Freshara Agro Exports Ltd Management Discussions

<dhhead-MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS</dhhead-

You should read the following discussion and analysis of financial condition and results of operations together wit! our financial statements included in this Draft Red Herring Prospectus. The following discussion relates to om Company and is based on our restated financial statements. Our financial statements have been prepared ir 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 coulc 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 formed as a Partnership Firm under the Partnership Act, 1932 having Firm Registration Number FR/Chennai Central/845/2015 in the name and style of "Freshara Picklz Exports" pursuant tc Deed of Partnership dated July 24, 2015. Subsequently our firm was converted from Partnership firm into a public limited company as per the provision of Part I Chapter XXI of the Companies Act, 2013 with the name and style oJ "FRESHARA AGRO EXPORTS LIMITED" and received a Certificate of Incorporation from the Registrar oJ Companies, Tamil-Nadu and Andaman situated at Chennai dated November 22, 2023

We have consistently grown in terms of our revenues over the past years. In the past years our revenues from operation were Rs. 11,127.91 lakhs in F.Y.2021-22, Rs. 12,599.45 lakhs in the FY 2022-23, Rs. 12,247.66 Lakhs for the period ended January 23, 2024 and Rs.7,130.99 for the period from January 24, 2024 to March 31, 2024. Our Net Profit after tax for the above-mentioned periods are Rs. 97.36 lakhs, Rs. 908.20 lakhs, Rs. 1,185.64 lakhs and Rs. 996.77 lakhs respectively.

Factors contributing to the growth of our Revenue:

FY 2021-22

1. Significant Surge in Revenue from Operations:

Our revenue from operations saw substantial expansion, increasing from Rs 8,533.97 lakhs to Rs 11,127.91 lakhs in FY 2021-22, reflecting an impressive growth of almost 30%. This growth was primarily attributed to the successful realization of organic opportunities within our current product offerings, particularly the increase in export contract revenue from diversified international clients.

2. Strategic Initiatives:

As part of our growth strategy, the company focused on promoting our capabilities and success stories with significant export projects, including partnerships with multinational clients, aligning well with our growth objectives. Increased visibility and accessibility in international markets played a pivotal role in the overall revenue surge.

FY 2022-23

1. Steady Revenue Increase:

Our revenue from operations experienced a positive trajectory, escalating from Rs 11,127.91 lakhs in FY 2021-22 to Rs 12,599.45 lakhs in FY 2022-23, marking a substantial growth of almost 13.22%. This increase was primarily a result of an increase in the number of export contracts awarded during FY 2022-23.

2. Strategic Marketing:

The company created a track record of positive testimonials and timely delivery of export projects, which clearly built trust and credibility in international markets, crucial for winning new contracts and maintaining a competitive edge.

FY 2023-24

1. Steady Revenue Increase:

Our revenue from operations experienced a positive trajectory, escalating from 12,599.45 lakhs in FY 2022-23 & reaching Rs 12,247.66 lakhs for the period ended January 23, 2024, and Rs 7,130.99 lakhs for the period from January 24, 2024, to March 31, 2024, marking a total of Rs 19,378.65 lakh, Marking a substantial growth of almost 54%. This increase was primarily a result of an increase in the number of export contracts awarded during FY 2023-24.

2. Strategic Expansion:

The company expanded by taking on export projects in other countries, significantly enhancing our market presence and client base organically.

FINANCIAL KPIs OF THE COMPANY:

	KEY FINANCIAL PERFORMANCE
Particulars	January 24,2024 to March 31, 2024	April 1, 2023 to January 23, 2024	F.Y 2022-23	F.Y 2021-22
Revenue from Operations	7,130.99	12,247.66	12,599.45	11,127.91
Growth in Revenue from Operations (%)	-	-	13.22%	30.40%
Total Income	7,324.98	12,476.60	12,700.22	11,840.68
EBITDA	1,385.66	2,176.10	1,749.30	495.41
EBITDA Margin (%)	18.92%	17.44%	13.77%	4.18%
Net Profit for the Year / Period	996.77	1,185.64	908.20	97.36
PAT Margin (%)	13.98%	9.68%	7.21%	0.87%
Return on Net Worth	36.96%	36.35%	48.95%	10.45%
Return on Average Net Worth	33.46%	46.34%	65.17%	16.13%
Return on Capital Employed	10.04%	20.25%	26.77%	8.90%
Debt-Equity Ratio	3.99	2.10	2.25	3.73

* 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:

- Natural Calamities e.g. Tsunami

- Global GDP growth

- Prevailing commercial freight rates;

- Changes in laws or regulations

- Political Stability of the Country;

- Competition from existing players;

- Our dependence on limited number of customers/suppliers/brands for a significant portion of our revenues;

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

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

- Failure to adapt to the changing technology in our industry of operation may adversely affect our business and financial condition;

- Occurrence of Environmental Problems & Uninsured Losses;

- Conflicts of interest with affiliated companies, the promoter group and other related parties;

- The performance of the financial markets in India and globally;

- Our ability to expand our geographical area of operation;

- Concentration of ownership among our Promoter.

