OF FINANCIAL POSITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with our restated consolidated financial statements for the period ended March 31, 2025, March 31, 2024 and March 31, 2023 prepared in accordance with the Companies Act, 2013 (to the extent notified) and /or Provisions of Companies Act, 1956 w.r.t. the sections which have not yet been replaced by the Companies Act, 2013 through any official notification and Indian GAAP and restated in accordance with the SEBI ICDR Regulations, including the schedules, annexure and notes thereto and the reports thereon, included in "Financial Statements" beginning on page no. 181 of this Red Herring Prospectus.
Indian GAAP differs in certain material respects from U.S. GAAP and IFRS. We have not attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in this Red Herring Prospectus, nor do we provide a reconciliation of our financial statements to those under U.S. GAAP or IFRS. Accordingly, the degree to which the Indian GAAP financial statements included in this Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with the Companies Act, Indian GAAP and the SEBI ICDR
Regulations.
This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in "Risk Factors" and "Forward-Looking
Statements" beginning on and respectively, of this Red Herring Prospectus.
COMPANY OVERVIEW
Our Company was incorporated on April 20, 2017 as a private limited company as Splendid Academy Private Limited, under the Companies Act, 2013, pursuant to a certificate of incorporation dated April 20, 2017 issued by the Registrar of Companies, Central Registration Centre. Subsequently, pursuant to a resolution passed by our Board of Directors in its meeting held on January 16, 2020, and by the Shareholders in their Extraordinary General Meeting held on January 17, 2020, the name of our Company was changed to Happy Square Outsourcing Services Private Limited and a fresh certificate of incorporation dated February 3, 2020 was issued by the Registrar of Companies,
Gwalior. Further, our Company was converted into a public limited company pursuant to a resolution passed by our Board of Directors in its meeting held on June 1, 2024, and by the Shareholders in an Extraordinary General Meeting held on June 26, 2024 and consequently the name of our Company was changed to Happy Square Outsourcing Services Limited and a fresh certificate of incorporation dated August 1, 2024 was issued by the Registrar of
Companies, Central Processing Centre. The corporate identification number of our Company is U80904MP2017PLC043153.
SUMMARY OF THE RESULTS OF OPERATION
The following table sets forth, for the fiscal years indicated, certain items derived from our Companys audited restated summary financial statements, in each case stated in absolute terms and as a percentage of total sales and/or total revenue.
(Rs. in Lakhs) |
|||
Particulars | March 31, 2025 | March 31, 2024 | March 31, 2023 |
INCOME |
|||
Revenue from Operations |
|||
Revenue | 9,741.46 | 6,928.87 | 5,269.92 |
As a % of Total Revenue | 99.72% | 99.64% | 99.81% |
Increase/Decrease in % | 40.59% | 31.48% | 86.68% |
Other Income | 26.89 | 25.43 | 10.20 |
As a % of Total Revenue | 0.28% | 0.36% | 0.19% |
Increase/Decrease in % | 5.74% | 149.31% | 525.77% |
Total Revenue |
9,768.35 | 6,954.31 | 5,280.11 |
EXPENDITURE |
|||
Cost of Services consumed | 8,496.00 | 6,113.34 | 4,741.08 |
As a % of Total Revenue | 86.97% | 87.91 % | 89.79 % |
Employee Benefit Expenses | 198.58 | 104.94 | 138.08 |
As a % of Total Revenue | 2.03% | 1.51% | 2.62 % |
Finance costs | 115.32 | 65.68 | 39.59 |
As a % of Total Revenue | 1.18% | 0.94% | 0.75% |
Depreciation and Amortization | 45.19 | 18.28 | 15.63 |
As a % of Total Revenue | 0.46% | 0.26% | 0.30% |
Other expenses | 115.52 | 66.15 | 106.82 |
As a % of Total Revenue | 1.18% | 0.95% | 2.02% |
Total Expenditure |
8,970.61 | 6,368.37 | 5,041.21 |
As a % of Total Revenue | 91.83% | 91.57% | 95.48% |
Profit Before Exceptional Items and |
|||
Tax |
797.74 | 585.93 | 238.91 |
As a % of Total Revenue | 8.17% | 8.43% | 4.52% |
Exceptional Items | - | - | - |
As a % of Total Revenue | - | - | - |
Extraordinary Items | - | - | - |
As a % of Total Revenue | - | - | - |
Profit Before tax |
797.74 | 585.93 | 238.91 |
PBT Margin (%) |
8.17% | 8.43% | 4.52% |
Tax expense : |
|||
(a) Current tax | 206.06 | 147.30 | 62.90 |
(b)Tax Adjustment for earlier years | - | ||
(c) Deferred Tax | 1.34 | (0.69) | (2.78) |
Total |
207.40 | 146.61 | 60.12 |
As a % of Total Revenue | 2.12% | 2.11% | 1.14% |
Profit After Tax |
590.34 | 439.32 | 178.78 |
Less: Profit/(Loss) attributable to minority interest | - | - | - |
Profit/(Loss) for the Year |
590.34 | 439.32 | 178.78 |
PAT Margin (%) |
6.04% | 6.32% | 3.39% |
SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO LATEST AUDIT PERIOD FOR THE PERIOD ENDED MARCH 31, 2025
In the opinion of the Board of Directors of our Company, since the date of the last audited period i.e., March 31, 2025, as disclosed in this Prospectus, there are no circumstances that materially or adversely affect or are likely to affect the trading or profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months except as follows:
1. The Board of Directors have decided to get their equity shares listed on National Stock Exchange of India Limited and pursuant to Section 62(1)(c) of the Companies Act 2013, by a resolution passed at its meeting held on September 06, 2024, proposed the Issue, subject to the approval of the shareholders and such other authorities as may be necessary.
2. The shareholders of the Company have, pursuant to Section 62(1)(c) of the Companies Act 2013, by a special resolution passed in the Extra Ordinary General Meeting held on September 13, 2024, authorized the Initial Public Issue.
3. The Board of our Company has approved bonus issue of equity shares in the ratio 840:1 in the board meeting held on September 06, 2024 The members of our Company approved proposal of Board of Directors for bonus issue of equity shares in the ratio 840:1 in the EGM held on September 13, 2024.
4. The bonus issue of equity shares in the ratio 840:1 was allotted in the board meeting held on September 17, 2024.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business, results of operations and financial condition are affected by a number of factors, some of which are beyond our control. This section sets out certain key factors that we believe have affected our business, results of operations and financial condition in the past or which we expect will affect our business, results of operations or financial condition in the future. For a detailed discussion of certain factors that may adversely affect our business, results of operations and financial condition, see "Risk Factors" beginning on page no. 27.
DISCUSSION ON RESULT OF OPERATION
The following discussion on results of operations should be read in conjunction with the restated consolidated financial results of our Company for period ended March 31, 2025, March 31, 2024 and March 31, 2023.
OVERVIEW OF REVENUE & EXPENDITURE
Revenues
Our Companys revenue is primarily generated from Sale of Services:-
(Rs. In Lakhs) |
|||
Particulars | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
Income |
|||
Revenue from Operations | 9,741.46 | 6,928.87 | 5,269.92 |
Increase/Decrease in % | 40.59% | 31.48% | 86.68% |
Other Income | 26.89 | 25.43 | 10.20 |
Increase/Decrease in % | 5.74% | 149.31% | 525.77% |
Total Revenue |
9,768.35 | 6,954.31 | 5,280.11 |
Services wise income mix of our Company are as under:
(Rs. In Lakhs) |
|||
Particulars | As at March 31, 2025 | March 31, 2024 | March 31, 2023 |
Revenue from Operation |
|||
Sale of services |
|||
- Receipt from Outsourcing | 9,451.68 | 6,760.71 | 5,005.69 |
- Agency Fees | 289.78 | 168.16 | 123.56 |
- Recruitment Charges | - | - | 140.15 |
- Consumable Items | - | - | 0.52 |
Total Sale from Service Activities |
9,741.46 | 6,928.87 | 5,269.92 |
Total Revenue from Operation |
9,741.46 | 6,928.87 | 5,269.92 |
The following is the Income mix in terms of percentage of total income of our Company from Sale of Services:
Particulars | March 31, 2025 | March 31, 2024 | March 31, 2023 |
Revenue from Operation |
|||
Sale of services |
100.00% | 100.00% | 100.00% |
- Receipt from Outsourcing | 97.03% | 97.57% | 95.00% |
- Agency Fees | 2.97% | 2.43% | 2.34% |
- Recruitment Charges | - | - | 2.66% |
- Consumable Items | - | - | - |
Total Revenue from Operation |
100.00% | 100.00% | 100.00% |
Revenue from Operations
Revenue from Operations includes income from Outsourcing, Agency Fees and Recruitment Charges. In the past three years FY 2025, FY 2024 and FY 2023, the revenue of company have increased primarily due to increased new customer acquisitions in sectors namely Automobile & Aviation, E-Commerce & Retail, Logistics, and Government (PSU) sectors. In FY 2023, the Company expanded into government projects, with revenue from PSUs accounting for 19% of the total revenue. Notably, 18% of the said contribution from PSUs, which is stemmed from newly added government projects, highlighting the companys focus into this sector. In FY 2024 whilst the Company was getting repeat orders from PSUs, the Company expanded into Logistics sector which accounted for 28% of the total revenue of FY 2024. In FY 2025, the company has continued its focus on major expansions across key sectors such Automobile & Aviation, E-Commerce & Retail, Logistics, and Government (PSU) sectors. The same has led the growth in our operations financial performance.
