Amwill Health Care Ltd Management Discussions

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the Financial Year ended on March 31, 2022, March 31, 2023, March 31, 2024, and for the six-month period ended on September 30, 2024. You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in the Red Herring Prospectus. You should also read the section entitled "Risk Factors" beginning on page 27 of this Red Herring Prospectus, which discusses several factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and is based on our restated financial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year ("Fiscal Year") are to the twelve-month period ended March 31 of that year. In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers to Amwill Health Care Limited (erstwhile " Amwill Health Care Private Limited "), our Company. Unless otherwise indicated, financial information included herein are based on our "Restated Financial Statements" for Financial Year ended on March 31, 2022, March 31, 2023, March 31, 2024, and for the six-month period ended on September 30, 2024 included in this Red Herring Prospectus beginning on page 180.

BUSINESS OVERVIEW

We are a derma-cosmetic development company, associated with contract manufacturers, distributor and third party product development agencies, which has enabled us in developing capabilities, in manufacturing, packaging and distribution. The core focus of our Company is on development of problem solving dermatological, cosmeceutical and aesthetical products, and therefore to direct all our efforts towards product formulation and development, we have outsourced key functions such as manufacturing, prototype development and distribution to third parties, for effective management and execution. In line of the aforementioned business strategy, we have presently created a business presence in Karnataka, Andhra Pradesh and Telangana, wherein we focus on deepening our presence in the regions we operate in, before venturing into new markets, thereby enabling us to establish a customer base in such states. This enables the target customers to identify with our product portfolio and aids our understanding of the market segment and the customer demand preference. The product portfolio of our Company is divided into two categories, namely, (i) development and contract manufacturing of generic dermatological solutions; and (ii) developing and formulating solutions to specific dermatological problem. Majority of the products marketed by us, were developed by our Promoter and Managing Director, Anand Gandhi, in the capacity of a sole proprietor of M/s. Amwill Healthcare. In order to formalise the business of M/s. Amwill Healthcare and to widen the reach of its products, our Promoters formed our Company and executed a Memorandum of Understanding dated March 31, 2020 with M/s. Amwill Healthcare and our Company ("Asset Transfer MoU"), wherein intellectual property rights, on the products developed by our Promoters under M/s. Amwill Healthcare were transferred to our Company, for a consideration of 91.06 lakhs. Since incorporation of our Company, has developed seven new products, namely proputor tabs, XL hydra cream, ozederm cream, PD-pill 10 tablets, XL aqua moisturising lotion, ultra kromaglo effervescent tablets and depimed ultra cream. Out of these products, our Company did not receive a positive response for PD -pill 10 tablets, proputor tabs and ozederm cream and therefore has discontinued former two products. For details in respect of these products, please refer to "Our Business – Case Studies" on page 127. Since inception, our focus has been on developing formulations which offer solutions to various dermatological disorders. Owing to the longstanding experience of our Promoters in the dermatological industry, our Promoters have remained in constant touch with various dermatologists and medical professionals. Due to our ongoing professional relationship with such dermatologists and medical professionals, we have been able to leverage their experience, while developing our products. Our Company during the ordinary course of business, seeks advice from various dermatologists and medical professionals, to develop solutions for various dermatological problems. The dermatologists, assist and advise our Company in identifying the gaps in skincare or cosmetic market, through their experience. Our Company based on such suggestions identifies a dermatological problem and develops a formulation of a derma-cosmetic suitable for addressing the designated problem. Our Managing Director, Anand Gandhi heads the product development initiatives and formulation development and has assisted our Company in curating an extensive product portfolio aimed at addressing various dermatological disorders, including acne, fungal infections, anti-ageing, histaminic, peri orbital hyperpigmentation, scabies, perspiration, trichology and vitiligo. We believe that our Company has by actively involving dermatologists and medical professionals, in its product development process developed a hands-on approach towards product development by identifying subsisting dermatological problems, thereby enabling us to appropriately positioning our products in the market.

