Afcom Holdings Ltd Management Discussions

You should read the following discussion and analysis of financial condition and results of operations together with our financial statements included in this Draft Red Herring Prospectus. The following discussion relates to our Company and is based on our restated financial statements. Our financial statements have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be "Forward looking statement" 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

Our Company was originally incorporated as ‘AFCOM HOLDINGS PRIVATE LIMITED a private limited company under the Companies Act, 2013 with the Registrar of Companies ("ROC"), Tamil Nadu, Chennai, Andaman and Nicobar Islands pursuant to Certificate of Incorporation dated 15^th February, 2013. The name of the company was changed from ‘AFCOM HOLDINGS PRIVATE LIMITED to ‘AFCOM HOLDINGS LIMITED, consequent to conversion of our company from private limited company to public limited company, pursuant to Special Resolution passed by the shareholders of our Company in the Extra-ordinary General Meeting held on 27^th March, 2023, and a fresh certificate of incorporation consequent to change of name was issued by ROC, Chennai on 11^th July, 2023. The corporate identification number of our company is U51201TN2013PLC089652.

FINANCIAL KPIs OF THE COMPANY:

* EBITDA margin is calculated as EBITDA as a percentage of total income and PAT Margin (%) is calculated as Profit for the year/period as a percentage of Revenue from Operations.

FACTORS CONTRIBUTING TO THE GROWTH OF THE REVENUE

Except as otherwise stated in this Draft Red Herring Prospectus and the Risk Factors given in the Draft Red Herring Prospectus, the following important factors could cause actual results to differ materially from the expectations include, among others:

Regulatory Framework

We have obtained all regulatory permissions which are necessary to run our business, Further, some of the approvals are granted for fixed periods of time and need renewals, which are obtained in the course of business, however, there may be change in statutory regulations at any time which cannot be predicted by us. There can be no assurance that the change in regulations will not impact our operations in the future.

Ability of Management

Our success depends on the continued services and performance of the members of our management team and other key employees. Competition for senior management in the industry is intense, and we may not be able to retain our existing senior management or attract and retain new senior management in the future. The loss of any member of our senior management or other key personnel may adversely affect our business, results of operations and financial condition.

Market & Economic conditions

India is one of the largest economies and is growing at a rapid pace. But in this globalised economy, all the businesses face an uncertain level of volatility from unexpected global events which ranges from global pandemics to wars, to weather changes to supply chain disruption, which may change the economic dynamics and the purchasing capability of the end customers. At the time of market slowdown, the demand falls which has adverse impact on our business.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting and Preparation of Financial Statements:

The restated summary statement of assets and liabilities of the Company as at February 29, 2024, March 31, 2023, March 31, 2022 and 2021 and the related restated summary statement of profits and loss and cash flows for the period ended February 29, 2024, March 31, 2023, March 31, 2022 and 2021 (herein collectively referred to as ("Restated Summary Statements") have been compiled by the management from the audited Financial Statements of the Company for the year/period ended on February 29, 2024, March 31, 2023, March 31, 2022 and 2021 approved by the Board of Directors of the Company. Restated Summary Statements have been prepared to comply in all material respects with the provisions of Part I of Chapter III of the Companies Act, 2013 (the "Act") read with Companies (Prospectus and Allotment of Securities) Rules, 2014, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("ICDR Regulations") issued by SEBI and Guidance note on Reports in Companies Prospectuses (Revised 2019) ("Guidance Note"). Restated Summary Statements have been prepared specifically for inclusion in the offer document to be filed by the Company with the BSE in connection with its proposed SME IPO. The Companys management has recast the Financial Statements in the form required by Schedule III of the Companies Act, 2013 for the purpose of restated Summary Statements.

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles in India.

All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current – non-current classification of assets and liabilities.

2. Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates

used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

3. Property, Plant & Equipment And Intangible Assets

1. Property, Plant & Equipment

All Property, Plant & Equipment are recorded at cost including taxes, duties, freight and other incidental expenses incurred in relation to their acquisition and bringing the asset to its intended use.

2. Intangible Assets

Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

1. Depreciation / Amortization:

Depreciation on fixed assets is calculated on a Straight Line method using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule II to the Companies Act, 2013. Individual assets cost of which doesnt exceed Rs. 5,000/- each are depreciated in full in the year of purchase. Intangible assets including internally developed intangible assets are amortised over the year for which the company expects the benefits to accrue. Intangible assets are amortized on straight line method basis over 10 years in pursuance of provisions of AS-26.