SIGNIFICANT ACCOUNTING POLICY

a) Basis of preparation:

The summary statement of restated assets and liabilities of the Company Restated Financial Statements for the period from January 24, 2024 to March 31, 2024, for the period from April 01, 2023 to January 23, 2024 and the Financial Years ended on March 31, 2023, 2022 (collectively referred to as the "Restated summary financial information) have been prepared specifically for the purpose of inclusion in the offer document to be filed by the Company in connection with the proposed Initial Public Offering (hereinafter referred to as ‘IPO).

The restated summary financial information has been prepared by applying necessary adjustments to the financial statements (‘financial statements) of the Company. The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the accounting standards specified under section 133 of the Companies Act, 2013, of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable and Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) regulations 2018, as amended (the "Regulations"). 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 consistently applied.

"While the company was operating as a partnership firm before its conversion into a public limited company, the financial statements till the date of conversion was prepared as per the accounting standards applicable to partnership firm. However, upon the conversion of partnership firm into a public limited company on November 22, 2023 and the consequent applicability of the provisions of the Companies Act, 2013, it became necessary to prepare the financial statements as per the applicable provisions of the Companies Act, 2013. Accordingly, the Board of the company has fixed the first financial year of the company from the date of incorporation of the company i.e., from November 22, 2023 to March 31, 2024 and the second and subsequent financial years of the company has been fixed as the period from 01st day of April to 31st day of March of each year. Accordingly, the first financial statements of the company were prepared for the period from November 22, 2023.

The Company has derived the position as on January 24, 2024 and transferred all the assets and liabilities of firm to the company pursuant to completion of all amendments in registrations, licenses and bank accounts to run the operations effectively in new name of the company w.e.f. January 24, 2024. Hence, we confirm that the company has complied with the disclosures requirement as per Companies Act 2013, Partnership Act, 1932, applicable IGAAP Accounting Standards and any other relevant applicable statutory provisions."

b) Use of estimates:

The preparation of the financial statements in conformity with Generally Accepted Accounting Principles requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and the reported amounts of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, income taxes, post - sales customer support and the useful lives of Property Plant and Equipments and intangible assets.

c) Property Plant and Equipment including Intangible assets:

Property, Plant and Equipments are stated at cost, less accumulated depreciation. Cost includes cost of acquisition including material cost, freight, installation cost, duties and taxes, and other incidental expenses, incurred up to the installation stage, related to such acquisition. Property, Plant and Equipments purchased in India in foreign currency are recorded in Rupees, converted at the exchange rate prevailed on the date of purchase. Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less any accumulated amortisation and any accumulated impairment loss.

d) Depreciation & Amortisation:

The Company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and calculated the depreciation as per the Written Down Value (WDV) method. Depreciation on new assets acquired during the year is provided at the rates applicable from the date of acquisition to the end of the financial year. In respect of the assets sold during the year, depreciation is provided from the beginning of the year till the date of its disposal. Intangible assets are amortised on a straight-line basis over the estimated useful life as specified in Schedule II of the Companies Act 2013. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss. In respect of the assets sold during the year, amortisation is provided from the beginning of the year till the date of its disposal. The Entity has depreciated its fixed assets using WDV Method at the income tax rates. Depreciation Expenses has been restated using SLM Method at the useful life as specified in Schedule-II of Companies Act, 2013. As in the reporting period of restated financials, the company was a partnership firm and accordingly, was not following the provisions of companies act, 2013, as the case may be, in respect of rates of depreciation charged on fixed assets. However, in restated financials, the company has adopted the method and rates of depreciation in terms of Schedule II to The Companies act, 2013, as applicable in respective financial year. The company has recalculated the depreciation since financial year 2015-16 and accordingly, retrospective impact has been given in the restated financials.

The estimated useful lives of assets are as follows:

Useful life of Property, Plant and Equipments

Category	Schedule - II Part C	Useful life
Computer & Accessories	XII (ii)	3 years
Furniture & Fittings	V (i)	10 years
Buildings	I ( c )	30 years
Plant & Machinery	IV (i) (a)	15 years
Vehicles	VI (3)	8 Years

e) Investments:

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

f) Cash and Cash Equivalents:

Cash and cash equivalents comprise cash and cash deposits with banks. The Company considers all highly liquid investments with a original maturity at a date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

g) Cash Flow Statement:

Cash flows are reported using indirect method, whereby net profit/loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

h) Foreign Currency Transactions:

Domestic Operation:

I . Initial Recognition:

A foreign currency transactions are accounted for in accordance with AS-11 "The Effects of Changes in Foreign Exchange Rates", on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

II . Measurement:

Foreign currency monetary items are reported using the closing rate.

Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

III . Treatment of Foreign Exchange:

Exchange differences arising on settlement/restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expenses in the Statement of Profit and Loss.

i) Provisions, Contingent Liabilities:

A provision is recognised if, as a result of past event, the Company has a present legal obligation that can be estimated reliably and it is probable that an outflow of economic benefit will be required to settle the obligation. Provisions are determined by the best estimate of outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

j) Details of Share capital

The Company was incorporated by conversion of erstwhile Partnership Firm, hence the partners of firm become subscriber of the Company. The partners of the firm were issued shares in the company against the outstanding credit balance of the partners capital account with is nothing but the capital contribution in partnership firm before conversion of such firm into the Company.

k) Revenue Recognition

Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and other sales-related taxes. Revenue from the sale of goods relates to the Exports in Food & Agro Products. Revenue is recognised once the performance obligation has been met. This is deemed to be when the goods and services have been collected by, or delivered to, the customer in accordance with the agreed delivery terms.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Firm and the revenue can be reliably measured in accordance with AS-9, Revenue Recognition. Sales are recognized on accrual basis, and only after transfer of services to the customer.

The following other revenues are recognized and accounted on their accrual with necessary provisions for all known liabilities and losses as per AS 9.

Interest Income: Revenue is recognized on the time proportion basis after taking into account the amount outstanding and the rate applicable.

Dividend Income: Dividend Income is recognised when the owners right to receive payment is established.

Other Income: Other items of income and expenditure are recognized on accrual basis and as a going concern basis, and the accounting policies are consistent with the generally accepted accounting policies.

l) Taxes On Income:

Income Tax expense is accounted for in accordance with AS-22 "Accounting for Taxes on Income" for both Current Tax and Deferred Tax stated below:

A. Current Tax:

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

B. Deferred Tax:

Deferred tax is recognised, subject to the consideration of prudence, as the tax effect of timing difference between the taxable income and accounting income computed for the current accounting year using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carried forward losses, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

m) Earnings Per Share

As the Company was formed through conversion of the Partnership Firm therefore, Profit for calculation of Basic & Diluted EPS for the period ended March 31, 2024,23rd January 2024 and for the year ended March 31, 2023 and 2022 on the basis of the profits after tax available as per the financials of Partnership Firm. Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Hence EPS and NAV per share for all the years of reporting period have been calculated by considering the number of shares outstanding post conversion of Partnership Firm into Company (i.e. 1,70,00,000 Equity Shares of Rs 10 each).

n) Employee Benefits:

Post-Employment Benefits:

Defined Benefit Plan:

Gratuity liability is a defined benefit obligation and is unfunded. The Company accounts for liability for future gratuity benefits based on the actuarial valuation using Projected Unit Credit Method carried out as at the end of each financial year.

Defined Contribution Plan:

Provident Fund: Eligible employees receive benefit from provident fund covered under the Provident Fund Act. Both the employee and the company make monthly contributions. The employer contribution is charged off to Profit & Loss Account as an expense.

RESULTS OF OUR OPERATIONS

Particulars	For the period from January 24, 2024 to March 31, 2024	% of Total**	For the period ended January 23, 2024	% of Total**	For the year ended March 31, 2023	% of Total**	For the year ended March 31, 2022	% of Total**
INCOME
Revenue from Operations	7,130.99	97.35%	12,247.66	98.17%	12,599.45	99.21%	11,127.91	93.98%
Other Income	193.99	2.65%	228.95	1.83%	100.76	0.79%	712.77	6.02%
Total Income (A)	7,324.98	100.00%	12,476.60	100.00%	12,700.22	100.00%	11,840.68	100.00%
EXPENDITURE
Cost of Raw Material Consumed	3,868.66	52.81%	9,007.67	72.20%	8,545.99	67.29%	6,868.50	58.01%
Changes in inventories of finished goods	539.54	7.37%	(1,225.69)	-9.82%	(1,094.71)	-8.62%	391.36	3.31%
Direct Manufacturing Expenses	1,274.74	17.40%	1,854.85	14.87%	2,830.45	22.29%	3,564.19	30.10%
Employee benefits expense	151.14	2.06%	318.59	2.55%	314.91	2.48%	234.45	1.98%
Finance costs	90.73	1.24%	286.32	2.29%	286.62	2.26%	265.62	2.24%
Depreciation and amortization expense	24.90	0.34%	97.78	0.78%	103.68	0.82%	94.20	0.80%
Other expenses	95.68	1.31%	307.96	2.47%	330.14	2.60%	261.50	2.21%
Total Expenses (B)	6,045.39	82.53%	10,647.48	85.34%	11,317.08	89.11%	11,679.81	98.64%
Profit before tax (A-B)	1,279.59	17.47%	1,829.12	14.66%	1,383.14	10.89%	160.87	1.36%
Tax Expense/ (benefit)
(i) Current tax	317.82	4.34%	619.48	4.97%	454.94	3.58%	34.51	0.29%
(ii) Deferred tax expenses/(credit)	(35.00)	-0.48%	24.00	0.19%	20.00	0.16%	29.00	0.24%
Net tax expense / (benefit)	282.82	3.86%	643.48	5.16%	474.94	3.74%	63.51	0.54%
Profit/(Loss) for the Period	996.77	13.61%	1,185.64	9.50%	908.20	7.15%	97.36	0.82%

**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 operations as a percentage of our total income was 97.35%, 98.17%, 99.21% and 93.98% for the period from January 24, 2024 to March 31, 2024, for the period ended January 23, 2024 and Financial Years ended March 31, 2023 and March 31, 2022 respectively.

