Vahh Chemicals Ltd Management Discussions

OPERATIONS.

The following discussion and analysis of our financial condition and results of operations for the financial years ended on 2026, 2025 and 2024 is based on, and should be read in conjunction with, our Restated Financial Statements, including the schedules, notes and significant accounting policies thereto, included in the chapter titled "Restated Financial Statements" beginning on page 179 of this Prospectus. Our Restated Financial Statements have been derived from our audited financial statements and restated in accordance with the SEBI ICDR Regulations and the ICAI Guidance Note.

You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in this Prospectus. You should also read the section titled "Risk Factors" beginning on page 20 of this Prospectus, which discusses a number offactors, risks and contingencies that could affect our financial condition and results of operations. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year are to the twelve-month period ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers to Vahh Chemicals Limited, our Company. Unless otherwise indicated, financial information included herein are based on our "Restated Financial Statements" for the financial years ended on 2026, 2025 and 2024 included in this Prospectus beginning on page 179 of this Prospectus.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be "Forward Looking Statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws and other Statutes and incidental factors.

BUSINESS OVERVIEW

We are an ISO 9001: 2015 certified Company engaged in the business of manufacturing and trading of textile auxiliaries chemicals. Our Company is engaged in the supplying and blending of wide range of chemicals in the textile industry. Our operations primarily involve the sourcing and blending of textile chemicals essential for various stages of textile processing, including pre-treatment, dyeing, printing, and finishing. Strategically, we cater primarily to dyeing and printing houses within the textile industry, offering tailored chemical solutions to address the specific needs and challenges of this sector, including customized formulations for various applications. These chemicals are essential for improving fabric quality, its texture, enhancing colour vibrancy, and ensuring the durability of the finished textile products. Our main strength of the products are our formulation of chemicals and quality maintenance.

Our business model is segregated under three business segments which include:

1) Trading - Distribution of textile chemicals, including pre-treatment agents, dyeing auxiliaries, and finishing chemicals to optimize the dyeing and printing processes in textile mills.

2) Blending - Customized chemical blends to ensure that textile manufacturers achieve superior results, with formulations designed to enhance the quality.

3) Nutrition - Nutraceutical products formulated to support health, wellness, and improved daily nutrition by the subsidiary.

The table below sets forth the breakdown of our product wise revenue from operations for the period ended March 31, 2026 and for Fiscal 2025, Fiscal 2024 :

Particulars	For the Financial year 2026		For the Financial year 2025		For the Financial year 2024
	Revenue	%	Revenue (Rs. in Lakhs)	%	Revenue (Rs. in Lakhs)	%
	(Rs. in Lakhs)
Blending	2,873.72	66.59%	1582.93	66.66%	776.33	76.45%
Trading	350.91	8.13%	459.72	19.36%	239.20	23.55%
Nutrition	1,090.62	25.27%	332.06	13.98%	-	-
Total	4,315.25	100.00%	2,374.71	100.00%	1,015.53	100.00%

As of March 31, 2026, our product portfolio comprises of 114 SKUs in our chemical division which are designed to enhance fabric quality, durability, and performance, our products cater to a wide spectrum of textile substrates such as cotton, polyester, silk, and synthetic blends. We focus on creating solutions tailored to specific needs in textile production. This strategic alignment enables us to support diverse industry needs, from enhancing colour vibrancy to imparting functional properties like water repellence, flame resistance, and anti-microbial finishes, UV Absorbers, wrinkle - free resins, driving innovation and value creation in the textile sector.

Our chemical business is predominately conducted on a business-to-business basis. Our Facility spans approximately 301.25 square meters. We have established a strong distribution network in Surat, supported by strategically positioned manufacturing facility.

For more details, please refer chapter titled "Our Business" beginning on page 133 of this Prospectus. SIGNIFICANT DEVELOPMENTS AFTER MARCH 31, 2026

In the opinion of the Board of Directors of our Company, since the date of the year in this 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 next twelve months.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subject to various risks and uncertainties, including those discussed in the section titled "Risk Factors" on page 20 beginning of this Prospectus.

1. Disruptions to the supply, or increases in price of raw materials andfinished products

Raw materials price volatility caused by various factors such as the quality and availability of supply, consumer demand, changes in government programs and regulatory sanctions. Our suppliers may be unable to provide us with a sufficient quantity of our raw materials at a suitable price for us to meet the demand for our products. The prices and supply levels of raw materials are dependent on factors, which are not in our control such as general economic conditions, competition, production levels and transportation costs.

