Yajur Fibres Ltd Management Discussions

OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the period ended December 31st, 2024 and the financial years ended March 31, 2024, 2023 and 2022. One should read the following discussion and analysis of our financial condition and results of operations in conjunction with our section titled "Restated Financial Information" on page 205 of the Draft Red Herring Prospectus. This discussion contains forward-looking statements and reflects our current views with respect to future events and our financial performance and involves numerous risks and uncertainties, including, but not limited to, those described in the section entitled "Risk Factors" on page 28 of this Prospectus. Actual results could differ materially from those contained in any forward-looking statements and for further details regarding forward-looking statements, kindly refer the chapter titled "Forward-Looking Statements" on page 18 of this Prospectus. Unless otherwise stated, the financial information of our Company used in this section has been derivedfrom the Restated Financial Information. Our financial year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular financial year are to the 12-month period ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers to Yajur Fibres Limited, our Company. Unless otherwise indicated, financial information included herein are based on our Restated Financial Statements for the period ended December 31st, 2024 and the financial years ended March 31, 2024, 2023 and 2022 included in this Prospectus beginning on page 205 of this Prospectus.

BUSINESS OVERVIEW

Yajur Fibres Limited operates a bast fibre cottonising unit in India. Situated in Howrah, our Company is a part of the well-recognised conglomerate, The Kankaria Group. The group has rich experience of over 80 years in the Jute Industry. Our group, in the year 2006, acquired the manufacturing operations of cotton and cotton blended yarns into Yajur Bast Fibres Limited (formerly known as M.F.L Corporation Ltd). Subsequently, we have started manufacturing of premium cottonised bast fibres, including flax (linen), jute, and hemp in the year 2017-18. Yajur Bast Fibres Limited was amalgamated into our Company pursuant to the Scheme of Amalgamation under Section 230 to 232 of the Companies Act, 2013, sanctioned by the National Company Law Tribunal, Kolkata bench, vide order dated January 12, 2023 w.e.f. appointed date of April 1, 2021.

Our Company specializes in producing premium cottonised bast fibres, including flax (linen), jute, and hemp. We cottonise long & brittle bast fibres into cotton like short staple fibre such that the cottonised fibres can easily blend upto 55% with cotton and man-made fibres in the existing cotton spinning system or similar. Cottonising jute fibres until few years ago was considered a farfetched idea but with robust R&D and diligent commercial production of the same by Yajur has changed the landscape of sustainable bast Fibres altogether. While there are thousands of cotton & polyester spinning mills globally there are less than 400 spinning mills between linen, jute and hemp. Our cottonised Fibres can spin from 10% to 85% in cotton spinning systems and easily blends with natural and manmade fibres. These blended fibres spin at 70% of average cotton spinning speed, while the linen rich blends give similar look and feel like 100% linen fabrics, however the cost of production is 25 % less than original linen fabrics. It has taken away the easy wrinkle issues associated with 100% linen. Our Company has capacity of over 300 MT per month of Cottonised Fiber, Flax Yarn and Jute yarn. Our Company is known for its extensive experience and innovation in bast fibres, which has made it the preferred choice for many top spinning & weaving mills in India, Turkey, Indonesia, Nepal and Bangladesh. Our products are being processed and manufactured in accordance with best practices available globally. Our system and product are tested constantly at each level to ensure international standards of quality in-house. Our Company places a strong emphasis on research and development (R&D) to continuously test and improve its products. We are dedicated to achieving excellence and best in class practices.

Our Companys cottonised flax fibres are known for their softness, cleanliness, and consistency. The fibres have very high fibre length uniformity and negligible trash, providing the highest yield when blended with other natural or manmade fibres.

Our Companys manufacturing facility is located in the Jute hub of West Bengal, India. The manufacturing unit is spread across an area of approximately 19 Acres with aprox. 500 meters of Ganges River front situated at Jagannathpur. Phuleshwar, Uluberia, District Howrah, Pincode - 711316.

Our manufacturing plants is equipped with best-in-class machinery and has received certifications ISO9001, ISO14001, ISO45001, OEKOTEX 100 and EUROPEAN FLAX certification.

Our Company is contributing its 100% output to the sustainability drives and desires of conscious companies and consumers alike. The whole company is dedicated to 100% sustainable, natural & biodegradable fibres.

