Spunweb Nonwoven Ltd Management Discussions

OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together with our restated consolidated financial information for the financial years ended March 31,2025, March 31, 2024, and March 31, 2023. Our Restated Consolidated Financial Statements have been derived from our audited financial statements and restated in accordance with the SEBI ICDR Regulations and the ICAI Guidance Note. Our financial statements are prepared in accordance with Indian GAAP, including the schedules, annexures and notes thereto and the reports thereon, included in the section titled "Financial Information" on page 238 of this Red Herring Prospectus. Unless otherwise stated, the financial information used in this section is derived from the restated consolidated financial statements of our Company.

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 set forth in the sections titled "Risk Factors" and "Forward-

Looking Statements" on pages 30 and 19 respectively, of this Red Herring Prospectus.

These financial statements have been prepared in accordance with Indian GAAP. Indian GAAP differs in certain significant respects from U.S. GAAP, IFRS and Ind AS. We have neither attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in this Red Herring Prospectus nor do we provide a reconciliation of our financial statements to those under U.S. GAAP or IFRS or Ind AS. Accordingly, the degree to which the Indian GAAP financial statements included in this Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with the Companies Act, Indian GAAP and the SEBI

ICDR Regulations. Any reliance on the financial disclosure in this Red Herring Prospectus, by persons not familiar with Indian Accounting Practices, should accordingly be limited.

References to the "Company", "we", "us" and "our" in this chapter refer to Spunweb Nonwoven Limited (formerly known as Spunweb Nonwoven Private Limited along with our Subsidiary Spunweb India Private Limited (earlier known as Spunweb Nonwoven) as applicable in the relevant fiscal period, unless otherwise stated.

OVERVIEW OF OUR BUSINESS

We, along with our wholly owned subsidiary, Spunweb India Private Limited ("SIPL"), are engaged in the business of manufacturing of polypropylene spunbond nonwoven fabrics primarily used in industries such as hygiene, healthcare, packaging, agriculture and others (including roofing & construction, industrial and home furnishing). We are one of the largest manufacturers in spunbond nonwoven fabric industry in India, with an installed production capacity of 32,640 MT as of FY24 (Source: CareEdge Report). Our product portfolio consists of hydrophobic nonwoven fabric, hydrophilic nonwoven fabric, super soft nonwoven fabric, UV treated fabric, antistatic nonwoven fabric and FR treated fabric in the width of 1.6m, 2.6m and 3.2m with the range of 7 to 150 grams per square metre ("GSM"). These products are available in more than 20 colours and they can be customized in colour with value-added services such as varied coatings, slitting, printing, sheet cutting and wider-width fabrics. We are also engaged in supply of various types of nonwoven fabric bags. Our Company is ISO 9001:2015 certified which ensures the products manufactured by us are reliable and consistent in quality.

Our customers include manufacturers of hygiene products viz. diapers, sanitary pads and under pads, manufacturers of healthcare products viz., face masks, PPE kits, surgical gowns and other medical disposable products. Our customers also include manufacturers of packaging products viz. shopping bags, grocery bags, suit cover bags and manufacturers of agricultural products viz. fruit cover and crop cover. Some of our customers include names such as RGI Meditech Private Limited, Millenium Babycares Limited, Sekhani Industries Private Limited, Myra Hygiene Products Private Limited, Rotech Healthcare Private Limited, Poligof Micro Hygiene (India) Private Limited, Salus Products Private Limited, Kwalitex Healthcare Private Limited, JDS Nonwoven, Vyom Nonwoven, among others.

We manufacture, market and sell our products in domestic as well as international markets. In domestic market, we have catered to more than 400, 450, and 485 customers during Fiscal 2023, Fiscal 2024, and Fiscal 2025. In the international market, we have catered to more than 15, 20, and 20 customers during Fiscal 2023, Fiscal 2024 and Fiscal 2025, respectively, who are based in countries such as the United States of America, United Arab Emirates, Italy, Egypt, Saudi Arabia, Sri Lanka, Nepal, Kenya and Nigeria.