Particulars	For the period from January 24 to March 31, 2024	For the period ended January 23, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022
Sales & Services
Sale from Manufacturing Activities
- Exports Sales	7,119.26	12,238.82	12,510.86	10,835.23
- Domestic Sales	11.73	8.84	88.59	292.68
Total Revenue from Operations	7,130.99	12,247.66	12,599.45	11,127.91

Other Income

Our Other Income primarily consists of Interest Income, Other non-operating income includes Gain on Exchange Rate Fluctuations, Subsidies and other benefits, Professional and consultancy, Insurance claimed and Gain on sale of Fixed asset etc.

Particulars	For the period January 24 to March 31, 2024	For the period ended January 23,2024	For the year ended March 31, 2023	For the year ended March 31, 2022
Interest Income	0.59	1.13	4.36	4.05
Other Non-Operating Income (Refer annexure below)	193.40	227.82	96.41	708.72
Total	193.99	228.95	100.76	712.77

ANNEXURE: OTHER NON-OPERATING INCOME

Particulars	For the period January 24 to March 31, 2024	For the period ended January 23, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022
Other Non-operating Income:
Subsidies and other benefits	-	38.00	69.38	98.66
Gain on Exchnage Rate Fluctuations	107.51	165.78	-	320.54
Discount received	2.17	0.89	0.88	1.42
Professional and consultancy	-	-	25.58	273.82
Insurance claimed	-	15.95	0.56	0.05
Gain on sale of Fixed asset	83.72	6.40	-	9.63
Scrap sales	-	0.80	-	4.59
Total	193.40	227.82	96.41	708.72

Expenditure

Our total expenditure primarily consists of Cost of Materials Consumed, Changes in Inventories of Finished Goods, Direct Manufacturing Expense, Employee benefit expenses, Finance costs, Depreciation & Amortization Expenses and Other Expenses.

Employee Benefit Expenses

Our employee benefits expense comprises of Salaries & Wages, Directors Remuneration, Provision for Gratuity and Staff Welfare.

Finance costs

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

Other Expenses

Other expenses primarily include Office Rent, Audit Fees, Professional & Consulting Fees, Commission paid to Selling Agents, Office Expenses, Travelling & Conveyance Expenses, Repair and Maintenance Expense, Testing & Calibration and Insurance Expenses, Rates & Taxes, Loss on Exchange Rate Fluctuations and Misc Expenses.

Particulars	For the period January 24 to March 31, 2024	For the period ended January 23, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022
Office Rent	8.59	24.24	20.82	13.24
Audit Fee	12.50	5.25	7.00	5.95
Printing & Stationery	9.00	8.09	2.68	1.81
Professional & Consulting fee	12.92	26.03	71.21	72.97
Electricity Charges	0.49	3.68	4.29	4.88
Commission paid to Selling Agents	20.09	127.99	60.08	76.99
Travelling & Conveyance Expense	3.55	26.94	18.48	12.72
Telephone & Internet Expenses	0.28	2.21	3.56	2.76
Advertisement Expenses	1.10	4.37	2.02	0.46
Insurance	3.75	8.21	6.69	14.15
Rates and Taxes	0.48	4.21	25.31	16.85
Postage & Courier Expenses	2.64	10.56	7.08	5.33
Vehicle Maintenance	1.20	23.68	10.89	16.30
Preliminary expenses	4.02	-	-	-
Loss on Sale of Fixed Assets	-	-	0.19	-
Loss on Exchange Rate Fluctuations	-	-	53.29	-
Misc Expenses	15.08	32.50	36.54	17.10
Total	95.68	307.96	330.14	261.50

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 January 24, 2024 to March 31, 2024

Revenue from Operations

For the period from January 24, 2024 to March 31, 2024, Revenue from Operations of our company was Rs 7,130.99 Lakhs.

Other Income

For the period from January 24, 2024 to March 31, 2024, Other Income of our company was Rs 193.99 Lakhs. Total Revenue

For the period from January 24, 2024 to March 31, 2024, the total income of our company was Rs 7,324.98 Lakhs. Expenditure

Cost of Raw Materials Consumed

For the period from January 24, 2024 to March 31, 2024, Cost of Materials Consumed was Rs 3,868.66 lakhs. Direct Manufacturing Expenses

For the period from January 24, 2024 to March 31, 2024, Direct Expenses was Rs 1,274.74 lakhs.

Changes in inventories of finished goods

For the period from January 24, 2024 to March 31, 2024, Changes in inventories of stock-in-trade was Rs 539.54 lakhs.

Employee Benefit Expenses

For the period from January 24, 2024 to March 31, 2024, our Company incurred for employee benefit expenses of Rs 151.14 Lakhs.

Finance Costs

The finance costs for the period from January 24, 2024 to March 31, 2024 was Rs 90.73 Lakhs.

Depreciation & Amortization Expense

Depreciation & Amortization Expense for the period from January 24, 2024 to March 31, 2024 was Rs 24.90 Lakhs. Other Expenses

For the period from January 24, 2024 to March 31, 2024, our other expenses were Rs 95.68 Lakhs.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the period from January 24, 2024 to March 31, 2024 of Rs 1,279.59 Lakhs.