2. Inventories:

Inventories comprises of Raw Material and Finished Goods. Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in, first-out principle.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

3. Impairment of Assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount is the higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arms length transaction between knowledgeable, willing parties, less the costs of disposal. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable value.

4. Investments:

Non-current investments are carried at cost less any other-than-temporary diminution in value, determined on the specific identification basis. Profit or loss on sale of investments is determined as the difference between the sale price and carrying value of investment, determined individually for each investment. Cost of investments sold is arrived using average method.

5. Foreign Currency Translations:

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Any income or expense on account of exchange difference either on settlement or on translation at the balance sheet date is recognized in Profit & Loss Account in the year in which it arises.

6. Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready

for intended use. All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred.

7. Provisions, Contingent Liabilities and Contingent Assets:

Provision involving substantial degree of estimation in measurement is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

8. Revenue Recognition

Revenue is Recognised only when significant risk and rewards of ownership has been transferred to the buyer and it can be reliabily measured and its reasonable to expect ultimate collection of it. Gross sales are of net trade discount, rebates, sales taxes and excise duties.

Revenue from services is recognized, when services have been performed as per terms of contract, amount can be measured and there is no significant uncertainty as to collection.The Company adopts accrual concepts in preparation of accounts. Claims /Refunds not ascertainable with reasonable certainity are accounted for,on final settlement.

9. Other Income

Interest Income on fixed deposit is recognized on time proportion basis. Other Income is accounted for when right to receive such income is established.

10. Taxes on Income

Income taxes are accounted for in accordance with Accounting Standard (AS-22) – "Accounting for taxes on income", notified under Companies (Accounting Standard) Rules, 2014. Income tax comprises of both current and deferred tax. Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization.

11. Cash And Bank Balances

Cash and cash equivalents comprises Cash-in-hand, Current Accounts, Fixed Deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Other Bank Balances are short-term balance ( with original maturity is more than three months but less than twelve months).

O) Earnings Per Share

Basic earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity share outstanding during the year. Diluted earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

1. Employee Benefits

Defined Contribution Plan:

Contributions payable to the recognised provident fund, which is a defined contribution scheme, are charged to the statement of profit and loss.

Defined Benefit Plan:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service without any monetary limit. Vesting occurs upon completion of five years of service. Provision for gratuity has been made in the books as per actuarial valuation done as at the end of the year.

16. Segment Reporting

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".

RESULTS OF OUR OPERATIONS

(Amount ? in lakhs)

Particulars	For the period ended 29th February, 2024	% of Total**	For the year ended 31st March, 2023	% of Total**	For the year ended 31st March, 2022	% of Total**	For the year ended 31st March, 2021	% of Total**
INCOME
Revenue from Operations (Gross)	13,369.97	99.65%	8,414.42	99.11%	4,827.40	99.19%	1,388.72	100.00%
Other Income	46.42	0.35%	75.70	0.89%	39.57	0.81%	-	0.00%
Total Revenue (A)	13,416.38	100.00%	8,490.12	100.00%	4,866.97	100.00%	1,388.72	100.00%
EXPENDITURE
Direct Expenses	9,228.05	108.69%	5,622.62	66.23%	3,305.19	67.91%	1,650.16	118.83%
Employee benefits expense	586.19	4.37%	654.63	7.71%	259.03	5.32%	154.31	11.11%
Finance costs	180.62	1.35%	94.29	1.11%	148.54	3.05%	7.38	0.53%
Depreciation and amortization expense	6.94	0.05%	5.67	0.07%	4.72	0.10%	2.98	0.21%
Other expenses	302.60	2.26%	297.54	3.50%	311.35	6.40%	182.47	13.14%
Total Expenses (B)	10,304.40	76.80%	6,674.75	78.62%	4,028.85	82.78%	1,997.31	143.82%
Profit/(Loss) before Tax	3,111.98	23.20%	1,815.38	21.38%	838.12	17.22%	(608.59)	-43.82%
Tax Expense/ (benefit)
(a) Current Tax Expense	804.53	6.00%	459.80	5.42%	139.90	2.87%	-	0.00%
(b)MAT credit entitlement					(92.84)		(188.28)
(c) Deferred Tax	(2.91)	-0.02%	(3.04)	-0.04%	276.26	5.68%		0.00%
Net tax expense / (benefit)	801.62	5.97%	456.76	5.38%	323.32	6.64%	(188.28)	-13.56%
Profit/(Loss) for the year	2,310.37	17.22%	1,358.62	16.00%	514.80	10.58%	(420.31)	-30.27%