We are associated with contract manufacturers for manufacturing our products, in accordance with the technical and quality specifications prescribed by our Company. Our contract manufacturers have requisite certifications to undertake manufacturing of our derma-cosmetic products, in a manner that is compliant with the regulatory guidelines and ensures that the final product meets high-quality standards. We have also executed formal arrangements with majority of the contract manufacturers, which govern various matters such as, specification of manufacturing products, quality standards to be maintained, sales estimates, packaging of products, use and protection of intellectual property, etc. Our association with manufacturers enable us to offer diverse solutions to our customers, including manufacturing, packaging and compliance with requisite quality standards. In addition to contract manufacturers, we also have informal arrangements with some of the contract developers, who prepare the active ingredients of our products using the technical formulations developed in consultation with our dermatologists. Third party contract developers play a major role in aiding the development and formulations for generic as well as solution oriented dermatological products. Our Company has created a structured storage and distribution chain through one of its promoter group entities, namely, M/s. Amderma Healthcare LLP ("Amderma"), which was established under the guidance of Tarun Gandhi. Our Company has entered into a carrying and forwarding agreement dated May 15, 2024 which was effective from January 1, 2024, with Amderma, for the purpose of appointing Amderma as a carrying and forwarding agent ("CF Agreement"). Under this arrangement, we sell all of our products to Amderma for the purpose of storing, delivering and distributing the same in the regions that we operate. In accordance with the CF Agreement, our Company upon receiving an order from wholesalers, doctors, hospitals, nursing homes, etc., passes on the order for execution to Amderma, by selling all our products to Amderma. Amderma records the order in its books of accounts and thereafter executes it on our behalf. Accordingly, we derive all of our revenue from M/s. Amderma Healthcare LLP. We have engaged Amderma as a carrying and forwarding agent, to outsource order execution and product distribution in order to consolidate all our efforts and resources towards product development and formulation. Amderma is responsible for executing inter alia the following functions:

• It shall store the products, sold to it by our Company and maintain a stock based on the estimated sales which would be undertaken in each of the territories;

• It shall at all times shall store the products in sound conditions and shall ensure proper storage conditions, suitable for each of the products;

• It shall take a comprehensive insurance cover for all the stock lying at its premises, at its own cost;

• Within Agreed time period of the receipt of the orders from any of our customers on any working day, Amderma shall execute such orders by raising the invoices to the customers concerned;

• It shall deliver the products to customers in the standard consumer packs in which the products were packed by our Company and in packages in which they were delivered to Amderma;

• It shall be responsible for follow-up of the stocks in transit until stocks are received by it and or delivered to customers (including inter location transfers) safely; and

• It shall follow-up on outstanding payments from the customers in line with the procedure prescribed by our Company. The responsibility of collection will be with Amderma with collective efforts of our Company. In consideration of the services rendered by Amderma, it receives a margin not exceeding a percentage of 4% on the purchase price of the products, while billing to the customers. The margin on each product varies and is decided by our Company in consultation with Amderma. In addition to the above, Amderma is also responsible for bearing the freight costs, incurred while dispatching the products. The CF Agreement executed by our Company with Amderma contains a non-compete clause which restricts Amderma from engaging in business similar to that of our Company for a period of twelve months from the termination of the CF Agreement. Further the CF Agreement also prescribes an exclusivity period starting from the effective date of this Agreement until completion of the non-compete period provided above, during which Amderma will not work for, associate with, carry on, engage in or be concerned in any manner, in any activity / business which is similar to, or competes with, the business of our Company. Further during such period, Amderma shall exclusively service our Company as the Carrying and Forwarding Agent, and shall not serve any other party / business in the said capacity. Under the guidance of our Promoter, Chairman and Managing Director, Tarun Gandhi, our Company has been able to create a hierarchy of regional managers, area managers and sales executives who implement our sales and marketing strategies across the states of Karnataka, Andhra Pradesh and Telangana. We are proposing to expand our operations in West Bengal and Odisha, and therefore we have during the year 2024, appointed senior regional sales managers, regional sales managers and sales executives in these states and have commenced marketing operations in these states. Our marketing team approaches various doctors for marketing and selling our products in various regions, where we are currently present. In order to market our products, we also participate in various scientific exhibitions and seminars organised by Indian Association of Dermatologists, Venereologists and Leprologists to showcase our products. Further, we also advertise our products in various scientific journals which offers good publicity for our products. We have a strong and experienced management team with a cumulative experience of more than two decades has positioned our business well for continued growth and development. Our Promoters have played a key role in developing our business and we benefit from their significant experience in the dermatology industry. We also have a qualified key management team with experience in the pharmaceutical industries, including in the areas of manufacturing, product development, quality control, information technology, strategy and business development. We believe that the healthcare domain knowledge and experience of our individual Promoters and our key management team provides us with a significant competitive advantage as we seek to grow in our existing markets and enter new segments and geographies. The success of our management team is also demonstrated by our growth including our ability to develop new products as well as attract and retain our customers over a long period of time. We also believe our management team has demonstrated its ability to execute our required business plan and has the skills and experience needed to implement our strategic objectives related to our business and expansion in the future. Our revenues from operations for the six-month period ended September 30, 2024 and the Fiscals 2024, 2023 and 2022 were 2,315.60 lakhs, 4,394.83 lakhs, 3,016.63 lakhs and 2,761.32 lakhs, respectively. Our EBITDA for the Six months period ended September 30, 2024, and the Fiscals 2024, 2023 and 2022 were 883.93 lakhs, 1,666.70 lakhs, 429.56 lakhs and 366.00 lakhs, respectively. Our profit after tax for the six-month period ended September 30, 2024 and the Fiscals 2024, 2023 and 2022 was 651.66 lakhs, 1,253.63 lakhs, 311.44 lakhs and 257.37 lakhs, respectively. For further details, please refer to the section titled "Financial Information" on page 180 of this Red Herring Prospectus.