BUSINESS OVERVIEW OF OUR SUBSIDIARY

Our Company has acquired 80% stake in Yashoda Linen Yarn Limited on January 30, 2025, which became a subsidiary of our Company. Currently, our subsidiary is engaged in trading of linen fibre and it is proposed to set up a green field 100% wet spun linen yarn and blended yarn manufacturing unit at Ujjain, Madhya Pradesh, as a part of our forward integration. For the setting up of the manufacturing unit, we have acquired 35 acres of designated industrial land at Plot No 126 & 127A, Vikram Udyogpuri, DMIC, Industrial Park, Ujjain, from the MP Industrial Development Corporation in Ujjain, Madhya Pradesh. The estimated project cost is Rs 148.83 crores which is planned to be operational by December 2026. We propose to utilise a sum of Rs 4,800.00 lakhs towards setting up of manufacturing unit in our subsidiary, which is planned to be operational by January 2027. We already have the sanction letter dated May 26, 2025 from Canara Bank for term loan of Rs. 99.00 crores.

For details of our business, please refer "Our Business" on page 146 of the DRHP.

Proposed expansion plan

We propose to utilise a sum of Rs 1,437.42 lakhs towards setting up of dyeing and bleaching unit and installation of additional production capacity of 4 tons per day at our existing manufacturing unit at Jagannathpur, Phuleshwar, Uluberia, District Howrah.

Further, we are also setting up manufacturing unit in our subsidiary as a greenfield unit in 35 acres of industrial land in Vikram Udyogpuri, DMIC (Industrial Park, Ujjain, Madhya Pradesh) for 100% wet spun linen yarn and blended yarn. Our subsidiary will be in the business of producing 100% Wet Spun Flax yarn and Flax blended yarn. Buyers of both wet spun long flax fibre yarn and blended yarns are same / similar to the existing buyers of Dry Spun flax yarn.

For details of our object, please refer "Objects of the Issue" on page 103 of the DRHP.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST AUDITED FINANCIALS

After the date of last Audited Accounts i.e. for the period ended December 31, 2024, the Directors of our Company confirm that, there have not been any significant material developments except for Our Company has acquired 80% stake in Yashoda Linen Yarn Limited on January 30, 2025, which became a subsidiary of our Company.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factor" beginning on page 28 of this DRHP. Our results of operations and financial conditions are affected by numerous factors including the following:

1. We derive a substantial portion of our revenue from the sale of Cottonised Flax and loss of sales due to reduction in demand for such products would have a material adverse effect on our business, financial condition, results of operations and cash flows.

2. Our expansion into new product categories and an increase in the number of products offered by us may expose us to new challenges and more risks.

3. We depend on a few customers of our products, for a significant portion of our revenue, and any decrease in revenues or sales from any one of our key customers may adversely affect our business and results of operations.

4. A significant portion of our revenue from operations from repeat orders of our customers. Any loss of, or a significant reduction in the repeat orders received by us could adversely affect our business, results of operations, financial condition and cash flows.

5. We highly depend on our raw materials and a few key suppliers who help us procure the same. In the event we are unable to procure adequate amounts of raw materials, at competitive prices our business, results of operations and financial condition may be adversely affected.

6. The commercial success of our products depends to a large extent on the success of the products of our end use customers. If the demand for the end use products in which our products are used as a raw materials declines, it could have a material adverse effect on our business, financial condition and results of operations.

7. Our business is subject to seasonal variations that could result in fluctuations in our results of operations.

8. Our Company had negative cash flows in the past years, details of which are given below. Sustained negative cash flow could impact our growth and business.

9. Yashoda Linen Yarn Limited, our subsidiary company, had negative cash flows in the past years, details of which are given below. Sustained negative cash flow could impact our growth and business.

10. Our promoter companies had negative cash flows and and losses in the past years, details of which are given below. Sustained negative cash flow could impact our growth and business.

DISCUSSION ON RESULT OF OPERATION

Our Significant Accounting Policies

For Significant accounting policies please refer Significant Accounting Policies, under Chapter titled "Restated Financial

Statements" beginning on page 205 of the Draft Red Herring Prospectus.

Overview of Revenue & Expenditure

Our revenue and expenses are reported in the following manner:

Revenues

Revenue of operations

Our Companys revenue is primarily generated from the sale of Flax Yarn, Jute Yarn, Cottonised Flax Fibre, Cottonised

Jute Fibre, Cottonised Hemp Fibre, Hessian Cloth and others.