For further details, please see "Our Business" on page 181 of this Red Herring Prospectus.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our financial condition and results of operations are affected by numerous factors and uncertainties, including those discussed in the section entitled "Risk Factors" on page 30 of this Red Herring Prospectus. The following are certain factors that have had, and we expect will continue to have, a significant effect on our financial condition and results of operations:

Disruption in supply of raw materials and labour supply at our manufacturing facilities

Development and adoption of advanced technology in manufacturing nonwoven fabrics

Government regulations and policies

Rising demand for hygiene products

Ability to maintain cordial relationships with our customers and suppliers

Companys ability to successfully implement its growth expansion plan

High competition and fragmented market

Lack of awareness and acceptance in some sectors

Optimum capacity utilisation of the installed capacity

Fluctuation in foreign currency rates

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies have been applied consistently to the periods presented in the Restated Consolidated Financial

Statements. For details of our significant accounting policies, please refer section titled "Financial information" on page 238 of this Red Herring Prospectus.

RESULTS OF OUR OPERATIONS

The following discussion on results of operations should be read in conjunction with the Restated Consolidated Financial Statements of Company for the financial years ended March 31,2025, March 31, 2024 and March 31, 2023:

	Financial Year 2025		Financial Year 2024		Financial Year 2023
	Amount	% of Total Income	Amount	% of Total Income	Amount	% of Total Income
Revenue from Operations	22,635.03	99.65%	14,861.14	96.35%	11,591.82	98.50%
Other Income	78.92	0.35%	562.98	3.65%	176.19	1.50%
Total Income	22,713.95	100.00%	15,424.12	100.00%	11,768.01	100.00%
Cost of Materials Consumed	17,456.99	76.86%	11,632.09	75.41%	8,875.35	75.42%
Changes in inventories of finished goods and work-in- progress	(991.28)	(4.36)%	(627.56)	(4.07)%	(211.93)	(1.80)%
Employee Benefits expenses	613.31	2.70%	422.22	2.74%	371.15	3.15%
Operating expenses	1,262.59	5.56%	1,061.68	6.88%	757.41	6.44%
Selling, general and	1,170.83	5.15%	872.19	5.65%	719.66	6.12%
Administrative Expense
Finance costs	753.20	3.32%	439.08	2.85%	435.19	3.70%
Depreciation and Amortization	873.67	3.85%	879.70	5.70%	650.33	5.53%
expenses
Total Expenses	21,139.31	93.07%	14,679.40	95.17%	11,597.18	98.55%
Profit /(Loss) before tax	1,574.64	6.93%	744.71	4.83%	170.83	1.45%
Tax expense:
- Current Tax	506.73	2.23%	246.76	1.60%	32.51	0.28%
- Deferred Tax	(36.83)	(0.16)%	(46.22)	(0.30)%	25.64	0.22%
-Short/ (excess) provision for tax relating to prior years	25.51	0.11%	-	-	-	-
Net Tax expenses	495.42	2.18%	200.53	1.30%	58.15	0.49%
Profit/(Loss) after tax	1,079.22	4.75%	544.18	3.53%	112.68	0.96%

PRINCIPAL COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS ACCOUNT

Total Income

Our total income for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 were amounted to 22,713.95 lakhs, 15,424.12 lakhs and 11,768.01 lakhs, respectively. Our revenue comprises of:

Revenue from operations

Our revenue from operations comprises of revenue from the sale of our products and discount income. Our revenue from operations amounted to 22,635.03 lakhs, 14,861.14 lakhs and 11,591.82 lakhs accounted for 99.65%, 96.35% and 96.43% of our total income for financial years ended March 31,2025, March 31, 2024 and March 31, 2023, respectively.

Other income

Other income comprises of interest on deposits, subsidy income, foreign exchange gain, liabilities no longer payable written off, and other income. Our other income amounted to 78.92 lakhs, 562.98 lakhs and 176.19 lakhs accounted for 0.35%,3.65% and 1.50% of our total income for the financial years ended March 31, 2025,March 31, 2024 and March 31, 2023, respectively.

