Delta Autocorp Ltd Management Discussions

OPERATIONS

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. Tire following discussion relates to our Company and is based on our restated financial statements. Our financial statements hare 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 "Delta Autocorp LLP" on May 20, 2016 under the provisions of Limited Liability Partnership Act, 2008 with Registrar of Companies, Kolkata vide (LLPIN:AAG-4165) and received a certificate of incorporation from the Registrar of Companies, Kolkata on May 20. 2016. Later, "Delta Autocorp LLP" was thereafter converted from a Limited Liability Partnership into a Private Limited Company under part I Chapter XXI of Section 366 of Companies Act. 2013 with the name of "Delta Autocorp Private Limited" and received a fresh certificate of incorporation from the Registrar of Companies. Central registration Centre on July 21. 2023. The Corporate Identification Number of our Company is U29304WB2023PTC263697. Later, our Company was converted into Public Limited Company and consequently name of company was changed from "Delta Autocorp Private Limited" to "Delta Autocorp Limited" vide Special resolution passed by the Shareholders at the Extra Ordinary General Meeting held on December 11^th. 2023 and a fresh certificate of incorporation dated May 8^th. 2024 issued by the Central Processing Centre. The corporate identification number of our Company is U29304WB2023PLC263697.

We have consistently grown in terms of our revenues over the past years. In the past years our revenues from operation were Rs. 1.666.71 lakhs in F.Y. 2020-21. Rs. 5.713.39 lakhs in F.Y.2021-22. 8.001.98 lakhs in the FY 2022-23. 1.774.01 Lakhs for the period from April 01. 2023 to July 20. 2023 and 4,922.91 Lakhs for the period from July 21. 2023 to January 3 1. 2024. Our Net Profit after tax for the above-mentioned periods are Rs. 42.08 lakhs. Rs. 419.97 lakhs. 513.13 lakhs. 126.18 and Rs. 583.18 lakhs respectively.

FINANCIAL KPIs OF THE COMPANY:

Particulars	For the period from July 21.2023 to January 31.2024	For the period from April 01, 2023 to July 20, 2023	For the year ended March 31
			2023	2022	2021
Revenue from Operations (Rs in Lakhs)	4,922.91	1.774.01	8,001.98	5,713.39	1,666.71
Growth in Revenue from Operations (%)	-	-	40.06%	242.79%	-
Other Income (Rs in Lakhs)	18.09	8.19	53.58	40.02	7.57
Total Income (Rs in Lakhs)	4,941	1,782.20	8,055.56	5,753.41	1.674.28
EBITDA (Rs in Lakhs)	797.26	187.75	784.30	622.66	67.39
EBITDA Margin (%)	16.14%	10.53%	9.74%	10.82%	4.03%
Profit After Tax (Rs in Lakhs)	583.18	126.18	513.13	419.97	42.08
PAT Margin (%)*	11.85%	7.11%	6.41%	7.35%	2.52%
ROE (%)	39.96%	10.59%	56.10%	90.49%	18.99%

* 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 AFFECTING OUR RESULT OF OPERATIONS

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:

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 A 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.

Competition

We operate in a competitive atmosphere. Our competition varies by market, geographic areas and type of products. Our Company may face stiff competition from domestic as well as global market as the dynamic changes. Some of our competitors may have greater resources than those available to us. While service quality, technical ability, performance records, etc. are key factors in client decisions among competitors, however, price& quality are the deciding factor in most cases. Further, this industry is fragmented with many small and medium sized companies and entities, which manufactures some of these products at various levels, which may adv ersely affect our business operation and financial condition. Further, there are no entry barriers in this industry and any expansion in capacity of existing market play ers would further intensify competition. Moreover, as we seek to diversify into new geographical areas, new territories, new emerging markets, we may face competition from competitors that have a pan-India presence and also from competitors that have a strong presence in regional markets. The markets in which we compete and intend to compete are undergoing, and are expected to continue to undergo, rapid and significant change. We expect competition to intensify as technological advances and consolidations continue. These competitive factors may force us to reduce rates, and to pursue new market opportunities. Increased competition could result in reduced demand for our products, increased expenses, reduced margins and loss of market share. Failure to compete successfully against current or future competitors could harm our business, operating cash flows and financial condition.

