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Active Infrastructure Ltd Management Discussions

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Active Infrastructure Ltd Share Price Management Discussions

The following discussion of our financial condition and results of operations should be read in conjunction with Our Restated Consolidated Financial Statements for the three month period ended June 30, 2024 and for the financial year ended March 31, 2024, March 31, 2023 and March 31, 2022 prepared in accordance with the Companies Act, 2013 (to the extent notified) and /or Provisions of Companies Act, 1956 w.r.t. the sections which have not yet been replaced by the Companies Act, 2013 through any official notification and Indian GAAP and restated in accordance with the SEBI ICDR Regulations, including the schedules, annexure and notes thereto and the reports thereon, include in "Financial Information" beginning on page no. 185 of this Draft Red Herring Prospectus.

There are significant differences between Indian GAAP and IND (AS). The Company has not attempted to quantify their impact in the restated consolidated financial statements position included herein and urges you to consult your own advisors regarding such differences and their impact on the Companys financial position. Accordingly, to what extent, the financial statements included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with Indian accounting practices / Indian

GAAP. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited.

This Draft Red Herring prospectus 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 "Risk Factors" and "Forward-Looking statement" beginning on page no. 29 and page no. 20, of this Draft Red Herring Prospectus.

COMPANY OVERVIEW

Our Company was incorporated as a Private Limited Company under the name of "Active Infrastructures Private Limited" as per the provisions of Part II of the Companies Act, 1956, and a certificate of incorporation was issued by Registrar of Companies, Mumbai, Maharashtra on September 26, 2007. Subsequently, our Company has been converted into a public limited company and the name of our Company has been changed to "Active Infrastructures Limited" pursuant to a special resolution passed at the Extra-Ordinary General Meeting of our Company held on June 12, 2024, and a fresh certificate of incorporation dated August 09, 2024 has been issued by the Registrar of Companies, Mumbai. The Corporate Identity Number of our Company is U45200MH2007PLC174506.For further details on incorporation and registered office of our Company, see

" History and Certain Corporate Matters" beginning on page 141 of this Draft Red Herring Prospectus.

BUSINESS OVERVIEW

Our Company operates primarily in two key segments: Infrastructure and Construction of Commercial Projects. Within the Infrastructure segment, our focus encompasses the construction of roads (including bridges), flyovers, water supply systems, irrigation projects, and other related infrastructure activities and in our Construction of commercial projects segment, we build various spaces such as, office complexes, retail centers, exhibition halls, retail outlets, private educational institutions, and other facilities.

We operate on a pan-India scale, with our completed, ongoing and upcoming projects being in the state of Maharashtra, Madhya Pradesh, Uttar Pradesh and Tripura. We strive for achieving customer satisfaction in all our projects, without compromising on quality and safety. Our manpower, resources, machinery and equipment, together with our engineering capabilities, strategically positions us to meet the market demands. We are committed to achieving industry standards in quality, environmental sustainability, and occupational health & safety requirements across all our projects. This helps in ensuring that our Company upholds innovation, quality, and client-centered values.

For further details please refer chapter "Our Business" beginning on page 114 of this Draft Red Herring Prospectus.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST AUDITED PERIOD

In the opinion of the Board of Directors of our Company, since the date of the last audited period i.e., June 30, 2024 as disclosed in this Draft Red Herring Prospectus, there have not arisen any circumstances 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.

1. Company has been converted into a public limited company and the name of our Company has been changed to "Active Infrastructures Limited" pursuant to a special resolution passed at the Extra-Ordinary General Meeting of our Company held on June 12, 2024, and a fresh certificate of incorporation dated August 09, 2024 has been issued by the Registrar of Companies, Mumbai.

2. The Board of our Company has approved to raise funds through Initial Public Offering in the board meeting held on September 2, 2024.