Any increase in raw material prices may affect our procurement of raw materials and will result in corresponding increases in our product costs, while the increase in the selling price of the finished products may not be in proportionate to the increase in raw material price. Such change in pricing may adversely affect our sales, cash flow and our overall profitability.

Our Companys cost of raw material consumed was 98.45 %, 94.37 % and 86.65 % of our revenues from operation in Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. If we are unable to manage these costs or increase the prices of our products to offset these increased costs, our margins, cash flows and our profitability may be adversely affected.

2. Concentration of business operations in the State of Gujarat

Our Company operates only in the state of State of Gujarat. Such geographical concentration of our business in the Gujarat region heightens our exposure to adverse developments related to competition, as well as economic and demographic changes in the region, which may adversely affect our business prospects, financial conditions and results of operations.

3. Our business is dependent on our manufacturing facility and the loss of or shutdown of operations of any of these facilities could adversely affect our business

Our facility at Gujarat are subject to operating risks, such as shutdowns due to the breakdown or failure of equipment, power supply or processes, performance below expected levels of output or efficiency, adequate utilisation rates, obsolescence of equipment, labour disputes, strikes, lockouts, industrial accidents, disruption by extremist groups, or any other reason, and the need to comply with the directives and regulations of the Government of India ("GoI") and relevant state government authorities. Our operations involve a significant degree of integration, and our results of operations are dependent on the successful operation of each facility. Although we take precautions to minimize the risk of any significant operational problems at our facilities, our business, financial condition, results of operations and prospects may be adversely affected b y any disruption of operations at our facilities.

4. Competition

The market in which our Company is doing business is highly and increasingly competitive and unorganised, and our results of operations and financial condition are sensitive to, and may be materially adversely affected by competitive pricing and other factors. Competition may result in pricing pressures, reduced profit margins, lost market share or a failure to grow our market share, any of which could substantially harm our business and results of operations.

5. Dependence on the knowledge and expertise of our Promoters, Directors, KMPs and SMPs

We depend on the management skills and guidance of our Promoter for development of business strategies, monitoring their successful implementation and meeting future challenges. Further, we also significantly depend on the expertise, experience and continued efforts of our Key Managerial Personnel and Senior Management. Our future performance will depend largely on our ability to retain the continued service of our management team. If one or more of our Key Managerial Personnel or Senior Management are unable or unwilling to continue in his or her present position, it could be difficult for us to find a suitable or timely replacement and our business, financial condition and results of operations could be adversely affected.

6. Lapses in precision, accuracy or quality control in our products may lead to customer dissatisfaction, product rejections, reputational damage, or financial losses

Our products are often tailored to meet specific customer requirements relating to chemical use for dyeing and printing. As our products are used for dyeing or printing on the textile with technical specifications are critical and even a minor deviation in quality may result in product rejection or loss of customer confidence. Further, inaccuracies in formulation of chemical could result in compliance breaches for our customers. Thus, maintaining a high degree of precision in product design and execution is essential.

SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies, "Annexure IV" beginning under "Restated Financial Statements" on page 188 of this Prospectus.

Set out below are a few key performance indicators:

Particulars	Units	For the financial year ended March 31, 2026	For the financial year ended March 31, 2025	For the financial year ended March 31, 2024
Revenue from Operations	Rs.	4315.25	2,374.71	1,015.53
Revenue CAGR(1)	%	106.14%
EBITDA (2)	Rs.	822.62	467.66	112.26
EBITDA Margin (3)	%	19.06%	19.69%	11.05%
PAT		508.83	258.22	34.46
PAT Margin (4)	%	11.79%	10.87%	3.39%
Return on Equity (RoE) (5)	%	34.11%	37.59%	33.55%
Return on Capital Employed (6)	%	31.76%	25.85%	16.58%
Net Capital Turnover Ratio (7)	Times	2.48	2.59	2.42
Debt to Equity Ratio (8)	Times	0.76	1.64	5.93
Return on Assets (9)	%	11.60%	6.57%	4.35%
Current Ratio (10)	Times	1.66	1.31	2.13
Operational KPI
Unit sold	Kgs	29,68,129	16,39,004	7,54,880

As certified by ACG & Co., Chartered Accountants pursuant to their certificate dated May 20, 2026.

Notes:

(1 Revenue CAGR is calculated by dividing the Revenue from operation for the FY 2026 by the Revenue from operation for the FY 2024, raising to the power of one divided by the number of compounding period i.e. 2 years and subtracting by one.

