Baba Food Processing India Ltd Management Discussions

OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the three month period ended June 30, 2023 and for the financial years ended March 31, 2023, 2022 and 2021. One should read the following discussion and analysis of our financial condition and results of operations in conjunction with our section titled "Financial Statements" and the chapter titled "Financial Statement" on page 167 of the Draft Red Herring Prospectus. This discussion contains forward-looking statements and reflects our current views with respect to future events and our financial performance and involves numerous risks and uncertainties, including, but not limited to, those described in the section entitled "Risk Factors" on page 27 of this Draft Red Herring Prospectus. Actual results could differ materially from those contained in any forward-looking statements and for further details regarding forward-looking statements, kindly refer the chapter titled "Forward-Looking Statements" on page 19 of this Draft Red Herring Prospectus. Unless otherwise stated, the financial information of our Company used in this section has been derived from the Restated Financial Information. Our financial year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular financial year are to the 12-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 Baba Food Processing (India) Limited, our Company and our wholly owned Subsidiary, Panchakanya Foods Private Limited. Unless otherwise indicated, financial information included herein are based on our Restated Financial Statements for three months ended June 30, 2023 and the financial years ended March 31, 2023, 2022 and 2021 included in this Draft Red Herring Prospectus beginning on page 167 of this Draft Red Herring Prospectus

BUSINESS OVERVIEW

Our Company was incorporated on April 22, 2015, as ‘Baba Food Processing (India) Private Limited, a private limited company under the Companies Act, 2013, pursuant to a certificate of incorporation issued by the Registrar of Companies, Jharkhand at Ranchi. Subsequently, pursuant to a resolution passed by the Shareholders in an Extra-Ordinary General Meeting held on May 27, 2023, our Company was converted from a private limited company to a public limited company and a fresh certificate of incorporated dated July 20, 2023 was issued by the Registrar of Companies, Jharkhand at Ranchi. Consequent to the conversion of our Company, the name of our Company was changed to ‘Baba Food Processing (India) Limited.

Our state of art manufacturing unit is situated in Ranchi and houses two divisions namely, high fibre whole wheat atta division and refined flour division. Our Company manufactures high fibre Whole Wheat Atta (Wheat Flour) in our whole wheat atta division and Refined Flour (Maida), Tandori Atta, Semolina flour(Sooji) in our refined flour division. We also commercialise the by-product andwaste material, i.e., wheat branand other waste materials generated during our manufacturing process as cattle feed and fish feed, which makes our manufacturing unit a zero waste and zero discharge manufacturing unit. Our manufacturing unit is equipped with ultra-modern highly automated Buhlers Swiss Technology PesaMill for manufacturing of stoneless high fibre atta and also an ultra-modern highly automated Buhlers Swiss Technology Roller Flour Mill with installed capacity of 200 Tons per day. We also market and sell Chickpea Flour (Besan) and Roasted Gram Flour (Sattu) under our brand ‘Panchakanya , however we procure these products from third party manufacturers. We propose to utilise a portion of the Net Proceeds of this Issue, towards funding of capital expenditure proposed to be incurred towards setting up of machinery for manufacturing Chickpea Flour (Besan) and Roasted Gram Flour (Sattu) in our manufacturing unit at Ranchi.

For detailed information on the business of our Company please refer to "Our Business" beginning on page numbers 116 of this Draft Red Herring Prospectus.

Products Offered by our Company

Our offerings consist of:

1. Whole Wheat Atta (Wheat Flour)

2. Refine Flour (Maida)

3. Semolina flour (Sooji)

4. Tandori Atta

5. Wheat Bran (Choker)

6. Waste Dust

7. Trading Goods (Chickpea Flour (Besan) and Roasted Gram Flour (Sattu))

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST AUDITED FINANCIALS

After the date of last Audited accounts i.e. June 30, 2023, the Directors of our Company confirm that, there have not been any significant material developments.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factor" beginning on page 27 of this Draft Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

• We cannot assure you that the manufacturing unit proposed to be set up by our Subsidiary, Panchakanya Foods Private Limited will become operational as scheduled, or at all, or operate as efficiently as planned. If we are unable to commission our new manufacturing unit in a timely manner or without cost overruns, it may adversely affect our business, results of operations and financial condition.