3. The members of our Company approved proposal of Board of Directors to raise funds through initial public offering in the EOGM held on September 2, 2024.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risk and uncertainties, including those discussed in the section titled "Risk Factor" beginning on page no. 29 of this Draft Red Herring Prospectus.

Our results of operations and financial conditions are affected by numerous factors including the following:

Uncertainty in relation to continuing effect of any pandemic on our business and operations;

Our dependence on our key personnel, including our Directors and senior management;

Our ability to successfully implement our business strategy and plans;

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

Changes in political and social conditions in India, the monetary and interest rate policies of India and other countries;

Changes in government policies and regulatory actions that apply to or affect our business;

Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

The performance of the financial markets in India and globally;

The occurrence of natural disasters or calamities;

Other factors beyond our control;

Our ability to manage risks that arise from these factors.

DISCUSSION ON RESULT OF OPERATION

The following discussion on results of operations should be read in conjunction with the Restated Consolidated Financial Statements of our Company for period ended June 30, 2024 and financial years ended March 31, 2024, 2023 and 2022.

All figures are in lakhs, except stated otherwise

OVERVIEW OF REVENUE & EXPENDITURE

Revenue.

Our Companys Revenue

(Figures in (Rs.) lakhs)

Particulars As at March 31
2024 2023 2022
Income
Total Revenue from Operations 9,718.33 8,939.83 110.08
Increase/(Decrease) in % 8.71% 8,021.21% -
Other Income 24.72 18.89 0.46
Increase (Decrease) in % 30.86% 2,096.51% -
Total Revenue 9,743.06 8,958.72 110.55

The following is the Total Revenue from Operations mix in terms of value of Total Revenue from Operations of our Company from Business:

(Figures in (Rs.) lakhs)

As at June 30, 2024 As at March 31
Particulars 2024 2023 2022
Revenue from Operation
Sale of Office Block/Commercial Space 1,850.00 5,550.00 8,050.00 -
Rent & Maintenance Services 55.15 162.54 177.14 -
Revenue from Trading of Goods - - - 8.35
Contract Receipts - 447.11 590.62 -
Sale of Services (Works Contract) 732.88 3,385.36 - -
Sale of Product 0.45 173.31 122.07 101.74
Total Revenue 2,638.47 9,718.33 8,939.83 110.08

The following is the Total Revenue from Operations mix in terms of percentage of Total Revenue from Operations of our Company from Business.

As at March 31
Particulars As at June 30, 2024 2024 2023 2022
Revenue from Operation
Sale of Office Block/Commercial Space 70.12% 57.11% 90.05% -
Rent & Maintenance Services 2.09% 1.67% 1.98% -
Revenue from Trading of Goods - - - 7.58%
Contract Receipts - 4.60% 6.61% -
Sale of Services (Works Contract) 27.78% 34.84% - -
Sale of Product 0.01% 1.78% 1.37% 92.42%
Total Revenue 100% 100% 100% 100%

Other Income

Our companys Other Income mix

(Figures in (Rs.) lakhs)

As at June 30, 2024 As at March 31
Particulars 2024 2023 2022
Balances Written Back - 0.01 - -
Dividend Received - 0.00 0.00 0.00
Interest Income on Fixed Deposit Receipts 2.52 8.45 - 0.05
Other Income - - 17.55 0.30
Interest Received from Income Tax Refund 0.09 - - -
Interest Received from Loans (unsecured) 4.57 16.27 1.33 -
Profit on Sale of Shares - - 0.10
Total Other Income 7.19 24.72 18.89 0.46

The following is the other income mix in terms of percentage of other income of our Company:

As at June 30, 2024 As at March 31
Particulars 2024 2023 2022
Balances Written Back - 0.02% - -
Dividend Received - 0.00% 0.02% 0.87%
Interest Income on Fixed Deposit Receipts 35.11% 34.16% - 11.88%
Other Income - - 92.91% 65.54%
Interest Received from Income Tax Refund 1.24% - - -
Interest Received from Loans (unsecured) 63.56% 65.81% 7.06% -
Profit on Sale of Shares - - 21.71%
Total Other Income 100% 100% 100% 100%

MAIN COMPONENTS OF OUR REVENUES

Total Income

Our total income comprises of total revenue from operations and other income.

