Ambo Agritec Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our restated financial statements for the three months period ended June 30, 2022 and for the financial year ended on 31^st March 2022, 31^st March 2021 and 31^st March 2020 including the notes and significant accounting policies thereto and the reports thereon, which appear elsewhere in this prospectus. You should also see the section titled "Risk Factors" beginning on page 20 of this prospectus, which discusses a number of factors and contingencies that could impact our financial condition and results of operations. The following discussion relates to our Company, unless otherwise stated, is based on restated audited financial statements.

These financial statements have been prepared in accordance with Ind GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditors dated November 12, 2022 which is included under the section titled "Financial Information as Restated" beginning on page 131 of this prospectus. The restatedfinancial statements have been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. We do not provide a reconciliation of our restated financial statements to US GAAP or IFRS and we have not otherwise quantified or identified the impact of the differences between Indian GAAP and U.S. GAAP or IFRS as applied to our restated financial statements.

This discussion 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 described under "Risk Factors" and "Forward Looking Statements" beginning on pages 20 and 15 respectively, and elsewhere in this prospectus

Accordingly, the degree to which the financial statements in this prospectus will provide meaningful information depends entirely on such potential investors level offamiliarity with Indian accounting practices. Our F. Y. ends on March 31 of each year; therefore, all references to a particular fiscal are to the twelve-month period ended March 31 of that year. Please also refer to section titled "Certain Conventions, Use of Financial, Industry and Market Data and Currency Presentation" beginning on page 13 of this prospectus.

BUSINESS OVERVIEW

Our Company was incorporated in the year 1994 in the name of ‘Sunny Biscuits Bakery and Confectionery Private Limited and over the years, has established itself as a brand name in the eastern India. Our company was allotted 1 acre and 52 square feet of land in Mangalpur Industrial Estate, Raniganj promoted and developed by Asansol Durgapur Development Authority, A Statutory Authority of Government of West Bengal.

Ambo Agritec Limited is primarily engaged in the business of Manufacturing of Biscuits, outsourced manufacturing of Edible Oils, Vanaspati and Bengali Speciality Products (through third parties). In addition to this, our company is also engaged in trading of Crude Linseed Oil, Soyabean Meal. Our Company use raw material of premium quality sourced from reputed local suppliers for Biscuits and raw materials imported for Edible Oils & Vanaspati, which help us to ensure the quality of our products.

Our state-of-the-art manufacturing plant for biscuits is situated at Mangalpur Industrial Estate, Raniganj in the state of West Bengal, India. Our manufacturing facility well equipped with machineries and other handling equipment to facilitate smooth manufacturing process.

Our products are marketed under our own brand names "Happy Bites" for Biscuits, "Happy Heart" for Edible Oil, "Ambo Gold" & "Vanaspati 2000" for Vanaspati and "Max Health" for Bengali Speciality Products.

We maintain hygienic norms and use good quality raw materials for manufacturing of our products. With a client centric approach, our Company strives hard for utmost contentment of the customers. The manufactured products are prepared completely under hygienic atmosphere by the professional makers. We have been certified by Food Safety and Standards Authority of India (FSSAI) for the quality management systems of our Company in relation to our products.

The promoter of our Company is Mr. Umesh Kumar Agarwal have sound industrial knowledge and experience, which enable us to carry the business in an efficient manner.

Place of Business of the Company

1 Sl. No. Particulars	Address
1. Registered Office	3, Pretoria Street, Flat No. 2D, 2nd Floor, Kolkata - 700 071, West Bengal, India
2. Manufacturing Unit (Biscuit)	Survey Plot No. A-2 & A-9, J.L. No. 30, Mangalpur Industrial Estate, Raniganj, West Bengal, Indi
3. Packaging Unit (Bengali Speciality Products)	3, Pretoria Street, Flat No. 1D (1st Floor), Flat No. 2A (2nd Floor), Kolkata - 700 071, West Bengal, India

Our manufacturing facilities are generally equipped with modern and automated production processes, with specialized custom-made manufacturing equipment obtained from national suppliers.

We manufacture Edible Oils i.e. Refined Rice Bran Oil, Refined Soyabean Oil, Refined Palm Oil, Mustard Oil, Vanaspati etc. on outsourced model through third parties on Job Contract basis. We provide Raw materials to them and procure finished products under our brand name.