Expenses

Our total expenses for the financial years ended March 31,2025, March 31, 2024 and March 31, 2023 amounted to 21,139.31 lakhs, 14,679.40 lakhs and 11,597.18 lakhs, respectively. Our expenses primarily consist of the following:

Cost of materials consumed

Cost of materials consumed amounted to 17,456.99 lakhs, 11,632.09 lakhs, and 8,875.35 lakhs for the financial years ended March 31,2025, March 31, 2024 and March 31, 2023, respectively accounted for 76.86%, 75.41%, and 75.42% of the total income, respectively.

Changes in inventories of finished goods and work-in-progress

Change in inventories of finished goods and work-in-progress amounted to (991.28) lakhs, (627.56) lakhs, and

(211.93) lakhs for the financial years ended March 31,2025, March 31, 2024, and March 31, 2023, respectively accounted for (4.36) %, (4.07)%, and (1.80)%,of the total income respectively.

Employee benefits expense

Employee benefits expenses consist of salaries and wages, contribution to provident fund and other funds, gratuity, directors remuneration and staff welfare expenses. Employee benefits expenses for the financial years ended March 31,2025, March 31, 2024 and March 31, 2023 amounted to 613.31 lakhs, 422.22 lakhs, and 371.15 lakhs, respectively which accounted for 2.70%, 2.74 %, and 3.15% of our total income, respectively.

Operating expenses

Operating expenses consist of production expense, power and fuel and job work expenses. Operating expenses for the financial years ended March 31,2025, March 31, 2024, and March 31, 2023 amounted to 1,262.59 lakhs,

1,061.68 lakhs, and 757.41 lakhs, respectively which accounted for 5.56%, 6.88%, and 6.44% of our total income, respectively.

Selling, general and administrative expenses

Selling, general and administrative expenses primarily consists of freight and forwarding, import duty & clearing charges, factory expense, repairs and maintenance, travelling expenses, insurance, legal & professional charges, exhibition expenses. Selling, general and administrative expenses for the financial years ended March 31,2025,

March 31, 2024, and March 31, 2023 amounted to 1,170.83 lakhs, 872.19 lakhs, and 719.66 lakhs, respectively which accounted for 5.15%, 5.65%, and 6.12% of our total income, respectively.

Finance Costs

Finance cost consists of interest on borrowings, interest on trade payables, delayed or deferred payment of taxes and other borrowing costs amounted to 753.20 lakhs, 439.08 lakhs, and 435.19 lakhs for the financial years ended March 31,2025, March 31, 2024, and March 31, 2023, which accounted for 3.32%, 2.85%, and 3.70% of our total income, respectively.

Depreciation and Amortization

Depreciation and amortization represents depreciation on property, plant & equipment and intangible assets. Depreciation and amortization expense amounted to 873.67 lakhs, 879.70 lakhs, and 650.33 lakhs for the financial years ended March 31,2025, March 31, 2024, and March 31, 2023, respectively which accounted for 3.85%, 5.70%, and 5.53% of our total income, respectively.

Financial Year 2025 compared to Financial Year 2024

Total Income

Our total income increased by 47.26% from 15,424.12 lakhs in financial year ended March 31, 2024, to

22,713.95 lakhs in financial year ended March 31, 2025, primarily due to an increase in sales of products from 14,798.00 lakhs to 22,476.88 lakhs, interest on deposits from 10.03 lakhs to 33.99 lakhs, and other reasons as discussed below:

Revenue from operations

Our revenue from operations increased by 52.31% from 14,861.14 lakhs in financial year ended March 31, 2024, to 22,635.03 lakhs in financial year ended March 31, 2025, primarily on account of an increase in capacity utilization from 52.83% in Fiscal 2024 to 73.24% in Fiscal 2025. The number of customers has also been increased from 426 in Fiscal 2024 to 496 in Fiscal 2025 which contributed to the growth in revenue. This increase in numbers of customers had a direct positive impact on our production capabilities and subsequent sales of our products. Further, the Company acquired all the equity outstanding equity shares of Spunweb India Private Limited on dated December 27,2024 and on account of this, SIPL became a wholly owned subsidiary of our Company with effect from December 30, 2024. As a result of this acquisition, the financial results of SIPL have been consolidated with those of the Company from December 31,2024 to March 31,2025, which resulted in an increase in the Companys revenue from operations for the financial year ended March 31,2025.

