Silky Overseas Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our Financial Statements as Restated which is included in this Red Herring Prospectus. The following discussion and analysis of our financial condition and results of operations is based on our Financial Statements as Restated, for ten months period ended on January 31, 2025 and for the years ended March 31, 2024, 2023 and 2022 including the related notes and reports, included in this Red Herring Prospectus is prepared in accordance with requirements of the Companies Act, 2013 and restated in accordance with the SEBI (ICDR) Regulations, 2018, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Our Financial Statements, as restated have been derived from our audited statutory financial statements. Accordingly, the degree to which our Financial Statements as Restated will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity with Indian GAAP, Companies Act, SEBI Regulations and other relevant accounting practices in India.

This discussion contains forward looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these Forward-Looking

Statements as a result of certain factors such as those described under chapters titled "Risk Factors" and "Forward Looking Statements" beginning on pages 34 and 25, respectively of this Red Herring Prospectus.

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

We are dedicated manufacturers and suppliers of bedding essentials, specializing in blankets, bed sheets, comforters, and more. Our integrated manufacturing process encompasses knitting, dyeing, processing, printing, and packaging, all under one roof. This ensures efficient bulk production without compromising on the quality that guarantees comfort and luxury throughout the night, allowing you to wake up revitalized and ready to embrace each day with vigour. Our diverse product portfolio includes a range of crafted items such as blankets, baby blankets, comforters, bedsheets and curtains. These products are thoughtfully designed and curated by our team of experienced professionals and designers, utilizing adequate machinery and techniques. With a commitment to quality and contemporary aesthetics, our designs resonate with modern preferences while maintaining a timeless appeal. Our commitment to quality is further demonstrated by our ISO 9001:2015 certification, obtained from the United Registrar of Systems certification body.

We manufacture products based on the order specifications received from our customers to meet their requirements. We believe that maintaining a range of products in our business provides us with an opportunity to cater to the diverse needs of different customer segments. Further, we believe that we have experience resources, and a network that can be customized and leveraged to cater to a wider range of bulk packaging containers as per the requirements of the customers. The Company is enhancing its product range as well as its client base so the dependency on a few customers for sale can be avoided

For more details kindly refer our chapter titled "Our Business" on page 123 of this Red Herring Prospectus.

Significant Developments Subsequent to The Last Financial Year

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

Our Company was converted from a Private Limited Company to Public Limited Company vide resolution passed in its members meeting dated October 19, 2023 and a fresh certificate of incorporation consequent to conversion was issued on November 07, 2023 by the Registrar of Companies, Delhi bearing Corporate Identification Number U17110DL2016PLC298888.

The company increased itss Authorised equity share capital from 4,00,00,000/- to 15,00,00,000/- vide resolution passed in its members meeting dated November 25, 2023.

The Company issued 6,07,523 Equity Shares fully paid equity share of 10/- each at a premium of 72.30 each at an aggregate nominal value of 4,99,99,123 to its existing share holder for cash, vide resolution passed in its members meeting dated November 26, 2023 effect of this right issue has been considered to calculate EPS.

The Board of our Company has approved to raise funds through initial public offering in the Board meeting held on June 02, 2024.

The members of our Company approved proposal of Board of Directors to raise funds through initial public offering in the extra ordinary general meeting held on June 11, 2024.

Factors Affecting Our Results of Operations

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

1. Identifying Target Market

2. Continue improving financial performance through a focus on operational and functional efficiencies

3. Continue to add to product portfolio by introducing new products

4. Improving & maintaining functional efficiencies

5. First Order Success

6. Key Customer Relationship Building

7. Change in price of Raw material

8. Change in Technology

9. Change in preferences and taste of the customers

Our business is subjected to various risks and uncertainties, including those discussed in the section titled ‘Risk Factors beginning on page 34 of this Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

Key Performance Indicators of our Company

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

( in Lakhs)

Key Financial	Ten months period ended January 31,	Financial Year ended March 31,	Financial Year ended March 31,	Financial Year ended March 31,
Performance	2025	2024	2023	2022
Revenue from Operations(1)	10,501.15	6,970.49	6,830.76	5,012.10
EBITDA(2)	1,508.34	1,101.46	535.09	296.59
EBITDA Margin(3) %	14.36	15.80	7.83	5.92
PAT	917.07	553.48	98.22	(41.77)
PAT Margin(4) ) %	8.73	7.94	1.44	(0.83)
Networth(5)	2,431.08	1,514.02	460.54	359.07
RoE %(6)	37.72	36.56	21.33	(11.63)
RoCE% (7)	45.12	39.54	30.95	10.09

Notes:

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

(2) EBITDA is calculated as Profit before tax + Depreciation + Finance Costs - Other Income ⁽³⁾ ‘EBITDA Margin is calculated as EBITDA divided by Revenue from Operations

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

(5) Net worth as defined under Regulation 2(1)(hh)of the SEBI ICDR Regulations means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account and debit or credit balance of profit and loss account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation. ⁽⁶⁾ Return on Equity is ratio of Profit after Tax and Shareholder Equity

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

Explanations for KPI Metrics

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

For further detail on Key Performance Indicators of our company, please refer Chapter Titled "Basis of Offer Price" on page 98 of this Red Herring Prospectus.

STATEMENT OF SIGNIFICANT POLICIES

Corporate Information:

1. Company Background

Silky Overseas Limited is a Public Company domiciled in India originally incorporated as Silky Overseas Private Limited vide certificate of incorporation consequent upon conversion to Public Limited Company dated 17th November, 2023 issued by Registrar of Companies, Delhi, being Corporate Identification Number U17110DL2016PLC298888.

The company is in the business of manufacturing of Blankets & Trading of Comforters, bed Sheets, Curtains, yarn & Other Fabrics. The Company primarily caters to the Indian market.

1.1 Basis of preparation of financial statements

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

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

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

1.2 Revenue Recognition

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

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

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

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

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

1.3 Property, Plant & Equipment and Intangible Assets & Depreciation

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

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

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

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

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

1.4 Impairment of Assets

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

1.5 Investments

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

1.6 Inventories

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

1.7 Employee Benefits

i) Short term employee benefits

Short term employee benefits are recognized as an expense at the undiscounted amount in the statement of Profit and loss for the year which includes benefits like salary, wages, bonus and are recognized as expenses in the period in which the employee renders the related service.

ii) Defined Contribution Plan:

The Company has Defined Contribution Plans for Post-employment benefits in the form of Provident Fund for all employees which are administered by Regional Provident Fund Commissioner. Provident Fund and Employee State Insurance are classified as defined contribution plans as the Company has no further obligation beyond making the contributions. The Companys contributions to Defined Contribution plans are charged to the Statement of Profit and Loss as and when incurred.

iii) Defined Benefit Plan:

Unfunded Plan the Company has a defined benefit plan for post-employment benefit in the form of Gratuity. Liability for the above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

1.8 Borrowing Costs

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

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

1.9 Taxes on Income

Tax expense comprises of current tax and deferred tax.