• As on date we have not obtained any of the approvals, clearances and permissions as may be required from the relevant authorities for the proposed manufacturing units. In the event we are unable to obtain such approvals and permits, our business, results of operations, cash flows and financial condition could be adversely affected.

• The allotment of land to our Subsidiary for setting up the proposed manufacturing unit is subject to compliance with certain terms and conditions. Failure to comply with such conditions could adversely affect our business and financial condition.

• All of our experience in respect of our business operations is limited to Jharkhand, Odisha and West Bengal. Further, our Company has limited experience of manufacturing Chickpea Flour (Besan) and Roasted Gram Flour (Sattu). Hence, we have limited exposure in operating outside the aforementioned states and manufacturing products outside of our existing product portfolio, which may make it difficult to evaluate our past performance and prospects with respect to the same.

• We cannot assure that we shall be able to utilize our proposed manufacturing units to their full capacity or up to an optimum capacity, and non-utilisation of the same may lead to loss of profits or can result in losses, and may adversely affect our business, results of operations and financial condition.

• There can be no assurance that the objects of the Issue will be achieved within the time frame anticipated or at all, or that the deployment of the Net Proceeds in the manner intended by us will result in any increase in the value of your investment. Further, the plan for deployment of the Net Proceeds has not been appraised by any bank or financial institution.

• Our Company and our Subsidiary is yet to place orders for 100% of the plant and machinery for the proposed manufacturing units. Further the costs of certain machinery proposed to be installed in the proposed manufacturing units, have been quoted in US Dollar and Euro, and therefore are exposed to risk of fluctuation of foreign exchange rate. Any delay in placing orders or procurement of such plant and machinery or variation in foreign exchange rate, may further delay the schedule of implementation and increase the cost of commissioning the manufacturing unit.

• We depend on our dealers, wholesalers and retailers for a significant portion of our revenue, and any decrease in revenues or sales from any one of our key intermediaries may adversely affect our business and results of operations.

• We do not have long term agreements with suppliers for our raw materials and an increase in the cost of or a shortfall in the availability of such raw materials could have an adverse effect on our business, results of operations and financial condition.

DISCUSSION ON RESULT OF OPERATION

Our Significant Accounting Policies

For Significant accounting policies please refer Significant Accounting Policies, under Chapter titled "Restated Financial Statements" beginning on page 167 of the Draft Red Herring Prospectus.

Overview of Revenue & Expenditure

Our revenue and expenses are reported in the following manner:

Revenues

• Revenue of operations

Our Companys revenue is primarily generated from sale of high fibre Whole Wheat Atta (Wheat Flour), Refined Flour (Maida), Tandori Atta, Semolina flour(Sooji) and by-products and waste material, i.e., wheat bran and other waste materials generated during our manufacturing process.

? Other Income

Our other income mainly consists of interest from banks and incentives from suppliers.

(Rs In Lakhs)

Particulars	For the period ended
	June 30, 2023	March 31, 2023	March 31, 2022	March 31, 2021
Income
Revenue from operations	4,134.63	18,953.95	9,711.10	10,655.10
As a % of total Income	99.90%	99.95%	99.54%	98.94%
Other Income	4.12	10.22	45.20	114.45
As a % of Total Income	0.02%	0.05%	0.46%	1.06%
Total Revenue	4,138.75	18,964.17	9,756.30	10,769.55

Expenditure

Our total expenditure primarily consists of Cost of material consumed, Employee Benefit Expenses, Depreciation and Amortization Expenses, Finance Costs and Other Expenses.

? Employment Benefit Expenses

It includes salaries, wages and allowances, directors remuneration, contributions to welfare funds, provision for gratuity and other expenses.

