Sollfege Smart Electronics Ltd Management Discussions

RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together with our restated financial statements for the three months ended on 31 st October, 2025 and for the financial year ended on 31 st March 2025, 31 st March 2024 and 31 st March 2023 including the notes and significant accounting policies thereto and the reports thereon, which appear elsewhere in this Draft Prospectus. You should also see the section titled Risk Factors beginning on page 16 of this Draft Prospectus, which discusses a number of factors and contingencies that could impact our financial condition and results of operations. The following discussion relates to our Company, unless otherwise stated, is based on restated audited financial statements.

These financial statements have been prepared in accordance with Ind GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditors dated April 21, 2026 which is included in this Draft Prospectus under the section titled Financial Information as Restated beginning on page 193 of this Draft Prospectus. The restated financial statements have been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. We do not provide a reconciliation of our restated financial statements to US GAAP or IFRS and we have not otherwise quantified or identified the impact of the differences between Indian GAAP and U.S. GAAP or IFRS as applied to our restated financial statements.

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 Risk Factors and Forward Looking Statements beginning on pages 16 and 15 respectively, and elsewhere in this Draft Prospectus

Accordingly, the degree to which the financial statements in this Draft Prospectus will provide meaningful information depends entirely on such potential investors level of familiarity with Indian accounting practices. Our F.Y. ends on March 31 of each year; therefore, all references to a particular fiscal are to the twelve-month period ended March 31 of that year. Please also refer to section titled Certain Conventions, Use of Financial, Industry and Market Data and Currency Presentation beginning on page 13 of this Draft Prospectus.

BUSINESS OVERVIEW

Sollfege Smart Electronics Limited operates in the premium segment of audio, video, home automation, smart living, lifestyle, and wellness solutions in India. The Company is engaged in the distribution, integration, and implementation of technologically advanced, design-focused solutions tailored for high-end residential, commercial, and institutional spaces. Its offerings are aimed at customers who value seamless technology integration, superior performance, and refined living experiences.

The Company was originally incorporated as Denn Audio Private Limited and began its operations with a primary focus on the distribution of high-end audio and video equipment. Over the years, it has evolved significantly by expanding its product portfolio, strengthening its brand identity, and diversifying into adjacent luxury technology segments. These include smart home automation, lifestyle electronics, and wellness solutions. Through continuous alignment with changing consumer preferences, rapid technological advancements, and global premium lifestyle trends, Sollfege has transitioned from being a traditional electronics distributor to a comprehensive, integrated solutions provider.

This strategic transformation has enabled the Company to cater to a broader and more discerning customer base that seeks sophisticated, future-ready, and fully integrated living environments. The Companys growth trajectory is also reflected in its financial performance, with revenue from operations increasing from 12.62 crores in Fiscal 2023 to 21.01 crores in

Fiscal 2025, demonstrating strong demand for its premium offerings and the effectiveness of its experience-driven business model.

The Company operates across multiple segments, offering a wide range of premium technology solutions:

Audio Solutions Our Company provides a diverse range of premium audio solutions, catering to every audiophiles needs with top-notch speakers, home theatres, and advanced headphones. Some of the products in this category include - High-end speakers, home theatre systems, soundbars, wireless speakers, and background music systems.

Video Solutions Our Company offers premium video solutions, featuring top-notch displays and projectors for an unparalleled visual experience for both residential and commercial applications.

Smart Living Solutions Our Company include Integrated smart home systems that include

Home Automation Solutions Home audio, Video and lighting controls, Advanced lifestyle technologies, Shades and blinds automation, Climate control systems, Designer smart lighting systems, etc., that enhance comfort and convenience.

Lifestyle & Wellness Solutions Branded home appliances, Luxury lifestyle equipment, Interactive fitness solutions and wellness-focused innovations tailored for modern, health-conscious consumers.

Networking, Security & Surveillance Solutions Smart door locks, Video door phones, CCTV solutions, Multi-function smart keypads, and Fully integrated monitoring and control systems, Whole-home surveillance control that deliver convenience alongside safety.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST AUDITED PERIOD

In the opinion of the Board of Directors of our Company, since the date of the last audited period i.e., October 31, 2025 as disclosed in this Draft Prospectus, there have not arisen any circumstance that materially or adversely affect or are likely to affect the trading or profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months except as follows:

1. The Board of Directors have decided to get their equity shares listed on SME Platform and pursuant to Section 62(1)(c) of the Companies Act 2013, by a resolution passed at its meeting held on March 31, 2026 proposed the Issue, subject to the approval of the shareholders and such other authorities as may be necessary.