(For Detailed information on our business, please refer to chapter titled "Our Business" and "Our History and Certain Corporate Matters" beginning from page no. 83 and 106 respectively of this 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, 2022 as disclosed in this prospectus, there have not arisen any circumstance that materially or adversely affect or are likely to affect the trading or profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months except as follows:

1. The Board of Directors have decided to get their equity shares listed on SME Platform of BSE Limited and pursuant to Section 62(1)(c) of the Companies Act 2013, by a resolution passed at its meeting held on September 01, 2022, proposed the Issue, subject to the approval of the shareholders and such other authorities as may be necessary.

2. The shareholders of the Company have, pursuant to Section 62(1)(c) of the Companies Act 2013, by a special resolution passed in the Extra Ordinary General Meeting held on September 05, 2022 authorized the Initial Public Offer.

3. The Company has issued 12,50,000 equity shares against loan on September 08, 2022.

4. The Company has issued 29,97,580 equity shares as Bonus Shares on September 10, 2022.

5. Our Company has received an in-principle approval from the BSE dated November 02, 2022 for listing of Equity Shares issued pursuant to the Issue.

KEY FACTORS AFFECTING OUR RESULTS OF OPERATION

1. Covid-19 pandemic

2. Our dependence on few clients for a significant portion of our revenues;

3. Any failure to comply with the financial and restrictive covenants under our financing arrangements;

4. Our ability to retain and hire key employees or maintain good relations with our workforce;

5. Impact of any reduction in sales of our services/products;

6. Rapid Technological advancement and inability to keep pace with the change;

7. Increased competition in industries/sector in which we operate;

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

9. Changes in laws and regulations relating to the Sectors in which we operate;

10. Political instability or changes in the Government in India or in the government of the states where we operate could cause us significant adverse effects;

11. Any adverse outcome in the legal proceedings in which we/our promoters may be involved;

12. Failure to obtain any applicable approvals, licenses, registrations and permits in a timely manner;

13. Occurrence of natural or man-made disasters could adversely affect our results of operations and financial condition and

14. Our inability to successfully diversify our product offerings may adversely affect our growth and negatively impact our profitability.

SIGNIFICANT ACCOUNTING POLICIES:

Our significant accounting policies are described in the section entitled "Financial Statements as Restated" beginning from page no. 131 of the prospectus

SUMMARY OF THE RESULTS OF OPERATION:

The following table sets forth select financial data from restated profit and loss accounts for the three months period ended June 30, 2022 and for the financial year ended on 31^st March 2022, 31^st March 2021 and 31^st March 2020 and the components of which are also expressed as a percentage of total income for such periods.

Particulars	Period ended June 30, 2022	% of Total Revenue	Year Ended March 31, 2022	% of Total Revenue	Year Ended March 31,2021	% of Total Revenue	Year Ended March 31, 2020	% of Total Revenue
I Income
Revenue from Operations	1,593.55	98.28	9,469.34	99.83	4,714.15	99.93	7,336.84	98.77
Other Income	27.84	1.72	16.20	0.17	3.16	0.07	91.30	1.23
II. Total Income	1,621.39	100.00	9,485.54	100.00	4,717.31	100.00	7,428.14	98.77
III. Expenses:
Cost of Materials Consumed	1,420.62	87.62	8,493.17	89.54	4,242.85	89.94	6,754.25	90.93
Purchase of Stock-in-trade	16.19	1.00	331.08	3.49	27.57	0.58	25.40	0.34
Changes in Inventories of Finished Goods, Work-in-progress and Stock-intrade	16.23	1.00	(40.80)	(0.43)	(23.25)	(0.49)	(1.12)	-0.02
Employee Benefit Expenses	40.83	2.52	94.17	0.99	57.80	1.23	107.22	1.44
Finance Costs	25.01	1.54	98.46	1.04	96.38	2.04	92.97	1.25
Depreciation and Amortization Expenses	2.68	0.17	12.47	0.13	12.73	0.27	15.97	0.21
Other Expenses	38.32	2.36	302.96	3.19	274.06	5.81	404.72	5.45
IV. Total Expenses	1,559.88	96.21	9,291.51	97.95	4,688.14	99.38	7,399.41	99.61
V. Profit Before Exceptional Items and Tax	61.51	3.79	194.03	2.05	29.17	0.62	28.73	0.39
VI. Exceptional Items	-	-	-	-	-	-	-	-
VII. Profit Before Tax (VII - VIII)	61.51	3.79	194.03	2.05	29.17	0.62	28.73	0.39
VIII. Tax Expenses:		-		-		-		-
(1) Current Tax	16.65	1.03	63.14	0.67	10.14	0.21	17.90	0.24
(2) Earlier Years Taxes	-	-	-	-	-	-	(16.80)	-0.23
(3) Deferred Tax	(4.72)	(0.29)	11.62	0.12	(0.08)	(0.00)	(4.36)	-0.06
IX. Profit for the Period	49.58	3.06	119.27	1.26	19.11	0.41	31.99	0.43