Other Income

The decrease in other income by 85.98% from 562.98 lakhs in financial year ended March 31, 2024 to 78.92 lakhs in financial year ended March 31, 2024 was primarily due to following reasons:

(a) Subsidy income:

The decrease in subsidy income from 453.27 lakhs to Nil in financial year ended March 31, 2025 as compared to financial year ended March 31, 2024.

(b) Foreign exchange gain:

The decrease in foreign exchange gain from 59.54 lakhs to 0.23 lakhs in in financial year ended March 31,2025 as compared to financial year ended March 31, 2024.

Expenses

Total expenses increased by 44.01% from 14,679.40 lakhs in financial year ended March 31, 2024, to 21,139.31 lakhs in financial year ended March 31,2025 primarily due to reasons as discussed below:

Cost of materials Consumed

Cost of materials consumed increased by 50.08% from 11,632.09 lakhs in financial year ended March 31, 2024, to 17,456.99 lakhs in financial year ended March 31, 2025, primarily due to increase in raw material consumption in line with increase in sales of products.

Changes in inventories of finished goods and work-in-progress

Changes in inventories of finished goods and work-in-progress increased by 57.96% from (627.56) lakhs in financial year ended March 31, 2024, to (991.28) lakhs in financial year ended March 31, 2025, primarily due to increase in closing inventories of finished goods.

Employee benefits expense

Employee benefits expense increased by 45.26% from 422.22 lakhs in financial year ended March 31, 2024, to 613.31 lakhs in financial year ended March 31, 2025, primarily due to primarily due to increase in salaries & wages, and directors remuneration.

Operating expenses

Operating expense increased by 18.92% from 1,061.68 lakhs in financial year ended March 31, 2024, to 1,262.59 lakhs in financial year ended March 31, 2025, primarily due to primarily due to increase in power & fuel and jobwork expenses.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by 34.24% from 872.19 lakhs in financial year ended March 31, 2024, to 1,170.83 lakhs in financial year ended March 31, 2025, primarily due to increase in freight and forwarding expenses from 216.30 lakhs in financial year ended March 31, 2024 to 314.74 lakhs in financial year ended March 31,2025, factory expenses from 31.59 lakhs in financial year ended March 31, 2024 to 78.46 lakhs in financial year ended March 31, 2025, repair & maintenance expenses from 38.77 lakhs in financial year ended March 31, 2024 to 49.72 lakhs in financial year ended March 31,2025, advertisement expense from 3.47 lakhs in financial year ended March 31, 2024 to 7.60 lakhs in financial year ended March 31,2025, canteen fees from Nil in financial year ended March 31, 2024 to 53.59 lakhs in financial year ended March 31,2025, exhibition expenses from 16.63 lakhs in financial year ended March 31, 2024 to 75.93 lakhs in financial year ended March 31, 2025, legal and professional charges from 9.80 lakhs in financial year 2024 to 54.49 lakhs in financial year 2025, and travelling expenses from 34.51 lakhs in financial year ended March 31,2024 to 48.30 lakhs in financial year ended March 31,2025.

Finance costs

Finance costs increased by 71.54 % from 439.08 lakhs in the financial year ended March 31, 2024, to 753.20 lakhs in the financial year ended March 31, 2025, primarily due to an increase in interest expense on trade payables and interest expense and additional interest expense from consolidation of SIPL following its acquisition on dated December 30,2024.

Depreciation and amortization

Depreciation and amortization expenses decreased by 0.69% from 879.70 lakhs in financial year ended March 31, 2024, to 873.67 lakhs in financial year ended March 31,2025, primarily on account of change in written down value (WDV) of property, plant and equipment and intangible assets.

Profit after tax

The profit after tax increase from 544.18 lakhs in financial year ended March 31, 2024, to 1,079.22 lakhs for financial year ended March 31,2025. The increase in profit after tax and PAT margin for FY 2025 as compared to FY 2024 was primarily on account of increase in revenue from operations by 52.31% from 14,861.14 lakhs to 22,635.03 lakhs due to consolidation with SIPL from December 31,2024 to March 31,2025 and increase in interest on deposits from 10.03 lakhs to 33.99 lakhs.