(2 EBITDA is calculated as Profit before tax + Depreciation + Interest Expenses - 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 Return on Equity (RoE) is equal to profit for the year divided by the total equity and is expressed as a percentage.

(6) Return on Capital Employed is calculated as EBIT divided by total capital employed. Capital employed is calculated as sum of total equity and total borrowings minus Deferred Tax Assets. EBIT is calculated as PBT plus Finance Cost

(7 Net Capital Turnover Ratio is calculated as Revenue from operation divided by working capital, wherein working capital is calculated as difference of Current Assets and Current Liabilities

(8 Debt to Equity Ratio is calculated as total borrowings divided by total equity. Total Borrowings is calculated as sum of non - current borrowings, current borrowings and lease liabilities.

(9 Return on Assets is calculated by dividing the total assets by the profit after tax.

(10) Current Ratio is calculated by dividing the current assets by current liabilities.

DETAILS OF THE REVENUE RECOGNITION METHOD ADOPTED BY THE ISSUER AND ITS BASIC PARAMETERS.

Revenue is recognized only when it is probable that the economic benefits will flow to the Parent entity and the amount of revenue can be measured reliably.

Trading (Sale of Goods)

Revenue derived from trading activities is recognized when the significant risks and rewards of ownership of the products are transferred to the customer. This transfer typically occurs at a point in time upon shipment or delivery of the goods according to the terms of sale.

Blending and Nutrition Services (Rendering of Services)

Revenue from blending, custom formulation, technical support, or nutrition consulting services is recognized as the performance obligation is satisfied. This is generally recognized upon the completion of performance of the specified service and acceptance by the customer. For lengthy service contracts (e.g., long-term blending arrangements), revenue may be recognized over time if the contractual criteria for continuous transfer of control are met.

Interest Income

Interest income is recognized on an accrual basis. The income is measured and recognized on a time-proportion basis using the effective interest method over the period the corresponding asset is held.

MAIN COMPONENTS OF OUR INCOME AND EXPENDITURE

Total Revenue

Our total revenue is divided into revenue from operations and other income.

Revenue from operations consists of Sales and Discount.

Other income consists of interest received on Fixed Deposits and Foreign Exchange Total Expenses

Our total expenses comprise of Cost of Materials Consumed, Changes in inventories of traded goods, Employee benefits expenses, Finance costs, Depreciation and amortisation expense and other expenses.

Cost of Materials Consumed

Cost of Material Consumed includes Consumption of Raw material and Consumption of Spares/packing material Changes in inventory

Changes in inventory includes change in inventories of finished goods, opening stock and closing stock Employee benefits expenses

Employee benefit expenses comprise of Salary and wages, Contribution to employees PF & ESIC and Directors Remuneration.

Finance Costs

Finance costs includes Bank Interest, Interest on Loan and Loan Processing Charges.

Depreciation and Amortization Expenses

Depreciation and amortization expenses primarily includes Depreciation on property, plant & equipment and Amortization of intangible assets.

Other Expenses

Other expenses include Bank Charges, Advertisement Expenses, Auditor Remuneration, Repairs and Maintenance, Brokerage Expenses, Legal and Professional Charges, Internet & Website Expense, Electricity Expenses, Maintenance Charges, Stamp duty and registration charges, Rent, Rates and Taxes, Donation Expenses, Insurance Expense, Transportation Charges, Packing & Sampling, Office Expense, Communication Expenses, Travelling & Conveyance and other Expenses.

RESULTS OF OPERATIONS

The following discussion on results of operations should be read in conjunction with the Restated Financial Statements of our Company for the Year and financial year(s) ended on March 31, 2026 and March 31, 2025, March 31, 2024 :

Particulars	Fiscal 2026 (Rs.)	% of Total Revenue	Fiscal 2025 (Rs.)	% of Total Income	Fiscal 2024 (Rs.)	% of Total Income
Revenue
Revenue from Operations	4315.25	99.91%	2374.71	100.00%	1015.53	100.00%
Other Income	3.70	0.09	0.03	0.00%	0.04	0.00%
Total Income	4318.95	100%	2374.74	100.00%	1015.57	100.00%
Expenses
Cost of materials consumed	4267.97	98.82	2259.18	95.13%	880.15	86.67%
Changes in Inventories of Finished Goods	(1168.20)	(27.05)	(580.08)	(24.43) %	(77.09)	(7.59) %
Employee benefits expense	207.62	4.81	103.81	4.37%	47.46	4.67%
Finance Cost	137.93	3.19	100.12	4.22%	68.73	6.77%
Depreciation and amortisation expense	1.74	0.04	1.54	0.06%	1.67	0.16%
Other expenses	177.16	4.10	121.95	5.14%	45.33	4.46%
Total expenses	3,624.22	83.91%	2006.52	84.49%	966.25	95.14%
Profit before tax	694.73	16.09%	368.22	15.51%	49.32	4.86%
Tax expense
Current tax	186.04	4.31	110.18	4.64%	15.10	1.49%
Deferred tax (credit)/charge	(0.14)	0.00	(0.18)	(0.01)%	(0.24)	(0.02)%
Profit for the period / year	508.83	11.78%	258.22	10.87%	34.46	3.39%