Table set forth below is bifurcation of our revenue under our business segments:

( in lakhs)

Product Segment s	Six-month period ended September 30, 2024	March 31, 2024		March 31, 2023		March 31, 2022
	Revenue earned	% of total revenue	Revenue earned	% of total revenue	Revenue earned	% of total revenue	Revenue earned	% of total revenue
Skin care	1,444.52	62.38%	2,500.06	56.89%	1,689.52	56.01%	1,509.56	54.67%
Hair care	569.43	24.59%	1,208.00	27.49%	807.51	26.77%	733.86	26.58%
Personal care and hygiene	273.12	11.79%	607.77	13.83%	464.38	15.39%	487.23	17.64%
Lip care	28.54	1.23%	79.01	1.80%	55.22	1.83%	30.67	1.11%
Total Sales	2,315.60	100.00%	4,394.83	100.00%	3,016.63	100%	2,761.32	100%

In the period ending September 30, 2024, the companys product segments included skin care, hair care, personal care and hygiene, and lip care. Skin care accounted for the largest share at 62.38%, with revenues of 1,444.52 lakhs. This segment has shown consistent growth over the years, increasing from 1,509.56 in FY 2022 to 1,689.52 lakhs in FY 2023 and then to 2,500.06 lakhs in FY 2024. Hair care followed with 24.59% share, generating revenues of 569.43 lakhs, also exhibiting growth from FY 2022 to FY 2024. Personal care and hygiene, although experiencing a slight decline in share from the previous year, still contributed significantly at 11.79%, amounting to 273.12 lakhs. Lip care, while the smallest segment, also saw growth, contributing 1.23% with revenues of 28.54 lakhs. Overall, the companys total revenue increased from 2,761.32 lakhs in FY 2022 to 4,394.83 lakhs in FY 2024, showcasing positive performance across its product segments.

KEY PERFORMANCE INDICATORS

The key financial and operational performance indicators of our Company for the six-month period ended September 30, 2024 and Fiscals 2024, 2023 and 2022 have been provided below:

		As of and for the Fiscal
Sr No. Metric	As of and for the period ended September 30, 2024*	2024	2023	2022
1 Revenue From operations ( in Lakhs)	2,315.60	4,394.83	3,016.63	2,761.32
2 Total Income ( in Lakhs)	2,324.71	4,428.41	3,028.25	2,761.54
3 Operating EBITDA ( in Lakhs)	883.93	1,666.69	429.56	366.00
4 Operating EBITDA Margin (%)	38.17%	37.92%	14.24%	13.25%
5 Profit after tax for the year/ period ( in Lakhs)	651.66	1,253.63	311.44	257.37
6 Net profit Ratio/ Margin (%)	28.14%	28.53%	10.32%	9.32%
7 Return on Equity (ROE) (%)	27.52%	73.06%	67.67%	172.97%
8 ROCE (%)	36.16%	94.16%	83.32%	204.08%
9 Current Ratio	5.46	11.39	1.51	1.13

* Not annualised

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR:

In the opinion of the Board of Directors of our Company, there have not arisen, since the date of September 30, 2024 as disclosed in this Red Herring Prospectus, any significant developments or any circumstance 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.