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

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

1.10Earnings per share (EPS)

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

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

1.11Prior Period Items

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

1.12Provisions/Contingencies

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

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

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

1.13Segment Reporting

A. Business Segments:

Based on the guiding principles given in Accounting Standard 17 (AS - 17) on Segment Reporting issued by ICAI, the Company has only one reportable Business Segment which is engaged in business of manufacturing Blankets and trading of Comforters, bed Sheets & Curtains and has manufacturing facilities in India. Accordingly, the figures appearing in these financial statements relate to the Companys single Business Segment.

B. Geographical Segments:

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

1.14 Foreign Currency Transactions

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

1.15 Balance Confirmations

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

1.16 Reporting

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

Discussion on Results of Operation

The following discussion on results of operations should be read in conjunction with the Restated Financial Results of our Company for ten months period ended on January 31, 2025 and the financial years ended on March, 31 2024, 2023 and 2022.

Results of Our Operations

The following table sets forth select financial data from our Financial Statements as Restated Profit and Loss for ten months period ended on January 31, 2025 and the financial years ended on March 31, 2024, 2023 and 2022 the components of which are also expressed as a percentage of total revenue for such periods:

(RS in Lakhs)

Particulars	For ten months period ended 31.01.2025			% of Total income	For the year ended 31.03.20 24		% of Total income	For the year ended 31.03.20 23		% of Total income	For the year ended 31.03.20 22		% of Total income
Revenue from operations	10,501.15			99.68%	6,970.49		99.21%	6,830.76		99.93%	5,012.10		99.91%
Other income	33.80			0.32%	55.76		0.79%	4.69		0.07%	4.68		0.09%
				100.00
Total Income (A)	10,534.96				7,026.25		100.00%	6,835.44		100.00%	5,016.78		100.00%
				%
Expenses:
Cost of Materials Consumed	5,799.17			55.05%	5,644.75		80.34%	5,849.50		85.58%	4,438.92		88.48%
Purchase of Stock in Trade	2,332.48			22.14%	580.62		8.26%	176.31		2.58%	568.36		11.33%
Change in Inventory of Stock							(10.59)						(11.79)
	548.05			5.20%	(743.82)			(104.97)		(1.54)%	(591.68)
in Trade and Finished Goods							%						%
Employee Benefit Expenses	148.01			1.40%	132.33		1.88%	130.09		1.90%	125.41		2.50%
Other Expenses	160.19			1.52%	255.14		3.63%	236.23		3.46%	173.17		3.45%
Total Expenses (B)	8,987.90			85.32%	5,869.03		83.53%	6,287.16		91.98%	4,714.19		93.97%
Earnings Before Interest,
Taxes, Depreciation &	1,547.06			14.68%	1,157.22		16.47%	548.28		8.02%	302.59		6.03%
Amortization(C=A-B)
Finance Cost (D)		161.91	1.54%			197.20	2.81%		158.60	2.32%		147.63	2.94%
Depreciation and
		147.35	1.40%			209.31	2.98%		242.29	3.54%		195.21	3.89%
Amortization Expenses (E )
Profit before Exceptional
		1,237.80	11.75%			750.70	10.68%		147.38	2.16%		(40.26)	(0.80)%
Items
Exceptional Items		(4.91)	(0.05)%			-	0.00%		(8.50)	(0.12)%		(1.31)	(0.03)%
Profit/(Loss) before Tax		1,232.88	11.70%			750.70	10.68%		138.88	2.03%		(41.57)	(0.83)%
Tax Expenses:
Current Tax		328.92	3.12%			201.34	2.87%		51.04	0.75%		-	-
Deferred Tax		(11.71)	(0.11)%			(4.12)	(0.06)%		(10.38)	(0.15)%		(5.44)	(0.11)%
Earlier Year tax		(1.40)	(0.01)%			-	-		-	-		5.64	0.11%
Profit/(Loss) for the year		917.07	8.71%			553.48	7.88%		98.22	1.44%		(41.77)	(0.83)%

Overview of Revenue and expenditure

Revenue and Expenditure

Total Income: Our total income comprises of revenue from operations and other income.

Revenue from operations: Our revenue from operations comprises of Sales from manufacturing of products, Sales from trading of Products, and Other Operating Revenue which consist of Sale of Scrap, Rebate & Discount and Interest income from Customers.

Other Income: Our other income consists of Interest Income from Loan & Deposit, Other Interest, Other Income, Commission received, Miscellaneous Write Back.

Expenses: Our expenses comprise of Cost of Material Consumed, Purchase of Stock in Trade, Change in Inventories of work in progress and finished goods, Employee Benefit Expenses, Finance Cost, Depreciation and Amortisation Expenses and Other Expenses.

Cost of Raw Material Consumed: Our Raw Material consumed consists of change in stock of Raw Material, Consumption of Stores and Spare parts and Direct Expenses which further includes Manufacturing expenses, Power & Fuel and Freight.

Changes in Inventories: Our Changes in Inventories comprises of change in Stock of Finished goods, Work-in-progress, Stock in trade and scrapes from the beginning of the year to the end of the year.

Employee Benefit Expenses: Our employee benefit expense consists of Salaries, Contribution to provident and other funds, Staff welfare expenses, Director Remuneration, Bonus, Gratuity, Employee Transport Cost.

Finance Cost: Our finance costs comprise of Interest on Term Loan, Working capital term loan and other borrowings.

Depreciation and amortisation expenses: Tangible assets are depreciated over periods corresponding to their estimated useful lives. Depreciation includes depreciation charged on Property, Plant & Equipment & Intangible Assets.

Other expenses: Other expenses includes Payment to auditors , Commission, Freight , Insurance, Job Work Expenses, Legal and professional charges, Loss on Sales of Assets , Statutory Interest Demand, Penalty & Late Fees , Rent, Building, Machinery, Others, Rates and Taxes, Sales Promotion Expenses, Postage, Telephone & Internet Expenses, Printing and Stationery, Travelling Expenses, Miscellaneous expenses, Rebate and Discount , Provision for doubtful debts , Fees & Subscriptions, Office Expenses, Security Expenses, Vehicle Running & Maintenance, Website & Software Expenses, MSME Interest.