Significant Developments after January 31^st, 2024 that may affect our Future Results of Operations

Tire Directors confirm that company has issued bonus shares on 15^th July 2024. Except this there have been no other events or circumstances since the date of the last financial statements as disclosed in the Draft Red Herring Prospectus which materially or adversely affect or is likely to affect the business or profitability of our Company or the value of our assets, or our ability to pay liabilities within next twelve months.

SIGNIFICANT ACCOUNTING POLICY

a) Basis of preparation:

The restated summary statement of assets and liabilities of the Company as at January 31, 2024. July 20, 2023, March 31, 2023. March 31. 2022 and 2021 and the related restated summary statement of profits and loss and cash flows for the year/period ended January 31. 2024. July 20. 2023. 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 January 3 1.2024. July 20. 2023. March 31. 2023. March 31. 2022 and 2021 approved by the Board of Directors of the Company. Restated Summary Statements hav e 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 NSE 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 w ith 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.

b) 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.

c) Property Plant and Equipment including Intangible assets:

(i) 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.

(ii) Intangible Assets

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

d) Depreciation & Amortisation:

"Depreciation on fixed assets is calculated on a written down value method and 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."

e) 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.

f) Inventories:

Inventories comprises of Raw Material, Work in Progress & 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.

g) 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).

h) 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.

i) 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.

j) Provisions, Contingent Liabilities And Contingent Assets:

Provisions are recognised where there is a present legal or statutory obligation as a result of past events, it is probable that there will be an outflow of resources to settle the obligation and a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are possible obligation arising from future events, which will be confirmed on occurrence or non-occurrence of certain events not wholly within the control of the company, or present obligation where it is not probable that future outflow of resources will be required, or where reliable estimate of the amount of outflow required cannot be made. Contingent liabilities are not provided for in the standalone financial statements but are only disclosed by way of note in the standalone financial statements, 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.

k) Revenue Recognition

Revenue is Recognised only when significant risk and rewards of ownership has been transferred to the buyer and it can be reliably 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 certainty are accounted for, on final settlement.

l) 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.

m) 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 resuit 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.

n) 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) aftertax (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.

o) Employee Benefits:

Defined Contribution Plan:

Contributions payable to the recognised provident fund and ESIC 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.

The company recognizes the present value of the leave encashment obligation as a liability in the balance sheet.

Actuarial gains and losses are recognized immediately in the statement of profit and loss.

Detailed disclosures about the actuarial assumptions, method used for valuation, and the components of the leave encashment expense are provided in the financial statements.

This Projected Unit Credit (PUC) Method is used to measure the present value of the defined benefit obligation. It considers the accrued service and expected future salary increments.

p) 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. Intersegment 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

Particulars	For the period from July 21, 2023 to January 31,2024	% of Total**	For the period from April 01, 2023 to July 20,2023	% of Total**	For the year ended March 31,2023	% of Total**	For the year ended March 31, 2022	% of Total**	For the year ended March 31, 2021	% of Total**
INCOME
Revenue from Operations	4,922.91	99.63%	1,774.01	99.54%	8,001.98	99.33%	5,713.39	99.30%	1,666.71	99.55%
Other Income	18.09	0.37%	8.19	0.46%	53.58	0.67%	40.02	0.70%	7.57	0.45%
Total Income (A)	4,941.00	100.00%	1,782.20	100.00%	8,055.56	100.00%	5,753.41	100.00%	1,674.28	100.00%
EXPENDITURE
Cost of Raw Material Consumed	3,920.63	79.35%	1,356.05	76.09%	6,263.32	77.75%	4,358.76	75.76%	1,300.39	77.67%
Changes in inventories of work in progress and finished goods	(334.07)	-6.76%	17.08	0.96%	(13.22)	-0.16%	(26.62)	-0.46%	(35.22)	-2.10%
Employee benefits expense	242.03	4.90%	98.74	5.54%	461.52	5.73%	260.52	4.53%	130.59	7.80%
Finance costs	2.19	0.04%	13.40	0.75%	82.93	1.03%	47.95	0.83%	5.58	0.33%
Depreciation and amortization expense	15.82	0.32%	6.58	0.37%	23.40	0.29%	15.02	0.26%	11.17	0.67%
Other expenses	314.60	6.37%	121.57	6.82%	551.37	6.84%	532.91	9.26%	206.82	12.35%
Total Expenses (B)	4,161.20	84.22%	1,613.42	90.53%	7,369.32	91.48%	5,188.54	90.18%	1,619.33	96.72%
Profit before tax (A-B)	779.80	15.78%	168.78	9.47%	686.24	8.52%	564.87	9.82%	54.95	3.28%
Tax Expense/ (benefit)
(i) Current tax	198.48	4.02%	44.00	2.47%	177.32	2.20%	147.02	2.56%	16.60	0.99%
(ii) Deferred tax expenses/(credit)	(1.86)	-0.04%	(1.40)	-0.08%	(4.21)	-0.05%	(2.12)	-0.04%	(3.73)	-0.22%
Net tax expense / (benefit)	196.62	3.98%	42.60	2.39%	173.11	2.15%	144.90	2.52%	12.87	0.77%
Profit/(Loss) for the Period	583.18	11.80%	126.18	7.08%	513.13	6.37%	419.97	7.30%	42.08	2.51%

