising raw material costs and changes in Government policies regarding the tender and bidding process.

6. Future relationship between Costs and Income

Our Companys future costs and revenues will be determined by competition, demand/supply situation, Indian Government Policies.

7. 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 Manufacturing Sector. Relevant industry data, as available, has been included in the chapter titled "Our Industry" beginning on page 131 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 product 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 and does not depend on environmental and climate changes.

11. Competitive Conditions

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