2. The shareholders of the Company have, pursuant to Section 62(1)(c) of the Companies Act 2013, by a special resolution passed in the Extra Ordinary General Meeting held on April 01, 2026 authorized the Initial Public Offer.

KEY FACTORS AFFECTING OUR RESULTS OF OPERATION

Changes in laws and regulations relating to the Sectors in which we operate;

Emergence of alternate products which may be technologically advanced and our inability to keep pace with the change

Political instability or changes in the Government in India or in the government of the states where we operate could cause us significant adverse effects;

Our dependence on limited number of customers/suppliers/brands for a significant portion of our revenues;

Any failure to comply with the financial and restrictive covenants under our financing arrangements;

Our ability to retain and hire key employees or maintain good relations with our workforce;

Impact of any reduction in sales of our products;

Increased competition in industries/sector in which we operate;

Our ability to expand our geographical area of operation;

General economic and business conditions in India and in the markets in which we operate and in the local, regional and national economies;

Failure to obtain any applicable approvals, licenses, registrations and permits in a timely manner;

Occurrence of natural or man-made disasters could adversely affect our results of operations and financial condition;

Our inability to successfully diversify our product offerings may adversely affect our growth and negatively impact our profitability; and

COVID-19 pandemic and similar circumstances

SIGNIFICANT ACCOUNTING POLICIES:

Our significant accounting policies are described in the section entitled Financial Statements as Restated beginning from page no. 193 of the draft prospectus/ prospectus.

FINANCIAL KPIs OF THE COMPANY:

( in lakhs except percentage and ratios)

Particulars	31-10-2025*	31-03-2025	31-03-2024	31-03-2023
Total Income	1,075.63	2,128.13	1,983.62	1,273.85
Growth (%)	-49.46%	7.28%	55.72%	-
Revenue from Operation	1,074.48	2,101.28	1,853.02	1,262.26
EBITDA (Operating Profit)	193.81	324.25	173.25	66.13
EBITDA Margin (%)	18.04%	15.43%	9.35%	5.24%
PAT	104.78	212.65	175.93	36.38
Growth (%)	-50.73%	20.87%	383.54%	-
PAT Margin (%)	9.74%	9.99%	8.87%	2.86%
EPS (Basic & Diluted) - (As per end of Restated period)	1.73	18.92	17.42	3.60
EPS (Basic & Diluted) - (Post Bonus with retrospective effect)	1.73	3.52	4.35	0.90
Total Borrowings	608.42	445.70	286.54	176.40
Total Net Worth (TNW)	1,047.49	942.72	375.07	199.15
ROCE%	12.64%	27.79%	54.65%	23.33%
RONW (%)	10.00%	22.56%	46.90%	18.27%
Debt Equity Ratio (Total Borrowing/TNW)	0.58	0.47	0.76	0.89

* Data as on 31/10/2025 are for Seven Months only and not annualised, so its not truly comparable.

SUMMARY OF THE RESULTS OF OPERATION:

The following table sets forth select financial data from restated profit and loss accounts for the seven months period ended on October 31, 2025 and for the financial years ended on 31 st March 2025, 31 st March 2024 and 31 st March 2023 and the components of which are also expressed as a percentage of total income for such periods.

( in lakhs except as otherwise mention)

	For the period ended				For the FY ended
Particulars	31-10- 2025	% of Total Turnover	31-03- 2025	% of Total Turnover	31-03- 2024	% of Total Turnover	31-03- 2023	% of Total Turnover
Income
Revenue from Operations	1,074.48	99.89%	2,101.28	98.74%	1,853.02	93.42%	1,262.26	99.09%
Other Income	1.15	0.11%	26.84	1.26%	130.60	6.58%	11.59	0.91%
Total Income	1,075.63	100.00%	2,128.13	100.00%	1,983.62	100.00%	1,273.85	100.00%
Expenditure
Purchase of Stock-in-Trade	917.27	85.28%	1,699.57	79.86%	1,569.38	79.12%	1,048.04	82.27%
Changes in Inventories of Stock-in-Trade	(241.80)	-22.48%	(223.24)	-10.49%	(201.52)	-10.16%	(60.03)	-4.71%
Employee Benefit Expenses	91.32	8.49%	122.18	5.74%	114.98	5.80%	80.89	6.35%
Other Expenses	113.85	10.58%	178.41	8.38%	188.79	9.52%	127.12	9.98%
Total Expenses	880.64	81.87%	1,776.92	83.50%	1,671.62	84.27%	1,196.02	93.89%
Profit Before Interest, Depreciation and Tax	194.99	18.13%	351.20	16.50%	312.00	15.73%	77.83	6.11%
Depreciation & Amortisation Expenses	16.35	1.52%	23.27	1.09%	16.42	0.83%	9.12	0.72%
Profit Before Interest and Tax	178.64	16.61%	327.93	15.41%	295.58	14.90%	68.71	5.39%
Financial Charges	35.52	3.30%	40.86	1.92%	34.80	1.75%	18.68	1.47%
Profit before Taxation and Prior Period Items
Prior Period Items	-	0.00%	-	0.00%	(8.04)	0.00%	-	0.00%
Profit before Taxation	143.12	13.31%	287.07	13.49%	252.74	12.74%	50.03	3.93%
Provision for Taxation	36.29	3.37%	70.09	3.29%	74.46	3.75%	14.00	1.10%
Earlier Year Taxes	-	0.00%	1.55	0.07%	3.72	0.19%	-
Provision for Deferred Tax	2.06	0.19%	2.78	0.13%	(1.36)	-0.07%	(0.35)	-0.03%
Total	38.35	3.56%	74.42	3.50%	76.81	3.87%	13.65	1.07%
Profit After Tax but Before Extra-ordinary Items	104.78	9.74%	212.65	9.99%	175.93	8.87%	36.38	2.86%
Extraordinary Items	-	-	-	-	-	-	-	-
Net Profit after adjustments	104.78	9.74%	212.65	9.99%	175.93	8.87%	36.38	2.86%
Net Profit Transferred to Balance Sheet	104.78	9.74%	212.65	9.99%	175.93	8.87%	36.38	2.86%