RESULTS OF OPERATIONS FOR THE PERIOD ENDED MARCH 31, 2026 Income

Total Income

During the period ended March 31, 2026, Total income for the period starting from April 01, 2025 to March 31, 2026 was Rs. 4318.95 Lakhs. The total income consists of revenue from operations and other income.

Revenue from Operations:

During the period ended March 31, 2026, revenue from operation of our Company was Rs. 4315.25 Lakhs. The main contribution to the revenue from operations is Sales.

Expenditure

Total Expenses:

During the period ended March 31, 2026, Total expenses of our Company was Rs. 3,624.22 Lakhs.

Cost of Material consumed

During the period ended March 31, 2026, Cost of Material consumed of our Company was Rs. 4267.97Lakhs. Changes in inventories of traded goods

During the period ended March 31, 2026, the changes in inventories of traded goods of our Company was Rs. - 1168.20 Lakhs.

Employee benefit expenses

During the period ended March 31, 2026, our Employee Benefit Expenses was Rs. 207.62 Lakhs, which included Salary and wages of Rs. 156.71 Lakhs, Contribution to employees PF & ESIC of Rs. 2.41 Lakhs and Directors Remuneration of Rs. 48.50 Lakhs.

Financial Costs

During the period ended March 31, 2026, Financial Costs of our Company was Rs. 137.93 Lakhs.

Depreciation and amortisation expense

During the period ended March 31, 2026, Depreciation and Amortization expenses of our Company was Rs. 1.74 Lakhs.

Other expenses

Our other expenses for the period ended March 31, 2026 amounted to Rs. 177.16 Lakhs.

COMPARISON OF FINANCIAL YEAR ENDED 2026 TO FINANCIAL YEAR ENDED 2025 Components of Balance sheet

Borrowings:

Long-term borrowings have decreased by 5.42% during the year, mainly due to repayment of term loans in accordance with the contractual repayment schedule, indicating adherence to debt servicing commitments.

Short-term borrowings have increased by 1.93% during the year, primarily due to higher utilisation of overdraft facilities to support business operations and growth

Trade receivables:

Trade receivables have decreased by 17.56% during the year, mainly due to reduction in credit period for sales transactions and improved collection mechanisms, indicating better working capital management.

Trade Payables:

Trade payables have decreased by 13.25% during the year, mainly due to accelerated payment cycles and improved vendor settlement practices, reflecting strengthened working capital management.

Loans and Advances:

Short-term loans and advances have increased by 17.78% during the year, mainly due to higher advances provided to employees in the normal course of business, resulting in an increase in outstanding balances at year end.

Income

Total Income:

Our total income was increased by 81.87% from Rs. 2,374.74 Lakhs in FY 2025 to Rs. 4,318.95 Lakhs in FY 2026 due to the factors described below:

Revenue from Operations:

Our Revenue from Operations was increased by 81.72 % in the year FY 2025. The amount increased from Rs. 2,374.71 Lakhs in FY 2025 to Rs. 4,315.25 Lakhs in FY 2026. This was because of This increase is primarily attributable to higher sales volume, improved capacity utilisation, expansion in customer base, and favourable market demand during the year.

Other Income

Other income increased by 12282.86 % from Rs. 0.03 Lakhs in FY 2025 to Rs. 3.70 Lakhs in FY 2026 due to increase is primarily attributable to higher interest income earned on fixed deposits and reversal of GST balances written back during the year.

Expenditure

Cost of Material consumed

The Cost of Material consumed increased by 88.92 % from Rs. 2,259.18 Lakhs in FY 2025 to Rs. 4267.97Lakhs in FY2026. This was due to increase in our consumption of raw materials due to increase is primarily attributable to higher consumption of raw materials on account of increased production volumes, improved capacity utilisation, and overall growth in business operations.