Tax Expenses: Income taxes are accounted for in accordance with Accounting Standard 22 on "Accounting for

Taxes on Income" ("AS-22"), prescribed under the Companies (Accounting Standards) Rules, 2006. Our Company provides for current tax as well as deferred tax, as applicable.

Provision for current taxes is made at the current tax rates after taking into consideration the benefits available to our Company under the provisions of the Income Tax Act, 1961.

Deferred tax arises from the timing differences between book profits and taxable profits that originate in one period and are capable of reversal in one or more subsequent periods and is measured using the tax rates and laws applicable as of the date of the financial statements. Our Company provides for deferred tax asset / liability on such timing differences subject to prudent considerations in respect of deferred tax assets.

Management DISCUSSION FOR TEN MONTHS PERIOD ENDED ON JANUARY 31, 2025

Income

Total Income: Our total income for ten months period ended January 31, 2025, is 10,534.96 Lakhs, which comprises of Revenue from Operations and Other Income.

Revenue from Operations:

Our revenue from operations for ten months period ended January 31, 2025, is 10,501.15 Lakhs, representing 99.68% of the total income. This primarily includes domestic sales from the manufacturing of products, domestic sales from trading of products, export sales, and other operating revenue. The other operating revenue consists of proceeds from the sale of scrap and income from rebates and discounts.

Other Income:

Our other income for ten months period ended January 31, 2025, is 33.80 lakhs, which accounts for 0.32% of the total income. This comprises of Interest Income from Loan & Deposit, Other Income, Commission received, Miscellaneous Write Back and Foreign Exchange Gain.

Expenses

Our total expenses, excluding finance costs, depreciation and amortization and tax expenses, for the ten months period ended January 31, 2025 amounted to 8,987.90 Lakhs, which is 85.32% of the total income for the period. The major components of these expenses are discussed below.

Cost of Raw Material Consumed:

Our cost of materials consumed during the ten months period ended January 31, 2025 was 5,799.17 Lakhs, representing 55.05% of the total income. This includes changes in stock of raw materials, consumption of stores and spare parts, and direct expenses, which further include wages, power and fuel, and freight inward.

Purchase of Stock in Trade:

Our purchase of stock in trade stood at 2,332.48 Lakhs for the ten months period ended January 31, 2025, accounting for 22.14% of the total income.

Changes in Inventories:

Our net change in inventories is 548.05 Lakhs for the ten months period ended January 31, 2025 with is 5.20% of total income. This includes changes in opening and closing inventory of stock of finished goods, work-in-progress, stock-in-trade, and scrap.

Employee Benefits Expenses:

Our Employee Benefit Expenses for the ten months period ended January 31, 2025, is 148.01 Lakhs, which is 1.40% of total income. This includes Salaries, Contribution to provident and other funds, Staff welfare expenses, Director Remuneration, Bonus, and Gratuity.

Finance Costs:

Our Finance Cost is 161.91 Lakhs, which is 1.54% of Total Income for the ten months period ended January 31, 2025. This comprises of Interest on Term Loan and Working capital term loan and Bank Charges.

Depreciation and Amortization Expenses:

Our Depreciation and Amortization Expenses are 147.35 Lakhs, which is 1.40% of total income for the ten months period ended January 31, 2025.

Other Expenses:

Our Other expenses are 160.19 Lakhs, which is 1.52% of the Total Income for the ten months period ended January 31, 2025. These expenses includes Payment to auditors, Commission, Freight, Insurance, Job Work Expenses, Legal and professional charges, Statutory Interest Demand, Penalty & Late Fees , Rent, Repairs and Maintenance to Building, Machinery and Others, Rates and Taxes, Sales Promotion Expenses, Postage, Telephone & Internet Expenses, Printing and Stationery, Travelling Expenses, Miscellaneous expenses, Rebate and Discount , Bad debts, Office Expenses, Security Expenses, Vehicle Running & Maintenance, Website & Software Expenses and Interest on MSME.

Exceptional Items:

Our Exceptional Items are 4.91 Lakhs, which is 0.05% of the Total Income for the ten months period ended January 31, 2025. This includes prior period items and CSR Expenses.

Profit Before Tax:

Our Profit before Tax is 1,232.88 Lakhs for the ten months period ended January 31, 2025, which is 11.70% of Total Income for the period.

Tax Expenses:

Our Tax expenses are 315.81 Lakhs for the ten months period ended January 31, 2025, which is 3.00% of Total Income for the period.

Profit After Tax:

Our Profit for the ten months period ended January 31, 2025 is 917.07 Lakhs which is 8.71% of the Total Income for the period ended January 31, 2025.

COMPARISON OF FY 2023-24 WITH FY 2022-23

Income

Total Income: Our Total Income increased by 190.81 lakhs, from 6835.44 lakhs for the financial year ended March 31, 2023 to 7026.25 lakhs for the financial year ended March 31, 2024, due to the factors described below:

Revenue from operations

Our Revenue from operations increased by 139.73 lakhs, from 6830.76 lakhs for the financial year ended March 31, 2023, to 6970.49 lakhs for the financial year ended March 31, 2024, representing a growth of 2.05% on account of increase and expansion of sale of Sales from manufacturing of products, Sales from trading of Products, Increase of E-Commerce sale and Other Operating Revenue which consist of Sale of Scrap, Rebate & Discount and Interest income from Customers.

Other Income

Our other income increased by 51.07 lakhs, from 4.69 lakhs for the financial year ended March 31, 2023, to 55.76 lakhs for the financial year ended March 31, 2024, representing a growth of 1089.79% due to increase in Commission received (sales commission) by 50.75 Lakhs and remaining from Miscellaneous Write Back.

Expenses

Our Total Expenses excluding finance cost, depreciation and tax expenses was 5869.03 lakhs for the year ended March 31,2024 as compared to 6287.16 Lakhs for the financial year March 31, 2023, representing decreased of 6.65% due to the factors described below: -

Cost of Raw Material Consumed

Our Cost of Materials Consumed decreased by 204.75 lakhs, from 5,849.5 lakhs for the financial year ended March

31,2023 to 5,644.75 lakhs for the financial year ended March 31, 2024. due to decrease in Purchases price of goods on account of strategic purchases and better negotiations, sale as semi-finished goods with low cost of conversion and decrease in wages due to enhanced process of production.

