DEAR SHAREHOLDERS,

It is with great pleasure that I present to you our Annual Report. This significant report reflects our commitment to transparency and governance, and our aim to foster a stronger connection with our esteemed shareholders.

As we navigate the complex and dynamic business landscape, it is imperative that we foster a culture of transparent and honest communication. Through this report, we aim to provide you with insights into not only our successes but also the challenges we have encountered and the strategies we are implementing to overcome them.

What began as a humble business in a small workshop has today evolved into one of the leading suppliers of springs to the Indian Railways and other sectors. Our story is one of overcoming challenges, learning and evolving with the changing landscape and I would like to take you through it.

Amid a post-Covid global resurgence, the Russia-Ukraine conflict disrupted trade and raised energy prices. Inflation surged worldwide, prompting central banks to raise rates, dampening global growth for 2023.

Conversely, India thrived with 7.2% GDP growth. Global commodity price spikes led to rising inflation (7.79% peak), surpassing RBI's target. RBI responded firmly, raising the repo rate six times from 4% to 6.5%. With a growing working-age population, a large domestic market, a boost to infrastructure development and the advent of digitisation, India is well-positioned to be the fastest-growing large economy in the world.

The Indian railways, which is our primary customer and a significant contributor to the Indian economy, registered record revenue figures of H 2.40 lakh crore for FY2023, reflecting a jump of nearly 25% over the previous year. The Railways also invested heavily in new infrastructure such as tracks, locomotives and coaches during the year. It also launched a number of new initiatives such as the Vande Bharat Express and the Gatimaan Express. The Ministry of Railways invested H 1 lakh crore in augmenting the capacity of the network. Thus, FY2023 witnessed the highest-ever commissioning of new lines and doubling/multi-tracking of 5,243 km. Additionally, the higher investments in DFC and Mumbai-Ahmedabad bullet trains have ensured rapid progress in wagon procurement. In the Union Budget 2022-23, the railways was allocated H 1.4 trillion. The funds will be spent on building railway tracks, wagons, trains, electrification, signalling and developing facilities at stations while focusing on safety.

With favourable government initiatives, the sector is expected to continue playing a key role in the development of the Indian economy.

During the year, our profitability encountered challenges due to fixed pricing contracts and unexpected price increases in key raw materials like iron and steel. Because these materials are integral to safety components, their procurement is subject to stringent controls, including both raw material and final product inspections. This regulatory framework prevents us from stockpiling raw materials in advance, exposing us to the risk of price escalations after contract agreements are finalised. Unfortunately, this risk became a reality in FY2023.

Our operational revenue reached H10,735.56 lakh, marking a 28.33% growth from FY2022. EBITDA reached H1,330.87 lakh, a 0.75% increase compared to FY2023's H1,320.95. EBITDA margin was 12.40%, down from 15.79% the prior year. Our PAT was H724.05 lakh, down from H751.44 in FY2022.

Despite the muted performance, our resolve remains strong. From manufacturing Leaf Springs and Laminated Bearing Springs to providing Air Springs to the railways today, we have grown with the evolving landscape and we are confident of continuing to make the most of opportunities that come our way. Furthermore, I am delighted to announce that we are diversifying our horizons by supplying products to OEMs for Metros. Our interactions with Siemens and Alstom have been promising, and active discussions are underway to establish partnerships that align with our values.

Siemens and Alstom's ventures into Metro Coaches, securing contracts from Railways, and source approvals hold immense promise for us. We are resolutely pursuing these avenues as they open doors for us to become integral parts of their supply chains.

Our role in the wagon industry, where demand is exceeding the cumulative capacity of manufacturers, is pivotal. With our products finding their place within these wagons, the opportunities are abundant. The insights gleaned from leading wagon manufacturers, provide valuable guidance. Our current market share distribution stands at approximately 20% for wagons, 40% for passenger coaches and 50% for locomotives. The opportunity ahead is substantial. While India produced 600 locomotives annually until recently, the coming year will witness a surge to 1,200 locomotives, followed by an even greater increase to 1,800 locomotives. While these projections are not yet public, they align with government targets, shaping our strategic direction. This magnitude of opportunity extends beyond locomotives alone; similar demand trends are evident in the passenger coaches segment, where volumes are notably higher.

This growth story is propelled by the government's commitment to dedicated freight corridors spanning North to South and East to West. Such infrastructural development will bolster train numbers and hasten transportation speeds. As we navigate these trends, our position remains opportune, promising a future defined by industry leadership and expansion.

In the forging and coil spring sectors, our focus remains steadfast. The growth potential in forging applications for the earth-moving and mining industries is substantial. With a recent investment in a 6-ton hammer, we are aligning ourselves for future success.

Air Springs hold a prominent place in our growth strategy. They promise higher profitability and significant revenue potential. At full capacity, this venture has the potential to generate substantial revenue. Our aim is to achieve optimal capacity utilization by the second quarter of the next financial year. The paradigm shift toward Air Springs is evident as they are increasingly adopted in coaches. We anticipate substantial demand for Air Springs, especially in passenger coaches, where new installations and maintenance needs are both considerable. We are also positioning ourselves to fulfill the Indian Government's ‘Make in India' initiative, aiming for at least 70% indigenisation in our products to secure government contracts. This aligns well with our ethos of promoting homegrown excellence. Our technological edge, combined with our focus on a lean balance sheet and working capital efficiency, will be our driving force.

As I conclude, I would like to express my heartfelt gratitude to each member of our team for your unwavering commitment and dedication. It is your tireless efforts that propel us forward, and your collective skills that drive our success. To our stakeholders, your trust and support inspire us to reach new heights.

It is important to remember that our journey is not just about milestones, but about creating sustainable value. With every innovation, every partnership, and every step forward, we are shaping the future of our Company and the industry at large. I am confident that with our collective dedication and strategic focus, we are poised to create a transformative impact with our products in the industries where we operate.

BEST WISHES,

CHAIRMAN CUM MANAGING DIRECTOR