In the Seven Months period ended October 31, 2025, we generated total income of 1,075.63 Lakhs, EBITD (operating profit) of 193.81 Lakhs and net profit after tax of 104.78 Lakhs. In the Fiscal 2025, Fiscal 2024 and Fiscal 2023, we generated total income of 2,128.13 Lakhs, 1,983.62 Lakhs and 1,273.85 Lakhs respectively, EBITD (operating profit) of 324.25 Lakhs, 173.25 Lakhs and 66.13 Lakhs respectively and net profit after tax of 212.65 Lakhs, 175.93 Lakhs and 36.38 respectively. We have reported Return on Net Worth of 10.00%, 22.56%, 46.90% and 18.27% for the seven months period ended October 31, 2025 and for the Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively.

Revenue from operations grew from 1,262.26 Lakhs in FY 2022-23 to 2,101.28 Lakhs in FY 2024-25, marking an increase of 839.03 Lakhs (66.47% for the said period). Correspondingly, Profit After Tax (PAT) surged from 36.38 Lakhs to 212.65 Lakhs (20.64% for the said period), as per the restated financial statements. This strong performance was mainly due to increase in demand of our products among different customers across multiple states, this has been a key factor driving the overall growth in both revenue and profitability. These factors are discussed in detail in this chapter.

Details of Revenue from Operations:

Particulars	October 31, 2025		March 31, 2025		March 31, 2024		March 31, 2023
	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %
Revenue from Trading Activities	1,074.21	99.97%	2,096.60	99.78%	1,851.05	99.89%	1,241.92	98.39%
Revenue from Service Activities	0.27	0.03%	4.68	0.22%	1.97	0.11%	20.34	1.61%
Total	1,074.48	100.00%	2,101.28	100.00%	1,853.02	100.00%	1,262.26	100.00%

Details of Product-wise Revenue:

	October 31, 2025		March 31, 2025		March 31, 2024		March 31, 2023
Particulars	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %
Audio Solutions	443.12	41.24%	933.87	44.44%	622.91	33.62%	553.78	43.87%
Video Solutions	173.10	16.11%	255.14	12.14%	253.66	13.69%	415.16	32.89%
Smart Living Solutions	458.00	42.62%	907.60	43.19%	974.49	52.59%	272.99	21.63%
Service Charge	0.27	0.03%	4.68	0.22%	1.97	0.11%	20.34	1.61%
Total	1,074.48	100.00%	2,101.28	100.00%	1,853.02	100.00%	1,262.26	100.00%