FINANCIAL PERFORMANCE HIGHLIGHTS FOR THE PERIOD ENDED ON JUNE 30, 2022

Total Income: Our Companys total revenue during the period (April 01, 2022 to June 30, 2022) was ^1621.39 Lakhs. The revenue from operation was Rs1593.55 Lakhs which is almost 98.28% of total revenue which consist of sale of Biscuits, Edible Oil, Vanaspati, Bengali Speciality Products etc.

Total Expenses: Our Companys total expenses during the said period (April 01, 2021 to June 30, 2022) was Rs1559.88 Lakhs. The total expenditure is almost 96.21% of total revenue. The main constituent of total expenditure is Cost of Materials Consumed which was Rs1420.22 Lakhs, almost 87.62% of total revenue.

Cost of Materials Consumed, Purchase of Stock-in-Trade and Changes in Inventories of Finished Goods: The Cost of Materials Consumed, Purchase of Stock-in-Trade and Changes in Inventories of Finished Goods for the said period (April 01, 2022 to June 30, 2022) was Rs1453.04 Lakhs which is almost 89.62% of total revenue.

Employee Benefit Expenses: The Employee Benefit Expenses for the said period (April 01, 2022 to June 30, 2022) was Rs40.83 Lakhs which is almost 2.52% of total revenue.

Finance Cost: The Finance Cost for the said period (April 01, 2022 to June 30, 2022) was Rs25.01 Lakhs which is almost 1.54% of total revenue.

Other Expenses: The Other Expenses for the said period (April 01, 2022 to June 30, 2022) was Rs38.32 Lakhs which is almost 2.36% of total revenue.

Profit/ (Loss) After Tax: The restated Profit after Tax for the said period (April 01, 2022 to June 30, 2022) was Rs49.58 Lakhs which is almost 3.06% of total revenue.

COMPARISON OF THE FINANCIAL PERFORMANCE OF FISCAL 2022 WITH FISCAL 2021

Total Income: During the FY 2021-22 the revenue from operation and other income of the company has been increased to Rs9485.54 Lacs as against Rs4717.31 Lacs in the FY 2020-21. This increase was mainly due to increase in volume of operation during the FY.

Total Expenses: The total expenditure for the FY 2021-22 has been increased to Rs9291.51 Lacs as against Rs4688.14 Lacs in the FY 2020-21. This increase was mainly due to increase in volume of operation during the FY as mentioned in revenue from operation above.

Cost of Materials Consumed, Purchase of Stock-in-Trade and Changes in Inventories of Finished Goods: The Cost of Materials Consumed, Purchase of Stock-in-Trade and Changes in Inventories of Finished Goods for the FY 2021-2022 has been increased to Rs8783.45 Lacs as against Rs4247.17 Lacs in the FY 2020-21. This increase was mainly due to increase in volume of operation during the FY as mentioned in revenue from operation above.

Employee Benefit Expenses: The Employee Benefit Expenses for the FY 2021-22 has been increased to Rs94.17 Lacs as against Rs57.580 Lacs in the FY 2020-21. This increase was mainly due to increase in volume of operation during the FY as mentioned in revenue from operation above.

Finance Cost: The Finance Cost for the FY 2021-22 has been increased to Rs98.46 Lacs as against Rs96.38 Lacs in the FY 202021.