? Material Cost of Goods Sold

This relates to the cost of material consumed in manufacturing, cost of traded goods sold, change in inventory of finish good, WIP and cost of consumable consumed.

? Other Expenses

It includes Power & Fuel, Consumption of Stores and Spare Parts, Consumption of Packing Materials, Advertisement expenses, Discount & Rebate, repair and maintenance, insurance expenses, audit fees, carriage outward, Rent including Lease Rentals, consultancy / professional fees, travelling and conveyance, staff welfare expenses, commission and others.

? Finance Costs

Our finance costs mainly include finance charges and interest.

? Depreciation

Depreciation includes depreciation and amortization.

RESULTS OF OUR OPERATION

(Rs In Lakhs)

Particulars	30-Jun-23	31-Mar-23	31-Mar-22	31-Mar-21
Incomes:
Revenue from Operations	4,134.63	18,953.95	9,711.10	10,655.10
% of total revenue	99.90%	99.95%	99.54%	98.94%
% Increase/(Decrease)	-	95.18%	(8.86%)	-
Other income	4.12	10.22	45.20	114.45
% of total revenue	0.10%	0.05%	0.46%	1.06%
% Increase/(Decrease)	-	-77.39%	(60.51%)	-
Particulars	30-Jun-23	31-Mar-23	31-Mar-22	31-Mar-21
Total Revenue	4,138.75	18,964.17	9,756.30	10,769.55
% Increase/(Decrease)	-	94.38%	(9.41%)	-
Expenses:
Material Cost of Goods Sold	3,343.14	16,092.23	7,933.92	8,865.86
% of total revenue	80.78%	84.86%	81.32%	82.32%
% Increase/(Decrease)	-	102.83%	(10.51%)	-
Employee Benefit expenses	119.97	421.89	298.74	310.77
% of total revenue	2.90%	2.22%	3.06%	2.89%
% Increase/(Decrease)	-	41.22%	(3.87%)	-
Other Expenses	294.74	1,342.53	990.16	1,020.76
% of total revenue	7.12%	7.08%	10.15%	9.48%
% Increase/(Decrease)	-	35.59%	(3.00%)	-
Total Expense	3,757.85	17,856.64	9,222.81	10,197.40
% of total revenue	90.80%	94.16%	94.53%	94.69%
% Increase/(Decrease)	-	93.61%	(9.56%)	-
Profit before Interest, Depreciation and Tax	380.90	1,107.52	533.48	572.15
% of total revenue	9.20%	5.84%	5.47%	5.31%
Depreciation and amortization Expenses	44.18	163.32	116.12	138.58
% of total revenue	1.07%	0.86%	1.19%	1.29%
% Increase/(Decrease)	-	40.65%	(16.21%)	-
Profit before Interest and Tax	336.72	944.20	417.37	433.57
% of total revenue	8.14%	4.98%	4.28%	4.03%
Financial Charges	60.31	246.36	136.20	124.09
% of total revenue	1.46%	1.30%	1.40%	1.15%
% Increase/(Decrease)	-	80.88%	9.76%	-
Profit before Tax and Extraordinary Expenses	276.41	697.84	281.17	309.48
% of total revenue	6.68%	3.68%	2.88%	2.87%
Extraordinary Expenses	-	-	-	-
% of total revenue	-	-	-	-
% Increase/(Decrease)	-	-	-	-
Restated Profit/(Loss) before tax	276.41	697.84	281.17	309.48
% of total revenue	6.68%	3.68%	2.88%	2.87%
% Increase/(Decrease)	-	148.20%	(9.15%)	-
Tax expenses/(income)
Current and prior years Tax (net)	77.36	186.70	55.54	29.08
Provisions for Deferred Tax	6.76	7.71	24.37	82.26
Total tax expenses	84.12	194.40	79.91	111.34
% of total revenue	2.03%	1.03%	0.82%	1.03%
Restated profit/(loss) after Tax	192.29	503.44	201.26	198.14
% of total revenue	4.65%	2.65%	2.06%	1.84%
% Increase/(Decrease)	-	150.14%	1.57%	-