Total Revenue from Operations:

Revenue from Operations as a percentage of total income accounted for 99.73%, 99.75%, 99.79% and 99.22% for the period ended as on June 30, 2024 and March 31, 2024, 2023 and 2022 respectively.

Other Income

Our other income majorly includes Interest income on fixed deposits, from loans (unsecured) and other income. It accounted for 0.27%, 0.25%, 0.21% and 0.42% of our Total income for the period ended as on June 30, 2024 and March 31, 2024, 2023 and 2022 respectively.

Expenditure

Our total expenditure consists of (i) Finance Cost (ii) Depreciation and Amortization and (iii) Purchase of Stock- in-trade, Cost of Goods Sold, Cost of Service Rendered, and Direct Expenses (iv) Employee Benefit Expenses (v) Other Expenses.

The following table sets forth our expenditure in Rupees in Lakhs and as a percentage of our total revenue for the periods indicated:

Main Components of our Expenditure

(Figures in Rs. Lakhs)

As at March 31
Particulars As at June 30, 2024 2024 2023 2022
Finance costs 0.18 13.31 1.69 -
As a % of Total Revenue from Operations 0.01% 0.14 % 0.02 % -
Depreciation and Amortization 80.64 338.33 4.04 0.04
As a % of Total Revenue from Operations 3.06% 3.48 % 0.05 % 0.03%
Purchase of Stock-in-trade, Cost of Goods Sold, Cost of Services Rendered, and Direct Expenses 2,042.38 7,949.11 7,628.24 96.78
As a % of Total Revenue from Operations 77.41% 81.79 % 85.33 % 87.92%
Employee Benefit Expenses 2.68 7.75 - -
As a % of Total Revenue from Operations 0.10% 0.08 % - -
Other expenses 5.53 28.39 5.26 2.57
As a % of Total Revenue from Operations 0.21% 0.29 % 0.06 % 2.34%
Total Expenditure 2,131.41 8,336.89 7,639.23 99.39
As a % of Total Revenue from Operations 80.78% 85.79 % 85.45% 90.28%

Finance Cost

Finance Cost primarily consists of Interest Expenses on borrowings, Interest on income tax of earlier years, and interest on TDS Payment. Our finance costs accounted for 0.01%, 0.14%,0.02% and 0% of our Total Revenue from Operations for the period ended as on June 30, 2024, March 31, 2024, 2023 and 2022 respectively.

Depreciation & Amortization

Depreciation consists of depreciation on the tangible assets of our Company which primarily includes Plant and Equipment, Furniture & Fixture (Office), and vehicles. Depreciation on Plant and Equipment is provided on

Written down Value Method over the useful life of the assets at the rates prescribed under part "C" of Schedule II of the Companies Act, 2013. Our depreciation expense accounted for 3.06%, 3.48%, 0.05% and 0.03% of our Total Revenue from Operation for the period ended as on June 30, 2024, March 31, 2024, 2023 and 2022 respectively.

Purchase of Stock-in-trade, Cost of Goods Sold, Cost of Service, and Direct Expenses

Purchase of Stock-in-trade, Cost of Goods Sold, Cost of Services Rendered, and Direct Expenses. It accounted for 77.41%, 81.79%, 85.33% and 87.92% of our Total Revenue from Operation for the period ended as on June 30, 2024, March 31, 2024, 2023 and 2022 respectively.

Employee Benefit Expenses

Employee Benefit Expenses consist of Salary Expenses, which constitute 0.1%, 0.08%, -\% and -% of our Total Revenue from Operation for the period ended as on June 30, 2024, March 31, 2024, 2023 and 2022 respectively.