Other Income

Our other income mainly consists of interest income, dividend, foreign exchange fluctuation and other income.

The below table show our revenue for the period ended December 31, 2024 and fiscal 2024, 2023 and 2022:

(Rs In Lakhs)

	Period ended	For the period ended
Particulars	December 31, 2024	March 31, 2024	March 31, 2023	March 31, 2022
Income
Revenue from Operations	9,501.57	8,431.95	6,167.55	4,195.99
% of total revenue	98.98%	99.38%	99.74%	99.96%
Other income	97.51	52.63	16.00	1.80
% of total revenue	1.02%	0.62%	0.26%	0.04%
Total Revenue	9,599.09	8,484.58	6,183.55	4,197.79

Expenditure

Our total expenditure primarily consists of cost of materials consumed, changes in inventories of finished goods, work- in-progress and stock-in-trade, employee benefits expenses, finance cost, depreciation and amortization and other expenses.

Cost of materials consumed

This represents cost of materials consumed comprises of Jute, Flax and Cotton.

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

This relates to the changes in inventories of finished goods and work-in-progress.

Employment Benefit Expenses

It includes salaries, wages, bonus and allowances, directors remuneration, contributions to welfare funds, provision for gratuity and other expenses.

Other Expenses

It includes Payment to Auditors, Stores & spares consumed, Power & Fuel, Repairs & Maintenance, Insurance, Rates & Taxes, Shipping, Freight & Transportation Expenses, Processing Charges, Brokerage & commission, Bank Charges, Service Charges, Tour & Travelling Expenses, Consultancy & Professional Charges, Factory Maintenance, Fair & Exhibition, Legal Charges, Postage & Telegram, Dematerialisation Charges, Loss on Flood, Donation, Inspection Charges, General Expenses.

Finance Costs

Our finance costs mainly include interest expenses.

Depreciation

Depreciation includes depreciation and amortization.

RESULTS OF OUR OPERATION

(Rs In Lakhs)

Particulars	As at 31st December 2024	As at 31st March 2024	As at 31st March 2023	As at 31st March 2022
Incomes:
Revenue from Operations	9,501.57	8,431.95	6,167.55	4,195.99
% of total revenue	98.98%	99.38%	99.74%	99.96%
% Increase/(Decrease)	-	36.71%	46.99%	-
Other income	97.51	52.63	16.00	1.80
% of total revenue	1.02%	0.62%	0.26%	0.04%
% Increase/(Decrease)	-	229.03%	788.08%	-
Total Revenue	9,599.09	8,484.58	6,183.55	4,197.79
% Increase/(Decrease)	-	37.21%	47.30%	-
Expenses:
Cost of raw material consumed	8,779.90	5,026.12	4,850.89	2,774.58
% of total revenue	91.47%	59.24%	78.45%	66.10%
% Increase/(Decrease)	-	3.61%	74.83%	-
Changes in Inventories	(2,335.31)	714.89	(1,258.76)	(90.81)
% of total revenue	(24.33%)	8.43%	(20.36%)	(2.16%)
% Increase/(Decrease)	-	(156.79%)	1286.14%	-
Employee Benefit expenses	543.52	762.03	779.03	562.86
% of total revenue	5.66%	8.98%	12.60%	13.41%
% Increase/(Decrease)	-	(2.18%)	38.41%	-
Other Expenses	910.78	1,127.80	1,128.70	510.36
% of total revenue	9.49%	13.29%	18.25%	12.16%
% Increase/(Decrease)	-	(0.08%)	121.16%	-
Total Expense	7,898.89	7,630.84	5,499.87	3,756.99
% of total revenue	82.29%	89.94%	88.94%	89.50%
% Increase/(Decrease)	-	38.75%	46.39%	-
Particulars	As at 31st December 2024	As at 31st March 2024	As at 31st March 2023	As at 31st March 2022
Profit before Interest, Depreciation and Tax	1,700.19	853.74	683.68	440.80
% of total revenue	17.71%	10.06%	11.06%	10.50%
Less: Other Income	97.51	52.63	16.00	1.80
Operating Profit before Interest, Depreciation, Tax and other income	1,602.68	801.11	667.68	439.00
% of total revenue	16.70%	9.44%	10.80%	10.46%
Depreciation and amortization Expenses	108.18	134.84	105.39	89.54
% of total revenue	1.13%	1.59%	1.70%	2.13%
% Increase/(Decrease)	-	27.94%	17.70%	-
Profit before Interest and Tax	1,592.01	718.90	578.29	351.26
% of total revenue	16.59%	8.47%	9.35%	8.37%
Finance Cost	177.69	271.52	198.31	91.15
% of total revenue	1.85%	3.20%	3.21%	2.17%
% Increase/(Decrease)	-	36.92%	117.56%	-
Profit before Tax and Extraordinary Expenses	1,414.32	447.38	379.98	260.11
% of total revenue	14.73%	5.27%	6.14%	6.20%
Extraordinary Expenses	-	-	-	-
% of total revenue	-	-	-	-
% Increase/(Decrease)	-	-	-	-
Restated Profit/(Loss) before tax	1,414.32	447.38	379.98	260.11
% of total revenue	14.73%	5.27%	6.14%	6.20%
% Increase/(Decrease)	-	17.74%	46.08%	-
Tax expenses/(income)
Current Tax	292.74	-	-	-
Deferred Tax	36.90	21.87	24.71	242.93
Earlier Year Taxes	(0.83)	(1.28)	0.15	-
Total tax expenses	328.81	20.59	24.86	242.93
% of total revenue	3.43%	0.24%	0.40%	5.79%
Restated profit/(loss) after Tax	1,085.51	426.79	355.12	17.18
% of total revenue	11.31%	5.03%	5.74%	0.41%
% Increase/(Decrease)	-	20.18%	1966.83%	-