Our income is dependent upon few major intermediaries, details of the same is as following:

(Rs in lacs)

Particulars	June 30, 2023		Fiscal 2023		Fiscal 2022		Fiscal 2021
	Amount	Percentage%	Amount	Percentage%	Amount	Percentage%	Amount	Percentage%
Top five customers	697.19	16.86%	3,042.00	16.05%	1,952.28	20.10%	2,058.79	19.32%
Top ten customers	934.12	22.59%	4,119.89	21.74%	2,673.74	27.53%	2,826.76	26.53%

REVIEW OF OPERATIONS FOR THE PERIOD ENDED JUNE 30, 2023 Income from Operations

Our revenue from operations for the period ended June 30, 2023 was Rs4,134.63 Lakhs which was about 99.90% of the total revenue and which comprises of revenue from sale of goods .

Other Income

Our other income for the period ended June 30, 2023 was Rs4.12 Lakhs which was about 0.10% of the total revenue and which includes interest and other income.

Expenditure

Material Cost of Goods Sold

The Material Cost of Goods Sold for the period ended June 30, 2023 were Rs 3,343.14 Lakhs which has about 80.78% of the total revenue.

Employee Benefits expenses

The employee benefits expenses for the period ended June 30, 2023 were Rs 119.97 Lakhs which was about 2.90% of the total revenue and which includes salaries, wages and allowances, directors remuneration, contributions to welfare funds, gratuity, staff welfare and other expenses.

Other Expenses

Other Expenses for the period ended June 30, 2023 were Rs 294.74 Lakhs which was about 7.12% of the total revenue and which includes Power & Fuel, Consumption of Stores and Spare Parts, Consumption of Packing Materials, Advertisement Expenses, Discount & Rebate, repair and maintenance, insurance expenses, audit fees, carriage outward, Rent including Lease Rentals, consultancy / professional fees, travelling and conveyance, staff welfare expenses, commission and others.

EBIDTA

Our EBITDA for the period ended June 30, 2023 were Rs 380.90 Lakhs.

Financial Costs

Financial costs for the period ended June 30, 2023 were Rs60.31 Lakhs which was about 1.46% of the total revenue and which consists of interest and other finance charges.

Depreciation

Depreciation for the period ended June 30, 2023 were Rs 44.18 Lakhs which was about 1.07% of the total revenue and which consists of depreciation and amortization expenses.

Profit /(Loss) after Tax

PAT for the period ended June 30, 2023 was Rs 192.29 Lakhs.

REVIEW OF OPERATIONS FOR THE PERIOD ENDED MARCH 31, 2023

Income from Operations

Our revenue from operations for the fiscal year ended March 31, 2023 was Rs 18,953.95 Lakhs which was about 99.95% of the total revenue and which comprises of revenue from sale of manufactured and traded goods.

Other Income

Our other income for the fiscal year ended March 31, 2023 was Rs 10.22 Lakhs which was about 0.05% of the total revenue and which includes interest and insurance & Other claim received.

Expenditure

Material Cost of Goods Sold

The Material Cost of Goods Sold for the period ended March 31, 2023 were Rs 16,092.23 Lakhs which has about 84.86% of the total revenue.

Employee Benefits expenses

The employee benefits expenses for the fiscal year ended March 31, 2023 were Rs 421.89 Lakhs which was about 2.22% of the total revenue and which includes salaries, wages and allowances, directors remuneration, contributions to welfare funds, gratuity, staff welfare and other expenses.

Other Expenses

Other Expenses for the fiscal year ended March 31, 2023 were Rs 1,342.53 Lakhs which was about 7.08% of the total revenue and which includes Power & Fuel, Consumption of Stores and Spare Parts, Consumption of Packing Materials, Advertisement Expenses, Discount & Rebate, repair and maintenance, insurance expenses, audit fees, carriage outward, Rent including Lease Rentals, consultancy / professional fees, travelling and conveyance, staff welfare expenses, commission and others.