**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 w as 99.63%. 99.54%. 99.33%. 99.30% and 99.55% for the period from July 21, 2023 to January 31, 2024. April 01. 2023 to July 20. 2023 and Financial Years ended March 31. 2023, March 31, 2022 and March 31, 2021 respectively.

Particulars	For the Period from July 21, 2023 to January 31, 2024	For the Period from April 01, 2023 to July 20, 2023 ‘	For the year ended March 31,2023	For the year ended March 31,2022	For the year ended March 31,2021
Sale of Products	4921.96	1774.01	8001.98	5.713.39	1.666.71
Sale of services	0.95	-	-	-	-
Total	4,922.91	1,774.01	8,001.98	5,713.39	1,666.71

Other Income

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

Particulars	For the Period from July 21, 2023 to January 31, 2024	For the Period from April 1, 2023 to July 20, 2023 ‘	For the year ended March 31, 2023	For the year ended March 31, 2022	For the year ended March 31, 2021
Interest Received on Fixed deposits	0.87	0.12	1.26	0.28	0.27
Foreign Exchange Gain (Net)	2.21	0.59	28.40	29.50	2.14
Commission Income	-	-	-	-	0.01
Discount Received	14.51	6.57	19.44	9.23	5.15
Profit on sale of Fixed assetd>	-	-	-	0.63	-
Sundry balances written back	-	0.83	2.87	0.33	-
Miscellaneous Income	0.50	0.08	1.61	0.05	-
TOTAL	18.09	8.19	53.58	40.02	7.57

Expenditure

Our total expenditure primarily consists of Cost of Materials Consumed. Changes in Inventories of work in progress and finished goods. Employee benefit expenses. Finance costs. Depreciation & Amortization Expenses and Other Expenses.

Employee Benefit Expenses

Our employee benefits expense comprises of Salaries & Wages, Employers Contribution to Provident fund and ESI, Provision for Gratuity and leave encashment and Staff Welfare.

Finance costs

Our Finance cost expenses comprise of Bank Charges and Interest on Borrowings. Interest on delayed payment of taxes. Other Expenses

Other expenses primarily include Manufacturing expense. Carriage outward, Printing & stationary exp. Professional & Legal Fees. Rent Expense. Discount Expense. Office Expenses. Business promotion & marketing expenses. Travelling & Conveyance Expenses. Repair and Maintenance Expense.

Particulars	For the Period from July 21, 2023 to January 31, 2024	For the Period from April 1, 2023 to July 20,2023 *	For the year ended March 31, 2023	For the year ended March 31, 2022	For the year ended March 31, 2021
Direct expense
Power & fuel	4.22	2.00	4.36	3.15	2.17
Repairs and Maintenance	8.34	0.49	22.34	23.57	8.91
Manufacturing expense	85.88	30.21	164.46	171.15	52.98
As Auditors:
For Statutory Audit	0.60	0.25	0.60	0.60	0.60
For Taxation matters	0.40	0.15	0.40	0.40	0.40
Rent	31.57	6.32	22.68	19.47	15.81
Duties, rates and taxes	0.77	0.12	0.10	10.28	0.66
Printing & Stationery	2.58	1.46	7.29	6.00	2.13
Courier Charges	-	1.96	12.07	4.93	1.48
Insurance premium	-	2.27	3.43	0.32	0.55
Professional Charges	7.79	0.41	20.13	33.11	17.91
Carriage outward.	89.33	36.69	131.73	145.98	52.85
Travelling & Conveyance Expenses	35.37	22.52	69.77	43.19	24.60
Business promotion & marketing expenses	16.15	6.59	46.66	41.02	11.64
Discount Expense	15.43	5.80	30.31	20.60	7.91
Office Expenses	5.20	1.83	5.82	6.17	6.20
Donation Expenses	-	0.02	0.15	0.06	-
Security Guards	2.74	0.86	2.26	1.57	-
Telephone & Internet Expenses	2.75	0.60	0.89	1.34	-
Vehicles Parking	-	0.35	0.56	-	-
PDI Reimbursement	-	0.47	0.76	-	-
Membership fees	0.85	0.20	2.99	-	-
Subvention fees	1.44	-	-	-	-
Interest and late fees statutory demand	3.19	-	1.61	-	0.02
TOTAL	314.60	121.57	551.37	532.91	206.82