Changes in Inventories

Our Net Change in Inventory of Work-in-Progress and Finished Goods decreased by 638.85 lakhs, from (104.97) lakhs for the financial year ended March 31, 2023 to (743.82) lakhs for the financial year ended March 31, 2024 representing an decrease of 608.60% due to increase in closing inventory of finished goods, Work in progress, Stock in trade and Scrap.

Purchase of Stock in Trade

Our Purchase of Stock in Trade increased by 404.32 lakhs, from 176.31 lakhs for the financial year ended March 31, 2023, to 580.62 lakhs for the financial year ended March 31, 2024 representing an increase of 229.32% due to increase in purchase of stock in trade.

Traded goods have been purchased as per the order book of the company and depends on the demand at the time. Hence the variation of stock in Trade is purely demand and supply managed system which changes and varies from season to season.

Employee Benefits Expenses

Our Employee Benefit Expenses increased by 2.25 lakhs, from 130.09 lakhs for the financial year ended March 31, 2023, to 132.33 lakhs for the financial year ended March 31, 2024, representing an increase of 1.73% due to increase in Salary and wages which was partially set off against decrease in Gratuity Expenses.

Finance Costs

Our Finance Cost was 197.2 lakhs for the year ended March 31, 2024 as compared to 158.6 Lakhs for the financial year

March 31, 2023, representing increase of 24.34%, on account of increase in Interest on Term Loan, Working capital term loan and other borrowings.

Depreciation and Amortization Expense

Our Depreciation and Amortization Expenses decreased by 32.98 lakhs, from 242.29 lakhs for the financial year ended March 31, 2023, to 209.31 lakhs for the financial year ended March 31, 2024, representing decrease of 13.61%% due to change in accounting estimate of useful life of Fixed assets and due lapse of time.

Other Expenses

Our Other Expenses increased by 18.91 lakhs, from 236.23 lakhs for the financial year ended March 31, 2023, to

255.14 lakhs for the financial year ended March 31, 2024, which is 3.46% and 3.63% of the total revenue of respective years, representing an increase of 8%, due to Payment to auditors, Commission, Legal and professional charges, Loss on Sales of Assets , Statutory Interest, Demand, Penalty & Late Fees, Building, Machinery, Rates and Taxes, Sales Promotion Expenses, Postage, Telephone & Internet Expenses, Travelling Expenses, Miscellaneous expenses, Rebate and Discount, Website & Software Expenses, MSME Interest.

Exceptional Items

Our Exceptional Items decreased by 8.5 lakhs, from 8.5 lakhs pertains to prior period expenses for the financial year ended March 31, 2023, to Nil for the financial year ended March 31, 2024.

Profit Before Tax

Our profit before tax Increased by 611.82 from 138.88 lakhs in FY 2023 to 750.70 lakhs in FY 2024, representing a growth of 440.54%, which is driven by several strategic improvements:

1. Reduction in Power and Fuel Expenses:

o Our investment in a solar power plant led to a substantial reduction in power and fuel expenses, decreasing costs from 412.72 lakhs in FY 2023 to 294.77 lakhs in FY 2024. This resulted in a cost saving of 117.95 lakhs.

2. Decrease in Wage Costs:

o The manufacturing process has been changed which includes shifting from double shifts to single shifts and reduction in raw material consumption, due to which we reduced our wage costs from 534.50 lakhs in FY 2023 to 438.82 lakhs in FY 2024. This adjustment resulted in a wage cost reduction of 95.68 lakhs.

3. New Commission Income:

o In FY 2024, we saw new commission income of 50.75 lakhs received for executing a sale contact between two parties which impacted positively to our profit before tax.

4. Decrease in Depreciation Costs:

o Depreciation costs decreased from 242.29 lakhs in FY 2023 to 209.31 lakhs in FY 2024 due to the lapse of time and changes in the useful life of assets. This reduction in depreciation costs amounted to 32.98 lakhs.

Tax Expenses

Our Tax expenses increased by 156.57 lakhs, from 40.66 lakhs for the financial year ended March 31, 2023, to 197.22 lakhs for the financial year ended March 31, 2024, on account of increase in deferred tax and Current tax due to increase in profits.

Profit After Tax

Our profit after tax increased by 455.26 lakhs from 98.22 lakhs in FY 2022-23 and to 553.48 lakhs in FY 2023-24, which is driven by several strategic improvements

Summary of Profit and Loss Account along with Changes is as follows:

(Rs in Lakhs)

Particulars	For the period ended March 31, 2024	For the period ended March 31, 2023	Net Change	Remarks
Income
Revenue from Operations	6,970.49	6,830.76	(139.73)	Justification No.1
Other Income	55.76	4.69	(51.07)	Justification No.2
Expenses
Cost of Material Consumed	5,644.75	5,849.50	(204.75)	Justification No.3
Purchase of Stock in Trade	580.62	176.31	404.32	Justification No.4
Change in Inventories of work in progress
	(743.82)	(104.97)	(638.85)	Justification No.4
and finished goods
Employee Benefit Expenses	132.33	130.09	2.25	Justification No.6
Finance Costs	197.20	158.60	38.60	Justification No.7
Depreciation and Amortization Expenses	209.31	242.29	(32.98)	Justification No.5
Other Expenses	255.14	236.23	18.91	Justification No.8
Total expenses	6,275.55	6,688.06	(412.52)
			-
Profit/(Loss) before Extraordinary item
	750.70	147.38	(603.32)
and Tax
Prior period item	-	(8.50)	(8.50)	Justification No.9
Profit/(Loss) before Tax	750.70	138.88	(611.82)
Tax Expenses
-Current Tax	201.34	51.04	150.30	Justification No.10
-Deferred Tax	(4.12)	(10.38)	6.26	Justification No.10
-Earlier Year tax	-	-	-
Profit/(Loss) for the year	553.48	98.22	(455.26)	Conclusion

Justification No.1

Revenue from Operations : Our Revenue from Operation increased by 139.73 Lakhs from 6,830.76 Lakhs for FY 2022-

23 to 6,970.40 for FY 2023-24 due to nominal increase in Sale by 2%. The details of the same are as follows:

Sr. Particulars	2023-24	2022-23
No.
I Revenue from Operation ( In Lakhs)	6,970.49	6,830.76
Sale Quantity (Units)	4,120,316.	4,159,754.
II	12	60

 

III Average Selling Price per unit (In )	169.17	164.21
IV Increase in average selling price per unit (In ) in 23-24 as compared to 22-23	5.07
V Decrease in sale quantity (Units) in 23-24 as compared to 22-23	(42,151.48)
Additional revenue on account of increase in sale price ( In Lakhs) (II (for 22-
	211.09
VI 23) *IV)
Reduction of revenue on account of decrease in sale quantity ( In Lakhs) (III(for
	(71.36)
VII 23-24) *V)
VIII Total additional revenue generated (VI+VII)	139.73

Justification No.2

Other Income: There was a total increase of 51.07 Lakhs in FY 2023-24 as compared to FY 2022-23. In FY 2023-24, the company had one time opportunity to execute certain sale contract with Primier Liminates. For executing this sale, company earned a commission income from Primier Liminates of 50.75 Lakhs and balance 0.32 Lakhs on account of miscellaneous income which impacted positively to our profit.