Details of Geography-wise Revenue

State	October 31, 2025		March 31, 2025		March 31, 2024		March 31, 2023
	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %
Andaman & Nicobar	0.25	0.02%	3.77	0.18%	-	-	-	-
Andhra Pradesh	-	-	0.43	0.02%	-	-	-	-
Assam	1.63	0.15%	4.16	0.20%	42.63	2.30%	21.35	1.69%
Bihar	3.42	0.32%	73.96	3.52%	812.44	43.84%	6.05	0.48%
Chhattisgarh	0.93	0.09%	0.37	0.02%	2.03	0.11%	7.59	0.60%
Delhi	45.71	4.25%	379.18	18.04%	182.17	9.83%	421.43	33.39%
Goa	-	-	2.45	0.12%	0.87	0.05%	-	-
Gujarat	-	-	0.92	0.04%	0.61	0.03%	0.06	0.00%
Haryana	27.95	2.60%	80.36	3.82%	19.14	1.03%	19.10	1.51%
Himachal Pradesh	-	-	-	-	0.10	0.01%	-	-
Jharkhand	4.57	0.43%	68.09	3.24%	30.21	1.63%	31.72	2.51%
Karnataka	-	-	0.98	0.05%	1.01	0.05%	-	-
Kerala	0.66	0.06%	-	-	-	-	-	-
Madhya Pradesh	-	-	0.11	0.01%	0.15	0.01%	0.73	0.06%
Maharashtra	46.36	4.31%	42.26	2.01%	14.57	0.79%	4.72	0.37%
Manipur	-	-	-	-	-	-	2.09	0.17%

State	October 31, 2025		March 31, 2025		March 31, 2024		March 31, 2023
	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %		Amount ( in lakhs)	In %
Mizoram	-	-	-	-	9.72	0.52%		-	-
Odisha	69.15	6.44%	65.61	3.12%	26.78	1.45%		82.75	6.56%
Punjab	0.75	0.07%	0.56	0.03%	23.13	1.25%		1.16	0.09%
Rajasthan	2.30	0.21%	0.72	0.03%	4.57	0.25%		0.25	0.02%
Sikkim	-	-	0.09	0.00%	1.36	0.07%		1.42	0.11%
Tamil Nadu	3.02	0.28%	12.17	0.58%	6.42	0.35%		2.97	0.24%
Telangana	2.18	0.20%	3.66	0.17%	17.01	0.92%		48.41	3.83%
Uttar Pradesh	1.17	0.11%	11.51	0.55%	13.99	0.76%		3.29	0.26%
Uttarakhand	-	-	-	-	-	-		0.10	0.01%
West Bengal	864.43	80.45%	1,349.90	64.24%	644.11	34.76%		607.07	48.09%
Total	1,074.48	100.00%	2,101.28	100.00%	1,853.02	100.00%		1,262.26	100.00%

Details of Country-wise Turnover

State	October 31, 2025		March 31, 2025		March 31, 2024		March 31, 2023
	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %
India	1,074.48	100.00%	2,101.28	100.00%	1,853.02	100.00%	1,262.26	100.00%
Total	1,074.48	100.00%	2,101.28	100.00%	1,853.02	100.00%	1,262.26	100.00%

Details of Showroom-wise Turnover

	October 31, 2025		March 31, 2025		March 31, 2024		March 31, 2023
State	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %
Kolkata- Ballygunge-upto April 2022	-	-	-	-	-	-	46.15	3.66%
Kolkata-Pretoria Street- From May- 22 to Dec-22	-	-	-	-	-	-	550.14	43.58%
Kolkata-Ho-Chi- Minh Sarani-from Jan-23	951.26	88.53%	1,870.20	89.00%	1,745.65	94.21%	350.72	27.79%
Bhubaneswar	73.74	6.86%	116.79	5.56%	-	-	-	-
Gurgaon	49.48	4.61%	114.29	5.44%	92.31	4.98%	314.41	24.91%
Guwahati	-	-	-	-	15.06	0.81%	0.84	0.07%
Total	1,074.48	100.00%	2,101.28	100.00%	1,853.02	100.00%	1,262.26	100.00%

Details of Sector-wise Turnover

	October 31, 2025		March 31, 2025		March 31, 2024		March 31, 2023
State	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %	Amount ( in lakhs)	In %
Government	-	-	-	-	-	-	-	-
Private	1,074.48	100.00%	2,101.28	100.00%	1,853.02	100.00%	1,262.26	100.00%
Total	1,074.48	100.00%	2,101.28	100.00%	1,853.02	100.00%	1,262.26	100.00%

MAIN COMPONENTS OF PROFIT AND LOSS ACCOUNT

Total Income

Our total income comprises of Revenue from Operations and Other Income.

Revenue from Operations

Our operational revenue is primarily generated from the Sales of premium segment of audio, video, home automation, smart living, lifestyle, and wellness solutions in India. The Company is engaged in the distribution, integration, and implementation of technologically advanced, design-focused solutions tailored for high-end residential, commercial, and institutional spaces.

Other Income

Our other income comprises of Discount Received, Other Income, Sundry Creditors Written off, Profit on Sale of Quoted Shares, Commission & Brokerage, Customer Advance Forfeited, Interest on Fixed Deposits, Interest on Unsecured Loan, Dividend Income, Rounded off, Interest on IT Refund.