Changes in inventories of traded goods

The Changes in inventories of traded goods negative change has increased by 101.39% from Rs. (580.08) Lakhs in FY 2025 to Rs. (1168.20) Lakhs in FY2026. This was mainly due to primarily attributable to higher consumption/sales of traded goods as compared to purchases, resulting in a reduction in closing inventory levels.

Employee benefit expenses

The Employee Benefit Expenses increased by 100.00% from Rs. 103.81 Lakhs in FY 2025 to Rs. 207.62 Lakhs in FY2026. This increase was mainly due to mainly due to increase in workforce and related costs to support higher operational activity.

Financial Costs

Our Financial Costs increased by 37.76% from Rs. 100.12 Lakhs in FY 2025 to Rs. 137.93 Lakhs in FY 2026. This was on account of Overdraft Facility & Loan From Bank & NBFC. This increase is primarily attributable to higher utilisation of borrowings, particularly working capital facilities, during the year.

Depreciation and amortisation expense

The Depreciation and Amortization expenses was increased by 12.99% from Rs. 1.54 Lakhs in FY 2025 to Rs. 1.74 Lakhs in FY 2026. This was because of addition of new assets during the year

Other expenses

Other expenses increased by 45.27% from Rs. 121.95 Lakhs in FY 2025 to Rs. 177.16 Lakhs in FY 2026. This increase is primarily attributable to higher operational and administrative expenses in line with the expansion of business activities during the year.

Profit before Tax

Our profit before tax increased by 88.67 % from Rs. 368.22 for the FY 2025 to Rs. 694.73 Lakhs for the FY 2026. Tax Expenses

Our total tax expense increased by 69.00% from Rs. 110.00 Lakhs in FY 2025 to Rs. 185.90 Lakhs in the FY 2026.

Profit after Tax

After accounting for taxes at applicable rates, our Profit after Tax increased by 97.05% from Rs. 258.22 Lakhs in FY 2025 to Rs. 508.83 Lakhs in FY 2026. This increase is primarily attributable to significant growth in revenue from operations, improved capacity utilisation, and better cost absorption leading to enhanced profitability.

COMPARISON OF FINANCIAL YEAR ENDED 2025 TO FINANCIAL YEAR ENDED 2024

Components of Balance sheet

Borrowings:

Long term borrowings have decreased by 30.25%, this is due to repayment of loan from related parties, banks and transfer to current maturities.

Short term borrowings have increased by 211.54%, this is due to further business expansion and consolidation of subsidiaries in current financial year.

Trade receivables:

Trade receivables have increased by 436.06%, this is due to increase in sales during the financial end of the year in the respectively financial year and consolidation of subsidiaries in current financial year.

Trade Payables:

Trade payables have increased by 2,991.71 %, this is mainly due to market volatility, consolidation of subsidiaries in current financial year and increase in purchase during the fag end of the year.

Loans and Advances:

There were no Short term Loans and Advances in Fiscal 2024. As on March 31, 2025, Short term Loans and Advances were Rs.47.70 Lakhs, this is because our raw material suppliers are traders and they have imported raw materials from various countries and for that reason we are paying advances for Raw Materials and consolidation of subsidiaries in current financial year.

Income

Total Income:

Our total income was increased by 133.83 % from Rs. 1,015.57 Lakhs in FY 2024 to Rs. 2,374.74 Lakhs in FY 2025 due to the factors described below:

Revenue from Operations:

Our Revenue from Operations was increased by 133.84 % in the year FY 2025. The amount increased from Rs. 1,015.53 Lakhs in FY 2024 to Rs. 2,374.71 Lakhs in FY 2025. This was because of our sale has been increasing from our product demand and market conditions. Further, this has been increased on account of expansion in our customer base and a ramp-up in orders from existing long-term clients.

Other Income

Other income decreased by 17.71 % from Rs. 0.04 Lakhs in FY 2024 to Rs. 0.03 Lakhs in FY 2025 due to decrease income from Interest on fixed deposit and interest income.

Expenditure

Total Expenses:

Our total expenses increased by 107.66 % from Rs. 966.25 Lakhs in Fiscal 2024 to Rs. 2,006.52 Lakhs in Fiscal 2025 due to the factors described below:

Cost of Material consumed

The Cost of Material consumed increased by 156.68 % from Rs. 880.15 Lakhs in FY 2024 to Rs. 2259.18 Lakhs in FY2025. This was due to increase in our consumption of raw materials due to increase in sale.

Changes in inventories of traded goods

The Changes in inventories of traded goods decreased by 652.48 % from Rs. 77.09 Lakhs in FY 2024 to Rs. 580.08 Lakhs in FY2025. This was mainly due to increase in purchase during the fag end of the financial year 2025.