Other Expenses

Other expenses primarily include Donation for CSR, Legal Charges, Professional Fess, Profession tax, ROC

Charges, Directors Sitting Fees etc. Other expenses accounted for 0.21%, 0.29%, 0.06% and 2.34% of Total

Revenue from Operation for the period ended as on June 30, 2024, March 31, 2024, 2023 and 2022 respectively.

STATEMENT OF PROFITS AND LOSSES

The following set forth, for the fiscal years indicated, certain items derived from our companys restated consolidated draft summary financial statements, in each case stated in absolute terms and as a percentage of total sales and/or total revenue.

(Figures in Rs. Lakhs)

For The Year Ended March 31
Particulars June 30, 2024 2024 2023 2022
INCOME
Revenue from Operations 2,638.47 9,718.33 8,939.83 110.08
As a % of Total Revenue 99.73% 99.75% 99.79% 99.58%
Increase/(Decrease) in % N/A 8.71% 8020.99% -
Other Income 7.19 24.72 18.89 0.46
As a % of Total Revenue 0.27% 0.25% 0.21% 0.42%
Increase/(Decrease) in % N/A 30.90% 2088.18% -

(Figures in Rs. Lakhs)

For The Year Ended March 31
Particulars June 30, 2024 2024 2023 2022
2,645.66 9,743.06 8,958.72 110.55
Total Revenue
EXPENDITURE
Finance costs 0.18 13.31 1.69 -
As a % of Total Revenue 0.01% 0.14 % 0.02% -
Depreciation and Amortization Expenses 80.64 338.3 3 4.04 0.04
As a % of Total Revenue 3.05% 3.47 % 0.05% 0.03%
Purchase of Stock-in-trade, Cost of Goods Sold, Cost of Service, and Direct Expenses 2,042.38 7,949.11 7,628.24 96.78
As a % of Total Revenue 77.20% 81.59 % 85.15 % 87.55%
Employee Benefit Expenses 2.68 7.75 - -
As a % of Total Revenue 0.10% 0.08 % - -
Other expenses 5.53 28.39 5.26 2.57
As a % of Total Revenue 0.21% 0.29 % 0.06% 2.33%
Total Expenditure 2,131.41 8,336 .89 7,639.23 99.39
As a % of Total Revenue 80.56% 85.57 % 85.27% 89.91%
Profit Before Tax 514.25 1,406.17 1,319.49 11.16
As a % of Total Revenue (PBT Margin %) 19.44% 14.43 % 14.73% 10.10%
Tax expense :
(a) Net Current tax 137.51 401.55 329.69 2.73
(b) Deferred Tax -7.91 - 42.34 2.8 0.08
(c) Tax of Earlier Years - - - -
Total Tax Expense 129.61 361.50 332.49 2.81
As a % of Total Revenue 4.90% 3.71% 3.71% 2.54%
Share in the Profit/Loss of Associate - (0.12) - 0.40
As a % of Total Revenue - 0.00% - 0.36%
Profit for the year 384.65 1,044.55 986.99 8.75
PAT Margin (%) 14.54% 10.72% 11.02% 7.89%
Other Comprehensive Income - - - -
Total comprehensive Income for the year 384.65 1044.55 989.99 8.75
As a % of Total Revenue 14.54% 10.72% 11.02% 7.89%

Current Tax

Current income tax is recognized based on the estimated tax liability computed after taking credit for allowance and exemption in accordance with the Income Tax Act, 1961. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the tax authorities.

Deferred Tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying values of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences. In contrast, deferred tax assets are only recognized to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized. Current and deferred tax are recognized as an expense or income in the statement of profit and loss except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognized in other comprehensive income or directly in equity.

DISCLOSURE FOR PERIOD ENDED JUNE 30, 2024

Revenue from Operations

The total income from April 01, 2024 to June 30, 2024 was Rs. 2,645.66 Lakhs which includes revenue from operations amounting to Rs 2,638.47 Lakhs.