EBIDTA

Our EBITDA for the fiscal year ended March 31, 2023 were Rs 1,107.52 Lakhs.

Financial Costs

Financial costs for the period ended March 31, 2023 were Rs 246.36 Lakhs which was about 1.30% of the total revenue and which consists of interest and other finance charges.

Depreciation

Depreciation for the fiscal year ended March 31, 2023 were Rs 163.32 Lakhs which was about 0.86% of the total revenue and which consists of depreciation and amortization expenses.

Profit /(Loss) after Tax

PAT for the fiscal year ended March 31, 2023 was Rs 503.44 Lakhs.

FISCAL YEAR ENDED MARCH 31, 2023 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31,

2022

Income

Total revenue has increased by Rs 9,242.85 Lakhs and 99.95%, from Rs 9,711.10 Lakhs in the fiscal year ended March 31, 2022 to Rs 18,953.95 Lakhs in the fiscal year ended March 31, 2023. The increase in revenue was on account of increase in manufacturing of finished products and increased sale volume.

Expenditure

Total Expenditure increased by Rs 8,791.19 Lakhs and 96.32%, from Rs 9,475.13 Lakhs in the fiscal year ended March 31, 2022 to Rs18,266.32 Lakhs in the fiscal year ended March 31, 2023. Overall expenditure was increased mainly due to increase in manufacturing of finished products.

Material Cost of Goods Sold

Material Cost of Goods Sold increased by Rs 8,158.31 Lakhs and 102.83%, from Rs 7,933.92 Lakhs in the fiscal year ended March31, 2022 to Rs 16,092.23 Lakhs in the fiscal year ended March 31, 2023. Materials Cost of Goods Sold was increased mainly due to increase volume of operations.

Employee Benefit Expenses

Employee Benefit Expenses in terms of value and percentage increased by Rs 123.15 Lakhs and 41.22% from Rs 298.74 Lakhs in the fiscal year ended March 31, 2022 to Rs 421.89 Lakhs in the fiscal year ended March 31, 2023. Overall employee cost was increased due to increase in number of man-hours in manufacturing process, increase staff strength and general increment in salary and incentives to employees.

Other Expenses

Other Expenses in terms of value and percentage increased by Rs352.37 Lakhs and 35.59% from Rs990.16 Lakhs in the fiscal year ended March 31, 2022 to Rs1,342.53 Lakhs in the fiscal year ended March 31, 2023. Other Expenses was increased mainly due to increase in Power & Fuel, Consumption of Stores and Spare Parts, Consumption of Packing Materials, Advertisement Expenses, Discount & Rebate, Carriage Outward, Staff Welfare Expenses, Travelling and Conveyance, Repairs and Maintenance, Rent including Lease Rentals, and other expenses.

EBIDTA

Profit before Interest, Depreciation and Tax has increased by Rs 574.04 Lakhs and 107.60% from Rs533.48 Lakhs in the fiscal year ended March 31, 2022 to Rs1,107.52 Lakhs in the fiscal year ended March 31, 2023. Profit before Interest, Depreciation and Tax was increased due to increase manufacturing of finished products and increased sale volume.

Finance Costs

Finance Costs in terms of value and percentage increased by Rs110.16 Lakhs and 80.88% from Rs 136.20 Lakhs in the fiscal year ended March 31, 2022 to Rs 246.36 Lakhs in the fiscal year ended March 31, 2023. Finance Costs was increased mainlydue to higher interest outgo and increased borrowings.

Depreciation & Amortization Expenses

Depreciation in terms of value increased by Rs 47.20 Lakhs and 40.65% from Rs 116.12 Lakhs in the fiscal year ended March 31, 2022 to Rs163.32 Lakhs in the fiscal year ended March 31, 2023. Increase in depreciation is due to increase in assets and is general in nature.