Expenditure

Our total expenditure primarily consists of Purchase of Stock-In-Trade, Change in Inventory of Stock-In-Trade, Employees Benefit Expenses, Finance Costs, Depreciation & Amortization Expenses and Other Expenses.

Purchases of Stock-in-trade

Purchases of Stock-in-trade comprises of Purchase of Stock-in-trade.

Changes in Inventories of Stock-in-trade

Changes in Inventories comprises of difference in opening and closing balance of Stock-in-trade.

Employee Benefit Expenses

Employee benefit expenses comprise of Salaries, Wages, Incentive & Bonus, PF Contribution, ESIC Contribution, PF Administration Charges, Staff Welfare, Gratuity, Directors Remuneration

Financial Charges

Financial Charges comprises of Interest on Bank & NBFC Finance, Loan, Interest on Government Statutory Dues.

Depreciation and Amortization Expenses

Depreciation and Amortization Expenses comprises of Depreciation on Property, Plant & Equipment and Amortization of Intangible Assets.

Other Expenses

Other Expenses comprises of Advertisement, Auditors Remuneration, Business Promotion Expenses, Bank Processing Fees, Commission & Charges, Carriage Inward, Carriage Outward, Clearing & Forwarding Charges, Commission (Domestic), Conveyance, Discount Allowed, Electric Charges, Filling Fees, General Expenses, Insurance, Loading & Unloading Charges, Legal Charges, Loss on Sale of Investments, Motor Car Expenses, Membership & Subscription, Office Rent, Postage & Courier, Printing & Stationery, Professional Fees, Repairs & Maintenance, Repairs & Maintenance to Goods, Rates & Taxes, Rounded Off, Sundry Balance Written Off, Sitting Fees, Telephone & Internet Charges, Travelling Expenses, Trade Mark Registration, Web & App Development Charges

Provision for Taxation

The provision for current tax is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.

FINANCIAL PERFORMANCE HIGHLIGHTS FOR THE PERIOD ENDED ON OCTOBER 31, 2025

Particulars	For the year ended 31-10-2025	% of Total Income
Income
Revenue from Operations	1,074.48	99.89%
Other Income	1.15	0.11%
Total Income	1,075.63	100.00%
Expenditure
Purchase of Stock-in-trade	917.27	85.28%
Changes in Inventories of Stock-in-Trade	(241.80)	-22.48%
Employee Benefit Expenses	91.32	8.49%
Other Expenses	113.85	10.58%
Total Expenses	880.64	81.87%
Profit/(Loss) Before Interest, Depreciation, Exceptional &
	194.99	18.13%
Extraordinary Items and Tax
Depreciation & Amortisation Expenses	16.35	1.52%
Profit/(Loss) Before Interest, Exceptional & Extraordinary Items
	178.64	16.61%
and Tax
Financial Charges	35.52	3.30%
Profit/(Loss) before Exceptional & Extraordinary Items and Tax	143.12	13.31%
Exceptional Item	-	-
Extraordinary Item	-	-
Prior Period Item
Profit before Taxation	143.12	13.31%
Provision for Taxation	36.29	3.37%
Earlier Year Tax	-
Provision for Deferred Tax	2.06	0.19%
Total	38.35	3.56%
Profit After Tax	104.78	9.74%
Net Profit Transferred to Balance Sheet	104.78	9.74%

Total Income

Our total income during the period (April 01, 2025 to October 31, 2025) was 1,075.63 Lakhs which comprises of Revenue from Operations and Other Income.

Revenue from Operations

Our operational revenue during the period (April 01, 2025 to October 31, 2025) was 1,074.48 Lakhs which is almost

99.89% of the total income and which is primarily generated from the Sales of premium segment of audio, video, home automation, smart living, lifestyle, and wellness solutions in India. The Company is engaged in the distribution, integration, and implementation of technologically advanced, design-focused solutions tailored for high-end residential, commercial, and institutional spaces.

Other Income

Our other income during the period (April 01, 2025 to October 31, 2025) was 1.15 Lakhs which is almost 0.11% of the total income and comprises of Discount Received, Customer Advance Forfeited, Interest on Fixed Deposits.

Expenditure

Our total expenditure during the period (April 01, 2025 to October 31, 2025) was 932.51 Lakhs which is almost 86.69% of the total income and which primarily consists of Purchase of Stock-In-Trade, Change in Inventory of Stock-In-Trade, Employees Benefit Expenses, Finance Costs, Depreciation & Amortization Expenses and Other Expenses.

Purchases of Stock-in-trade

Purchases of Stock-in-trade during the period (April 01, 2025 to October 31, 2025) was 917.27 Lakhs which is almost

85.28% of the total income and comprises of Purchase of Stock-in-trade.