Justification No.3

Cost of Material Consumed:

The cost of raw material consumed has decreased by 204.75 Lakhs from FY 2022-23 to FY 2023-24 due to factors including but not limited to reduction in purchases during the year and savings in wages and power & fuel expenses towards production process. The details of the are mentioned below:

(RS in Lakhs)

Particulars	2023-24	2022-23	Difference
Raw Materials
Opening stock	423.82	151.11	-272.71
Add: Purchases during the year	4,577.15	5,079.74
Less : Purchase of Diesel & Bio Fuel	(125.09)
Net Purchase	4,452.06	5,079.74	627.68
Less: Closing Stock	(51.45)	(423.82)	(372.37)
Consumption of stores and spare parts	84.53	95.25	10.72
Add: Direct Expenses
Wages	438.82	534.5	95.68
Power and fuel	169.68	412.72
Add : Diesel & Bio Fuel	125.09
Total Power and fuel	294.77	412.72	117.95
Freight Inward	2.20	-	(2.20)
Total	5,644.75	5,849.50	204.75

The above reduction in Cost of raw material consumed involves following components:

The manufacturing process has been changed which includes shifting from double shifts to single shifts and reduction in raw material consumption on account of change in strategy, due to which we reduced our wage costs from 534.50 lakhs in FY 2022-23 to 438.82 lakhs in FY 2023-24. This adjustment resulted in a wage cost reduction of 95.68 lakhs.

Details of Reduction in Wages cost is as follows:

Sr. Particulars	2023-24	2022-23
I Total Wages ( In Lakhs)	438.82	534.50
II Total No. of workers employed during the year	1,870	2,384
III Average Wages per Worker (I/II)	23,466.23	22,420.29
IV Increase in Average Wages rate in 23-24 as compared to 22-23(In )	1,045.94
Reduction in Number of workers in 23-24 as compared to 22-23 on account of		514
V change from double shift to single shift and process optimization
Gross Cost saving in Wages due to reduction of number of workers (V*III(For VI 22-23)) ( In Lakhs)		115.25
Additional Wages paid in 23-24 as compared to 22-23 on account of increase		(19.56)
VII in average wage rate (IV*II (for 23-24)) ( In Lakhs)
VIII Net Cost Saving in Wages( In Lakhs) (VI-VII)	95.68

Our Power and Fuel Expenses, decreased by 117.95 lakhs from 412.72 lakhs in FY 2022-23 to 294.77 lakhs in FY 2023-24. We investment in a solar power plant which led to a substantial reduction in Power expenses. The Solar power plant was purchased during March 2022 and it was operational from April 2022 onwards. (Note: We have misinterpreted purchase of bio fuel into purchase of material which we have now rectified as mentioned above in table of Raw Material Consumption. We undertake to update the same in Red Herring Prospectus)

The table below shows bifurcation of Power and Fuel Expenses into Electricity Expenses and Diesel & Biofuel Expenses so as to provide better clarity on savings made on electricity expenses due to installation of solar power plant:

( In Lakhs)

	For the period/year ended
Particulars	March 31,	March 31,	March 31,
	2024	2023	2022
Power & Fuel
(a) Electricity Expenses	160.85	252.21	267.44
(b) Diesel & Bio Fuel Cost	133.92	160.51	132.99
(c) Less: Bio Fuel Cost included in Cost of Raw Material Purchased	(125.09)	-	(104.66)
Total	169.68	412.72	295.77

The table below shows unit wise consumption of electricity and per unit saving in electricity expenses on account of installation of Solar Power Plant:

Particulars	March 31,	March 31,	March 31,
	2024	2023	2022
Total Units Consumed (including Solar) (i)	3,274,410	4,181,338	3,499,506
Solar Units Produced and consumed (ii)	826,145	810,818	-
Net Units consumed over and above Solar production-(i)-(ii) (iii)	2,448,265	3,370,520	3,499,506
Total Electricity Expenses incurred (as per table-A above)- (iv)	160.85	252.21	267.44
(iv)-in Lakhs
Average Electricity cost per unit (including solar)-(iv)/(i) (v)	4.91	6.03	7.64
Net Electricity cost per unit (excluding solar) =(iv)/(iii)-in (vi)	6.57	7.48	7.64
Cost savings per unit due to Solar installation =(vi)-(v)-in (vii)	1.66	1.45	-

In addition to the savings on account of Solar Plant installation, there was savings in power & fuel under consumption of diesel and bio fuel due to change from double shift to single shift basis and reduction in number of workers as explained above.

Towards the end for FY 2022-23 we have undergone the training program organized by Solidarid Regional Expertise Centre to optimize consumption of natural resources (Water & Energy), to further reduce consumption of hazardous chemicals in production activity and development of EMC (Environment Management Cell) which helped us to optimize our production processes which leads to optimum utilization of resources and optimization of cost of goods sold.

Additionally, we have undergone some more changes in our production process as follows:

We have installed following machineries and equipments which leads to improvement in performance of machineries. All these items were installed in our polishing and finishing machines. These items helped in increasing the speed of our finishing machines which reduced production lead time and It further helped us to reduce the power and fuel consumption. All this developments lead to reduction in production cost.

The details of equipments and machineries are as follows: a) Inovance 10 H.P. New Drive b) Ledger Blade c) Heater Rod 1700 Watt d) Washing Sensor e) Brushing Fillet Straight (94 meter) f) Brushing Fillet Angular (100 meter)

Also, we have requested for the chartered engineer certificate to analyze and certify the improved capacity due to installation of above machineries and equipments. Earlier 4 rolls of 100 meters each were sent for drying (dryer machine runs on fuel) in one lot. Now, 4 rolls of 134 meters each are sent for drying. We designed a trolley system that could accommodate these 4 rolls of 134 meters in one lot. Now, 528 meters of fabric is dried at the same cost as compared to 400 meters of fabric earlier. Following are the pictures of old and new trolleys:

Justification No.4

Purchase of Stock in Trade and Changes in Inventory of Work in Progress and Finished Goods: Our Purchase and Stock in Trade increased by 404.32 Lakhs in FY 2023-24 as compared to FY 2022-23 whereas on the other hand our changes in inventory of finished goods, WIP and Stock in Trade by (638.85) Lakhs. The net impact of increase in closing stock of finished goods, WIP and stock in trade of 234.53 Lakhs resulted in increase in profitability of the company.