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 from July 21,2023 to January 31,2024

Revenue from Operations

For the period from July 21,2023 to January 31,2024, Revenue from Operations of our company was Rs 4,922.91 Lakhs. Other Income

For the period from July 21, 2023 to January 31, 2024, Other Income of our company was Rs 18.09 Lakhs.

Total Revenue

For the period from July 21, 2023 to January 31, 2024, the total income of our company was Rs 4,941.00 Lakhs. Expenditure

Cost of Raw Materials Consumed

For the year from July 21, 2023 to January 31, 2024, Cost of Materials Consumed was Rs 3,920.63 lakhs.

Changes in inventories of work in progress and finished goods

For the year from July 21,2023 to January 31,2024, Changes in inventories of work in progress and finished goods was Rs (334.07) lakhs.

Employee Benefit Expenses

For the period from July 21,2023 to January 31,2024, our Company incurred for employee benefit expenses ofRs 242.03 Lakhs.

Finance Costs

The finance costs for the period from July 21, 2023 to January 31, 2024 was Rs 2.19 Lakhs.

Depreciation & Amortization Expense

Depreciation & Amortization Expense for the period from July 21, 2023 to January 31, 2024 was Rs 15.82 Lakhs.

Other Expenses

For the period from July 21, 2023 to January 31, 2024, our other expenses were Rs 314.60 Lakhs.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the period from July 21, 2023 to January 31, 2024 ofRs 779.80 Lakhs. Profit/ (Loss) after Tax

Profit aftertax forthe period from July 21, 2023 to January 31, 2024 was at Rs 583.18 Lakhs.

For the period from April 01, 2023 to July 20, 2023 Revenue from Operations

For the period from April 01, 2023 to July 20, 2023, Revenue from Operations of our company was Rs 1,774.01 Lakhs. Other Income

For the period from April 01, 2023 to July 20, 2023, Other Income of our company was Rs 8.19 Lakhs.

Total Revenue

For the period from April 01, 2023 to July 20, 2023, the total income of our company was Rs 1,782.20 Lakhs. Expenditure

Cost of Raw Materials Consumed

For the year from April 01, 2023 to July 20, 2023, Cost of Materials Consumed was Rs 1,356.05 lakhs.

Changes in inventories of work in progress and finished goods

For the year from April 01, 2023 to July 20, 2023, Changes in inventories of work in progress and finished goods was Rs 17.08 lakhs.

Employee Benefit Expenses

For the period from April 01, 2023 to July 20, 2023, our Company incurred for employee benefit expenses ofRs 98.74 Lakhs.

Finance Costs

The finance costs for the period from April 01, 2023 to July 20, 2023 was Rs 13.40 Lakhs.

Depreciation & Amortization Expense

Depreciation & Amortization Expense for the period from April 01, 2023 to July 20, 2023 was Rs 6.58 Lakhs.

Other Expenses

For the period from April 01, 2023 to July 20, 2023, our other expenses were Rs 121.57 Lakhs.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the period from April 01, 2023 to July 20, 2023 of Rs 168.78 Lakhs. Profit/ (Loss) after Tax

Profit aftertax for the period from April 01, 2023 to July 20, 2023 was at Rs 126.18 Lakhs.