Reason for increase in revenue during period ended December 31, 2024 as compared to FY 2024:

Total revenue has increased by Rs 1,114.51 Lakhs and 13.14%, from Rs 8,484.58 Lakhs in the fiscal year ended March 31, 2024 to Rs 9,599.09 Lakhs during the period ended on 31^st December 2024. The increase in revenue was on account of increase in production and sale of finish products. The growth in the turnover is the result of introduction of new product variants, higher realisation on sale of flax and jute products and better capacity utilization.

Reason for increase in PAT for during the period ended December 31, 2024 as compared to FY2024.

Net Profit has increased by Rs 658.72 Lakhs and 154.34% from Rs 426.79 Lakhs in the fiscal year ended March 31, 2024 to Rs 1,085.51 Lakhs during the period ended 31^st December 2024. Net profit was increased due to introduction of new product variants, increase in price realization of products, higher capacity utilization resulting in economic of scale during the period ended 31^st December 2024 as against in fiscal 2024. This has resulted in increased profitability.

Our income is dependent upon few major customers, details of the same is as following:

Particulars	Dec 31,2024		2024		2023		2022
	(Rs in lakhs)	As a% of total Revenue	(Rs in lakhs)	As a% of total Revenue	(Rs in lakhs)	As a% of total Revenue	(Rs in lakhs)	As a% of total Revenue
Top Ten customers	7,788.10	81.97	5,193.6	61.58	4,364.84	70.79	2,788.42	66.45
Top five customers	6,416.47	67.53	3,517.9	41.71	3,448.17	55.91	2,046.01	48.76

Capacity utilised

Period	Installed Capacity (in Units PA)	Utilized Capacity (in Units PA)	Percentage of utilization (%)
2021-22	2400 MT	1572 MT	65.50
2022-23	3600 MT	2889 MT	80.25
2023-24	3600 MT	1914 MT	53.17
December 31, 2024	3150 MT	2168 MT	68.82

Our company has faced shortage of raw material due of poor crop in FY2024 which caused significant dip in the capacity utilisation in FY2024. The same has been normalised during FY2025.

A break up of the revenue earned from sale of Cottonised flax, Cottonised jute, Cottonised hemp, Flax Yarn, Jute Yarn, Hessian Cloth and others during the preceding three years and the nine months period ended December 31st, 2024 has been provided below:

Product Name	Dec 31,2024		2024		2023		2022
	Rs. In Lakhs	As a% of total Revenue	Rs. In Lakhs	As a% of total Revenue	Rs. In Lakhs	As a% of total Revenue	Rs. In Lakhs	As a% of total Revenue
Cottonised Flax	8,463.16	89.07	7,226.67	85.71	4,836.54	78.42	2,665.67	63.53
Cottonised Jute	372.68	3.92	64.13	0.76	98.80	1.60	65.96	1.57
Cottonised Hemp	0.94	0.01	-	-	0.22	-	34.61	0.83
Flax Yarn	656.95	6.92	1,092.16	12.95	731.44	11.86	1,385.27	33.01
Jute Yarn	7.84	0.08	8.17	0.10	56.13	0.91	22.36	0.53
Hessian Cloth	-	-	34.95	0.41	354.57	5.75	-	-
Others	-	-	5.87	0.07	89.85	1.46	22.12	0.53
Total	9,501.57	100.00	8,431.95	100.00	6,167.55	100.00	4,195.99	100.00