Employee benefit expenses

The Employee Benefit Expenses increased by 118.73 % from Rs. 47.46 Lakhs in FY 2024 to Rs. 103.81 Lakhs in FY2025. This increase was mainly due to hiring new employees being the part of business expansion and increase in salaries, wages, bonus and allowances and staff welfare expense.

Financial Costs

Our Financial Costs increased by 45.67% from Rs. 68.73 Lakhs in FY 2024 to Rs. 100.12 Lakhs in FY 2025. This was on account of increase in long term and short term borrowings during the FY 2024-25 and also due to increase in interest expense.

Depreciation and amortisation expense

The Depreciation and Amortization expenses was decreased by 7.53% from Rs. 1.67 Lakhs in FY 2024 to Rs. 1.54 Lakhs in FY 2025. This was because of we have not purchased any assets during the FY 2024-25.

Other expenses

Other expenses increased by 169.03% from Rs. 45.33 Lakhs in FY 2024 to Rs. 121.95 Lakhs in FY 2025. This was on account of increase in Bank Charges, Advertisement Expenses, Auditor Remuneration, Repair and Maintenance, Legal and Professional Fees, Internet and Website Expenses, Electricity Expenses, Maintenance Charges, Stamp Duty and Registration Charges, Rent, Rates & Taxes, Donation Expenses, Insurance Expenses, Transportation Charges, Packing and Sampling, Office Expenses, Communication Expenses, Travelling and Conveyance and Other Expenses.

Profit before Tax

Our profit before tax increased by 646.56 % from Rs. 49.32 for the FY 2024 to Rs. 368.22 Lakhs for the FY 2025. Tax Expenses

Our total tax expense increased by 640.24% from Rs. 14.86 Lakhs in FY 2024 to Rs. 110.00 Lakhs in the FY 2025. Profit after Tax

After accounting for taxes at applicable rates, our Profit after Tax increased by 649.29% from Rs. 34.46 Lakhs in FY 2024 to Rs. 258.22 Lakhs in FY 2025. This increase is primarily attributable to Increasing Sales and at the same time decrease in cost of material consumed considering the changes in inventory of work-in-progress and finished goods.

Common Note: Vahh Chemicals Limited has acquired its subsidiary company HSHS Nutraceuticals Limited during the FY 2024-25. The amount considered for FY 2023-24 is on standalone basis while the amount considered for FY 2024-25 is on consolidated basis. This is a common reason for significant volatility in the ratios.

CASH FLOWS

The table below is our cash flows for the Year and financial year(s) ended on March 31, 2026, March 31, 2025, and March 31, 2024 :

Particulars	For the financial year ended on
	March 31, 2026	March 31, 2025	March 31, 2024
Net cash (used)/from operating activities	(369.83)	(567.79)	(213.56)
Net cash (used)/from investing activities	(1.32)	(28.92)	(0.40)
Net cash (used)/from financing activities	186.93	782.38	263.91

Cash Flows from Operating Activities

For the Year ended March 31, 2026

Our net cash used in operating activities was Rs. 369.83 Lakhs for the Year ended March 31, 2026. Our net profit before tax of Rs. 694.73 Lakhs for the Year ended March 31, 2026 which was primarily adjusted against Interest paid of Rs. 137.93 Lakhs, Unrealised foreign exchange on translation Rs. 4.82 Lakhs and Depreciation of Rs. 1.74 Lakhs. Operating cash flows before working capital changes was Rs. 837.47 Lakhs for the Year ended March 31, 2026.

The adjustments to operating cash flows before working capital changes included adjustments for (i) Increase in inventory of Rs. 702.72 Lakhs, (ii) Decrease in trade receivables of Rs. 358.47 Lakhs, (iii) Increase in loans & advances of Rs. 8.48 Lakhs, (iv) Increase in other current assets Rs. 288.85 Lakhs (v) Decrease in trade payables of Rs. 226.27 Lakhs (vi) Increase in provision of Rs. 1.00 Lakhs (vii) Decrease in other current liabilities of Rs. 203.24 Lakhs. Tax paid for the the Year ended March 31, 2026 amount to Rs. 137.21 Lakhs.

For the year ended on March 31, 2025

Our net cash used from operating activities was Rs. 567.79 Lakhs for the Fiscal 2025. Our net profit before tax of Rs. 368.22 Lakhs for the Fiscal 2025 which was primarily adjusted against Interest paid of Rs. 100.12 Lakhs, Depreciation of Rs. 1.54 Lakhs, Unrealised foreign exchange on translation Rs. (2.64) Lakhs and Interest received of Rs.0.03 Lakhs. Operating cash flows before working capital changes was Rs. 467.21 Lakhs for the Fiscal 2025.