Financial Year 2024 compared to Financial Year 2023

Total Income

Our total income increased by 31.07% from 11,768.01 lakhs in financial year ended March 31, 2023, to 15,424.12 lakhs in financial year ended March 31, 2024, primarily due to increase in sales of products from 11,474.18 lakhs to 14,798.00 lakhs, subsidy income from 136.00 lakhs to 453.27 lakhs, foreign exchange gain from 22.03 lakhs to 59.54 lakhs, liabilities no longer payable written off from nil to 30.50 lakhs and other reasons as discussed below:

Revenue from operations

Our revenue from operations increased by 28.20% from 11,591.82 lakhs in financial year ended March 31, 2023, to 14,861.14 lakhs in financial year ended March 31, 2024, primarily on account of an increase in capacity utilization from 34.37% in Fiscal 2023 to 52.83% in Fiscal 2024. This Increase in capacity installation was due to the enhanced production facilitated by the installation of the 3.2m PP SSS machine with an online detection system, designed for the hygiene industry, in January 2023. Since, the machine required lead time for sample production, customer trials and final approval, the full benefits of the machinery were utilised in Fiscal 2024, thereby, resulting in an increase in capacity utilisation in Fiscal 2024. Further, the number of customers has also been increased from 354 in Fiscal 2023 to 426 in Fiscal 2024. This investment in advanced plant and machinery and the increase in numbers of customers had a direct positive impact on our production capabilities and subsequent sales of our products.

Other Income

The increase in other income by 219.53% from 176.19 lakhs was primarily due to following reasons:

(a) Subsidy income:

The increase in subsidy income from 136.00 lakhs to 453.27 lakhs in financial year ended March 31,2024 as compared to financial year ended March 31,2023. This increase in subsidy income was primarily on account on accrual of SGST subsidy in financial year ended March 31,2024 as compared to financial year ended March 31,2023.

(b) Foreign exchange gain:

The increase in foreign exchange gained from 22.03 lakhs to 59.54 lakhs in financial year ended March 31,2024 as compared to financial year ended March 31,2023.

(c) Liabilities no longer payable written off:

The increase in liabilities no longer payable written off from NIL to 30.50 lakhs in lakhs in financial year ended March 31,2024 as compared to financial year ended March 31,2023 was primarily due to the write off of unsecured loans which were no longer payable.

Expenses

Total expenses increased by 26.58% from 11,597.18 lakhs in financial year ended March 31, 2023, to 14,679.40 lakhs in financial year ended March 31,2024 primarily due to reasons as discussed below:

Cost of materials Consumed

Cost of materials consumed increased by 31.06% from 8,875.35 lakhs in financial year ended March 31, 2023, to 11,632.09 lakhs in financial year ended March 31, 2024, primarily due to increase in raw material consumption in line with increase in sales of products.

Changes in inventories of finished goods and work-in-progress

Changes in inventories of finished goods and work-in-progress increased by 196.13% from (211.93) lakhs in financial year ended March 31, 2023, to (627.56) lakhs in financial year ended March 31, 2024, primarily due to increase in closing inventories of finished goods.

Employee benefits expense

Employee benefits expense increased by 13.76% from 371.15 lakhs in financial year ended March 31, 2023, to

422.22 lakhs in financial year ended March 31, 2024, primarily due to increase in salaries & wages, gratuity and staff welfare expenses.

Operating expenses

Operating expense increased by 40.17% from 757.41 lakhs in financial year ended March 31, 2023, to 1,061.68 lakhs in financial year ended March 31, 2024, primarily due to increase in power & fuel expenses.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by 21.19% from 719.66 lakhs in financial year ended March 31, 2023, to 872.19 lakhs in financial year ended March 31, 2024, primarily due to increase in freight and forwarding expenses from 120.36 lakhs in financial year ended March 31, 2023 to 216.30 lakhs in financial year ended March 31,2024, import duty & clearing charges from 226.42 lakhs in financial year ended March 31,2023 to 346.16 lakhs in financial year ended March 31,2024, insurance expense from 15.64 lakhs in financial year ended March 31,2023 to 21.95 lakhs in financial year ended March 31,2024, travelling expenses from 22.59 lakhs in financial year ended March 31,2023 to 34.51 lakhs in financial year ended March 31,2024.