Justification No.5

Depreciation and Amortization Expenses: Depreciation costs decreased from 242.29 Lakhs in FY 2022-23 to 209.31 lakhs in FY 2023-24 due to the lapse of time and changes in the useful life of assets. This reduction in depreciation costs amounted to 32.98 Lakhs

Justification No.6

Employee Benefit Expenses: Our Employee Benefit Expenses increased by 2.25 Lakhs, from 130.09 lakhs for FY 2022-23 to 132.33 Lakhs for FY 2023-24 due to increase in Salary and wages which was partially set off against decrease in Gratuity Expenses.

Justification No.7

Finance Cost: Our Finance Cost was increased by 38.60 Lakhs from 158.6 Lakhs for FY2022-23 to 197.2 Lakhs for

FY 2023-24 on account of increase in Interest on Term Loan, Working capital term loan and other borrowings.

Justification No.8

Other Expenses: Our Other Expenses increased by 18.91 Lakhs, from 236.23 Lakhs for FY 2022-23 to 255.14 Lakhs for FY 2023-24 due to Payment to auditors, Commission, Legal and professional charges, Loss on Sales of Assets , Statutory Interest, Demand, Penalty & Late Fees, Building, Machinery, Rates and Taxes, Sales Promotion Expenses, Postage, Telephone & Internet Expenses, Travelling Expenses, Miscellaneous expenses, Rebate and Discount, Website & Software Expenses, MSME Interest.

Justification No.9

Prior period item: Our Exceptional Items decreased by 8.5 Lakhs, from 8.5 Lakhs for FY 2022-23 to Nil for FY 2023-24.

Justification No.10

Tax Expenses: Our Tax expanses increased by 156.57 Lakhs, from 40.66 Lakhs for FY 2022-23 to 197.22 lakhs for

FY 2023-24 on account of increase in deferred tax and Current tax due to increase in profits.

Conclusion:

Considering the net increase and decrease in line items mentioned in justification no. 1 to 10, our net profit after tax has increased by 455.26 Lakhs from 98.22 Lakhs in FY 2022-23 and to 553.48 Lakhs in FY 2023-24.

COMPARISON OF FY 2022-23 WITH FY 2021-22

Income

Total Income: Our Total Income increased by 1818.66 lakhs, from 5016.78 lakhs for the financial year ended March 31, 2022, to 6835.44 lakhs for the financial year ended March 31, 2023, representing a growth of 36.25% due to the factors described below:

Revenue from operations

Our Revenue from operations increased by 1818.66 lakhs, from 5012.1 lakhs for the financial year ended March 31, 2022, to 6830.76 lakhs for the financial year ended March 31, 2023, representing a growth of 36.29% on account of increase and expansion of sale of products.

Other Income

Our Other income increased by 0.003 lakhs, from 4.68 lakhs for the financial year ended March 31, 2022, to 4.69 lakhs for the financial year ended March 31, 2023, representing a growth of 0.06% on account of increase of other income.

Expenses

Our Total Expenses excluding finance cost, depreciation and tax expenses was increased by 1572.97 lakhs, from 4714.19 lakhs for the financial year ended March 31, 2022, to 6287.16 lakhs for the financial year ended March 31, 2023, representing a growth of 33.37% due to the factors described below: -

Cost of Materials Consumed

Our Cost of Materials Consumed increased by 1410.58 lakhs, from 4438.92 lakhs for the financial year ended March 31, 2022, to 5849.5 lakhs for the financial year ended March 31, 2023, representing a growth of 31.78% due to increase in Purchases of Raw material Increase of Wages and Power and fuel expanses.

Changes in Inventories

The Change in Inventory of Work-in-Progress and Finished Goods increased by 486.71 lakhs, from (591.68) lakhs for the financial year ended March 31, 2022, to (104.97) lakhs for the financial year ended March 31, 2023. This was mainly due to increase in closing inventory of Finished Goods scrap and stock in trade.

Employee Benefits Expenses

Our Employee Benefit Expenses increased by 4.68 lakhs, from 125.41 lakhs for the financial year ended March 31, 2022, to 130.09 lakhs for the financial year ended March 31, 2023, representing a growth of 3.73% due to increase in Gratuity Expenses and Employee Transport Cost.

Finance Costs

Our Finance Cost increased by 10.97 lakhs, from 147.63 lakhs for the financial year ended March 31, 2022, to 158.6 lakhs for the financial year ended March 31, 2023, representing a growth of 7.43% on account of increase in Interest on term loan Loans, working capital term loan and other borrowings.

Depreciation and Amortization Expense

Our Depreciation and Amortization Expenses increased by 47.08 lakhs, from 195.21 lakhs for the financial year ended March 31, 2022, to 242.29 lakhs for the financial year ended March 31, 2023, representing a growth of 24.12% due to addition in assets during the year.

Other expenses

Our Other Expenses increased by 63.06 lakhs, from 173.17 lakhs for the financial year ended March 31, 2022, to

236.23 lakhs for the financial year ended March 31, 2023, which is 3.45% and 3.46% of the total revenue of respective years, representing a growth of 36.42%. The increase was mainly due to increase in Freight, Legal and professional charges, Rent, -Building, -Machinery, Rates and Taxes, Travelling Expenses, Rebate and Discount, Provision for doubtful debts, Fees & Subscriptions, Office Expenses, Security Expenses, Website & Software Expenses.

Exceptional Items

Our Exceptional Items increased by 7.19 lakhs, from 1.31 lakhs for the financial year ended March 31, 2022, to 8.5 lakhs for the financial year ended March 31, 2023, representing a growth of 548.01% on account of increase Prior Period Expenditure.

Profit Before Tax

Our Profit before Tax increased by 180.45 lakhs, from loss of 41.57 lakhs for the financial year ended March 31, 2022, to a profit of 138.88 lakhs for the financial year ended March 31, 2023, representing a growth of 434.11% on account of increase and expansion of sale of products.