KEY FACTORS AFFECTING THE RESULTS OF OPERATION:

Our Companys future results of operations could be affected potentially by the following factors:

1. General economic conditions in India, changes in laws and regulations.

2. Changes in revenue mix, including geographic mix of our revenues.

3. Changes in Fiscal, Economic or Political conditions in India.

4. Increased market fragmentation.

5. Competition with existing and new entrants

6. Technology System and Infrastructure Risks

OUR SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies, "Annexure IV" beginning under Chapter titled "Financial Information of our Company" beginning on page 180 of the Red Herring Prospectus.

RESULTS OF KEY OPERATIONS

The following table sets forth select financial data from our restated financial statement of profit and loss for the period ended on September 30, 2024 and financial years ended March 31, 2024, 2023 and 2022 the components of which are also expressed as a percentage of total revenue for such period and financial years:

( in lakhs)

Particulars	For the period ended on				For the year ended on
	30.09.2024	% of	31.03.2024	% of	31.03.2023	% of	31.03.2022	% of
	Total Income		Total Income		Total Income		Total Income
Revenue from operation	2,315.60	99.61%	4,394.83	99.24%	3,016.63	99.62%	2,761.32	99.99%
Other income	9.11	0.39%	33.58	0.76%	11.62	0.38%	0.22	0.01%
Total Income	2,324.71	100.00%	4,428.41	100.00%	3,028.25	100.00%	2,761.54	100.00%
Materials Produced	678.91	29.20%	933.57	21.08%	1,019.04	33.65%	833.33	30.18%
Changes in inventories of materials in hand	-46.25	-1.99%	268.97	6.07%	-112.20	-3.71%	43.74	1.58%
Employee Benefits Expenses	348.97	15.01%	558.19	12.60%	747.81	24.69%	639.17	23.15%
Depreciation and Amortisation Cost	18.22	0.78%	23.86	0.54%	23.75	0.78%	32.75	1.19%
Other Expenses	450.04	19.36%	967.41	21.85%	932.41	30.79%	879.08	31.83%
Total Expenses	1,449.89	62.37%	2,752.00	62.14%	2,610.81	86.21%	2,428.07	87.92%
Profit Before Tax	874.82	37.63%	1,676.41	37.86%	417.44	13.78%	333.47	12.08%
Tax Expenses	223.17	9.60%	422.78	9.55%	106.00	3.50%	76.10	2.76%
Profit for the Year	651.66	28.03%	1,253.63	28.31%	311.44	10.28%	257.37	9.32%

Review of Restated Financials

Revenue from Operations: Revenue from operations mainly consists of sale of products. Sale of products are from following segments: 1) Skin care 2) Hair care 3) Personal care and hygiene & 4) Lip care. Other Income: Other income includes interest income on fixed deposits, interest income on Income Tax Refund and profit from sale of PPE. Total Income: Our total income comprises of revenue from operations and other income. Total Expenses: Companys total expenses consist of Purchases of material, Changes in inventories of Stock-in-trade, Employee benefit expenses, finance costs, depreciation and amortization expenses, other expenses. Materials Produced: Materials produced comprises of material acquired from Contract manufacturers. Changes in inventories of materials in hand: Changes in inventories of material in hand consists of costs attributable to an increase or decrease in inventory levels during the relevant financial period. Employee Benefits Expense: Employee benefit expense includes Salary & Wages, Staff Welfare Expenses, contribution to provident fund. Other expenses: Other expenses mainly consist of Advertisement and sales promotion, Discount allowed, Commission Expenses, Conveyance and Marketing expense, Legal and professional fees, Printing and stationery expense, etc.

REVIEW OF OPERATION FOR THE PERIOD ENDED SEPTEMBER 30, 2024

Revenue from Operations

The total revenue from operations for the period ending on September 30, 2024, amounted to 2,315.60 lakhs. Out of which 1,444.52 lakhs or 62.38% came from Skin care segment; 569.43 lakhs or 24.59% came from Hair care segment; 273.12 lakhs or 11.79% came from Personal care and hygiene segment; and 28.54 lakhs or 1.23% came from Lip care segment.

Other Income

Other income for the period ended September 30, 2024, amounted to 9.11 lakhs constituting 0.39% of total income which is entirely attributable to Interest income on deposits.