Revenue from Operations mainly includes revenue from Sale of Office Block/Commercial Space, Sale of Services (Works Contract), and Rent & Maintenance services.

Other Income

Other income from April 01, 2024 to June 30, 2024 was Rs. 7.19 Lakhs. It is 0.27% of Total Revenue from operations. The other Income mainly includes Interest Income on Fixed Deposits, and Interest Received from Loans (unsecured).

Expenditure

Total Expenditure from April 01, 2024 to June 30, 2024 was Rs 2,131.41 Lakhs. It is 80.78% of Total Revenue from Operations.

Employee Benefit Expenses

Employee Benefit Expenses from April 01, 2024 to June 30, 2024 was Rs 2.68 Lakhs. It consists of Salary Expenses. It is 0.10% of Total Revenue from Operations.

Finance Costs

Finance Costs from April 01, 2024 to June 30, 2024 was Rs. 0.18 Lakhs. It mainly consists of Interest Expense on Borrowings. It is 0.01% of Total Revenue from Operations.

Depreciation and Amortization

Depreciation and Amortization from April 01, 2024 to June 30, 2024 was Rs. 80.64 Lakhs. It mainly Depreciation consists of depreciation on the tangible assets of our Company which primarily includes Plant and Equipment, Furniture and Fixture (Office) , and vehicles. It is 3.06 % of Total Revenue from Operations.

Other Expenses

Other Expenses from April 01, 2024 to June 30, 2024 was Rs. 5.53 Lakhs. It is 0.21% of Total Revenue from Operations.

Net Profit before Tax

Net Profit before tax from April 01, 2024 to June 30, 2024 was Rs. 514.25 Lakhs. It is 19.49% of Total Revenue from operations

Net Profit after Tax

Net Profit after tax from April 01, 2024 to June 30, 2024 was Rs. 384.65 Lakhs. It is 14.58% of Total Revenue from operations.

Fiscal Year Ended March 31, 2024 Compared with the Fiscal Year Ended March 31, 2023

Revenue from Operations

Revenue from operations has increased by Rs 778.50 Lakhs that is an increase of 8.71% from the previous year. Revenue from Operations was Rs. 9,718.33 in the fiscal year ended March 31, 2024 and Rs. 8,939.83 in the fiscal year ended March 31, 2023. The increase in revenue in the fiscal year ending March 31, 2024 from fiscal year ending March 31, 2023, was primarily due to sale of services (works contract) which was non-existent in the fiscal year ending March 31, 2023.

Other Income

Other income has increased by Rs. 5.84 Lakhs, which is an increase of 30.90%, to Rs. 24.72 Lakhs in the fiscal year ended March 31, 2024 from Rs. 18.89 Lakhs in the fiscal year ended March 31, 2023, mainly due to increase of interest received from unsecured loans (from Rs 1.33 lakhs in the fiscal 2023 to 16.27 lakhs in fiscal 2024) and interest income on FD (from NIL in the fiscal 2023 to Rs 8.45 lakhs in fiscal 2024).

Expenditure

Total Expenditure increased by Rs 697.65 lakhs which is an increase of 9.13%. The total expenditure increased to Rs. 8,336.89 lakhs in the fiscal year ended March 31, 2024 from Rs. 7,639.23 in the fiscal year ended March 31, 2023. Overall expenditure increased mainly due to increase in cost of service rendered (from NIL in the fiscal 2023 to Rs 2677.71 lakhs in fiscal 2024) and depreciation and amortization (from Rs 4.04 lakhs in the fiscal 2023 to Rs 338.33 lakhs in fiscal 2024).

Employee Benefit Expenses

Employee Benefit Expenses ("EBE") which consists of Salary Expenses increased by Rs. 7.75 lakhs. EBE increased to rupees 7.75 lakhs in the fiscal year ended March 31, 2024 from NIL in the fiscal year ended March 31, 2023. As the companys projects were under contstruction in the fiscal year 2023 all employee-related expenses were also booked under inventory as Work-In-Progress (WIP). Consecutively, in fiscal year 2024 all EBE were booked as a separate item and no longer in WIP.