REVIEW OF OPERATIONS FOR THE PERIOD ENDED DECEMBER 31, 2024 Income from Operations

Our revenue from operations for the period ended December 31, 2024 was Rs 9,501.57 Lakhs which was about 98.98% of the total revenue and which comprises of revenue from sale of Cottonised flax, Cottonised jute, Cottonised hemp, Flax Yarn, Jute Yarn, Hessian Cloth and others. The overall turnover has been increased because of introduction of new product variants, higher realisation on sale of flax and jute products and better capacity utilisation.

Other Income

Our other income for the period ended December 31, 2024 was Rs 97.51 Lakhs which was about 1.02% of the total revenue and which includes dividend income, foreign exchange fluctuation and interest income.

Expenditure

Total Expenditure for the fiscal year ended December 31, 2024 was Rs 7,898.89 Lakhs which was about 82.29% of the total revenue.

Cost of raw materials consumed

The Cost of raw materials consumed for the period ended December 31, 2024 were Rs 8,779.90 Lakhs which was about 91.47% of the total revenue.

Changes in Inventories of Finished Goods and Work-In-Progress

The changes in inventories of Finished Goods and Work-In-Progress for the period ended December 31, 2024 were Rs (2,335.31) Lakhs which was about (24.33%) of the total revenue.

Employee Benefits expenses

The employee benefits expenses for the period ended December 31, 2024 were Rs 543.52 Lakhs which was about 5.66% of the total revenue and which includes salaries, wages, bonus and allowances, contributions to welfare funds, provision for gratuity and other expenses.

Other Expenses

Other Expenses for the period ended December 31, 2024 were Rs 910.78 Lakhs which was about 9.49% of the total revenue and which includes Payment to Auditors, Stores & spares consumed, Power & Fuel, Repairs & Maintenance, Insurance, Rates & Taxes, Shipping, Freight & Transportation Expenses, Processing Charges, Brokerage & commission, Bank Charges, Service Charges, Tour & Travelling Expenses, Consultancy & Professional Charges, Factory Maintenance, Fair & Exhibition, Legal Charges, Postage & Telegram, Donation, Inspection Charges, General Expenses.

EBIDTA

Our EBITDA for the period ended December 31, 2024 were Rs 1,602.68 Lakhs (excluding other income). The growth in EBIDTA is the result of introduction of new product variants, higher realisation on sale of flax and jute products and better capacity utilisation during the period ended December 31, 2024.

Finance Costs

Finance costs for the period ended December 31, 2024 were Rs 177.69 Lakhs which was about 1.85% of the total revenue and which consists of interest and other finance charges.

Depreciation

Depreciation for the period ended December 31, 2024 were Rs 108.18 Lakhs which was about 1.13% of the total revenue and which consists of depreciation and amortization expenses.

Profit /(Loss) after Tax

PAT for the fiscal year ended December 31, 2024 was Rs 1,085.51 Lakhs which is about 11.31% of the revenue. The growth in PAT is the result of better capacity utilization, introduction of new product variants and higher realisation on sale products during the period ended December 31, 2024.

REVIEW OF OPERATIONS FOR THE PERIOD ENDED MARCH 31, 2024

Income from Operations

Our revenue from operations for the fiscal year ended March 31, 2024 was Rs 8,431.95 Lakhs which was about 99.38% of the total revenue and which comprises of revenue from sale of Cottonised flax, Cottonised jute, Cottonised hemp, Flax Yarn, Jute Yarn, Hessian Cloth and others. The growth in the turnover is the result of higher realisation on sale of flax and jute products. However, our company has faced shortage of raw material due of poor crop in FY2024 which caused significant dip in the capacity utilisation in FY2024. The same has been normalised during FY2025.

Other Income

Our other income for the fiscal year ended March 31, 2024 was Rs 52.63 Lakhs which was about 0.62% of the total revenue and which includes dividend income, foreign exchange fluctuation and interest income.