Materials produced

Material produced for the period ended September 30, 2024, amounted to 678.91 lakhs which was 29.20% of our Total Income.

Changes in inventories of materials in hand

The changes in inventories of materials in hand was 46.25 lakhs, the closing stock of stock-in-trade was 95.24 lakhs as of September 30, 2024, against an opening stock of 48.99 lakhs as at April 1, 2024.

Employee Benefits Expenses

The costs associated with employee benefits for the period that concluded on September 30, 2024, totalled 348.97 lakhs, making up 15.01% of the total income. These employee benefits expenses primarily included salaries and wages, amounting to 324.25 lakhs.

Depreciation and amortization expenses

Depreciation and amortization expenses for the period ended September 30, 2024, amounted to 18.22 lakhs constituting 0.78% of total income.

Other Expenses

Other expenses for the period ended September 30, 2024, amounted to 450.04 lakhs constituting 19.36% of total income which primarily comprised of Advertisement and sales promotion of 139.23 lakhs, Discount allowed of 131.01 lakhs, Commission Expense of 73.87 lakhs, Conveyance and Marketing expense of 38.84 lakhs, Rent expense of 14.85 lakhs, Printing and stationery expense of 15.09 lakhs.

Profit before tax

Profit before tax for the period ended September 30, 2024, amounted to 874.82 lakhs constituting 37.63% of total income.

Tax Expenses:

Tax expenses for the period ended September 30, 2024, were 223.17 lakhs. Tax expenses were 9.60% of total income.

Profit after Tax:

Profit after tax for the period ended September 30, 2024, amounted to 651.66 lakhs constituting 28.03% of total income.

COMPARISON OF F.Y. 2024 WITH F.Y. 2023:

Revenue from Operations

The Companys revenue from operations the financial year 2023-24 is 4,394.83 lakhs. This represents 1,378.20 lakhs or 45.69% increase compared to the previous financial years total income of 3,016.63 lakhs. This increase is primarily due to increase in Sales from Skin care of 810.54 lakhs, Hair care of 400.49 lakhs, Personal care and hygiene of 143.38 lakhs and Lip care of 23.79 lakhs.

Other Income

Other Income in the Financial Year 2023-24 increased by 21.95 lakhs or by 188.86%, reaching 33.58 lakhs in comparison to the 11.62 lakhs incurred in the Financial Year 2022-23. This increase was primarily due to increase in Interest income on deposits of 20.48 lakhs.

Materials produced

Materials produced decreased by 8.39%, reaching 933.57 lakhs in Financial Year 2023-24 as compared to the 1,019.04 lakhs incurred in the Financial Year 2022-23.

Changes in Inventories of materials in hand

Changes in Inventories of materials in hand was decrease of 268.97 lakhs for Fiscal 2024 as compared to an increase of 112.20 lakhs for Fiscal 2023, primarily attributable to a lower inventory of materials in hand at the end of Fiscal 2024.

Employee Benefits Expenses

Employee benefit expenses in the Financial Year 2023-24 decreased by 25.36%, reaching 558.19 lakhs in comparison to the 747.81 lakhs incurred in the Financial Year 2022-23. This fall in employee expenses primarily stemmed from decrease in salaries and wages, which fell by 173.65 lakhs and Contribution to provident fund, which went down by 11.80 lakhs.

Depreciation and Amortisation Expenses

Depreciation and amortization in the Financial Year 2023-24 increased by 0.47%, reaching 23.86 lakhs in comparison to the 23.75 lakhs incurred in the Financial Year 2022-23.

Other Expenses

Other expenses in the Financial Year 2023-24 increased by 3.75%, reaching 967.41 lakhs in comparison to the 932.41 lakhs incurred in the Financial Year 2022-23. This rise in other expenses was primarily attributed to several factors, including 83.59 lakhs increase in Advertisement and sales promotion and 63.83 lakhs increase in Discount allowed.

Tax Expenses

Tax expenses increased by 298.84%, reaching a total of 422.78 lakhs in the financial year 2023-24, in contrast to the 106.00 lakhs in the financial year 2022-23. This notable increase in tax expenses can be primarily attributed to 318.60 lakhs rise in current tax payments.