Finance Costs

Finance Costs has increased by Rs. 11.62 lakhs which is an increase of 687.16%. It has increased to Rs. 13.31 lakhs in the fiscal year ended March 31, 2024 from Rs. 1.69 lakhs in the fiscal year ended March 31, 2023. Finance cost has been increased due to increase in interest expense on borrowings and interest on income tax of earlier year.

Depreciation and Amortization

Depreciation and Amortization has increased by Rs 334.28 lakhs which is an increase of 8264.66%. It has increased to Rs. 338.33 lakhs in the fiscal year ended March 31, 2024 from Rs. 4.04 in the fiscal year ended March 31, 2023 due to additions in block of Plant and Equipment.

Other Expenses

Other Expenses has increased by Rs 23.13 lakhs which is an increase of 449.80%. It has increased to Rs. 28.39 lakhs in the fiscal year ended March 31, 2024 from Rs. 5.26 in the fiscal year ended March 31, 2023. Other Expenses have increased primarily due to increase in legal charges (from Rs 0.13 lakhs in the fiscal 2023 to Rs 9.86 lakhs in fiscal 2024), donation to CSR (from NIL in the fiscal 2023 to Rs 8.75 lakhs in fiscal 2024), professional fees (from Rs 2.46 lakhs in the fiscal 2023 to Rs 4.98 lakhs in fiscal 2024) and ROC charges (from Rs 0.16 lakhs in the fiscal 2023 to Rs 2.38 lakhs in fiscal 2024).

Net Profit before Tax

Net Profit before tax has increased by Rs. 86.68 lakhs which is an increase of 6.57%. It has increased to Rs. 1,406.17 in the fiscal year ended March 31, 2024 from Rs. 1,319.49 in the fiscal year ended March 31, 2023.Net profit before tax has increased due to increase in revenue from sale of services (works contracts) (from NIL in the fiscal 2023 to Rs 3,385.36 lakhs in fiscal 2024), and sale of product (from Rs 122.07 lakhs in the fiscal 2023 to Rs 173.31 lakhs in fiscal 2024).

Net Profit after Tax

Net Profit after tax has increased by Rs. 57.55 lakhs which is an increase of 5.83 %. It has increased to Rs. 1,044.55 lakhs in the fiscal year ended March 31, 2024 from Rs. 986.99 lakhs in the fiscal year ended March 31, 2023.Net profit after tax has been increased due to the changes in net profit before tax.

Fiscal Year Ended March 31, 2023 Compared with the Fiscal Year Ended March 31, 2022

Income

Revenue from Operations

Revenue from operation increased by Rs 8,829.75 lakhs which is an increase of 8020.99%. Revenue from Operations has increased to Rs. 8,939.83 lakhs in the fiscal year ended March 31, 2023 from Rs. 110.08 lakhs in the fiscal year ended March 31, 2022. The reason of this increase is primarily due to sale of the Office Block/Commercial Space (from NIL in fiscal 2022 to Rs 8,050.00 lakhs in fiscal 2023).

Other Income

Other income has increased by Rs. 18.42 lakhs which is an increase of 4000.32%. It has increased to Rs. 18.89 in the fiscal year ended March 31, 2023 from Rs. 0.46 in the fiscal year ended March 31, 2022. The reason of this increase is primarily due increase in Other Income (from Rs 0.30 lakhs in fiscal 2022 to Rs 17.55 lakhs in fiscal 2023).