Finance costs

Finance costs increased by 0.89% from 435.19 lakhs in the financial year ended March 31, 2023, to 439.08 lakhs in the financial year ended March 31, 2024, primarily due to an increase in interest expense on short-borrowings.

Depreciation and amortization

Depreciation and amortization expenses increased by 35.27% from 650.33 lakhs in financial year ended March 31, 2023, to 879.70 lakhs in financial year ended March 31,2024, primarily on account of on account of higher asset base as compared to previous financial year.

Profit after tax

The profit after tax increase from 112.68 lakhs in financial year ended March 31, 2023, to 544.18 for financial year ended March 31,2024. The increase in profit after tax and PAT margin for FY 2024 as compared to FY 2023 was primarily on account of increase in revenue from operations by 28.20% from 11,591.82 lakhs to 14,861.14 lakhs and increase in subsidy income from 136.00 lakhs to 453.27 lakhs.

SELECTED RESTATED STATEMENT OF ASSETS AND LIABILITIES

The table below sets forth the principal components of our total assets, equity and liabilities as at the periods indicated in the table below:

Particulars	March 31,2025	March 31,2024	March 31,2023
Total Shareholders funds	4,504.94	2,576.67	2,032.49
Total Non-Current Liabilities	3,735.91	2,895.14	3,392.99
Total Current Liabilities	10,034.96	5,186.24	3,889.23
Total Equity and Liabilities	18,275.81	10,658.04	9,314.71
Total Non-current Assets	6,176.57	4,843.06	5,287.19
Total Current Assets	12,099.24	5,814.98	4,027.53
Total Assets	18,275.81	10,658.04	9,314.71

Our shareholders fund increased from 2,032.49 lakhs as at March 31, 2023, 2,576.67 lakhs as at March 31, 2024 and to 4,504.94 lakhs as March 31,2025. Increase in fiscal 2023 and fiscal 2024 was primarily on account of profit after tax for the financial year ended March 31, 2023 amounting to 112.68 lakhs and profit after tax for the financial year ended March 31, 2024 amounting to 544.18 lakhs. Increase in shareholders fund for financial year ended March 31,2025 is due to issue of share capital by 77.53 lakhs, security premium of 773.09 lakhs and profit after tax amounting to 1,079.22 lakhs.

Our total non-current liabilities decreased from 3,392.99 lakhs as at March 31, 2023 to 2,895.14 lakhs, as at March 31,2024, primarily on account of decrease in long term borrowings from 3,369.63 lakhs as at March 31, 2023 to 2,856.11 lakhs. Our total non-current liabilities further increased to 3,735.91 lakhs as at March 31, 2025 which was primarily on account of increase in long term borrowings from 2,856.11 lakhs to 3,683.38 lakhs.

Our total current liabilities (i) increased from 3,889.23 lakhs as at March 31, 2023 to 5,186.24 lakhs as at March 31,2024; and (ii) increased from 5,186.24 lakhs as at March 31, 2024 to 10,034.96 lakhs as on March 31, 2025. The principal components of short-term borrowings include cash credit facilities from banks. During the financial year ended March 31, 2024, the Company has been sanctioned additional cash credit facility the existing bank from 1,150.00 lakhs to 1,550.00 lakhs. The reason for availing these borrowings was to support the growth in business of the Company. Further, short-term borrowings increase due to the acquisition of SIPL on dated December 30,2024. The trades payables of the company (i) increased from 2,167.53 lakhs as at March 31, 2023 to 2,858.76 lakhs as at March 31,2024; and (ii) increased from 2,858.76 lakhs as on March 31, 2024 to 3,862.67 lakhs as at March 31, 2025.

Our total non-current assets decreased from 5,287.19 lakhs as at March 31, 2023 to 4,843.06 lakhs as at March 31,2024, which further increase to 6,176.57 lakhs as at March 31, 2025. Decrease from fiscal 2023 to fiscal 2024, was primarily on account of decrease in WDV of property, plant & equipments from 5,029.95 lakhs as at March 31, 2023 to 4,584.62 lakhs as at March 31, 2024. As at March 31,2025, property, plant & equipments further increased to 5,620.65 lakhs from 4,584.62 lakhs as at March 31,2024.