Net Profit after Tax and Extraordinary items

Net Profit has increased by Rs302.18 Lakhs and 150.14% from profit of Rs 201.26 Lakhs in the fiscal year ended March 31, 2022 to profit of Rs503.44 Lakhs in the fiscal year ended March 31, 2023. Net profit was increased due to increase in revenue from operations, increase in profit margins and higher sales volume.

FISCAL YEAR ENDED MARCH 31, 2022 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2021

Income

Total revenue has decreased by Rs944.00 Lakhs and 8.86%, from Rs 10,655.10 Lakhs in the fiscal year ended March 31, 2021 to Rs9,711.10 Lakhs in the fiscal year ended March 31, 2022. The decrease in revenue was on account of lower production of finish product and decreased sale volume.

Expenditure

Total Expenditure decreased by Rs984.94 Lakhs and 9.42%, from Rs10,460.07 Lakhs in the fiscal year ended March31, 2021 to Rs 9,475.13 Lakhs in the fiscal year ended March 31, 2022. Overall expenditure was decreased mainly due to lower production of finished products.

Material Cost of Goods Sold

Material Cost of Goods Sold decreased by Rs 931.94 Lakhs and 10.51%, from Rs 8,865.86 Lakhs in the fiscal year ended March31, 2021 to Rs7,933.92 Lakhs in the fiscal year ended March 31, 2022. Material Cost of Goods Sold was decreased mainly due to decrease in production of finish goods.

Employee Benefit Expenses

Employee Benefit Expenses in terms of value and percentage decreased by Rs12.04 Lakhs and 3.87% from Rs310.77 Lakhs in the fiscal year ended March 31, 2021 to Rs 298.74 Lakhs in the fiscal year ended March 31, 2022. Overallemployee cost was decreased due to decrease in number of man-hours in manufacturing process.

Other Expenses

Other Expenses in terms of value and percentage decreased by Rs30.60 Lakhs and 3.00% from Rs1,020.76 Lakhs in the fiscal year ended March 31, 2021 to Rs990.16 Lakhs in the fiscal year ended March 31, 2022. Other Expenses was decreased mainly due to decrease in Power & Fuel, Consumption of Stores and Spare Parts, Consumption of Packing Materials, Advertisement Expenses, Carriage Outward, Staff Welfare Expenses, Travelling and Conveyance, Repairs and Maintenance, Commission, and other expenses.

EBIDTA

Profit Before Interest, Depreciation and Tax has decreased by Rs -38.67 Lakhs and 6.76% from Rs 572.15 Lakhs in the fiscal year ended March 31, 2021 to Rs 533.48 Lakhs in the fiscal year ended March 31, 2022. Profit Before Interest, Depreciation and Tax was decreased due to decrease in production of finished products.

Finance Costs

Finance Costs in terms of value and percentage increased by Rs12.11 Lakhs and 9.76% from Rs 124.09 Lakhs in the fiscal year ended March 31, 2021 to Rs136.20 Lakhs in the fiscal year ended March 31, 2021. Finance Costs was increased mainlydue to higher interest outgo and increased borrowings.

Depreciation & Amortization Expenses

Depreciation in terms ofvalue decreased by Rs 22.47 Lakhs and 16.21% from Rs 138.58 Lakhs in the fiscal year ended March 31, 2021 to Rs 116.12 Lakhs in the fiscal year ended March 31, 2022. Decrease in depreciation is general in nature.

Net Profit after Tax and Extraordinary items

Net Profit has increased by Rs3.12 Lakhs and 1.57% from profit of Rs198.14 Lakhs in the fiscal year ended March 31, 2021 to profit of Rs201.26 Lakhs in the fiscal year ended March 31, 2022. Net profit was decreased due to decrease in material cost of goods sold.