Fiscal 2023 compared with fiscal 2022 Revenue from Operations

The Revenue from Operations of our company for fiscal year 2023 was Rs 8,001.98 Lakhs against Rs 5,713.39 Lakhs for Fiscal year 2022. An increase 40.06% in revenue from operations. The significant increase was contributed by the launch of two new high speed scooter models, the “Deltic ZGS” and the “Deltic Trento”, on April 22 and October 22 respectively, Further, boost to revenue was given by our flagship scooter “Deltic Legion” launch way back in December 2021. Along with the same, we also added 156 new dealers across India expanding our geographical presence.

Other Income

The other income of our company for fiscal year 2023 was Rs 53.58 Lakhs against Rs 40.02 Lakhs for Fiscal year 2022. An increase of 33.88% in other income was due the discounts received on bulk purchased leading us to economies of scale along with foreign exchange gains arising in ordinary course of business.

Total Income

The total income of our company for fiscal period 2023 was Rs 8,055.56 Lakhs against Rs 5,753.41 Lakhs total income for Fiscal period 2022. An increase of 40.01% in total income. This increase was primarily due to increase in sales coming from launch of new scooters and boost in sales of current products along with bulk discounts and foreign exchange gains.

Expenditure

Cost of Raw Materials Consumed

In Fiscal 2023, Cost of Raw Materials Consumed was Rs 6,263.32 lakhs against 4,358.76 in fiscal 2022. This increase of 43.69% was in line with the production and sales of our EVs. The cost of materials consumed reflects the cost of raw materials used in the production of our EVs, and represented 77.75% and 75.76% of our total income for Fiscals 2023 and 2022, respectively.

Changes in inventories of work in progress and finished goods

In Fiscal 2023, Changes in inventories of work in progress and finished goods was Rs (13.22) Lakhs against Rs (26.62) Lakhs in fiscal 2022. The change was due to growth of our business.

Employee Benefit Expenses

In Fiscal 2023, our Company incurred for employee benefit expenses Rs 461.52 Lakhs against Rs 260.52 Lakhs expenses in fiscal 2022. The increase of 77.15%. This increase was due to an increase in the size of our workforce to support the growth in sales of our EVs along with appointment of senior level employees.

Finance Costs

The finance costs for the Fiscal 2023 was Rs 82.93 Lakhs while it was Rs 47.95 Lakhs for Fiscal 2022.This Increase of 72.95% was due to increase borrowings from financial institutions to finance our business operations.

Other Expenses

In fiscal 2023, our other expenses were Rs 551.37 Lakhs and Rs 532.91 Lakhs in fiscal 2022. An increase of 3.46% was due to increase in operation which led to increase in travelling & other operation cost.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal 2023 ofRs 686.24 Lakhs against profit before tax ofRs 564.87 Lakhs in Fiscal 2022, This increase of 21.49% was due to the increase in revenue from operations occurring from growth in sales of existing products and launch of new products along with achieving economies of scale on the other hand.

Profit/ (Loss) after Tax

Profit aftertax for the Fiscal 2023 was at Rs 513.13 Lakhs against profit aftertax ofRs 419.97 Lakhs in fiscal 2022, An 22.18% increase. This was due to the growth in operations leading to growth in profit before taxes.

Fiscal 2022 compared with fiscal 2021

Revenue from Operations

The Revenue from Operations of our company for fiscal year 2022 was Rs 5,713.39 Lakhs against Rs 1,666.71 Lakhs for Fiscal year 2021. An increase of 242.79% in revenue from operations. This significant increase was due to introduction of two-wheeler segment by introducing a new model “Deltic Costa” in March 2021 fostering the sales in 2022. Moreover, this two-fold increase in revenue was majorly because of the recovery in automobile industry post-pandemic which help us to increase our customer base from 92 dealers to 211 dealers during the year.

Other Income

The other income of our company for fiscal year 2022 was Rs 40.02 Lakhs against Rs 7.57 lakhs for Fiscal year 2021. This increase of 428.67% in Other Income was mainly attributable to increase in foreign exchange gain for import of raw material, which increased with the increase in sales.

Total Income

The total income of our company for fiscal year 2022 was Rs 5,753.41 Lakhs against Rs 1,674.28 Lakhs total income for Fiscal year 2021. An increase of 243.63% in total income. This increase was due to recovery of electric vehicle industry post pandemic along with launch of new scooter model and supported by the favourable foreign exchange rates.