Changes in Inventories of Stock-in-trade

Changes in Inventories of Stock-in-trade during the period (April 01, 2025 to October 31, 2025) was (241.80) Lakhs and comprises of difference in opening and closing balance of Stock-in-trade.

Employee Benefit Expenses

Employee benefit expenses during the period (April 01, 2025 to October 31, 2025) was 91.32 Lakhs which is almost 8.49% of the total income and comprise of Salaries, Wages, Incentive & Bonus, PF Contribution, ESIC Contribution, PF Administration Charges, Staff Welfare, Gratuity, Directors Remuneration

Financial Charges

Financial Charges during the period (April 01, 2025 to October 31, 2025) was 35.52 Lakhs which is almost 3.30% of the total income and comprises of Interest on Bank & NBFC Finance, Loan, Interest on Government Statutory Dues.

Depreciation and Amortization Expenses

Depreciation and Amortization Expenses during the period (April 01, 2025 to October 31, 2025) was 16.35 Lakhs which is almost 1.52% of the total income and comprises of Depreciation on Property, Plant & Equipment and Amortization of Intangible Assets.

Other Expenses

Other Expenses during the period (April 01, 2025 to October 31, 2025) was 113.85 Lakhs which is almost 10.58% of the total income and comprises of Advertisement, Auditors Remuneration, Business Promotion Expenses, Bank Processing Fees, Commission & Charges, Carriage Inward, Carriage Outward, Commission (Domestic), Conveyance, Discount Allowed, Electric Charges, Filling Fees, General Expenses, Insurance, Loss on Sale of Investments, Motor Car Expenses, Membership & Subscription, Office Rent, Postage & Courier, Printing & Stationery, Professional Fees, Repairs & Maintenance, Repairs & Maintenance to Goods, Rates & Taxes, Rounded Off, Sundry Balance Written Off, Sitting Fees, Telephone & Internet Charges, Travelling Expenses, Web & App Development Charges

Provision for Taxation

The Provision for Taxation (both current and deferred tax) during the period (April 01, 2025 to October 31, 2025) was

38.35 Lakhs which is almost 3.56% of the total income and The provision for current tax is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.

COMPARISON OF THE FINANCIAL PERFORMANCE OF FISCAL 2025 WITH FISCAL 2024

Particulars	For the year ended 31-03- 2025	% of Total Income	For the year ended 31-03- 2024	% of Total Income	Total Increase/ (Decrease) in comparison to previous FY	% Increase/ (Decrease)	Reasons/ Justification for increase/ (decrease)
Income
Revenue from Operations	2,101.28	98.74%	1,853.02	93.42%	248.26	13.40%	Refer Note-1
Other Income	26.84	1.26%	130.60	6.58%	(103.76)	-79.45%	Refer Note-2
Total Income	2,128.13	100.00%	1,983.62	100.00%	144.51	7.28%	Refer Note-3

Particulars	For the year ended 31-03- 2025	% of Total Income	For the year ended 31-03- 2024	% of Total Income	Total Increase/ (Decrease) in comparison to previous FY	% Increase/ (Decrease)	Reasons/ Justification for increase/ (decrease)
Expenditure
Purchase of Stock-in-trade	1,699.57	79.86%	1,569.38	79.12%	130.19	8.30%	Refer Note-4
Changes in Inventories of Stock-in-Trade	(223.24)	-10.49%	(201.52)	-10.16%	(21.71)	10.77%	Refer Note-5
Employee Benefit Expenses	122.18	5.74%	114.98	5.80%	7.21	6.27%	Refer Note-6
Other Expenses	178.41	8.38%	188.79	9.52%	(10.39)	-5.50%	Refer Note-7
Total Expenses	1,776.92	83.50%	1,671.62	84.27%	105.30	6.30%
Profit/(Loss) Before Interest,
Depreciation, Exceptional & Extraordinary Items and Tax	351.20	16.50%	312.00	15.73%	39.21	12.57%	-
Depreciation & Amortisation Expenses	23.27	1.09%	16.42	0.83%	6.85	41.74%	Refer Note-8
Profit/(Loss) Before Interest, Exceptional & Extraordinary Items and Tax	327.93	15.41%	295.58	14.90%	32.35	10.95%	-
Financial Charges	40.86	1.92%	34.80	1.75%	6.06	17.42%	Refer Note-9
Profit/(Loss) before Exceptional & Extraordinary Items and Tax	287.07	13.49%	260.78	13.15%	26.29	10.08%	-
Exceptional Item	-	-	-	-	-	-	-
Extraordinary Item	-	-	-	-	-	0.00%	-
Prior Period Item	-	-	(8.04)	-	8.04	0.00%	-
Profit before Taxation	287.07	13.49%	252.74	12.74%	34.33	13.58%	Refer Note-10
Provision for Taxation	70.09	3.29%	74.46	3.75%	(4.36)	-5.86%
Earlier Year Tax	1.55	0.07%	3.72	0.19%	(2.17)	-58.34%
Provision for Deferred Tax	2.78	0.13%	(1.36)	-0.07%	4.14	-304.77%
Total	74.42	3.50%	76.81	3.87%	(2.39)	-3.11%	Refer Note-11
Profit After Tax	212.65	9.99%	175.93	8.87%	36.72	20.87%	Refer Note-12
Net Profit Transferred to Balance Sheet	212.65	9.99%	175.93	8.87%	36.72	20.87%