Main Components of our Expenditure
Cost of Services Consumed
In the past three years FY 2025, FY 2024 and FY 2023, the revenue of company and the cost of services have increased primarily due to increased new customer acquisitions in sectors namely Automobile & Aviation, E -Commerce & Retail, Logistics, and Government (PSU) sectors. Cost of Services Consumed represent the cost incurred by our company on the manpower placed by the company at our clients location. It accounts for 86.97%, 87.91% and 89.79% of our total revenue for FY25, FY 24 and FY 23 respectively.
DISCUSSION ON RESULT OF OPERATION
Our Significant Accounting Policies
For Significant accounting policies please refer Significant Accounting Policies, under Chapter titled
" Restated Financial Statements" beginning on page no. 181 of this Red Herring Prospectus.
Overview of Revenue & Expenditure
Our revenue and expenses are reported in the following manner:
Revenue from Operations
Revenue from Operations includes income from Outsourcing, Agency Fees and Recruitment Charges.
Other Income
Our other income includes Interest Income, Agency Fees and Miscellaneous Income. Other income, as a percentage of total income was 0.28 %, 0.36%, and 0.19% for FY 25, FY 24 and FY 23 respectively.
Expenditure
Our total expenditure primarily consists of (i) Cost of Service consumed (ii) Employee Benefit Expenses (iii) Finance Cost (iv) Depreciation and Amortisation (v) and Other Expenses.
Main Components of our Expenditure
Cost of Services Consumed
Cost of Services Consumed represent the cost incurred by our company on the manpower placed by the company at our clients location. It accounts for 86.97%, 87.91% and 89.79% of our total revenue for FY25, FY 24 and FY
23 respectively.
Employee Benefit Expenses
Expenses in relation to employees remuneration and benefits include salary, wages and bonus, directors remuneration, provision for gratuity and staff welfare expenses. Employee benefit expenses accounted for 2.03%, 1.51%, and 2.62% of our total revenue for FY 25, FY 24 and FY 23 respectively.
Finance Cost
Finance Cost primarily consists of interest expenses and bank charges. Our finance costs accounted for 1.18%, 0.94%, and 0.75% of our total revenue for FY 25, FY 24 and FY 23 respectively.
Depreciation & Amortization
Depreciation primarily consists of depreciation on the tangible assets of our Company which primarily includes Computer & Accessories, Furniture & Fittings, Plant and Machinery, Office Equipments and Amortization on intangible assets of our company which forms 0.46%, 0.26%, and 0.30% of our total revenue for FY 25, FY 24 and FY 23 respectively.
Other Expenses
Other expenses primarily include Advertisement Expenses, telephone and Internet Expenses, Professional Fees and Consultancy fee, Travelling and Conveyance, Repairs and Maintenance, Duties and Taxes, Insurance expenses and others. Other expenses accounted for 1.19%, 0.95%, and 2.02% of our total revenue for FY 25, FY 24 and FY 23 respectively.