**Total refers to Total Revenue

Components of our Profit and Loss Account Income

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

Revenue from Operations

Our revenue from operation as a percentage of our total income was 99.65%, 99.11%, 99.19% and 100.00% for the period ended February 29, 2024 and Financial Years ended March 31, 2023, March 31, 2022 and March 31,

2021 respectively.

(? In Lakhs)

Other Income

Our Other Income primarily consists of Interest Income, Net Foreign Exchange Gain, Other non-operating income, etc.

(? In Lakhs)

Expenditure

Our total expenditure primarily consists of Direct Expenses, Employee benefit expenses, Finance costs, Depreciation & Amortization Expenses and Other Expenses.

Direct Expenses

Our direct expenses comprise primarily of Aircraft Charter Fee, Professional and technical services charges, Rental Charges Paid- AAI, Cargo management software charges.

Employee Benefit Expenses

Our employee benefits expense comprises of Salaries & Wages, Employers Contribution to Welfare Funds, Employees Gratuity, Staff Welfare.

Finance costs

Our Finance cost expenses comprises of Bank Charges and Interest on Borrowings.

Other Expenses

Other expenses primarily include Advertisement Expenses, Audit Fees, Electricity Charges, Other Expenses, Printing and Stationery, Management Consultancy & other professional charges, Rates and taxes, CSR expenses paid Office Rental expense, Repairs & Maintenance, Travelling, Boarding & lodging expenses, Vehicle Maintenance, Net Foreign Exchange Loss.

(? In Lakhs)

Particulars	For the period ended February 29, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022	For the year ended March 31, 2021
Advertisement Expenses	6.86	21.15	38.54	0.43
Audit Fees	2.50	12.50	5.46	1.20
Electricity Charges	4.07	6.56	3.08	0.86
Other Expenses	17.93	21.74	18.41	7.56
Printing and Stationery	2.67	2.35	1.33	1.69
Management Consultancy & other professional charges	127.19	109.90	172.87	120.79
Rates and taxes	11.42	6.96	13.22	1.88
CSR expenses paid	0.26	-	-	-
Office Rental expense	56.90	33.22	30.11	30.95
Repairs & Maintenance	2.02	6.11	7.75	-
Travelling, Boarding & lodging expenses	69.63	75.98	19.52	8.49
Vehicle Maintenance	1.17	1.08	1.08	0.35
Net Foreign Exchange Loss	-	-	-	8.28
Total	302.60	297.54	311.35	182.47

Provision for Tax

The provision for current taxation is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.

For the period ended February 29^th, 2024 Revenue from Operations

For the period ended February 29th, 2024, Revenue from Operations of our company was ? 13,369.97 lacs.

Other Income

For the period ended February 29th, 2024, Other Income of our company was ? 46.42 lacs.

Total Revenue

For the period ended February 29th, 2024, the total income of our company was ? 13,416.38 lacs.

Expenditure Direct Expenses

For the year ended February 29^th, 2024, Direct expenses was ? 9,228.05 lakhs.

Employee Benefit Expenses

For the period ended February 29^th, 2024, our Company incurred for employee benefit expenses ? 586.19 lacs.

Finance Costs

The finance costs for the period ended February 29th, 2024 was ? 180.62 lacs.

Depreciation & Amortization Expense

Depreciation & Amortization Expense for the period ended February 29^th, 2024 was ? 6.94 lacs.

Other Expenses

For the period ended February 29th, 2024, our other expenses were ? 302.60 lacs.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the period ended February 29^th, 2024 of ? 3,111.98 lacs

Profit/ (Loss) after Tax

Profit after tax for the period ended February 29^th, 2024 was at ? 2,310.37 lacs.