Profit/ (Loss) after Tax

Profit after tax For the period from January 24, 2024 to March 31, 2024 was at Rs 996.77 Lakhs.

For the period ended January 23, 2024 Revenue from Operations

For the period ended January 23, 2024, Revenue from Operations of our company was Rs 12,247.66 Lakhs.

Other Income

For the period ended January 23, 2024, Other Income of our company was Rs 228.95 Lakhs.

Total Revenue

For the period ended January 23, 2024, the total income of our company was Rs 12,476.60 Lakhs.

Expenditure

Cost of Raw Materials Consumed

For the period ended January 23, 2024, Cost of Materials Consumed was Rs 9,007.67 lakhs.

Direct Manufacturing Expenses

For the period ended January 23, 2024, Direct Manufacturing Expenses was Rs 1,854.85 lakhs.

Changes in inventories of finished goods

For the period ended January 23, 2024, Changes in inventories of stock-in-trade was Rs (1,225.69) lakhs. Employee Benefit Expenses

For the period ended January 23, 2024, our Company incurred for employee benefit expenses of Rs 318.59 Lakhs. Finance Costs

The finance costs for the period ended January 23, 2024 was Rs 286.32 Lakhs.

Depreciation & Amortization Expense

Depreciation & Amortization Expense for the period ended January 23, 2024 was Rs 97.78 Lakhs.

Other Expenses

For the period ended January 23, 2024, our other expenses were Rs 307.96 Lakhs.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the period ended January 23, 2024 of Rs 1,829.12 Lakhs. Profit/ (Loss) after Tax

Profit after tax for the period ended January 23, 2024 was at Rs 1,185.64 akhs.

Fiscal 2023 compared with fiscal 2022 Revenue from Operations

The Revenue from Operations of our company for fiscal year 2023 was Rs 12,599.45 Lakhs against Rs 11,127.91 Lakhs for Fiscal year 2022. An increase 13.22% in revenue from operations. This increase was due to primarily attributed to the successful realization of organic opportunities within our Pickles Export business, particularly the increase in demand for our high-quality products from diversified international clients.

Other Income

The other income of our company for fiscal year 2023 was Rs 100.76 Lakhs against Rs 712.77 Lakhs other income for Fiscal year 2022. A decrease of 85.86% in other income. This decrease was due to the following factors:

1. Gain on Exchange Rate Fluctuations: There was no gain on exchange rate fluctuations in FY 2022-23 compared to a substantial gain of Rs320.54 Lakhs in FY 2021-22.

2. Professional and Consultancy Income: In FY 2021-22, there was income from the sale of a license (MEIS) Export incentive. However, this Export Incentive was discontinued by Government of India in FY 22-23, leading to a decrease in our professional and consultancy income.

3. Subsidies and Other Benefits: The Capital Goods subsidies and other benefits decreased from Rs98.66 Lakhs in FY 2021-22 to Rs69.38 Lakhs in FY 2022-23.

These factors combined resulted in the overall reduction in other income for the fiscal year 2022-23.

Total Income

The total income of our company for fiscal year 2023 was Rs 12,700.22 Lakhs against Rs 11,840.68 Lakhs total income for fiscal year 2022. An increase of 7.26% in total income. This increase was due to primarily attributed to the successful realization of organic opportunities within our Pickles Export business, particularly the increase in demand for our high-quality products from diversified international clients.

Expenditure

Cost of Raw Materials Consumed

In fiscal 2023, our cost of raw material consumed were Rs 8,545.99 Lakhs against Rs 6,868.50 Lakhs cost of raw material consumed in fiscal 2022. An increase of 24.42%. This increase was due to Following factors:

1. Increase in Sales: The total revenue from operations increased from ^11,127.91 Lakhs in FY 2021-22 to Rs12,599.45 Lakhs in FY 2022-23. This increase in sales required a higher volume of raw materials to meet the production demands, thereby increasing the cost of raw material consumed.

2. Higher Purchasing Costs: The purchase of raw materials during the year increased from Rs6,892.53 Lakhs in FY 2021-22 to Rs8,985.67 Lakhs in FY 2022-23. This increase in purchasing costs contributed significantly to the higher cost of raw material consumed.

Overall, the increase in sales and the higher costs of purchasing raw materials were the primary drivers for the 24.42% increase in the cost of raw materials consumed.

Direct Manufacturing Expenses

In fiscal 2023, our direct expenses were Rs 2,830.45 Lakhs against Rs 3,564.19 Lakhs in fiscal 2022. A decrease of 20.59%. This decrease was due to the following factors:

Reduced Freight Charges: Freight charges paid decreased significantly from Rs2,924.56 Lakhs in fiscal 2022 to Rs1,976.23 Lakhs in fiscal 2023. This reduction in freight charges was a major factor contributing to the overall decrease in direct expenses.

Changes in inventories of finished goods

In fiscal 2023 our changes in inventories of finished goods were Rs (1,094.71) Lakhs against Rs 391.36 Lakhs changes in inventories of finished goods in fiscal 2022.