Income
The total income for the year ended March 31, 2025 was 9,768.35 lakhs.
Revenue from Operations
Revenue from Operations contributed to 9,741.46 lakhs or 99.72% of total income for the period ended March 31, 2025.
Other Income
Other income contributed to 26.89 lakhs or 0.28% of total income for the period ended March 31, 2025
Expenditure
The total expenditure for the year ended March 31, 2025 was 8,970.61 lakhs.
Cost of Service Consumed
Cost of service consumed being 8,496.00 lakhs or 86.97% of total income for the period ended March 31, 2025.
Employee Benefit Expenses
Employee Benefit Expense contributed to 198.58 lakhs or 2.03% of Total income for the period ended March 31, 2025.
Finance Costs
Finance costs contributed to 115.32 lakhs or 1.18% of Total income for the period ended March 31, 2025.
Depreciation and Amortization
Depreciation & Amortization being 45. 19 lakhs or 0.46% of Total income for the period ended March 31, 2025.
Other Expenses
Other Expenses contributed to 115. 52 lakhs or 1.18% of Total income for the period ended March 31, 2025.
Profit/Loss before exceptional & extraordinary items and Tax
Profit before tax contributed to 797.74 lakhs or 8.17 % of Total income for the period ended March 31, 2025 and tax expense being 207.40 lakhs or 2.12% of Total Income for the period ended March 31, 2025.
Profit after tax
Profit after tax contributed to 590.34 lakhs or 6.04% of Total Income for the period ended March 31, 2025.
Other key ratios:
Particulars |
March 31, 2025 |
Return on Net worth % | 61.97% |
Current Ratio | 1.47 |
Return on Net- worth
This is defined as Net profit after tax by average Net worth, based on the Restated summary statements.
Current Ratio
This is defined as total current assets by total current liabilities, based on the Restated Summary Statements.
FISCAL YEAR ENDED MARCH 31, 2025 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2024
Income
The Total Income for FY 2025 has increased by 40.46% to 9,768.35 lakhs from Rs. 6,954.31 lakhs in FY2024.
Revenue from Operations
In FY2025 Revenue from operations has increased by 40.59% to 9,741.46 lakhs from Rs. 6,928.87 lakhs in FY2024 due to the addition of new customers in customer portfolio and additional services from the existing clientele.
Other Income
Other income has increased to 26.89 lakhs in FY 2025 from 25.43 lakhs in FY 2024 which was mainly due to increase in interest income.
Expenditure
The total Expenditure for FY 2025 increased by 40.86% to 8,970.61 lakhs in FY 2025 from 6,368.38 lakhs in FY 2024. This increase was mainly due to higher costs of services consumed, driven by the growth in business operations.
Cost of Service Consumed
Cost of service consumed increased by 38.97% to 8,496.00 lakhs in FY 2025 from 6,113.34 lakhs in FY 2024.
This increase in cost of service consumed is line with the increase in revenue which predominantly consists of services took for the business.
Employee Benefit Expenses
Employee benefit expense has increased by 89.24% to 198.58 lakhs in FY 2025 from 104.94 lakhs in FY 2024. This increase aligns with growth of operation of the Company.
Finance Costs
Finance Costs increased by 75.58% to 115.32 lakhs in FY 2025 from 65.68 lakhs in FY 2024 due to increase in interest expenses due to increase in cash credit facility from Axis Bank.
Depreciation and Amortization
Depreciation and amortization costs increased by 147.23% to 45.19 lakhs in FY 2025 from 18.28 lakhs in FY 2024. This was primarily due to the addition of new fixed assets during the year, contributing to higher depreciation expenses.
Other Expenses
Other expenses increased by 74.63% to 115.52 lakhs in FY 2025 from 66.15 lakhs in FY 2024 with the growth in spending on duties and taxes, insurance, Donations and Other admin expenses.
Profit/Loss before exceptional & extraordinary items and Tax
Profit before exceptional & extraordinary items and Tax 797.74 lakhs for FY 2025, compared to 585.93 lakhs in FY 2024, an increase of 36.15%. This increase was primarily due to higher revenue growth, improved cost efficiency, and better overall performance across key business areas.