Fiscal 2023 compared with fiscal 2022 Revenue from Operations

The Revenue from Operations of our company for fiscal year 2023 was ? 8,414.42 lacs against ? 4,827,40 lacs total income for Fiscal year 2022. An increase 74.31% in revenue from operations. This increase was due to increase in number of flights that were operated from 2 schedules a week to 3 schedules a week on account of increase in wet lease operations.

Other Income

The other income of our company for fiscal year 2023 was ? 75.70 lacs against ? 39.57 lacs for Fiscal year 2022. An increase 91.30% in other income. This increase was due to increase in foreign exchange gain to the tune of Rs.42.31 lakhs. As the companys major revenue about 98% is from export operations, increase in export turnover coupled with increase in foreign exchange rates in turn increased the forex earnings and other income.

Total Income

The total income of our company for fiscal period 2023 was ? 8,490.12 lacs against ? 4,866.97 lacs total income for Fiscal period 2022. An increase of 74.44% in total income. This increase was primarily due to the fact that the companys operations was being carried out throughout the year in all twelve months whereas in fiscal 2022 the companys operations started in the last six months and operated for a lesser period. Hence increase in operations resulted in increase in total income.

Expenditure

Direct Expenses

In Fiscal 2023, Direct Expenses ? 5,622.62 lakhs against ? 3,305.19 lakhs in fiscal 2022. An increase of 70.11% in Direct expenses. This increase was primarily due to increase in the number flights that were being rented and operated. The Air charter fee expenses were increased to the tune ? 2,583.67 lacs which was an 89% increase from fiscal 2022. Further the use of cargo management software also increased to the tune of Rs.66.20 lakhs

Employee Benefit Expenses

In Fiscal 2023, our Company incurred for employee benefit expenses ? 654.63 lacs against ? 259.03 lacs expenses in fiscal 2022. The increase of 152.72%. This increase was due to increase in salaries to the tune of ? 374.37 lacs, and the reason for increase in wages is due to the fact that the scale of operations of the company was increased and the salaries are a direct correlation to operations of the business, hence increase in employee benefit expenses are due to increase in operations. Further there has been as increase of ? 30 lacs in remuneration paid to directors which is also a factor contributing to increase in employee benefit expenses.

Finance Costs

The finance costs for the Fiscal 2023 was ? 94.29 lacs while it was ? 148.54 lacs for Fiscal 2022.This Decrease of 36.52% was due to increase in repayment of principal and closure of loan.

Other Expenses

In fiscal 2023, our other expenses were ? 297.54 lacs and ? 311.35 lacs in fiscal 2022. This Decrease of 4.44% was due to the fact that there was a decrease in advertisement expenditure to the tune of ? 17.39 lakhs, and also decrease in management consultancy fee for 36%.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal 2023 of ? 1,815.38 lacs against profit before tax of ?

838.12 lacs in Fiscal 2022, An 116.60 % increase. This increase was primarily due to the fact that the companys operations was being carried out throughout the year in all twelve months as compared to fiscal 2022 wherein the company was operated for a lesser period, hence resulting in an increase in turnover to the tune of about 74% as compared to fiscal 2022. Increase in operations resulted in profitability.

Profit/ (Loss) after Tax

Profit after tax for the Fiscal 2023 was at ? 1358.62 lacs against profit after tax of ? 514.80 lacs in fiscal 2022, An 163.91% increase. This was due to increase in the conduct of the business year considerably increasing the bottomline in line with the revenue generation.

Fiscal 2022 compared with fiscal 2021

Revenue from Operations

The Revenue from Operations of our company for fiscal year 2022 was ? 4,827.40 lacs against ? 1,388.72 acs total income for Fiscal year 2021. The increase of 247.62% in revenue from operations. This increase was due to increase in operation of aircrafts, operating 2 schedules per week operating to and fro adding up the total trips. The increase is also comparably higher as the aircrafts operated for the whole year.

Other Income

The other income of our company for fiscal year 2022 was ? 39.57 lacs against ? Nil for Fiscal year 2021.

Total Income

The total income of our company for fiscal year 2022 was ? 4,866.97 lacs against ? 1,388.72 lacs total income for Fiscal year 2021. An increase of 250.47% in total income. This increase was due to the operation of the aircrafts with busy schedule for the whole year adding up 8 trips up and down per week.