For FY 22 and FY23, the inventory holding period remained constant at 60 days, indicating stable inventory management practices. This stability reflects efficient forecasting and procurement strategies tailored to the specific demands of the agro export market. The reduction can be attributed to enhanced inventory turnover and better alignment of production with export schedules.

Employee Benefit Expenses

In fiscal 2023, our Company incurred for employee benefits expense of Rs 314.91 Lakhs against Rs 234.45 Lakhs expenses in fiscal 2022. An increase of 34.32%. This increase was due to:

The increase in employee benefits expense for fiscal 2023, which amounted to Rs 314.91 Lakhs compared to Rs 234.45 Lakhs in fiscal 2022 (an increase of 34.32%), can be attributed to several factors based on the provided data:

1. Salaries & Wages: There was a significant increase in salaries and wages from Rs 185.72 Lakhs in 2022 to Rs 254.64 Lakhs in 2023. This increase of Rs 68.92 Lakhs (37.11%) contributed greatly to the overall increase in employee benefits expense.

2. Staff Welfare Expenses: Staff welfare expenses also saw a rise from Rs 44.67 Lakhs in 2022 to Rs 56.84 Lakhs in 2023, marking an increase of Rs 12.17 Lakhs (27.24%).

3. Provision for Gratuity: The provision for gratuity, though not as substantial as other components, increased slightly from Rs 4.07 Lakhs in 2022 to Rs 3.43 Lakhs in 2023.

The inclusion of directors/partners remuneration in 2023 also adds to the increase in expenses, although no specific value is available for fiscal 2022 for direct comparison.

Thus, the main factors for the increase in employee benefits expense are the rise in salaries & wages and staff welfare expenses.

Finance Costs

The finance costs for the fiscal 2023 was Rs 286.62 Lakhs while it was Rs 265.62 Lakhs for fiscal 2022. An increase of 7.91% was due to Following Factors:

1. Interest Expenses from Borrowings: There was an increase in interest expenses from borrowings, which went from Rs 185.09 Lakhs in 2022 to Rs 205.51 Lakhs in 2023. This increase of Rs 20.42 Lakhs (11.03%) is a significant contributor to the overall increase in finance costs.

Other Expenses

In fiscal 2023, our other expenses were Rs 330.14 Lakhs and Rs 261.50 Lakhs in fiscal 2022. This increase of 26.25% was due to Following factors.

1. Loss on Exchange Rate Fluctuations: In fiscal 2023, there was a significant expense due to loss on exchange rate fluctuations amounting to Rs 53.29 Lakhs, which was not present in fiscal 2022.

2. Miscellaneous Expenses: Miscellaneous expenses increased from Rs 17.10 Lakhs in fiscal 2022 to Rs 36.54 Lakhs in fiscal 2023, an increase of Rs 19.44 Lakhs (113.68%).

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal 2023 of Rs 1,383.14 Lakhs against profit before tax of Rs 160.87 Lakhs in Fiscal 2022. An increase of 759.79%. This increase was due to Following Factors

Increase in Revenue from Operations:

• The revenue from operations increased from Rs 11,127.91 Lakhs in Fiscal 2022 to Rs 12,599.45 Lakhs in Fiscal 2023. This represents an increase of Rs 1,471.54 Lakhs (13.22%).

• This increase in revenue significantly contributed to the higher profit before tax, as it provided a larger base of income to cover the companys fixed and variable costs.

Effective Cost Management:

• The company effectively managed its expenses, ensuring that the increase in costs did not proportionately match the increase in revenue. This allowed a greater portion of the increased revenue to contribute to the profit before tax.

Profit/ (Loss) after Tax

Profit after tax for the Fiscal 2023 was at Rs 908.20 Lakhs against profit after tax of Rs 97.36 Lakhs in fiscal 2022. An increase of 832.83%. This was due to Following Factors:

Increase in Revenue from Operations:

• The revenue from operations increased from Rs 11,127.91 Lakhs in Fiscal 2022 to Rs 12,599.45 Lakhs in Fiscal 2023. This represents an increase of Rs 1,471.54 Lakhs (13.22%).

• This increase in revenue significantly contributed to the higher profit before tax, as it provided a larger base of income to cover the companys fixed and variable costs.

Effective Cost Management:

• The company effectively managed its expenses, ensuring that the increase in costs did not proportionately match the increase in revenue. This allowed a greater portion of the increased revenue to contribute to the profit before tax.

Cash Flows

Particulars	For the period from January 24, 2024 to March 31, 2024	For the period ended January 23, 2024	For the year ended March 31,
			2023	2022
Net Cash Flow from/(used in) Operating Activities	(1,758.33)	(2,033.97)	(0.83)	(460.77)
Net Cash Flow from/(used in) Investing Activities	(498.38)	(609.66)	(310.32)	(398.52)
Net Cash Flow from/(used in) Financing Activities	2,251.33	2,664.05	505.00	832.09

Cash Flows from Operating Activities

1. For the period from January 24, 2024 to March 31, 2024, net cash used in operating activities was Rs 1,758.33 Lakhs. This comprised of the profit before tax of Rs 1,279.59 Lakhs, which was primarily adjusted for depreciation and amortization expenses of Rs 24.90 Lakhs, Interest income of Rs 0.59 Lakhs, Finance Cost Rs 80.86 Lakhs and Gratuity Provision of Rs 1.12 Lakhs and Unrealised gain on foreign exchange transactions of Rs 1.10 Lakhs. The resultant operating profit before working capital changes was Rs 1,384.78 Lakhs, which was primarily adjusted for a decrease in inventory of Rs 412.51 lakhs, increase in trade receivables during the period of Rs 4,223.11 Lakhs,

increase in short term loans and advances of Rs 182.12 lakhs, increase in trade payables during the period of Rs 830.65 Lakhs and increase in Other current liabilities during the period of Rs 70.84 Lakhs.