Note:1 -

The growth in revenue during the current financial year, as compared to the previous year, is mainly driven by increased sales of Audio Solutions and a broader customer base across various states.

Note:2 -

The decrease in Other Income in FY 2025, as compared to FY 2024 is due to the decrease in sundry creditors written off and customers advance forfeited during the current financial year as compared to the previous financial year.

Note:3

The increase in Total Income in FY 2025 is primarily due to an increase in Revenue from Operations during the current fiscal year as discussed above.

Note:4

The increase in purchase of stock-in-trade is due to an increase in Purchase of stock in trade in the current fiscal, in line with higher revenue from Trading Activities.

Note:5

The increase was mainly due to an increase in the closing stock.

Note:6

The increase in Employee Benefit Expenses during the current fiscal was largely on account of higher Salaries, Wages, Incentive & Bonus during the current fiscal as compared to previous.

Note:7

Other expenses decreased primarily due to the decrease in various expenses during the fiscal compared to the previous year.

Note:8 -

This rise in depreciation in the current fiscal year was due to the capital expenditure incurred during the fiscal year.

Note:9

This increase was mainly due to increase in interest on loan as per their utilization.

Note:10

There was a marginal increase in Profit before tax in the current fiscal as compared to previous. Despite a rise in revenue and a rise in overall expenditure in line with business expansion, the Company maintained stable expense ratios, resulting in improved operating margins.

Note:11 -

The decrease in provision for taxation during the current financial year is primarily due to the absence of interest on income tax, which was recognized in the previous year.

Note:12 -

This increase was mainly due to increase in Profit before Tax as explained above.

COMPARISON OF THE FINANCIAL PERFORMANCE OF FISCAL 2024 WITH FISCAL 2023

Particulars	For the year ended 31-03- 2024	% of Total Income	For the year ended 31-03- 2023	% of Total Income	Total Increase/ (Decrease) in comparison to previous FY	% Increase/ (Decrease)	Reasons/ Justification for increase/ (decrease)
Income
Revenue from Operations	1,853.02	93.42%	1,262.26	99.09%	590.76	46.80%	Refer Note-1
Other Income	130.60	6.58%	11.59	0.91%	119.01	1026.40%	Refer Note-2
Total Income	1,983.62	100.00%	1,273.85	100.00%	709.77	55.72%	Refer Note-3
Expenditure
Purchase of Stock-in-trade	1,569.38	79.12%	1,048.04	82.27%	521.33	49.74%	Refer Note-4
Changes in Inventories of Stock-in-Trade	(201.52)	-10.16%	(60.03)	-4.71%	(141.50)	235.73%	Refer Note-5
Employee Benefit Expenses	114.98	5.80%	80.89	6.35%	34.09	42.14%	Refer Note-6
Other Expenses	188.79	9.52%	127.12	9.98%	61.68	48.52%	Refer Note-7
Total Expenses	1,671.62	84.27%	1,196.02	93.89%	475.60	39.77%	-
	-
Profit/(Loss) Before Interest,
Depreciation, Exceptional &	312.00	15.73%	77.83	6.11%	234.17	300.87%	-
Extraordinary Items and Tax
Depreciation & Amortisation Expenses	16.42	0.83%	9.12	0.72%	7.30	80.05%	Refer Note-8
	-
Profit/(Loss) Before Interest,
Exceptional & Extraordinary Items and	295.58	14.90%	68.71	5.39%	226.87	330.18%	-
Tax
Financial Charges	34.80	1.75%	18.68	1.47%	16.12	86.33%	Refer Note-9
	-
Profit/(Loss) before Exceptional &
	260.78	13.15%	50.03	3.93%	210.74	421.21%	-
Extraordinary Items and Tax
Exceptional Item	-	-	-	-	-	-	-
Extraordinary Item	-	-	-	-	-	-	-
Prior Period Item	(8.04)						-
Profit before Taxation	252.74	12.74%	50.03	3.93%	202.71	405.15%	Refer Note-10
Provision for Taxation	74.46	3.75%	14.00	1.10%	60.46	431.83%	-
Earlier Year Tax	3.72		-				-
Provision for Deferred Tax	(1.36)	-0.07%	(0.35)	-0.03%	(1.01)	288.16%	-
Total	76.81	3.87%	13.65	1.07%	63.16	462.74%	Refer Note-11
Profit After Tax	175.93	8.87%	36.38	2.86%	139.54	383.54%	Refer Note-12
Net Profit Transferred to Balance Sheet	175.93	8.87%	36.38	2.86%	139.54	383.54%	-