Net Profit for the year
Net Profit increased by 34.38% to 590.34 lakhs in FY 2025 from 439.32 lakhs in FY 2024 was primarily due to higher revenue growth, improved cost management, and better overall operational performance.
FISCAL YEAR ENDED MARCH 31, 2024 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2023 Income
The Total Income for FY 2023-24 has increased by 31.71% to 6,954.31 lakhs in FY 2023-24 from Rs.5,280.11 lakhs in FY 2022-23.
Revenue from Operations
Revenue from operations has increased by 31.48% to 6,928.87 lakhs against 5,269.92 lakhs for FY2022-23 due to the addition of new customers in customer portfolio and additional services from the existing clientele.
Other Income
Other income has increased to 25.43 lakhs in FY 2023-24 from 10.20 lakhs in FY 2022-23 which was mainly due to increase in interest income.
Expenditure
The total Expenditure for FY 2023-24 increased by 26.33% to 6,368.37 lakhs in FY 2023-24 from 5,041.20 lakhs in FY 2022-23. This increase was mainly due to higher costs of services consumed, driven by the growth in business operations.
Cost of Service Consumed
Cost of service consumed increased by 28.94% to 6,113.34 lakhs in FY 2023-24 from 4,741.08 lakhs in FY
2022-23. This increase in cost of service consumed is line with the increase in revenue which predominantly consists of services took for the business.
Employee Benefit Expenses
Employee benefit expense has decreased by 24% to 104.94 lakhs in FY 2023-24 from 138.08 lakhs in FY 2022-23This reduction aligns with strategic cost optimization efforts while maintaining operational efficiency, even as the business continues to grow.
Finance Costs
Finance Costs increased by 65.09% to 65.68 lakhs in FY 2023-24 from 39.59 lakhs in FY 2022-23 due to increase in interest expenses due to increase in cash credit facility from Axis Bank.
Depreciation and Amortization
Depreciation and amortization costs increased by 16.93% to 18.28 lakhs in FY 2023-24 from 15.63 lakhs in FY
2022-23 This was primarily due to the addition of new fixed assets during the year, contributing to higher depreciation expenses.
Other Expenses
Other expenses decreased by 38.08% to 66.15 lakhs in FY 2023-24 from 106.82 lakhs in FY 2022-23due to lower spending on professional consultancy and reduced duties and taxes.
Profit/Loss before exceptional & extraordinary items and Tax
Profit before exceptional & extraordinary items and Tax 585.93 lakhs and 146.61 lakhs for FY 2023-24, compared to 238.91 lakhs and 60.12 lakhs respectively in FY 2022-23, an increase of 145.25% and 143. 86% respectively. This increase was primarily due to higher revenue growth, improved cost efficiency, and better overall performance across key business areas.
Net Profit for the year
Net Profit increased by 145.73% to 439.32 lakhs in FY 2023-24 from 178.78 lakhs in FY 2022-23 was primarily due to higher revenue growth, improved cost management, and better overall operational performance.
Net Profit increased by 145.73% to 439.32 lakhs in FY 2023-24 from 178.78 lakhs in FY 2022-23 has increased in line with the increased topline comparing the previous years with effective management of direct and indirect costs. Diversification to higher margin sector, Integration of technology and purchase of bulk data has reduced operational costs, contributing to better EBITDA and PAT margins.
Other key ratios:
Particulars | March 31, 2024 |
Return on Net worth % | 100.82% |
Current Ratio | 1.29 |
FISCAL YEAR ENDED MARCH 31, 2023 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2022 Income
The Total Income for FY 2022-23 has increased by 86.93% to 5,280.11 lakhs in FY 2022-23 from Rs.2,824.63 lakhs in FY 2021-22.
Revenue from Operations
Revenue from operations has increased by 86.68 % to 5,269.92 lakhs against 2,823.00 lakhs for FY2021-22 due to additional work orders from existing customers, expansion of the market, and the addition of new customers to the portfolio.
Other Income
Other income has increased to 10.20 lakhs in FY 2022-23 from 1.63 lakhs in FY 2021-22 which was mainly due to increase in interest income.
Expenditure
The total Expenditure for FY 2022-23 increased by 80.57% to 5,041.20 lakhs in FY 2022-23 from 2,791.82 lakhs in FY 2021-22. This increase was mainly due to higher costs of services consumed, driven by the growth in business operations.