Profit after Tax (PAT)

Due to the aforementioned factors, the profit experienced an upswing, primarily driven by the growth in total income and a decrease in total expenses as a percentage of total income. The Profit After Tax (PAT) for the financial year 2023-24 reached 1,253.63 lakhs, marking a notable increase from 311.44 lakhs in the financial year 2022-23. In the financial year 2023-24, PAT constituted 28.31% of the total revenue, in contrast to 10.28% in the fiscal year 2022-23.

COMPARISON OF F.Y. 2023 WITH F.Y. 2022:

Revenue from Operations

The Companys revenue from operations the financial year 2022-23 is 3,016.63 lakhs. This represents 255.31 lakhs or 9.25% increase compared to the previous financial years total income of 2,761.32 lakhs. This increase is primarily due to increase in Sales from Skin care of 179.96 lakhs, Hair care of 73.65 lakhs and Lip care of 24.55 lakhs.

Other Income

Other Income in the Financial Year 2022-23 increased by 11.41 lakhs or by 5256.86%, reaching 11.62 lakhs in comparison to the 0.22 lakhs incurred in the Financial Year 2021-22. This increase was primarily due to increase in Interest income on deposits of 9.76 lakhs.

Materials produced

Materials produced increased by 22.29%, reaching 1,019.04 lakhs in Financial Year 2022-23 as compared to the 833.33 lakhs incurred in the Financial Year 2021-22.

Changes in Inventories of materials in hand

Changes in Inventories of materials in hand was increase of 112.20 lakhs for Fiscal 2023 as compared to an decrease of 43.74 lakhs for Fiscal 2022, primarily attributable to a higher inventory of materials in hand at the end of Fiscal 2023.

Employee Benefits Expenses

Employee benefit expenses in the Financial Year 2022-23 increased by 17.00%, reaching 747.81 lakhs in comparison to the 639.17 lakhs incurred in the Financial Year 2021-22. This rise in employee expenses primarily stemmed from increases in salaries and wages, which went up by 63.60 lakhs and Contribution to provident fund, which went up by 35.70 lakhs.

Depreciation and Amortisation Expenses

Depreciation and amortization in the Financial Year 2022-23 shrunk by 27.50%, reaching 23.75 lakhs in comparison to the 32.75 lakhs incurred in the Financial Year 2021-22.

Other Expenses

Other expenses in the Financial Year 2022-23 increased by 6.07%, reaching 932.41 lakhs in comparison to the 879.08 lakhs incurred in the Financial Year 2021-22. This rise in other expenses was primarily attributed to several factors, including 113.81 lakhs increase in Commission expenses, 69.89 lakhs increase in Advertisement and sales promotion and 31.14 lakhs increase in Discount allowed.

Tax Expenses

Tax expenses increased by 39.29%, reaching a total of 106.00 lakhs in the financial year 2022-23, in contrast to the 76.10 lakhs in the financial year 2021-22. This notable increase in tax expenses can be primarily attributed to 31.20 lakhs rise in current tax payments.

Profit after Tax (PAT)

Due to the aforementioned factors, the profit experienced an upswing, primarily driven by the growth in total income and a decrease in total expenses as a percentage of total income. The Profit After Tax (PAT) for the financial year 2022-23 reached 311.44 lakhs, marking a notable increase from 257.37 lakhs in the financial year 2021-22. In the financial year 2022-23, PAT constituted 10.28% of the total revenue, in contrast to 9.32% in the fiscal year 2021-22.

Cash Flow

The table below summaries our cash flows from our Restated Financial Information for the period ended September 30, 2024, and for the financial years ended on 2024, 2023, and 2022:

( in lakhs)

Particulars	For the period ended September 30, 2024	FY 2024	FY 2023	FY 2022
Net cash (used in)/ Generated from operating activities	1,014.63	(305.52)	479.19	301.81
Net cash (used in)/ Generated from investing activities	165.27	(138.73)	(127.35)	(5.85)
Net cash (used in)/ Generated from finance activities	-	(1.50)	(8.60)	-
Net increase/ (decrease) in cash and cash equivalents	1,179.90	(445.75)	343.24	295.96
Cash and Cash Equivalents at the beginning of the period	138.29	584.04	240.80	(55.16)
Cash and Cash Equivalents at the end of period	1,318.19	138.29	584.04	240.80