Cash used in Operations was Rs 1,706.45 Lakhs which was reduced by Direct Tax paid for Rs 51.88 Lakhs resulting into Net cash used in operating activities of Rs 1758.33 Lakhs.

2. For the period ended January 23, 2024, net cash used in operating activities was Rs 2033.97 Lakhs. This comprised of the profit before tax of Rs 1,829.12 Lakhs, which was primarily adjusted for depreciation and amortization expenses of Rs 97.78 Lakhs, Interest income of Rs 1.13 Lakhs, Finance Cost Rs 244.73 Lakhs and Gratuity Provision of Rs 4.97 Lakhs and Unrealised gain on foreign exchange transactions of Rs 163.20 Lakhs. The resultant operating profit before working capital changes was Rs 2,012.27 Lakhs, which was primarily adjusted for an increase in inventory of Rs 1,581.49 lakhs, increase in trade receivables during the period of Rs 95.01 Lakhs, increase in short term loans and advances of Rs 1,362.22 lakhs, decrease in Other non-current assets of Rs 30.70 lakhs, decrease in trade payables during the period of Rs 266.55 Lakhs and decrease in Other current liabilities during the period of Rs 333.96 Lakhs.

Cash used in Operations was Rs 1,596.25 Lakhs which was reduced by Direct Tax paid for Rs 437.71 Lakhs resulting into Net cash used in operating activities of Rs 2,033.97 Lakhs.

3. In FY 2023, net cash used in operating activities was Rs 0.83 Lakhs. This comprised of the profit before tax of Rs 1,383.14 Lakhs, which was primarily adjusted for depreciation and amortization expenses of Rs 103.68 Lakhs, Interest income of Rs 4.36 Lakhs, Finance Cost of Rs 205.51 Lakhs and Gratuity Provision of Rs 3.43 Lakhs, Unrealised loss on foreign exchange transactions of Rs 62.98 Lakhs and loss on sale of Fixed asset of Rs 0.19 Lakhs. The resultant operating profit before working capital changes was Rs 1,754.57 Lakhs, which was primarily adjusted for an increase in inventory of Rs 1,534.39 lakhs, increase in trade receivables during the year of Rs 405.47 Lakhs, increase in short term loans and advances of Rs 399.06 lakhs, decrease in other non-current assets of Rs 77.58 lakhs, increase in trade payables during the year of Rs 386.53 Lakhs and increase in Other current liabilities during the year of Rs 253.30 Lakhs

Cash generated from operations was Rs 133.07 Lakhs which was reduced by Direct Tax paid for Rs 133.90 Lakhs resulting into Net cash flow used in operating activities of Rs 0.83 Lakhs.

4. In FY 2022, net cash used in for operating activities was Rs 460.77 Lakhs. This comprised of the profit before tax of Rs 160.87 Lakhs, which was primarily adjusted for depreciation and amortization expenses of Rs 94.20 Lakhs, Interest income of Rs 4.05 Lakhs, Finance Cost of Rs 185.09 Lakhs and Gratuity Provision Provisions of Rs 4.07 Lakhs, Unrealised gain on foreign exchange transactions of Rs 105.65 Lakhs and gain on sale of Fixed asset of Rs 9.63 Lakhs. The resultant operating profit before working capital changes was Rs 324.90 Lakhs, which was primarily adjusted for a decrease in inventory of Rs 367.33 lakhs, increase in trade receivables during the year of Rs 1,152.49 Lakhs, increase in short term loans and advances of Rs 127.77 lakhs, increase in other non-current assets of Rs 39.69 lakhs, increase in trade payables during the year of Rs 18.64 Lakhs and increase in other current liabilities during the year of Rs 200.41 Lakhs.

Cash used in Operations was Rs 408.67 Lakhs which was reduced by Direct Tax paid for Rs 52.10 Lakhs resulting into Net cash flow used in operating activities of Rs 460.77 Lakhs.

Cash Flows from Investment Activities

1. For the period from January 24, 2024 to March 31, 2024, net cash used in investing activities was Rs 498.38 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances of Rs 488.97 Lakhs, increase in Non-Current Investments of Rs 10.00 Lakhs and Interest & Other Income of Rs 0.59 Lakhs.

2. For the period ended January 23, 2024, net cash used in investing activities was Rs 609.66 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances of Rs 624.14 Lakhs, Sale of Fixed assets of Rs 53.35 Lakhs, Interest & Other Income of Rs 1.13 Lakhs and increase in Non-Current Investments of Rs 40.00 Lakhs.