Expenditure Direct Expenses

In Fiscal 2022, Direct Expenses ? 3,305.19 lakhs against ? 1,650.16 lakhs in fiscal 2021. An increase of 100.29

% in Direct expenses. This increase was primarily due to increase in operations of overall business in line with the increase in revenue for the particular year where the company saw a remarkable growth of 267.64% in topline.

Employee Benefit Expenses

In Fiscal 2022, our Company incurred for employee benefit expenses ? 259.03 lacs against ? 154.31 lacs expenses in fiscal 2021. An increase of 67.87 % was due to the increase in operation of the overall business in line generation of revenue for the fiscal 2022.

Finance Costs

The finance costs for the fiscal 2022 was ? 148.54 lacs while it was ? 7.38 lacs for fiscal 2021. An Increase of 1912.92% is due to new car loan and other interest cost for the fiscal 2022. However the finance cost incurred is nominal comparing the revenue generated for the period.

Other Expenses

In fiscal 2022, our other expenses were ? 311.35 lacs and ? 182.47 lacs in fiscal 2021. An increase of 70.63% was again due to the increase in overall operation of the business in line with topline for the fiscal 2022 which majorly comprises of management and professional fees.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal 2022 of ? 838.12 lacs against profit before tax of ? (608.59) lacs in Fiscal 2021. The Company is able to disclose the profits for the fiscal 2022 comparing previous fiscal 2021 due to improvement in operations of the business.

Profit/ (Loss) after Tax

Profit after tax for the Fiscal 2022 was at ? 514.80 lacs against profit after tax of ? (420.31) lacs in fiscal 2021. The Positive Bottomline is due to the optimum utilisation of the resources in line with the increase in turnover for the fiscal 2022 comparing the previous years.

Cash Flows

(Amount ? in lakhs)

Cash Flows from Operating Activities

1. For the period ended February 29, 2024, net cash used in for operating activities was ? (2,179.13) Lakhs. This comprised of the profit before tax of ? 3,111.98 Lakhs, which was primarily adjusted for depreciation and amortization expenses of ? 6.94 Lakhs and Interest Expenses of 158.22 Lakhs. The resultant operating profit before working capital changes was ? 3,255.06 Lakhs, which was primarily adjusted for an increase in trade receivables during the year of ? 344.82 Lakhs, increase in inventory of ? 648.24 lakhs, loans and advances of ? 2,260.51 lakhs, and increase in other current assets 1,676.02 lakhs.

Cash Generated from Operations was ? (1,810.13) Lakhs which was reduced by Direct Tax paid for ? (369.00) Lakhs resulting into Net cash flow generated from operating activities of ? (2,179.13) Lakhs.

1. In FY 2023, net cash used in for operating activities was ? (1,894.22) Lakhs. This comprised of the profit before tax of ? 1,815.38 Lakhs, which was primarily adjusted for depreciation and amortization expenses of ? 5.97 Lakhs and Interest Expenses of 74.59. The resultant operating profit before working capital changes was ? 1,903.76 Lakhs, which was primarily adjusted for an decrease in trade receivables during the year of ? 123.90 Lakhs, inventory of ? 920.91 lakhs, increase in loans and advances of ? 584.81 lakhs, and increase in other current assets 2,018.85 lakhs.

Cash Generated from Operations was ? (1,757.89) Lakhs which was reduced by Direct Tax paid for ? (136.33) Lakhs resulting into Net cash flow generated from operating activities of ? (1,894.22) Lakhs.

2. In FY 2022, net cash used in for operating activities was ? 2.21 Lakhs. This comprised of the profit before tax of ? 838.12 Lakhs, which was primarily adjusted for depreciation and amortization expenses of ? 4.72 Lakhs and Interest Expenses of 135.23 lakhs. The resultant operating profit before working capital changes was ? 963.34 Lakhs, which was primarily adjusted for an increase in trade receivables during the year of ? 1,499.37 Lakhs, decrease in short term loans and advances of ? (14.69) lakhs, other current assets of ? 72.07 lakhs. Cash Generated from Operations was ? 374.42 Lakhs which was reduced by Direct Tax paid for ? Nil Lakhs resulting into Net cash flow generated from operating activities of ? 374.42 Lakhs.
3. In FY 2021, net cash used in for operating activities was ? (1,322.15) Lakhs. This comprised of the profit before tax of ? (608.59) Lakhs, which was primarily adjusted for depreciation and amortization expenses of ? 2.98 Lakhs and Interest Expenses of ? 7.25 Lakhs. The resultant operating profit before working capital changes was ? (605.92) Lakhs, which was primarily adjusted for an decrease in trade receivables during the year of ? 9.10 Lakhs, increase in other current assets 762.19 Lakhs. Cash Generated from Operations was ? (1,322.15) Lakhs which was reduced by Direct Tax paid for Nil Lakhs resulting into Net cash flow generated from operating activities of

? (1,322.15) Lakhs.