Expenditure

Total Expenditure for the fiscal year ended March 31, 2024 was Rs 7,630.84 Lakhs which was about 89.94% of the total revenue.

Cost of raw materials consumed

The Cost of raw materials consumed for the period ended March 31, 2024 were Rs 5,026.12 Lakhs which was about 59.24% of the total revenue.

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

The changes in inventories of finished goods and work-in-progress for the period ended March 31, 2024 were Rs 714.89 Lakhs.

Employee Benefits expenses

The employee benefits expenses for the fiscal year ended March 31, 2024 were Rs 762.03 Lakhs which was about 8.98% of the total revenue and which includes salaries, wages, bonus and allowances, directors remuneration, contributions to welfare funds, provision for gratuity and other expenses.

Other Expenses

Other Expenses for the fiscal year ended March 31, 2024 were Rs 1,127.80 Lakhs which was about 13.29% of the total revenue and which includes Payment to Auditors, Stores & spares consumed, Power & Fuel, Repairs & Maintenance, Insurance, Rates & Taxes, Shipping, Freight & Transportation Expenses, Processing Charges, Brokerage & commission, Bank Charges, Service Charges, Tour & Travelling Expenses, Consultancy & Professional Charges, Factory Maintenance, Fair & Exhibition, Legal Charges, Postage & Telegram, Donation, Inspection Charges, General Expenses.

EBIDTA

Our EBITDA for the fiscal year ended March 31, 2024 were Rs 801.11 Lakhs (excluding other income) which was about 9.44% of the total revenue.

Finance Costs

Finance costs for the period ended March 31, 2024 were Rs 271.52 Lakhs which was about 3.20% of the total revenue and which consists of interest and other finance charges.

Depreciation

Depreciation for the fiscal year ended March 31, 2024 were Rs 134.84 Lakhs which was about 1.59% of the total revenue and which consists of depreciation and amortization expenses.

Profit /(Loss) after Tax

PAT for the fiscal year ended March 31, 2024 was Rs 426.79 Lakhs which was about 5.03% of the total revenue.

FISCAL YEAR ENDED MARCH 31, 2024 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2023

Income

Total revenue has increased by Rs 2,301.03 Lakhs and 37.21%, from Rs 6,183.55 Lakhs in the fiscal year ended March 31, 2023 to Rs 8,484.58 Lakhs in the fiscal year ended March 31, 2024. The increase in revenue was on account of much higher realisation on sale of flax and jute products due to substantial price increase. Total revenue comprises of revenue from sale of Cottonised flax, Cottonised jute, Cottonised hemp, Flax Yarn, Jute Yarn, Hessian Cloth and others.

Expenditure

Total Expenditure increased by Rs 2,130.97 Lakhs and 38.75%, from Rs 5,499.87 Lakhs in the fiscal year ended March 31, 2023 to Rs 7,630.84 Lakhs in the fiscal year ended March 31, 2024. Overall expenditure was increased mainly due to increase in cost of raw material.

Cost of raw materials consumed

Cost of raw materials consumed increased by Rs 175.23 Lakhs and 3.61%, from Rs 4,850.89 Lakhs in the fiscal year ended March 31, 2023 to Rs 5,026.12 Lakhs in the fiscal year ended March 31, 2024. Cost of materials consumed is increased on account of increase in prices of raw materials due to shortage in supply in the market.

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

Changes in inventories of finished goods and work-in-progress was Rs 714.89 Lakhs in the fiscal year ended March 31, 2024 as against Rs (1,258.76) Lakhs the fiscal year ended March 31, 2023. The increase in changes in Inventories of finished goods and work-in-progress was because of higher sale of finished products from the inventory and lower inventory level.

Employee Benefit Expenses

Employee Benefit Expenses in terms of value and percentage decreased by Rs 17.00 Lakhs and 2.18% from Rs 779.03 Lakhs in the fiscal year ended March 31, 2023 to Rs 762.03 Lakhs in the fiscal year ended March 31, 2024. The reduction in overall employee cost was mainly driven by a decrease in labour expenses, resulting from the introduction of new technologies that lowered the need for labour and led to greater efficiencies in processes.

Other Expenses

Other Expenses in terms of value and percentage decreased by Rs 0.90 Lakhs and 0.08% from Rs 1,128.70 Lakhs in the fiscal year ended March 31, 2023 to Rs 1,127.80 Lakhs in the fiscal year ended March 31, 2024. The decrease was mainly on account of net off difference between decrease in Loss on Flood, Processing charges, Factory Maintenance and General Expenses and increase in Shipping, Freight & Transportation Expenses, Rates and Taxes, Fair and Exhibition and Insurance cost.