Expenditure

Total Expenditure increased by Rs. 7,539.84 Lakhs which is an increase of 7586.25%. It has increased to Rs. 7,639.23 Lakhs in the fiscal year ended March 31, 2023 from Rs. 99.39 in the fiscal year ended March 31, 2022. Overall expenditure primarily increased due to increase in costs of goods sold (from Rs 88.47 lakhs in fiscal 2022 to Rs 7,054.51 lakhs in fiscal 2023) and direct expense (from NIL in fiscal 2022 to Rs 573.73 lakhs in fiscal 2023).

Finance Costs

Finance Costs increased by Rs. 1.69. It has increased to Rs. 1.69 lakhs in the fiscal year ended March 31, 2023 from NIL in the fiscal year ended March 31, 2022. Finance cost has been increased primarily due to increase in interest on TDS payment (from NIL in fiscal 2022 to Rs 0.60 lakhs in fiscal 2023), interest expense on borrowings (from NIL in fiscal 2022 to Rs 0.45 lakhs in fiscal 2023) and interest on income of tax earlier year (from NIL in fiscal 2022 to Rs 0.25 lakhs in fiscal 2023).

Depreciation and Amortization

Depreciation and Amortization has increased by Rs 4.01 which is an increase of 11074.26%. It has increased to Rs. 4.04 lakhs in the fiscal year ended March 31, 2023 from Rs. 0.04 in the fiscal year ended March 31, 2022, due to additions in block of Plant and Equipment.

Other Expenses

Other Expenses have increased by Rs. 2.69 lakhs which is an increase of 104.26%. It has increased to Rs. 5.26 lakhs in the fiscal year ended March 31, 2023 from Rs. 2.57 lakhs in the fiscal year ended March 31, 2022. Other expenses has increased mainly due to increase in profession fees (from Rs 0.77 lakhs in fiscal 2022 to Rs 2.46 lakhs in fiscal 2023), profession tax (from Rs 0.03 lakhs in fiscal 2022 to Rs 0.62 lakhs in fiscal 2023), and membership fees (from Rs 0.19 lakhs in fiscal 2022 to Rs 0.42 lakhs in fiscal 2023).

Net Profit before Tax

Net Profit Before tax has increased by Rs. 1,308.32 which is an increase of 11721.53%. It has increased to Rs. 1,319.49 lakhs in the fiscal year ended March 31, 2023 from profit of Rs. 11.16 lakhs in the fiscal year ended March 31, 2022. The reason of this increase is primarily due to sale of the Office Block/ Commercial Space (from NIL in fiscal 2022 to Rs 8,050.00 lakhs in fiscal 2023).

Net Profit after Tax

Net Profit after tax has increased by Rs. 978.24 which is an increase of 11177.41%. It has increased to Rs. 986.99 in the fiscal year ended March 31, 2023 from profit of Rs. 8.75 in the fiscal year ended March 31, 2022. Net profit after tax has been increased due to the changes in net profit before tax.

CASH FLOWS

(Figures in lakhs)

Particulars Year ended March 31,
June 30, 2024 2024 2023 2022
Net Cash from Operating Activities 343.93 3,188.29 1,821.54 (248.68)
Net Cash from Investing Activities (77.23) (2,702.66) (724.29) (121.30)
Net Cash from Financial Activities (262.81) (474.66) (1,094.40) (370.71)

Cash Flows from Operating Activities

Net Cash Generated from Operating Activities as at June 30, 2024 was Rs 343.93 lakhs.

Net Cash Generated from Operating Activities in financial year 2024 was Rs 3,188.29 lakhs as compared to Rs. 1,821.54 lakhs in in financial year 2023. This increase in the cash flow is due to changes in working capital.

In the financial year 2023, it was Rs 1,821.54 lakhs as compared to Rs (248.68) lakhs in financial year 2022. This increase in Net Cash Generated from Operating Activities is mainly due to changes in working capital.

In the financial year 2022, Net Cash Generated from Operating Activities was Rs. (248.68) lakhs.

Cash Flows from Investment Activities.

As at June 30, 2024 the Net Cash Invested in Investing Activities was Rs (77.23) lakhs due to investment made in property, plant and equipment of Rs 84.84 lakhs.