Other Expenses: The Other Expenses for the FY 2021-2022 has been decreased to Rs302.96 Lacs as against Rs274.06 Lacs in the FY 2020-21.

Profit/ (Loss) After Tax: The restated Profit after Tax for FY 2021-22 has been increased to ^ 119.27 Lacs as against Rs19.11 Lacs in the FY 2020-21.

COMPARISON OF THE FINANCIAL PERFORMANCE OF FISCAL 2021 WITH FISCAL 2020

Total Income: During the FY 2020-21 the revenue from operation and other income of the company was decreased to Rs4714.15 Lacs as against Rs7336.84 Lacs in the FY 2019-20. This change was mainly due to decrease in sales in FY 2020-21 due to COVID-19.

Total Expenses: The total expenditure for the FY 2020-21 has been decreased to Rs4688.14 Lacs as against Rs7399.41 Lacs in the FY 2019-20. This decrease was mainly due to decrease in volume of operation during the FY as mentioned in revenue from operation above.

Cost of Materials Consumed, Purchase of Stock-in-Trade and Changes in Inventories of Finished Goods: The Cost of Materials Consumed, Purchase of Stock-in-Trade and Changes in Inventories of Finished Goods for the FY 2020-21 has been decreased to Rs4247.17 Lacs as against Rs6778.53 Lacs in the FY 2019-20. This decrease was mainly due to decrease in volume of operation during the FY as mentioned in revenue from operation above.

Employee Benefit Expenses: The Employee Benefit Expenses for the FY 2020-21 has been decreased to Rs57.80 Lacs as against Rs107.22 Lacs in the FY 2019-20. This decrease was mainly due to decrease in volume of operation during the FY as mentioned in revenue from operation above.

Finance Cost: The Finance Cost for the FY 2020-21 has been increased to Rs96.38 Lacs as against Rs92.97 Lacs in the FY 201920.

Other Expenses: The other Expense for the FY 2020-2021 has been decreased to Rs274.06 Lacs as against Rs404.72 Lacs in the FY 2019-20. This increase was mainly due to increase in volume of operation during the FY as mentioned in revenue from operation above.

Profit/ (Loss) After Tax: The restated Profit after Tax for FY 2020-21 has been decreased to Rs19.11 Lacs as against ^31.99 Lacs in the FY 2019-20. This decrease was mainly due to decrease in volume of operation during the FY as mentioned in revenue from operation above.

AN ANALYSIS OF REASONS FOR THE CHANGES IN SIGNIFICANT ITEMS OF INCOME AND EXPENDITURE IS GIVEN HEREUNDER:

1. Unusual or infrequent events or transactions

Except as described in this 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.

There are no significant economic changes that may materially affect or likely to affect income from continuing operations except the Covid-19 pandemic which is still to be controlled. However, Government policies governing the sector in which we operate as well as the overall growth of the Indian economy has a significant bearing on our operations. Major changes in these factors can significantly impact income from continuing operations.

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

Apart from the risks as disclosed under Section "Risk Factors" beginning on page 20 in the 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. Expected Future changes in relationship between costs and revenues

Our Companys future costs and revenues will be determined by demand/supply situation, Government Policies and Taxation and Currency fluctuations.

5. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or increased sales prices

Changes in revenue in the last financial years are as explained in the part "Comparison of the financial performance of above.

6. Total turnover of each major industry segment in which our Company operates

The Company is mainly engaged in manufacturing of Biscuits, Edible Oils, Vanaspati, Bengali Speciality Products etc. and all the activities of the business revolve around this main business. Therefore, there are no separate reportable segments.

7. Status of any publicly announced New Products or Business Segment

Our Company has not announced any new product other than disclosed in this prospectus.

8. Seasonality of business

Our Companys business is not seasonal in nature.

9. Competitive conditions

Competitive conditions are as described under the Chapters "Industry Overview" and "Our Business" beginning on page 66 and 83 respectively of the prospectus.

10. Details of material developments after the date of last balance sheet i.e., June 30, 2022

Except as mentioned in this prospectus, no circumstances have arisen since the date of last financial statement until the date of filing the prospectus, which materially and adversely affect or are likely to affect the operations or profitability of our Company, or value of its assets, or its ability to pay its liability within next twelve months.