Cash Flows

(Amount Rs in lacs)

Particulars	For the three month period ended June 30, 2023	For the year ended March 31,
		2023	2022	2021
Net Cash from Operating Activities	(339.94)	39.85	(802.65)	858.42
Net Cash from Investing Activities	(21.48)	(221.31)	325.38	(8.39)
Net Cash used in Financing Activities	(15.50)	499.95	587.36	(858.55)

Cash Flows from Operating Activities

Net cash from operating activities for the three months ended June 30, 2023 was Rs (339.94) lacs as compared to the Profit Before Tax at Rs 276.41 lacs. Net cash from operating activities for fiscal 2023 was at Rs 39.85 lacs as compared to the Profit Before Tax at Rs 697.84 lacs, while for fiscal 2022, net cash from operating activities was at Rs(802.65) lacs as compared to the Profit Before Tax at Rs 281.17 lacs. For fiscal 2021, the net cash from operating activities was Rs858.42 lacs compared to Profit before Tax of Rs 309.48 lacs.

Cash Flows from Investment Activities

Net cash from investing activities for the three months ended June 30, 2023 was Rs (21.48) lacs. This high cash outflow is attributed to increase in Fixed Assets in relation to Atta Plant Facilities. Net cash from investing activities for fiscal 2023 was at Rs (221.31) lacs due to additions in increase in Fixed Assets, while for fiscal 2022, net cash from investing activities was at Rs325.38 lacs due to maturity of fixed deposit. For fiscal 2021, the net cash from investing activities was Rs(8.39) lacs due to investment in fixed Assets.

Cash Flows from Financing Activities

Net cash from financing activities for the three months ended June 30, 2023 was Rs(15.50) lacs. Net cash from financing activities for fiscal 2023 was at Rs499.95 lacs due to increase in short term loans, while for fiscal 2022, net cash from financing activities was at Rs587.36 lacs also due to increase in borrowings. For fiscal 2021, the net cash from financing activities was Rs(858.55) lacs due to repayment of loan.

OTHER MATTERS

1. Unusual or infrequent events or transactions

Except as described in this Draft Red Herring 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

Other than as described in the Section titled "Financial Information" and chapter titled "Managements Discussion and Analysis of Financial Conditions and Results of Operations", beginning on Page 167 and 205 respectively of this Draft Red Herring Prospectus, to our knowledge there are no significant economic changes that materially affected or are likely to affect income from continuing Operations.

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

Other than as described in the chapter titled "Risk Factors" and "Managements Discussion and Analysis of Financial Conditions and Result of Operations", beginning on Page 27 and 205 respectively of this Draft Red Herring Prospectus, best to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our company from continuing operations.

4. Future relationship between Costs and Income

Other than as described in the chapter titled "Risk Factors" beginning on Page 27 of this Draft Red Herring Prospectus, best to our knowledge there are no factors, which will affect the future relationship between costs and income or which are expected to have a material adverse impact on our operations and finances.

5. Competition Conditions

Our Industry is fragmented consisting of large established players and small niche players. We compete with organized as well as unorganized sector on the basis of availability of product, product quality and product range. Further, there are no entry barriers in this industry and any expansion in capacity of existing manufacturers would further intensify competition. Industry is very competitive and we expect competition to continue and likely to increase in the future.

CAPITALISATION STATEMENT

(In Lakhs)

Particulars	Pre Issue June 30, 2023	Post Issue
Debt
Short Term Debt	1,949.07
Long Term Debt	1,301.87
Total Debt	3,250.94
Shareholders Fund (Equity)
Share Capital	1,200.00	[-]
Reserves & Surplus	1,492.26
Less: Miscellaneous Expenses not w/off	-
Total Shareholders Fund (Equity)	2,692.26
Long Term Debt/Equity	0.48
Total Debt/Equity	1.21

Notes:

1. Short term debts represent the debts which are expected to be paid/payable within 12 months.

2. Long term debts represent debts other than Short term debts as defined above and also excludes installment of term loans repayable within 12 months grouped under short term debt.

3. The figures disclosed above are based on restated statement of Assets and Liabilities of the Company as at June 30, 2023.