Cost of Service Consumed
Cost of service consumed increased by 77.91% to 4,741.08 lakhs in FY 2022-23 from 2,664.88 lakhs in FY
2021-22 due to the higher volume of services provided to meet growing customer demand.
Employee Benefit Expenses
Employee benefit expense has decreased by 366.78% to 138.08 lakhs in FY 2022-23 from 29.58 lakhs in FY
2021-22. This increase was primarily due to the expansion of our workforce to support business growth and increasing operational needs.
Finance Costs
Finance Costs increased by 640 % to 39.59 lakhs in FY 2022-23 from 5.35 lakhs in FY 2021-22 due to higher interest expenses related to increased borrowing to fund business expansion and operational activities.
Depreciation and Amortization
Depreciation and amortization costs increased by 63.73 % to 15.63 lakhs in FY 2022-23 from 9.55 lakhs in FY
2021-22 due to the addition of new assets during the year, leading to higher depreciation costs.
Other Expenses
Other expenses increased by 29.54 % to 106.82 lakhs in FY 2022-23 from 82.46 lakhs in FY 2021-22 due to higher spending on professional consultancy and reduced duties and taxes.
Profit/Loss before exceptional & extraordinary items and Tax
Profit before exceptional & extraordinary items and Tax 238.91 lakhs and 60.12 lakhs for FY 2022-23, compared to 32.81 lakhs and 8.23 lakhs respectively in FY 2021-22, an increase of 628.05% and 630.90 % respectively. This increase was primarily due to higher revenue growth, improved cost efficiency, and better overall performance across key business areas.
Net Profit for the year
Net Profit increased by 627.09% to 178.78 lakhs in FY 2022-23 from 24.58 lakhs in FY 2022-23 was primarily due to higher revenue growth, improved cost management, and better overall operational performance.
Net Profit increased by 627.09% to 178.78 lakhs in FY 2022-23 from 24.58 lakhs in FY 2022-23 has increased in line with the increased topline comparing the previous years with effective management of direct and indirect costs. Diversification to higher margin sector, Integration of technology and purchase of bulk data has reduced operational costs, contributing to better EBITDA and PAT margins.
Other key ratios:
Particulars | March 31, 2023 |
Return on Net worth % | 143.47% |
Current Ratio | 1.25 |
(Rs. In Lakhs) |
|||
Particulars |
March 31, 2025 | March 31, 2024 | March 31, 2023 |
Net Cash from Operating Activities | (164.25) | (188.09) | (142.53) |
Net Cash from Investing Activities | (39.00) | (187.53) | (116.41) |
Net Cash from Financial Activities | 245.90 | 375.36 | 232.27 |
Cash Flows from Operating Activities
Net Cash Generated from Operating Activities for the year ended March 31, 2025, was Rs (164.25) lakhs and for financial year ended 2024 was Rs (188.09) lakhs as compared to Rs (142.53) lakhs in FY 2023.This decline in the cash flow is primarily attributed to an increase in trade receivables and increase in trade payables. EBDITA for the period ended March 31, 2025 was Rs. 944.67 Lakh, while for FY2024 was Rs. 664.47 Lakh, for FY 2023 was Rs. 284.51 Lakh.
Cash Flows from Investment Activities
For the year ended March 31, 2025
The Net Cash Invested in Investing Activities was (39.00) lakhs mainly due to purchase of fixed assets for an amount of 146.65 lakhs and increase in long term loans and advances for 96.78 lakhs.
For the year ended March 31, 2024
The Net Cash Invested in Investing Activities was (187.53) lakhs. This was mainly on account of purchase of fixed assets for an amount of 189.54 lakhs.
For the year ended March 31, 2023
The Net Cash Invested in Investing Activities was (116.41) lakhs. This was mainly due increase in long term loans and advances by 104.32 lakhs which consist of fixed deposit for an amount of 59.66 lakhs and provision for income tax of 44.66 lakhs.
Cash Flows from Financing Activities
For the Year ended March 31, 2025
The Net Cash generated from Financing Activities was 245.90 lakhs. This was mainly on account of increase in short term borrowings amounting to 358.80 lakhs.