Tax Expenses

Our tax expenses for the financial year 2022-23 amounted to 40.66 Lakhs as against tax expenses of 0.20 Lakhs for the financial year 2021-22. The net increase of 40.45 Lakhs is on account of increase in Deferred Tax and decrease in Current tax.

Profit After Tax

Our Profit for the year increased by 140.00 lakhs, from loss of 41.77 lakhs for the financial year ended March 31, 2022, to a profit of 98.22 lakhs for the financial year ended March 31, 2023, representing a growth of 335.14% lakhs mainly due to expansion of business and increase in revenue.

Changes in Cash Flows

The table below summaries our cash flows from our Restated Financial Statements for ten months period ended on January 31, 2025 and financial years ended on March 31, 2024, 2023 and 2022:

( RS in Lakhs)

	For ten months period ended on	For the financial year ended on
Particulars		March 31,
	January 31, 2025	2024	2023	2022
Net cash (used in)/ generated from operating Activities	685.33	(10.42)	(362.41)	80.80
Net cash (used in)/ generated from investing Activities	(31.83)	(9.75)	(14.46)	(569.93)
Net cash (used in)/ generated from financing Activities	(653.60)	4.52	(368.21)	488.32
Net increase/ (decrease) in cash and cash Equivalents	(0.10)	(15.65)	(20.27)	(0.81)
Cash and Cash Equivalents at the beginning of the period	4.55	20.22	40.48	41.29
Cash and Cash Equivalents at the end of the Period	4.45	4.55	20.22	40.48

Operating Activities

Ten months period ended on January 31, 2025

Our net cash generated from operating activities was 685.33 Lakhs for the ten months period ended January 31, 2025. Our operating profit before working capital changes was primarily adjusted against an Decrease in inventories of 165.39 Lakhs, an Increase in trade receivables by 1,025.05 Lakhs, Increase in non current assets by 0.10 Lakhs, Increase in short loans and advances by 1,044.18 Lakhs, Increase in current provisions by 236.25 Lakhs, Increase in other current liabilities by

104.71 Lakhs, Increase in trade payables by 1,124.21 Lakhs and Increase in non-current provisions by 28.24 Lakhs which was further decreased by payment of Income Tax of 109.76 Lakhs.

Financial year 2023-24

Our net cash used in operating activities was 10.42 Lakhs for the year ended March 31, 2024. Our operating profit before working capital changes was primarily adjusted against an Increase in inventories of 369.03 Lakhs, an decrease in trade receivables by 86.84 Lakhs, current assets decreased by 0.56 Lakhs, and an Increase in non-current assets by 0.36 Lakhs, increase in short loans and advances by 927.96 Lakhs, an increase in current provisions by 217.49 Lakhs, a decrease in other current liabilities by 205.17 Lakhs, an increase in trade payables by 272.87 Lakhs and a decrease in non-current provisions by 1.81 Lakhs. which was further decreased by payment of Income Tax of 30.80 Lakhs.

Financial year 2022-23

Our net cash generated from operating activities was 362.41 Lakhs for the year ended March 31, 2023. Our operating profit before working capital changes was primarily adjusted against an increase in inventories of 361.17 Lakhs, an increase in trade receivables by 180.51 Lakhs, decrease in other current assets by 0.56 Lakhs, an decrease in other non-current assets by 6.45 Lakhs, a decrease in other non-current liabilities by 2.58 Lakhs, increase in short loans and advances by 65.36 Lakhs, increase in current provisions by 44.90 Lakhs, an increase in other current liabilities by 179.32 Lakhs, an increase in trade payables by 254.28 Lakhs, and increase in non-current provisions by 17.22 Lakhs. which was further decreased by payment of Income Tax of 12 Lakhs.

Financial year 2021-22

Our net cash generated from operating activities was 80.80 Lakhs for the year ended March 31, 2022. Our operating profit before working capital changes was primarily adjusted against a increase in inventories of 633.18 Lakhs, a increase in trade receivables by 68.74 Lakhs, a decrease in current assets by 5.23 Lakhs, decrease in short loans and advances by 266.85 Lakhs, an receipt of long loans and advances of 24.72 Lakhs, an increase in current provisions by 2.44 Lakhs, a increase in other current liabilities by 79.77 Lakhs, an increase in trade payables by 108.05 Lakhs, and an increase in non-current provisions by 6.89 Lakhs.

Investing Activities

Ten months period ended on January 31, 2025

Our net cash used in investing activities was 31.83 Lakhs for ten months period ended January 31, 2025. This was due to net purchases of Property, Plant & Equipment amounting to 32.35 Lakhs and Interest Income of 0.52 Lakhs.

Financial year 2023-24

Our net cash used in investing activities was 9.75 Lakhs for the financial year 2023-24. This was primarily due to net purchases of Property, Plant & Equipment amounting to 16.20 Lakhs, partially offset by the sale of Property, Plant & Equipment generating 6.45 Lakhs.

Financial year 2022-23

Our net cash used in investing activities was 14.46 Lakhs for the financial year 2022-23. This was primarily due to net purchases of Property, Plant & Equipment amounting to 14.79 Lakhs and due to interest income of .33 Lakhs.

Financial year 2021-22

Our net cash used in investing activities was 569.93 Lakhs for the financial year 2021-22. This was primarily due to net purchases of Property, Plant & Equipment amounting to 573.37 Lakhs and due to interest income of 3.44 Lakh.

Financing Activities

Ten months period ended on January 31, 2025

Net cash used in financing activities for ten months period ended January 31, 2025 was 653.60 Lakhs, which was primarily due to repayment short term borrowings of 274.35 Lakhs, repayment of long term borrowings of 223.42 Lakhs and interest cost of 155.83 Lakhs.

Financial year 2023-24

Net cash generated in financing activities for the financial year March 31, 2024, was 4.52 Lakhs, which was primarily due to repayment short term borrowings of 690.03 Lakhs, proceeds of long term borrowings of 382.82 Lakhs, an interest cost of 188.26 Lakhs Additionally, there were proceeds from the issue of shares amounting to 499.99 Lakhs.

Financial year 2022-23

Net cash used in financing activities for the financial year March 31, 2023, was -368.21 Lakhs, which was primarily due to repayment of short-term borrowings of 28.23 Lakhs, repayment of long-term borrowings of 191.73 Lakhs and an interest cost of 148.25 Lakhs.

Financial year 2021-22

Net cash generated from financing activities for the financial year March 31, 2022, was 488.32 Lakhs, which was primarily on account of proceeds from short term borrowings of 1,719.49 Lakhs, repayment of long term borrowings of 1,086.96 Lakh and an interest cost of 144.21 Lakhs.