Cash Flows from Investment Activities

1. For the period ended February 29, 2024, net cash used in investing activities was ? (18.54) Lakhs, which primarily comprised of cash used for the purchase of property, plant, and equipment of ? 23.41 Lakhs, Interest received of 4.88 lakhs.
2. In FY 2023, net cash used in investing activities was ? (1,227.47) Lakhs, which primarily comprised of cash used for the purchase of property, plant, and equipment of ? 1,227.49 Lakhs and Interest received of 0.02 lakhs.
3. In FY 2022, net cash used in investing activities was ? (4.30) Lakhs, which primarily comprised of cash used for the purchase of property, plant, and equipment of ? 4.30 Lakhs, sale of property, plant, and equipment of ?

4.51 lakhs.

4. In FY 2021, net cash used in investing activities was ? (20.45) Lakhs, which primarily comprised of cash used for the purchase of property, plant, and equipment of ? 20.45 Lakhs.

Cash Flows from Financing Activities

1. For the period ended February 29, 2024, net cash generated from financing activities was ? 1,788.46 Lakhs, which predominantly comprised of proceeds from issue of share capital of ? 446.78 lakhs, Increase in long term borrowings of ? 18.75 Lakhs, increase in short term borrowings of ? 1481.14 Lakhs and payment of finance cost of ? 1,788.46 Lakhs.
2. In FY 2023, net cash generated from financing activities was ? 3,739.47 Lakhs, which predominantly comprised of proceeds from issue of share capital of ? 3,790.29 lakhs, decrease in long term borrowings of ? 2.06 Lakhs, increase in short term borrowings of ? 45.83 Lakhs, payment of finance cost of ? 74.59 Lakhs and Proceeds from Share application money pending allotment of ? (20.00) Lakhs.
3. In FY 2022, net cash generated from financing activities was ? 421.32 Lakhs, which predominantly comprised of proceeds from issue of share capital of ? 2,004.04 lakhs, decrease in long term borrowings of ? 1,369.26 Lakhs, decrease in short term borrowings of ? 98.23 Lakhs and payment of finance cost of ? 135.23 Lakhs and Proceeds from Share application money pending allotment of ? 20.00 Lakhs.
1. In FY 2021, net cash generated from financing activities was ? 1,335.50 Lakhs, which predominantly comprised, decrease in long term borrowings of ? 257.24 Lakhs, payment of finance cost of ? 7.25 Lakhs and Proceeds from Issuance of CCD ? 1,599.99 Lakhs.

OTHER MATTERS

1. Unusual or infrequent events or transactions

Except COVID-19 or any such kind of pandemic and as described in this Draft Red Herring Prospectus, there have been no other events or transactions to the best of our knowledge which may be described as "unusual" or "infrequent".

2. 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 arising from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described in the section entitled "Risk Factors" beginning on page no. 32 of the Draft Red Herring Prospectus. To our knowledge, except as we have described in the Draft Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

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

Apart from the risks as disclosed under Chapter titled "Risk Factors" beginning on page no. 32 in this Draft Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Total turnover of each major industry segment in which the issuer company operated.

Our company providing Air cargo services. Relevant Industry data and , as available, has been included in the chapter titled "Industry Overview" beginning on page no. 90 of this Draft Red Herring Prospectus.

5. Status of any publicly announced new products or business segment.

Our company is in the service industry hence new products or business segment not applicable.

6. The extent to which business is seasonal.

Our Companys business is not seasonal in nature.

7. Any significant dependence on a single or few suppliers or customers.

The percentage of contribution of our Companys customer vis-?-vis the total revenue from operations respectively as on period ended on February 29, 2024 and FY 2022-23, FY 2021-22 and FY 2020-21 is 98.71%, 75.99%, 84.32% and 100% respectively.