Expenditure

Cost of Raw Materials Consumed

In Fiscal 2022, Cost of Raw Materials Consumed was Rs 4,358.76 lakhs against Rs 1,300.39 Lakhs in fiscal 2021. This increase of235.19% was in line with the commencement of scooter sales in Fiscal 2022 representing 75.76% and 77.67% of our total income for Fiscals 2023 and 2022, respectively.

Changes in inventories of work in progress and finished goods

In Fiscal 2022, Changes in inventories of work in progress and finished goods was Rs (26.62) Lakhs against Rs (35 .22) Lakhs in fiscal 2021. This was due to increase in sales which led to more frequent rotation of inventory.

Employee Benefit Expenses

In Fiscal 2022, our Company incurred for employee benefit expenses Rs 260.52 Lakhs against Rs 130.59 Lakhs expenses in fiscal 2021. An increase of 99.49% was due to an increase in the size of our workforce to support our sales and operations.

Finance Costs

The finance costs for the fiscal 2022 was Rs 47.95 Lakhs while it was Rs 5.58 Lakhs for fiscal 2021. This increase of 759.32% is due to an increase in borrowings from financial institutions and the interest expense thereon.

Other Expenses

In fiscal 2022, our other expenses were Rs 532.91 Lakhs and Rs 206.82 Lakhs in fiscal 2021. An increase of 157.67% was due to increase in Operations which led to increase in operational expenses like carriage, assembling charges, etc.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal 2022 ofRs 564.87 Lakhs against profit before tax of Rs 54.95 Lakhs in Fiscal 2021. An increase of 927.97%. An increase was due to the increase in revenue from operations arising out of launch of scooters fostering the sales, favourable foreign exchange rates along with achieving operational efficiency on the other hand.

Profit/ (Loss) after Tax

Profit after tax for the Fiscal 2022 was at Rs 419.97 Lakhs against profit after tax of Rs 42.08 Lakhs in fiscal 2021, A subsequent increase of 898.03% was due to the increase in profit before taxes.

Cash Flows

Particulars	For the period from July 21, 2023 to January 31, 2024	For the period from April 01, 2023 to July 20,2023	For the year ended March 31,
			2023	2022	2021
Net Cash from Operating Activ ities	177.22	3.81	502.44	(352.80)	(65.60)
Net Cash from Investing Activities	(80.09)	(43.78)	(14.08)	(57.78)	(21.27)
Net Cash used in Financing Activities	(80.82)	14.91	(463.65)	410.69	38.56

Cash Flows from Operating Activities

1. For the period from July 21, 2023 to January 31, 2024. net cash flow from operating activities was Rs 177.22 Lakhs. This comprised of the profit before tax of Rs 779.80 Lakhs, which was primarily adjusted for depreciation and amortization expenses ofRs 15.82 Lakhs. Interest income ofRs 0.87 Lakhs. Finance Cost Rs 2.19 Lakhs and Gratuity Provision and Leave Encashment Provisions of Rs 5.98 Lakhs. Hie resultant operating profit before working capital changes was Rs 802.92 Lakhs, which was primarily adjusted for an increase in inventory ofRs 51.53 lakhs, increase in trade receivables during the period ofRs 243.15 Lakhs, increase in loans and advances ofRs 556.09 lakhs, decrease in other current assets of Rs 18.26 lakhs, increase in trade & other payables during the period of Rs 434.38 Lakhs, decrease in Other current liabilities during the period ofRs 131.50 Lakhs, increase in Other long term liabilities during the period ofRs 26.64 Lakhs, increase in Short term provisions during the period ofRs 0.21 Lakhs, decrease in Long term provisions during the period ofRs 0.84 Lakhs.

Cash Generated from Operations was Rs 299.30 Lakhs which was reduced by Direct Tax paid for Rs 122.08 Lakhs resulting into Net cash flow generated from operating activities ofRs 177.22 Lakhs.