Our total current assets increased from 4,027.53 lakhs as at March 31, 2023, to 5,814.98 lakhs as at March 31, 2024 and to 12,099.24 lakhs as on March 31,2025. The increase was primarily on account of the increase in inventories from 985.33 lakhs as at March 31, 2023 to 2,388.66 lakhs as at March 31,2024, and 5,037.63 lakhs as March 31,2025. The trades receivables also increased from 2,192.97 lakhs as at March 31, 2023 to 3,034.30 lakhs as at March 31,2024 and to 6,048.22 lakhs as at March 31, 2025.

Cash flows

The following table sets forth our cash flows for the period indicated:

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Net cash flow from/ (used in) operating activities	294.93	994.26	1,710.91
Net cash flow from/ (used in) investing activities	(863.83)	(439.07)	(645.80)
Net cash flow from/ (used in) financing activities	602.15	(547.78)	(1,067.52)
Net increase/decrease) in cash and cash equivalents	33.24	7.40	(2.41)
Cash and cash equivalents at the beginning of the year	17.09	9.69	12.10
Cash and cash equivalents at the end of the year	20.38	17.09	9.69

Operating Activities

Financial Year 2024-25

Our net cash from in operating activities was 294.93 lakhs for the financial year ended March 31,2025. Our operating profit before changes in working capital was 3,197.99 lakhs which was primarily adjusted against increase in inventories by 1,744.69 lakhs, trade receivables by 987.18 lakhs, other current assets by 22.26 lakhs and decrease in short term loans and advances by 192.91 lakhs, trade payables by 5.29 lakhs, current liabilities by 47.91 lakhs and other non -current assets by 16.35 lakhs, respectively.

Financial Year 2023-24

Our net cash generated from operating activities was 994.26 lakhs for the financial year ended March 31, 2024. Our Operating profit before changes in working capital was 2,072.11 lakhs which was primarily adjusted against increase in inventories by 1,403.33 lakhs, trade receivables by 841.33 lakhs, other non current assets by 50.90 lakhs, increase in trade payables by 691.23 lakhs and decrease in short term loans & advances by 191.91 lakhs, other current assets by 270.84 lakhs and other current liabilities by 5.56 lakhs, respectively.

Financial Year 2022-23

Our net cash generated from operating activities was 1,710.91 lakhs for the financial year March 31, 2023. Our

Operating profit before changes in working capital was 1253.14 lakhs, which was primarily adjusted against increase in inventories by 70.10 lakhs, trade receivables by 995.97 lakhs, other current assets by 167.17 lakhs, increase in trade payables by 1,530.12 lakhs, other non-current assets by 107.03 lakhs and decrease in short term loans and advances by 367.28 lakhs, and other current liabilities by 182.63 lakhs, respectively.

Investing Activities

Financial Year 2024-25

Our net cash used in investing activities was 863.83 lakhs for the financial year ended on March 31, 2025. It was on account of capital expenditure incurred on fixed assets including capital advances by 379.95 lakhs, investment in subsidiary by 848.49 lakhs and fixed deposits with banks placed of 0.90 lakhs, respectively was offsetted by interest income, proceeds from the sales of fixed assets, change in non-current assets and government grant or subsidy received of 33.99 lakhs, 2.55 lakhs, 109.91 lakhs and 219.06 lakhs, respectively.

Financial Year 2023-24

Our net cash used in investing activities was 439.07 lakhs for the financial year ended on March 31, 2024. It was on the on account of capital expenditure incurred on fixed assets including capital advances by 456.28 lakhs which was offset against interest income and proceeds from the sales of fixed assets of 10.03 lakhs and 7.17 lakhs, respectively.

Financial Year 2022-23

Our net cash used in investing activities was 645.80 lakhs for the financial year ended March 31,2023. It was on account of capital expenditure incurred on fixed assets including capital advances by 659.13 lakhs, which was offset against interest income of 13.33 lakhs.

Financing Activities

Financial Year 2024-25

Net cash generated from financing activities for the financial year ended March 31,2025 was 602.15 lakhs which was on account of proceeds from short-term borrowings of 1,931.24 lakhs which were offset by repayment of long-term borrowings and finance cost of 575.89 lakhs and 753.20 lakhs, respectively.