3. In FY 2023, net cash used in investing activities was Rs 310.32 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances of Rs 309.86 Lakhs, Sale of Fixed assets of Rs 5.19 Lakhs, Increase in Non-Current Investments of Rs 10.00 Lakhs and Interest & Other Income of Rs 4.36 Lakhs.

4. In FY 2022, net cash used in investing activities was Rs 398.52 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances of Rs 504.47 Lakhs, Sale of Fixed assets of Rs 102.00 Lakhs and Interest & Other Income of Rs 4.05 Lakhs.

Cash Flows from Financing Activities

1. For the period from January 24, 2024 to March 31, 2024, net cash flow from financing activities was Rs 2,251.33 Lakhs, which predominantly comprised of Increase in short term borrowings of Rs 2,356.09 Lakhs, decrease in long term borrowings of Rs 23.91 Lakhs and payment of finance cost of Rs 80.86 Lakhs.

2. For the period ended January 23, 2024, net cash flow from financing activities was Rs 2,664.05 Lakhs, which predominantly comprised of Increase in short term borrowings of Rs 2,190.22 Lakhs, increase in long term borrowings of Rs 498.01 Lakhs, payment of finance cost of Rs 244.73 Lakhs and Increase in Partners capital of Rs 220.55 Lakhs.

3. In FY 2023, net cash flow from financing activities was Rs 505.00 Lakhs, which predominantly comprised of Increase in short term borrowings of Rs 908.28 Lakhs, decrease in long term borrowings of Rs 213.49 Lakhs, payment of finance cost of Rs 205.51 Lakhs and Increase in Partners capital of Rs 15.71 Lakhs.

4. In FY 2022, net cash generated from financing activities was Rs 832.09 Lakhs, which predominantly comprised of, Increase in short term borrowings of Rs 143.51 Lakhs, increase in long term borrowings of Rs 871.76 Lakhs, payment of finance cost of Rs 185.09 Lakhs and Increase in Partners capital of Rs 1.92 Lakhs.

OTHER MATTERS

1. Unusual or infrequent events or transactions

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

2. Significant economic changes that materially affected or are likely to affect income from continuing Operations

Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described in the section entitled "Risk Factors" beginning on page no. 31 of the Draft Red Herring Prospectus. To our knowledge, except as we have described in the Draft Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

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

Apart from the risks as disclosed under Chapter titled "Risk Factors" beginning on page no. 31 in this Draft Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known

Our Companys future costs and revenues will be determined by demand/supply situation, both of the end products/services as well as the raw materials, government policies and other economic factors.

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

We are engaged in the procurement, processing and exporting of preserved Gherkins and other pickled commodities from India to different countries of the world. Our procurement process involves direct sourcing from accredited farms and farmers dedicated to sustainable agricultural methodologies. Our Company concludes buy-back agreements with the farmers and in turn supplies the farmers the necessary sowing material such as seeds to the identified small and marginal farmers Increases in revenues are by and large linked to increases in volume of business and also dependent on the price realization on our products/services.

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

We are engaged in the procurement, processing and exporting of preserved Gherkins and other pickled commodities from India to different countries of the world. Our procurement process involves direct sourcing from accredited farms and farmers dedicated to sustainable agricultural methodologies. Our Company concludes buy-back agreements with the farmers and in turn supplies the farmers the necessary sowing material such as seeds to the identified small and marginal farmers Relevant Industry data and, as available, has been included in the chapter titled "Industry Overview" beginning on page no. 91 of this Draft Red Herring Prospectus.

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

Except as disclosed elsewhere in the Draft Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new products or business segments.

8. The extent to which business is seasonal.

We are engaged in the procurement, processing and exporting of preserved Gherkins and other pickled commodities from India to different countries of the world. Our procurement process involves direct sourcing from accredited farms and farmers dedicated to sustainable agricultural methodologies. Our Company concludes buy-back agreements with the farmers and in turn supplies the farmers the necessary sowing material such as seeds to the identified small and marginal farmers,

9. Competitive conditions:

We face competition from existing and potential competitors which is common for any business. We have, over a period, developed certain competitors who have been discussed in chapter titles "Business Overview" beginning on page no. 102 of this Draft Red Herring Prospectus.

CAPITALISATION STATEMENT

Particulars	Pre-Issue	Post Issue
	March 31, 2024
Debt		[•]
Short Term Debt	9,623.61
Long Term Debt	1,132.37
Total Debt	10,755.98
Shareholders Fund (Equity)
Share Capital	1,700.00
Reserves & Surplus	996.77
Less: Misc. Expenditure	-
Total Shareholders Fund (Equity)	2,696.77
Long Term Debt/Equity	0.42
Total Debt/Equity	3.99

Notes:

1. Assuming Full Allotment of IPO shares.

2. The figures disclosed above are based on restated statement of Assets and Liabilities of the Company as at 31.03.2024.

3. Long term debts represent debts other than short term debts as defined above.

4. Short term Debts represents the debts which are expected to be paid / payable within 12 months and also includes instalment of term loans repayable within 12 months.