2. For the period from April 01. 2023 to July 20. 2023. net cash flow generated from operating activities was Rs 3.81 Lakhs. This comprised of the profit before tax of Rs 168.78 Lakhs, which w as primarily adjusted for depreciation and amortization expenses ofRs 6.58 Lakhs. Interest income ofRs 0.12 Lakhs. Finance Cost Rs 13.40 Lakhs, Gratuity Provision and Leave Encashment Provisions ofRs 4.49 Lakhs and Balances Written back ofRs 0.83 Lakhs. The resultant operating profit before working capital changes was Rs 192.30 Lakhs, which was primarily adjusted for an increase in inventory of Rs 18.58 lakhs, decrease in trade receivables during the period of Rs 41.06 Lakhs, increase in loans and advances of Rs 419.06 lakhs, decrease in other current assets of Rs 1.35 lakhs, increase in trade & other payables during the period of Rs 69.53 Lakhs, increase in Other current liabilities during the period of Rs 130.07 Lakhs, increase in Other long term liabilities during the period ofRs 7.80 Lakhs, decrease in Short term provisions during the period ofRs 0.25 Lakhs and decrease in Long term provisions during the period ofRs 0.19 Lakhs.

Cash Generated from Operations was Rs 4.03 Lakhs which was reduced by Direct Tax paid for Rs 0.22 Lakhs resulting into Net cash flow generated from operating activities of Rs 3.81 Lakhs.

3. In FY 2023. net cash flow generated from operating activities was Rs 502.44 Lakhs. This comprised of the profit before tax of Rs 686.24 Lakhs, which was primarily adjusted for depreciation and amortization expenses of Rs 23.40 Lakhs. Interest income ofRs 1.26 Lakhs. Finance Cost Rs 82.93 Lakhs. Gratuity Provision and Leave Encashment Provisions of Rs 8.78 Lakhs and balances written back ofRs 2.87 Lakhs. Tire resultant operating profit before working capital changes was Rs 797.22 Lakhs, which was primarily adjusted for an decrease in inventory ofRs 13.22 lakhs, increase in trade receivables during the rear ofRs 40.55 Lakhs, decrease in loans and advances ofRs 129.95 lakhs, increase in other current assets ofRs 21.78 lakhs, decrease in trade & other payables during the year ofRs 71.27 Lakhs, decrease in Other current liabilities during the year of Rs 53.36 Lakhs, increase in Other long term liabilities during the year of Rs 63.25 Lakhs, decrease in Short term provisions during the year ofRs 0.32 Lakhs, decrease in Long term provisions during the year of Rs 1.07 Lakhs.

Cash Generated from Operations was Rs 815.29 Lakhs which was reduced by Direct Tax paid for Rs 312.85 Lakhs resulting into Net cash flow generated from operating activities ofRs 502.44 Lakhs.

4. In FY 2022, net cash used in for operating activities was Rs 352.80 Lakhs. This comprised of the profit before tax ofRs 564.87 Lakhs, which was primarily adjusted for depreciation and amortization expenses of Rs15.02 Lakhs, Interest income ofRs 0.28 Lakhs, Finance Cost Rs 47.95 Lakhs, Gratuity Provision and Leave Encashment Provisions ofRs 4.08 Lakhs and Balances written back ofRs 0.33 Lakhs. The resultant operating profit before working capital changes was Rs 630.68 Lakhs, which was primarily adjusted for an increase in inventory ofRs 989.41 lakhs, decrease in trade receivables during the year ofRs 0.24 Lakhs, increase in loans and advances of Rs 203.93 lakhs, increase in other current assets ofRs 8.13 lakhs, increase in trade & other payables during the year ofRs 195.73 Lakhs, increase in Other current liabilities during the year ofRs 50.29 Lakhs, increase in Other long term liabilities during the year ofRs 111.74 Lakhs, increase in Short term provisions during the year of Rs 1.41 Lakhs and decrease in Long term provisions during the year of Rs 0.55 Lakhs.

Cash used in Operations was Rs 211.93 Lakhs which was reduced by Direct Tax paid for Rs 140.87 Lakhs resulting into Net cash flow used in operating activities ofRs 352.80 Lakhs.

5. In FY 2021, net cash used in for operating activities was Rs 65.60 Lakhs. This comprised of the profit before tax ofRs 54.95 Lakhs, which was primarily adjusted for depreciation and amortization expenses ofRs 11.17 Lakhs, Interest income ofRs 0.27 Lakhs, Finance Cost Rs 5.58 Lakhs, Gratuity Provision and Leave Encashment Provisions ofRs 2.80 Lakhs. The resultant operating profit before working capital changes was Rs 74.23 Lakhs, which was primarily adjusted for increase in inventory of Rs 150.84 lakhs, increase in trade receivables during the year ofRs 1.45 Lakhs, increase in loans and advances of Rs 45 .93 lakhs, increase in trade & other payables during the year of Rs 1.29 Lakhs, increase in Other current liabilities during the year of Rs 87.60 Lakhs, increase in Other long term liabilities during the year of Rs 9.58 Lakhs, increase in Short term provisions during the year of Rs 0.19 Lakhs, decrease in Long term provisions during the year of Rs 0.19 Lakhs.