Financial Year 2023-24

Net cash used in financing activities for the financial year ended March 31,2024 was 547.78lakhs which was on account of net repayment of long term borrowings and finance cost of 504.80 lakhs and 439.08 lakhs, respectively which was offset by proceeds from short term borrowings 396.09 lakhs.

Financial Year 2022-23

Net cash used in financing activities for the financial year ended March 31, 2023, was 1,067.52 lakhs which was on account of repayment of long-term borrowings and finance cost of 1,147.75 lakhs and 435.19 lakhs, respectively which was offset by repayment of short-term borrowings of 515.43 lakhs.

Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss related to adverse changes in market prices, including interest rates. In the normal course of business, we are exposed to certain market risks including interest risks.

Interest rate risk

Interest rate risk results from changes in prevailing market interest rates, which can cause a change in the fair value of fixed-rate instruments and changes in the interest payments of the variable-rate instruments. Our operations are funded to a certain extent by borrowings. Our current loan facilities carry interest at variable rates as well as fixed rates. We mitigate risk by structuring our borrowings to achieve a reasonable, competitive cost of funding. There can be no assurance that we will be able to do so on commercially reasonable terms, that our counterparties will perform their obligations, or that these agreements, if entered into, will protect us adequately against interest rate risks.

Liquidity risk

Adequate and timely cash availability for our operations is the liquidity risk associated with our operations. Our

Companys objective is to all time maintain optimum levels of liquidity to meet its cash and collateral requirements. We employee prudent liquidity risk management practices which inter-alia means maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities.

Credit Risk

We are exposed to the risk that our counterparties may not comply with their obligations under a financial instrument or customer contract, leading to a financial loss. We are exposed to credit risk from our operating activities, primarily from trade receivables.

We consider our customers to be creditworthy counterparties, which limits the credit risk, however, there can be no assurance that our counterparties may not default on their obligations, which may adversely affect our business and financial condition.

Material Frauds

There is no material frauds committed against our Company in the last three financials year.

Unusual or Infrequent Events or Transactions

Except as described elsewhere in this Red Herring Prospectus, there have been no events or transactions to our knowledge which may be described as "unusual" or "infrequent".

Significant economic/regulatory changes

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.

There are no significant economic changes that materially affected our Companys operations or are likely to affect income except as mentioned in the section titled "Risk Factors" on page 30 of this Red Herring Prospectus.

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

Other than as described in the section titled "Risk Factors" and chapter titled "Managements Discussion and Analysis of Financial Conditions and Results of Operations" on pages 30 and 291, respectively, of this Red Herring Prospectus, to our knowledge there are no known trends or uncertainties that have or are expected to have a material adverse impact on our income from continuing operations.

Future changes in the relationship between costs and revenues

Other than as described in the section titled "Risk Factors" and chapter titled "Managements Discussion and

Analysis of Financial Conditions and Results of Operations" on pages 30 and 291, respectively, and elsewhere in this Red Herring Prospectus, there are no known factors to our knowledge which would have a material adverse impact on the relationship between costs and income of our Company. Our Companys future costs and revenues will be determined by demand/supply situation, government policies and other economic factors.

New products or Business segments

Except as disclosed in this Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new products/ services or business segment.

Seasonality of Business

Except as mentioned in this chapter, our business is not subject to seasonal variations.

Significant Dependence on a Single or Few Suppliers or Customers

For financial year ended March 31,2025, March 31, 2024 and March 31,2023, our top five customers accounted for 30.70%, 17.57%, and 18.04%, respectively, and our largest customer accounted for 9.45%, 4.25%, and 6.78% of our revenue from operations, respectively.

Related Party Transactions

We enter into various transactions with related parties in the ordinary course of business. For further information relating to our related party transactions see "Restated Financial Statements" on page 238.

Material Developments subsequent to March 31, 2025

Except as disclosed elsewhere in Red Herring Prospectus, no circumstances have arisen since March 31, 2025, the date of the last financial statements as disclosed in this Red Herring Prospectus which materially or adversely affect or are likely to affect our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next twelve months.