In financial year 2024, the Net Cash Invested in Investing Activities was Rs. (2,702.66) lakhs. This was mainly on account of purchase of property, plant and equipment amounting to Rs 2,661.61 lakhs.

In financial year 2023, the Net Cash Invested in Investing Activities was of Rs (724.29) lakhs. This was mainly on account of purchase of property, plant and equipment amounting to Rs 743.16.

In financial year 2022, the Net Cash Invested in Investing Activities was Rs. (121.30) lakhs. This was mainly on account of purchase of property, plant and equipment amounting to Rs 21.97 lakhs and due to investment Rs 100.20 lakhs.

Cash Flows from Financing Activities.

As at June 30, 2024 the Net Cash from Financing Activities was negative to the extent of Rs. (262.81) lakhs. It was majorly due to repayments from non-current borrowings of Rs 192.37 lakhs.

In financial year 2024, the Net Cash from Financing Activities was Rs (474.66) lakhs. This was majorly due to Finance cost-interest and other charges of Rs 773.21 lakhs and proceeds from non-current borrowings of Rs 294.77 lakhs.

In financial year 2023, the Net Cash from Financing Activities was of Rs. (1,094.40) lakhs. This was majorly due to Finance cost-interest and other charges of Rs 1,280.65 lakhs and proceeds from non-current borrowings of Rs 431.97 lakhs.

In financial year 2022, the Net Cash from Financing Activities was of Rs. 370.71 lakhs. This was majorly due to Finance cost-interest and other charges of Rs 1,193.33 lakhs and proceeds from non-current borrowings of Rs 1,517.31 lakhs.

Revenue Bifurcation

For revenue bifurcation of two segments please refer to chapter Our Business Segment wise revenue on page 125 of this Draft Red Herring Prospectus

Competition

We operate in a competitive atmosphere. Some of our competitors may have greater resources than those available to us. While service quality, brand value, etc. are key factors in client decisions among competitors, reliability and business logic contribution is the deciding factor in most cases. We face fair competition from both organized and unorganized players in the market. We believe that our experience, and reliability record with our customers will be key to overcome competition posed by such organized and unorganized players. Although, a competitive market, there are not enough competitors offering end-to-end solutions like us. We believe that we are able to compete effectively in the market with our quality of services and our reputation. We believe that the principal factors affecting competition in our business include client relationships, reputation and the relative quality and price of the services.

Extent to which Material Increases in Net Sales or Revenue are due to Increased Sales Volume, Introduction of New Products or Services or Increased Sales Prices

Changes in revenue in the last three financial years are as explained in the part "Financial Year 2023-24 compared with financial year 2022-23 Compared with Financial Year 2021-22"

Unusual or Infrequent Events or Transactions

As on date there have been no unusual or infrequent events or transactions including unusual trends on account of business activity, unusual item of income, change of accounting policy and discretionary reduction of expenses.

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" beginning on page 29 of this Draft Red Herring Prospectus and in this chapter, to our knowledge there are no known trends or uncertainties that are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

Future Changes in Relationship between Costs and Revenues, in Case of Events Such as Future Increase in Labour or Service Costs or Prices that will Cause a Material Change are known

Other than as described in chapter titled "Risk Factors" beginning on page 29 of this Draft Red Herring Prospectus and in this section, to our knowledge there are no known factors that might affect the future relationship between cost and revenue.

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

Indian rules and regulations as well as the overall growth of the Indian economy have 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 from continuing operations except as described in chapter titled "Risk Factors" beginning on page 29 of this Draft Red Herring Prospectus.

Significant dependence on a single or few suppliers or customers

Given the nature of our business operations, we do not believe our business is dependent on any single or a few suppliers.

Seasonality of Business

The nature of our business is not seasonal.

Status of any Publicly Announced New Business Segments

Except as disclosed elsewhere in the Draft Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new business segments.

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