The adjustments to operating cash flows before working capital changes included adjustments for (i) Increase in inventory of Rs. 988.38 Lakhs, (ii) Increase in trade receivables of Rs. 1,659.59 Lakhs, (iii) Increase in loans & advances of Rs. 47.70 Lakhs, (iv) Increase in other current assets Rs. 225.81 Lakhs (v) Increase in trade payables of Rs. 1,652.32 Lakhs (vi) Increase in provision of Rs. 11.93 Lakhs (vii) Increase in other current liabilities of Rs. 222.91 Lakhs. Tax paid for the Fiscal 2025 amount to Rs. 0.68 Lakhs.

For the year ended on March 31, 2024

Our net cash used in operating activities was Rs. 213.56 Lakhs for the Fiscal 2024. Our net profit before tax of Rs. 49.32 Lakhs for the Fiscal 2024 which was primarily adjusted against Interest paid of Rs. 68.73, Depreciation of Rs. 1.67 Lakhs, and Interest received of Rs.0.04 Lakhs. Operating cash flows before working capital changes was Rs. 119.68 Lakhs for the Fiscal 2024.

The adjustments to operating cash flows before working capital changes included adjustments for (i) Increase in inventory of Rs. 201.00 Lakhs, (ii) Decrease in trade receivables of Rs. 51.91 Lakhs, (iii) Increase in other current assets Rs. 82.57 Lakhs (iv) Decrease in trade payables of Rs. 101.21 Lakhs (v) Increase in provision of Rs. 0.05 Lakhs (vi) Increase in current liabilities of Rs. 6.85 Lakhs. Tax paid for the Fiscal 2024 amount to Rs. 7.27 Lakhs.

Cash Flows from Investing Activities

For the Year ended March 31, 2026

Net cash flow used in investing activities for the year ended March 31, 2026 was Rs. 1.32 Lakhs. This was primarily on account of Investment in deposits of Rs. 1.62 Lakhs and Purchase of fixed assets Rs. 1.45. This was offset by Interest received Rs. 1.75 Lakhs.

For the year ended on March 31, 2025

Net cash flow used in investing activities for the Fiscal 2025 was Rs. 28.92 Lakhs. This was primarily on account of Investment in deposits of Rs. 25.69 Lakhs and Purchase of fixed assets Rs. 3.26 Lakhs. This was partially offset by Interest received Rs. 0.03 Lakhs.

For the year ended on March 31, 2024

Net cash flow used in investing activities for the Fiscal 2024 was Rs. 0.40 Lakhs. This was primarily on account of purchase of Purchase of fixed assets Rs. 0.44 Lakhs. This was partially offset by Interest received of Rs. 0.04 Lakhs.

Cash Flows from Financing Activities

For the Year ended March 31, 2026

Net cash flow generated from financing activities for the year ended March 31, 2026_was Rs. 186.93 Lakhs. This was primarily on account of Proceeds from issue of share of Rs. 319.49 Lakhs and Short Term borrowings Rs. 17.45 Lakhs. This was partially offset by proceeds from long term borrowings of Rs. 12.08Lakhs and Interest paid of Rs. 137.93 Lakhs.

For the year ended March 31, 2025

Net cash flow generated from financing activities for the Fiscal 2025 was Rs. 782.38 Lakhs. This was primarily on account of Proceeds from issue of share of Rs. 322.31 Lakhs, Minority Shareholders of Rs. 44.27 Lakhs and Proceeds from short term borrowings Rs. 612.67 Lakhs. This was partially offset by repayment from long term borrowings of Rs. 96.75 Lakhs and Interest paid of Rs. 100.12 Lakhs.

For the year ended March 31, 2024

Net cash flow generated from financing activities for the Fiscal 2024 was Rs. 263.91 Lakhs. This was primarily on account of Proceeds from long term borrowings of Rs.195.56 Lakhs and short term borrowings Rs. 137.08 Lakhs. This was partially offset by Interest paid of Rs. 68.73 Lakhs.

RELATED PARTY TRANSACTIONS

Related party transactions with certain of our promoter, directors and their entities and relatives primarily relate to remuneration, salary, commission and issue of Equity Shares. For further details of related parties kindly refer chapter titled "Restated Financial Statements" beginning on page 179 of this 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.