Other Key Ratios

The table below summaries key ratios in our Restated Financial Statements for ten months period ended on January 31, 2025 and for the financial years ended March 31, 2024, 2023 and 2022:

	Ten months period ended on January 31, 2025	For the year ended March 31,
Particulars		2024	2023	2022
Fixed Asset Turnover Ratio	8.80	5.25	4.47	2.85
Current Ratio	1.51	1.40	0.81	0.73
Debt Equity Ratio	0.85	1.70	6.25	8.63
Inventory Turnover Ratio	5.13	4.19	5.38	8.05

Fixed Asset Turnover Ratio: This is defined as revenue from operations divided by total fixed assets based on Financial Statements as Restated.

Current Ratio: This is defined as current assets divided by current liabilities, based on Financial Statements as Restated.

Debt Equity Ratio: This is defined as total debt divided by total shareholder funds. Total debt is the sum of long-term borrowings, short-term borrowings and current maturities of long-term debt, based on Financial Statements as Restated.

Inventory Turnover Ratio: This is defined as average inventory divided by cost of goods sold based on Financial Statements as restated.

Financial Indebtedness

As on January 31, 2025, the total outstanding borrowings of our Company is as below. For further details, refer to the chapter titled "Statement of Financial Indebtedness" beginning on page of this Red Herring Prospectus.

( in Lakhs)

Particulars	As on January 31, 2025
Loans from Banks & Financial Institutions	2,036.45
Loans from Related parties	38.23
Total	2,074.68

Related Party Transactions

Related party transactions with our promoters, directors and their entities and relatives primarily relate to purchase and sale of products and services. For further information, please refer to the chapter titled "Financial Statements as Restated" on page 195 of this Red Herring Prospectus.

Off-Balance Sheet Items

We do not have any other off-balance sheet arrangements, derivative instruments or other relationships with any entity that have been established for the purposes of facilitating off-balance sheet arrangements.

Qualitative Disclosure about Market Risk

Financial Market Risks

Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk. We are exposed to interest rate risk, inflation and credit risk in the normal course of our business.

Interest Rate Risk

Our financial results are subject to changes in interest rates, which may affect our debt service obligations and our access to funds.

Effect of Inflation

We are affected by inflation as it has an impact on the raw material cost, wages, etc. In line with changing inflation rates, we rework our margins so as to absorb the inflationary impact.

Credit Risk

We are exposed to credit risk on monies owed to us by our customers. If our customers do not pay us promptly, or at all, we may have to make provisions for or write-off such amounts.

Reservations, Qualifications and Adverse Remarks

Except as disclosed in chapter titled "Financial Statements as Restated" beginning on page 195 of this Red Herring Prospectus, there have been no reservations, qualifications and adverse remarks.

Details of Default, if any, including therein the Amount Involved, Duration of Default and Present Status, in Repayment of Statutory Dues or Repayment of Deposits or Repayment of Loans from any Bank or Financial Institution.

Except as disclosed in chapter titled "Financial Statements as Restated" beginning on page 195 of this Red Herring Prospectus, there have been no defaults in payment of statutory dues and interest thereon or repayment of deposits and interest thereon or repayment of loans from any bank or financial institution and interest thereon by the Company.

FACTORS THAT MAY AFFECT THE RESULTS OF THE OPERATIONS

Unusual or infrequent events or transactions

There are no transactions or events, which in our best judgment, would be considered unusual or infrequent that have significantly affected operations of the Company.

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

There are no significant economic changes that materially affected Companys operations or are likely to affect income from continuing operations. Any slowdown in the growth of Indian economy or future volatility in global commodity prices, could affect the business including the future financial performance, shareholders funds and ability to implement strategy and the price of the Equity Shares.

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

Other than as disclosed in the chapter titled "Risk Factors" beginning on page 34 of this Red Herring Prospectus to our knowledge, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

Future changes in relationship between costs and revenues in case of events such as future increase in labour or material cost or prices that will cause material change

According to our knowledge, there are no future relationship between cost and income that would be expected to have a material adverse impact on our operations and revenues. However, increase in the cost of the goods in which the Company deals, will affect the profitability of the Company. Further, the Company may not be able to pass on the increase in prices of the services to the customers in full and this can be offset through cost reduction.

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

The increase in revenue is by and large linked to increase in volume of all the activities carried out by the Company.

Total turnover of each major industry segment in which the Issuer Company operates

Our Company is primarily engaged manufacturing and suppliers of bedding essentials, specializing in blankets, bed sheets, comforters, and more.

Relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page 107 of this Red Herring Prospectus.

Competitive Conditions

We have competition with domestic and international bedding essentials manufacturers who may vertically integrate their supply chains by acquiring or establishing their own distribution operation which reduces the need for independent distributors and create additional competition in the market. We expect competition to intensify due to possible new entrants in the market, existing competitors further expanding their operations and our entry into new markets where we may compete with well-established unorganized companies/ entities. This we believe may impact our financial condition and operations. For details, please refer to the chapter titled "Risk Factors" beginning on page 34 of this Red Herring Prospectus.

The extent to which business is seasonal:

The business of manufacturing blankets and comforters is highly seasonal, with demand peaking during the winter months. As temperatures drop, consumers actively seek warm bedding, leading to increased sales. Conversely, demand declines in warmer months when such products are less needed. This seasonality affects production planning, inventory management, and cash flow, necessitating strategic approaches to align with consumer purchasing behaviours.

Any significant dependence on a single or few suppliers or customers

We depend on external suppliers for all the raw materials required and typically purchase raw materials on a purchase order basis and place such orders with them in advance based on our projected requirements. As a result, the success of our business is significantly dependent on maintaining good relationships with our suppliers. The absence of long-term supply contracts subjects us to risks such as price volatility caused by various factors viz. commodity market fluctuations, currency fluctuations, climatic and environmental conditions, transportation cost, changes in domestic regulatory changes and trade sanctions. If we cannot fully offset the increase in raw material prices with an increase in the prices for our products, we will experience lower profit margins, which in turn may have a material adverse effect on our results of operations, and financial condition and ultimately lead to a liquidity crunch. In the absence of such contracts, we are also exposed to the risk of unavailability of raw materials in desired quantities and qualities, in a timely manner.

Increase in income

Increases in our income are due to the factors described above in in this chapter under "Factors Affecting Our Results of Operations" and chapter titled "Risk Factors" beginning on page 34 of this Red Herring Prospectus.

Status of any Publicly Announced New Business Segments

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