Cash used in Operations was Rs 25.52 Lakhs which was reduced by Direct Tax paid for Rs 40.08 Lakhs resulting into Net cash used in operating activities ofRs 65.60 Lakhs.

Cash Flows from Investment Activities

1. For the period from July 21, 2023 to January 31, 2024, net cash used in investing activities was Rs 80.09 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances of Rs 80.96 Lakhs and Interest received ofRs 0.87 Lakhs.

2. For the period from April 01, 2023 to July 20, 2023, net cash used in investing activities was Rs 43.78 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances ofRs 43.90 Lakhs and Interest received of Rs 0.12 Lakhs.

3. In FY 2023, net cash used in investing activities was Rs 14.08 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances ofRs 15.34 Lakhs and Interest received ofRs 1.26 Lakhs.

4. In FY 2022, net cash used in investing activities was Rs 57.78 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances ofRs 59.34 Lakhs, Proceeds from sale of fixed assets received ofRs 1.28 Lakhs and Interest received ofRs 0.28 Lakhs.

5. In FY 2021. net cash used in investing activities was Rs 21.27 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances ofRs 21.54 Lakhs and Interest received ofRs 0.27 Lakhs.

Cash Flows from Financing Activities

1. For the period from July 21.2023 to January 31, 2024. net cash used in financing activities was Rs 80.82 Lakhs, which predominantly comprised of repayment of borrowings ofRs 78.63 Lakhs and payment of finance cost of Rs 2.19 Lakhs.

2. For the period from April 01. 2023 to July 20. 2023. net cash generated from financing activities was Rs 14.91 Lakhs, which predominantly comprised of Increase in borrowings ofRs 53.49 Lakhs, payment of finance cost ofRs 13.40 Lakhs. Withdrawal of cash by partner ofRs 25.40 Lakhs and Contribution of cash from partner ofRs 0.22 Lakhs.

3. In FY 2023. net cash used in financing activities was Rs 463.65 Lakhs, which predominantly comprised of decrease in borrowings of Rs 3 19.97 Lakhs, payment of finance cost of Rs 82.93 Lakhs, Withdrawal of cash by partner of Rs 60.75 Lakhs.

4. In FY 2022. net cash generated from financing activities was Rs 410.69 Lakhs, which predominantly comprised of Increase in borrowings ofRs 429.92 Lakhs, payment of finance cost ofRs 47.95 Lakhs, Withdrawal of cash by partner of Rs 36.31 Lakhs and Contribution of cash from partner ofRs 65.03 Lakhs.

5. In FY 2021. net cash generated from financing activities was Rs 38.56 Lakhs, which predominantly comprised of. Increase in long term borrowings ofRs 49.97 Lakhs, payment of finance cost ofRs 5.58 Lakhs, Withdrawal of cash by partner ofRs 22.00 Lakhs and Contribution of cash from partner ofRs 16.17 Lakhs.

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 53 and 179 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 32 and 179 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 32 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

We face competition from existing and potential competitors which is common for any business. We have, over a period of time, developed certain competitors who have been discussed in section titles “Business Overview” beginning on page no. 113 of this Draft Red Herring Prospectus.

6. To extend to which business is seasonal

Our Company is engaged in the business of Business of manufacturing and selling of electric 2W & 3W EVs using cutting edge components procured from reputed OEMs who use design & engineering specification given by us using state-of-the-art manufacturing process and business of our company is not seasonal

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

Our top five customers contribute 32.04%, 19.99%, 17.20% and 21.8% and 19.7% of our total sales for the year/period ended on March 31, 2021, March 31,2022, March 31, 2023 and July 20^th, 2023 and January 31^st, 2024 respectively.

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

Otherwise stated in the Draft Red Herring Prospectus our company has not publicly announced any new business segment till the date of this Draft Red Herring Prospectus.

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

We operate in only one segment.

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

Our Company is engaged in the business of manufacturing and selling of electric 2W, 3W. Increases in revenues are by and large linked to increase in sales of company and also dependent on the price realization of our products.