QUALIFICATIONS OF THE STATUTORY AUDITORS WHICH HAVE NOT BEEN GIVEN EFFECT TO IN THE RESTATED FINANCIAL STATEMENTS

The Restated Financial Statements do not contain any qualifications which have not been given effect in the restated financial statements.

QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our exposure to the risk of changes in market interest rates relates primarily to our longterm debt obligations with floating interest rates. We manage our interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. For further information, see "Financial Indebtedness" on page 221.

Effect of Inflation

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

Credit Risk

Credit risk is the risk of financial loss to us if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from our receivables from deposits with landlords and other statutory deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. We assess the credit quality of the counterparties, taking into account their financial position, past experience and other factors. We limit exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions and retaining sufficient balances in bank accounts required to meet a months operational costs. We review the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts.

Liquidity risk

Liquidity risk is the risk that we will not be able to meet our financial obligations as they become due. We manage liquidity risk by ensuring, that we will always have sufficient liquidity to meet our liabilities when due.

OTHER MATTERS

Details of default, if any, including therein the amount involved, duration of default and present status, in repayment of statutory dues or repayment of debentures or repayment of deposits or repayment of loans from any bank or financial institution

Except as disclosed in chapter titled "Restated Financial Statements" beginning on page 179 of this Prospectus, there have been no defaults in payment of statutory dues or repayment of debentures 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.

Material Frauds

There are no material frauds, as reported by our statutory auditor, committed against our Company, in the last three Fiscals.

Unusual or infrequent events or transactions

Except as described in this Prospectus, during the period/ years under review there have been no transactions or events, which in our best judgment, would be considered "unusual" or "infrequent".

Significant Economic Changes that Materially Affected or are Likely to Affect Income from Continuing Operations

Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect our income from continuing operations identified above in ‘Managements

Discussion and Analysis of Financial Condition and Results of Operations -Significant factors affecting our financial condition and results of operations and the uncertainties described in ‘Risk Factors on pages 20 and 20 respectively.

Known trends or uncertainties that have had or are expected to have a material adverse impact on 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", beginning on page 20 and 227 of this Prospectus respectively 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 relationship between Costs and Income

Other than as described in the section titled "Risk Factors" beginning on page 20 of this Prospectus, to our knowledge there are no factors, which will affect the future relationship between costs and income or which are expected to have a material adverse impact on our operations and finances.

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

Changes in revenue in the last three financial years are as explained in the part "Financial Year 2025-26 compared with financial year 2024-25 and Financial Year 2024-25 compared with Financial Year 2023-24" above.

Total turnover of industry segments

Our Company is engaged into manufacturing and trading of textile auxiliaries chemicals. Relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page 120 of this Prospectus.

Significant dependence on a single or few Suppliers or Customers

Significant proportion of our total revenue have historically been derived from a limited number of Customers. The % of Contribution of our Customers vis a vis the revenue from operations for financial years ended March 31, 2026, 2025 and 2024 are as follows:

Period	Revenue from Largest Customer (Rs. in Lakhs)	% Contribution of largest customer to revenue from operations	Revenue from Top 5 Customers (Rs. in Lakhs)	% Contribution of top 5 to revenue from operations
Fiscal 2026	725.96	22.51%	1695.92	52.59%
Fiscal 2025	393.93	16.59%	1035.84	43.62%
Fiscal 2024	241.73	23.80%	657.11	64.71%

Significant proportion of our purchases have historically been derived from a limited number of suppliers. The % of Contribution of our suppliers vis a vis the total purchases for the financial year ended March 31, 202 6, 2025 and 2024 are as follows:

	Suppliers
Particul ars	March 31, 2026		March 31, 2025		March 31, 2024
	Purchase contributi on	% of Purcha se	Purchase contribution	% of Purchase	Purchase contribution	% of Purchase
Top 1	1215.63	39.36%	495.82	18.56%	290.11	28.89%
Top 3	2052.62	66.46%	1,017.13	38.07%	705.81	70.30%
Top 5	2463.61	79.76%	1,279.31	47.88%	971.84	96.79%
Top 10	2894.28	93.71%	1,698.37	63.57%	1,002.42	99.84%

Status of any publicly announced new products or business segments

Please refer to the chapter titled "Our Business" beginning on page 133 of this Prospectus for new products or business segments.

The extent to which the business is seasonal

Our business is not seasonal in nature.

Competitive Conditions

Competitive conditions are as described under the Chapters titled "Industry Overview" and "Our Business" beginning on pages 120 and 133 respectively of this Prospectus.