Cash Flow from/(used in) Operating Activities

Net cash generated from operating activities for the six-month period ended September 30, 2024 was 1,014.63 lakhs and our profit before tax that period was 874.82 lakhs. The difference was primarily attributable to depreciation of 18.22 lakhs, Interest income of (9.11) lakhs, and thereafter change in working capital of 355.26 lakhs respectively, resulting in gross cash generated from operations at 1,239.19 lakhs. We have income tax paid of 224.56 lakhs. Net cash generated from operating activities in the Fiscal 2024 was (305.52) lakhs and our profit before tax that period was 1,676.41 lakhs. The difference was primarily attributable to depreciation of 23.86 lakhs, Profit on sale of PPE of

(2.78) Lakhs, Interest income of (30.80) lakhs and thereafter change in working capital of 1,573.44 lakhs respectively, resulting in gross cash generated from operations at 93.25 lakhs. We have income tax paid of 398.77 lakhs. Net cash generated from operating activities in the Fiscal 2023 was 479.19 lakhs and our profit before tax that period was 417.44 lakhs. The difference was primarily attributable to depreciation of 23.75 lakhs, Interest income of (11.61) lakhs, and thereafter change in working capital of 149.37 lakhs respectively, resulting in gross cash generated from operations at 578.95 lakhs. We have income tax paid of 99.76 lakhs. Net cash generated from operating activities in the Fiscal 2022 was 301.81 lakhs and our profit before tax that period was 333.47 lakhs. The difference was primarily attributable to depreciation of 32.75 lakhs, Interest income of (0.22) lakhs, Loss on sale of PPE of (8.77) lakhs, and thereafter change in working capital of 29.57 lakhs respectively, resulting in gross cash generated from operations at 404.35 lakhs. We have income tax paid of 102.54 lakhs.

Cash Flow from/(used in) Investing Activities

For the six-month period ended September 30, 2024, our net cash used in investing activities was 165.27 lakhs, which was primarily for Purchase of PPE of (37.38) lakhs, Interest received of 13.16 lakhs and Proceeds from maturity of FD of 189.49 lakhs during the said period. In the Fiscal 2024, our net cash used in investing activities was (138.73) lakhs, which was primarily for Purchase of PPE of (89.13) lakhs, Proceeds from sale of PPE of 5.65 Lakhs, Interest received of 32.92 lakhs and Investment in FD of (88.17) lakhs during the said year. In the Fiscal 2023, our net cash used in investing activities was (127.35) lakhs, which was primarily for Purchase of PPE of (31.47) lakhs, Interest received of 5.44 lakhs and Proceeds from maturity of FD of (101.32) lakhs during the said year. In the Fiscal 2022, our net cash used in investing activities was (5.85) lakhs, which was primarily for Purchase of PPE of (11.07) lakhs, Proceeds from sale of PPE of 5.00 lakhs and Interest received of 0.22 lakhs during the said year.

Cash Flow from/(used in) Financing Activities

For the six-month period ended September 30, 2024, our net cash used in financing activities was 0 (Nil).

In the Fiscal 2024, our net cash used in financing activities was (1.50) lakhs. This was primarily due to proceeds from issue of share capital of 2 lakhs and repayment of short term borrowings of (3.50) lakhs. In the Fiscal 2023, our net cash used in financing activities was (8.60) lakhs. This was primarily due to proceeds from short term borrowings of 2.52 lakhs, and repayment of short term borrowings of (11.12) lakhs. In the Fiscal 2022, our net cash used in financing activities was 0 (Nil). This was primarily due to proceeds from short term borrowings of 0.66 lakhs, and repayment of short term borrowings of (0.66) lakhs.

Information required as per Item 11 (II) (C) (iv) of Part A of Schedule VI to the SEBI Regulations:

1. Unusual or infrequent events or transactions

To our knowledge there have been no unusual or infrequent events or transactions that have taken place during the last three years other than shut down of business due to COVID-19.

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 27 of this Red Herring Prospectus. To our knowledge, except as we have described in this Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

3. Income and Sales on account of major product/main activities

Income and sales of our Company mainly consists of sale of products from following segments: 1) Skin care 2) Hair care 3) Personal care and hygiene & 4) Lip care.

4. Whether the company has followed any unorthodox procedure for recording sales and revenues

Our Company has not followed any unorthodox procedure for recording sales and revenues.

5. 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 titled "Risk Factors" beginning on page 27 in this 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.

6. 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.

Increases in revenues are by and large linked to increases in volume of business.

7. Total turnover of each major industry services in which the issuer company operated.

The Company is in the business of, the relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page 101 of this Red Herring Prospectus.