Note:1 -

Revenue from Operations increased during the year primarily driven by higher trading sales and expansion of the customer base compared to the previous financial year. Additionally, the Company strategically strengthened its market presence by opening a new showroom in a different area of Kolkata to attract new customers, while discontinuing operations at its older showroom. This repositioning has contributed positively to improved sales performance.

Note:2 -

The increase in Other Income in FY 2024, as compared to FY 2023 is mainly due to the increase in sundry creditors written off and customers advance forfeited during the current financial year as compared to the previous financial year.

Note:3

The increase in Total Income in FY 2025 is primarily due to an increase in Revenue from Operations during the current fiscal year as discussed above.

Note:4

The increase in purchase of stock-in-trade is due to an increase in Purchase of stock in trade in the current fiscal, in line with higher revenue from Trading Activities.

Note:5

The increase was mainly due to an increase in the closing stock.

Note:6

The increase in Employee Benefit Expenses during the current fiscal was largely on account of higher Salaries, Wages, Incentive & Bonus during the current fiscal as compared to previous.

Note:7

Other expenses increased primarily due to the increase in various expenses like professional fees and sundry balance written off during the fiscal compared to the previous year.

Note:8 -

This rise in depreciation in the current fiscal year was due to the capital expenditure incurred during the fiscal year.

Note:9

This increase was mainly due to increase in interest on loan as per their utilization.

Note:10

Profit Before Tax (PBT) has increased significantly during the year primarily on account of strong growth in revenue from operations, driven by higher trading sales and expansion of the customer base. While total expenses have increased in line with business growth, they have risen at a comparatively lower rate than the increase in total income, resulting in improved operating margins. Additionally, increase in other income also has contributed positively towards enhanced profitability.

Note:11 -

The increase in provision for taxation during the current financial year is primarily due to the increase in Profit Before tax as explained above.

Note:12 -

This increase was mainly due to increase in Profit before Tax as explained above.

AN ANALYSIS OF REASONS FOR THE CHANGES IN SIGNIFICANT ITEMS OF INCOME AND EXPENDITURE IS GIVEN HEREUNDER:

1. Unusual or infrequent events or transactions

Except as described in this 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.

There are no significant economic changes that may materially affect or likely to affect income from continuing operations. However, Government policies governing the sector in which we operate as well as the overall growth of the Indian economy has a significant bearing on our operations. Major changes in these factors can significantly impact income 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.

Apart from the risks as disclosed under Section Risk Factors beginning on page 16 in the Draft Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Expected Future changes in relationship between costs and revenues

Our Companys future costs and revenues will be determined by demand/supply situation, inflation, Government

Policies and Taxation and Currency fluctuations.

5. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or increased sales prices

Changes in revenue in the last financial years are as explained in the part Comparison of the Financial Performance of above.

6. Total turnover of each major industry segment in which our Company operates operates in the premium segment of audio, video, home automation, smart living, lifestyle, and wellness solutions in India. The Company is engaged in the distribution, integration, and implementation of technologically advanced, design-focused solutions tailored for high-end residential, commercial, and institutional spaces. Its offerings are aimed at customers who value seamless technology integration, superior performance, and refined living experiences.

7. Status of any publicly announced New Products or Business Segment

Our Company has not announced any new product other than disclosed in this Draft Prospectus/ Prospectus.

8. Seasonality of business

Our business is not seasonal in nature as per the type of products we trade.

9. Competitive conditions

Competitive conditions are as described under the Chapters Industry Overview and Our Business beginning on page 114 and 125 respectively of the Draft Prospectus/ Prospectus.

10. Details of material developments after the date of last balance sheet i.e. October 31, 2025

Except as mentioned in this Draft Prospectus, no circumstances have arisen since the date of last financial statement until the date of filing the Prospectus, which materially and adversely affect or are likely to affect the operations or profitability of our Company, or value of its assets, or its ability to pay its liability within next twelve months.