EBIDTA

Profit before Interest, Depreciation and Tax has increased by Rs 133.43 Lakhs and 19.98% from Rs 667.68 Lakhs in the fiscal year ended March 31, 2023 to Rs 801.11 Lakhs in the fiscal year ended March 31, 2024. Profit before Interest, Depreciation and Tax was increased due to higher realisation on sale of flax and jute products.

Finance Costs

Finance Costs in terms of value and percentage increased by Rs 73.21 Lakhs and 36.92% from Rs 198.31 Lakhs in the fiscal year ended March 31, 2023 to Rs 271.52 Lakhs in the fiscal year ended March 31, 2024. Finance costs saw an increase primarily as a result of fresh borrowings during the fiscal year ended March 31, 2024.

Depreciation & Amortization Expenses

Depreciation in terms of value increased by Rs 29.45 Lakhs and 27.94% from Rs 105.39 Lakhs in the fiscal year ended March 31, 2023 to Rs 134.84 Lakhs in the fiscal year ended March 31, 2024. The increase in depreciation is primarily attributable to the expansion in assets and is a general trend for growing businesses.

Net Profit after Tax

Net Profit has increased by Rs 71.67 Lakhs and 20.18% from Rs 355.12 Lakhs in the fiscal year ended March 31, 2023 to Rs 426.79 Lakhs in the fiscal year ended March 31, 2024. Net profit was increased due to increase in price realization of flax and jute products and sale of products from previous manufactured inventory produced at a lower cost resulting in increased profitability.

FISCAL YEAR ENDED MARCH 31, 2023 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2022 Income

Total revenue has increased by Rs 1,985.76 Lakhs and 47.30%, from Rs 4,197.79 Lakhs in the fiscal year ended March 31, 2022 to Rs 6,183.55 Lakhs in the fiscal year ended March 31, 2023. The increase in revenue was on account of increase in production and sale of finish product. Total revenue comprises of revenue from sale of Cottonised flax, Cottonised jute, Cottonised hemp, Flax Yarn, Jute Yarn, Hessian Cloth and others.

Expenditure

Total Expenditure increased by Rs 1,742.88 Lakhs and 46.39%, from Rs 3,756.99 Lakhs in the fiscal year ended March 31, 2022 to Rs 5,499.87 Lakhs in the fiscal year ended March 31, 2023.

Cost of materials consumed

Cost of materials consumed increased by Rs 2,076.31 Lakhs and 74.83%, from Rs 2,774.58 in the fiscal year ended March 31, 2022 to Rs 4,850.89 Lakhs in the fiscal year ended March 31, 2023. Cost of materials consumed on account of increase in consumption of raw materials in production due to introduction of product variants.

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

Changes in inventories of finished goods and work-in-progress were (90.81) in the fiscal year ended March 31, 2022 and Rs (1,258.76) in the fiscal year ended March 31, 2023. The changes in inventories of finished goods and work-in-progress were driven by an increase in the inventory of finished goods.

Employee Benefit Expenses

Employee Benefit Expenses in terms of value and percentage increased by Rs 216.17 Lakhs from 562.86 in the fiscal year ended March 31, 2022 to Rs 779.03 Lakhs in the fiscal year ended March 31, 2023. Overall employee cost was increased due to increase in employment of new personnel.

Other Expenses

Other Expenses in terms of value and percentage increased by Rs 618.34 Lakhs and 121.16% from Rs 510.36 Lakhs in the fiscal year ended March 31, 2022 to Rs 1,128.70 Lakhs in the fiscal year ended March 31, 2023. The increase was majorly on account of shipping, freight & Transportation Expenses, Processing Charges, amalgamation expenses and due to loss by natural disaster (flood).

EBIDTA

Profit before Interest, Depreciation and Tax has increased by Rs 228.68 Lakhs and 52.09% from Rs 439.00 Lakhs in the fiscal year ended March 31, 2022 to Rs 667.68 Lakhs in the fiscal year ended March 31, 2023. Profit before Interest, Depreciation and Tax was increased due to introduction of new product variants, higher realisation on sale of flax and jute products and better capacity utilisation.