8. Status of any publicly announced new products or business services.

Our Company has not announced any new services or business services.

9. The extent to which business is seasonal.

Our Companys business is not seasonal.

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

Our Company has appointed one of its promoter group entities, namely, M/s. Amderma Healthcare LLP, as its carrying and forwarding agent for storing our products, delivering and distributing the same. Consequently, we derive all of our revenue from M/s. Amderma Healthcare LLP.

The details of revenue earned by our Company from M/s. Amderma Healthcare LLP during the six-month period ended September 30, 2024 and the Fiscals ended March 31, 2024, March 31, 2023 and March 31, 2022 have been provided below:

( in lakhs)

		Six-month period ended September 30, 2024		Fiscal 2024		Fiscal 2023		Fiscal 2022
S. No. Name of the customer	Amount of revenue earned	% of total revenues	Amount of revenue earned	% of total revenues	Amount of revenue earned	% of revenues	total	Amount of revenue earned	% of total revenues
1. M/s. Amderma Healthcare LLP	2,277.40	98.35%	4,349.09	98.96%	2,963.58		98.24%	2,489.43	90.15%

The expenses incurred by our Company from top ten contract manufacturers during the preceding three years and the nine-month period ended September 30, 2024 have been provided below:

Six month period ended September 30, 2024:

( in lakhs)

S. No. Contract Manufacturer	Total expenses incurred	% of total expenses
1 Contract Manufacturer 1	149.91	22.08%
2 Contract Manufacturer 2	112.93	16.63%
3 Contract Manufacturer 3	109.28	16.10%
4 Contract Manufacturer 4	39.51	5.82%
5 Contract Manufacturer 5	27.44	4.04%
6 Contract Manufacturer 6	26.04	3.83%
7 Contract Manufacturer 7	17.91	2.64%
8 Contract Manufacturer 8	16.75	2.47%
9 Contract Manufacturer 9	12.40	1.83%
10 Contract Manufacturer 10	11.98	1.76%
Total	524.14	77.20%

March 31, 2024:

S. No. Contract Manufacturer	Total expenses incurred	% of total expenses
1 Contract Manufacturer 1	176.34	18.89%
2 Contract Manufacturer 2	175.28	18.78%
3 Contract Manufacturer 3	137.45	14.72%
4 Contract Manufacturer 4	38.38	4.11%
5 Contract Manufacturer 5	24.90	2.67%
6 Contract Manufacturer 6	24.79	2.66%
7 Contract Manufacturer 7	22.21	2.38%
8 Contract Manufacturer 8	19.58	2.10%
9 Contract Manufacturer 9	19.32	2.07%
10 Contract Manufacturer 10	18.83	2.02%
Total	657.08	70.38%

March 31, 2023:

S. No. Contract Manufacturer	Total expenses incurred	% of total expenses
1 Contract Manufacturer 1	177.69	17.44%
2 Contract Manufacturer 2	174.64	17.14%
3 Contract Manufacturer 3	161.70	15.87%
4 Contract Manufacturer 4	65.76	6.45%
5 Contract Manufacturer 5	36.53	3.59%
6 Contract Manufacturer 6	32.74	3.21%
7 Contract Manufacturer 7	23.94	2.35%
8 Contract Manufacturer 8	23.08	2.27%
9 Contract Manufacturer 9	17.89	1.76%
10 Contract Manufacturer 10	17.02	1.67%
Total	730.99	71.75%

March 31, 2022:

S. No. Contract Manufacturer	Total expenses incurred	% of total expenses
1 Contract Manufacturer 1	141.00	16.92%
2 Contract Manufacturer 2	138.29	16.59%
3 Contract Manufacturer 3	91.98	11.04%
4 Contract Manufacturer 4	83.77	10.05%
5 Contract Manufacturer 5	52.56	6.31%
6 Contract Manufacturer 6	41.00	4.92%
7 Contract Manufacturer 7	21.09	2.53%
8 Contract Manufacturer 8	19.02	2.28%
9 Contract Manufacturer 9	17.65	2.12%
10 Contract Manufacturer 10	17.15	2.06%
Total	623.51	74.82%

11. Competitive conditions.

Competitive conditions are as described under the Chapters titled "Industry Overview" and "Our Business" beginning on pages 101 and 110, respectively of this Red Herring Prospectus.