Finance Costs

Finance Costs in terms of value and percentage increased by Rs 107.16 Lakhs and 117.56% from Rs 91.15 Lakhs in the fiscal year ended March 31, 2022 to Rs 198.31 Lakhs in the fiscal year ended March 31, 2023. Finance Costs was decreased due to increase in borrowings during the fiscal year March 31, 2023.

Depreciation & Amortization Expenses

Depreciation in terms of value increased by Rs 15.85 Lakhs from 89.54 Lakhs in the fiscal year ended March 31, 2022 to Rs 105.39 Lakhs in the fiscal year ended March 31, 2023. The increase in depreciation is attributable to the amalgamation process, leading to the consolidation of assets.

Net Profit after Tax

Net Profit has increased by Rs 337.94 Lakhs and 1966.83% from Rs 17.18 Lakhs in the fiscal year ended March 31, 2022 to Rs 355.12 Lakhs in the fiscal year ended March 31, 2023. The Net Profit was increased due to introduction of new product variants, higher realisation on sale of flax and jute products and effective capacity utilization.

Cash Flows

(Amount Rs in lacs)

Particulars	For the Period ended December 31st, 2024	For the year ended March 31,
		2024	2023	2022
Net Cash from Operating Activities	(789.63)	1073.52	(292.88)	(1022.10)
Net Cash from Investing Activities	(200.64)	90.38	(1,269.96)	(2,576.29)
Net Cash used in Financing Activities	992.09	(1132.59)	1,607.29	3,595.45

Cash Flows from Operating Activities

Net cash from operating activities for Period ended December 31, 2024 was at Rs (789.63) lacs as compared to the EBIDTA at Rs 1,602.67 lacs Net cash from operating activities for fiscal 2024 was at Rs 1,073.52 lacs as compared to the EBIDTA at Rs 801.11 lacs, while for fiscal 2023, net cash from operating activities was at Rs (292.88) lacs as compared to the EBIDTA at Rs 667.68 lacs. For fiscal 2022, the net cash from operating activities was Rs (1,022.10) lacs compared to EBIDTA of Rs 439.00 lacs.

Cash Flows from Investment Activities

Net cash from Investing activities for Period ended December 31, 2024 was at Rs (200.64) lacs. Net cash from investing activities for the fiscal 2024 was Rs 90.38 lacs. This negative cash outflow is attributed to increase in investment in plant and equipments. Net cash from investing activities was at Rs (1,296.96) lacs and Rs (2,596.29) lacs and in the fiscal 2023 and 2022 attributed to increase in investment in plant and equipments.

Cash Flows from Financing Activities

Net cash from Financing activities for Period ended December 31, 2024 was at Rs 992.09 lacs Net cash from financing activities for fiscal 2024 was at Rs (1132.59) lacs. The negative cash flow was on account of higher interest outgo and repayment of loan. In fiscal 2023 was Rs 1,607.29 lacs due increased loans and borrowings. For fiscal 2022, the net cash from financing activities was Rs 3,595.45 lacs on account of loans and borrowings and proceeds from issue of equity shares.

OTHER MATTERS

1. Unusual or infrequent events or transactions

Except as described in this Draft Red Herring Prospectus, during the periods under review there have been no transactions or events, which in our best judgment, would be considered unusual or infrequent.

2. Significant economic changes that materially affected or are likely to affect income from continuing Operations

Other than as described in the Section titled "Restated Financial Information" and chapter titled "Managements Discussion and Analysis of Financial Conditions and Results of Operations", beginning on Page 205 and 255 respectively of this Draft Red Herring Prospectus, to our knowledge there are no significant economic changes that materially affected or are likely to affect income from continuing Operations.

3. 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 chapter titled "Risk Factors" and "Managements Discussion and Analysis of Financial Conditions and Result of Operations", beginning on Page 28 and 255 respectively of this Draft Red Herring Prospectus, best 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.

4. Future relationship between Costs and Income

Other than as described in the chapter titled "Risk Factors" beginning on Page 28 of this Draft Red Herring Prospectus, best 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.

5. Competition Conditions

Our Industry is fragmented consisting of large established players and small niche players. We compete with organized as well as unorganized sector on the basis of availability of product, price and product range. Further, there are no entry barriers in this industry. Industry is very competitive and we expect competition to continue and likely to increase in the future. We operate in a competitive environment. See "Risk Factors", "Industry Overview", "Our Business" and on pages 28, 137 and 146, respectively, for further details on competitive conditions that we face across our various businesses.