For the year ended March 31, 2024
The Net Cash generated from Financing Activities was 375.36 lakhs. This was mainly on account of increase in long term and short term borrowings amounting to 41.34 lakhs and 399.70 lakhs .
For the year ended March 31, 2023
The Net Cash generated from Financing Activities was 232.27 lakhs. This was mainly on account of increase in short term borrowings amounting to 302.11 lakhs and repayment of long term borrowings amounting to (30.24) Lakhs and finance cost of (39.59).
RELATED PARTY TRANSACTIONS
We enter into various transactions with related parties in the ordinary course of business. For further details, relating to our related party transactions, see "Restated Financial Information Annexure 31 Statement of Related Party Transactions Restated" from the chapter titled "Restated Financial Information" on Page No. 204 of this Red Herring Prospectus.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Our Companys Board of Directors has overall responsibility for the establishment and oversight of the Companys risk management framework. The Board of Directors is responsible for developing and monitoring the companys risk management policies. The companys risk management policies are established to identify and analyse the risk faced by our company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and our companys activities. The Companys Board of Directors oversees how management monitors compliance with the companys risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by our company. The Board of Directors is assisted in its oversight role by internal audit team. Internal audit team undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Board of Directors.
Market Risk
Market risk is the risk that the changes in market prices such as foreign exchange rates, interest rates and equity prices will affect our companys income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The pre dominant currency of our companys revenue and operating cash flows is Indian Rupees (INR). There is no foreign currency risk as there is no outstanding foreign currency exposure at the year end.
Interest Rate Risk
Our company has taken term loans and working capital loans from bank and financial institutions. Our company exposes to the risk of changes in market interest rates as our companys long and short term debt obligations are of floating interest rate. Therefore, there are interest rate risks, since the carrying amount and the future cash flows will fluctuate because of change in market interest rates.
Credit Risk
Credit risk arises from the possibility that customers or counterparty to financial instruments may not be able to meet their obligations. To manage this, our company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Credit risks arises from cash and cash equivalents, deposits with banks, financial institutions and others, as well as credit exposures to customers, including outstanding receivables. Our company evaluates the concentration of risk with respect to trade receivables as low, as none of its customers constitutes significant portions of trade receivables as at the year end. Our company considers factors such as track record, size of institutions, market reputation and service standards to select banks with which balances and deposits are maintained. the balances and fixed deposits are generally maintained with the banks with whom our company has regular transactions. Further, Our company does not maintain significant cash in hand other than those required for its day to day operations. Considering the same, Our company is not exposed to expected credit loss of cash and cash equivalent and bank balances.
Liquidity Risk
Liquidity risk is the risk that Our company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Our companys approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Our companys reputation. Management of the Company monitors rolling forecasts of Our companys liquidity position and cash and cash equivalents on the basis of expected cash flows to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration Our companys debt financing plans, covenant compliance and compliance with internal statement of financial position ratio targets.
Capital risk management
Our company manages its capital to ensure that it will be able to continue as a going concern so, that they can continue to provide returns to shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce cost of capital. Our company manages its capital structure and make adjustments to, in light of changes in economic conditions, and the risk characteristics of underlying assets. In order to achieve this overall objective, our companys capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define the capital structure requirements.
Consistent with others in the industry, Our company monitors capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by equity. Net debt is calculated as total borrowing (including current and noncurrent) as shown in the balance sheet.
OTHER MATTERS
1. Unusual or infrequent events or transactions.
Except as described in this 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 "Risk Factors" beginning on page no. 27 of this Red Herring Prospectus respectively, to our knowledge there are no known 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.
Our business has been subject to significant economic changes arising from the trends identified above in
"Significant Factors Affecting our Financial Conditions and Results of Operations" above and the uncertainties described in "Risk Factors" on page no. 27 of this Red Herring Prospectus.
4. Future relationship between Costs and Revenue.
Other than as described in the sections "Risk Factors", "Our Business" and "Managements Discussion and
Analysis of Financial Condition and Results of Operations" on page nos. 27, 122 and 218 respectively, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.
5. Total turnover of each major industry segment in which the issuer company operates.
Segment wise revenue break-up of the industry in which the Company operates has been given under the heading "Restated Financial Statement" beginning on page no. 181 of this Red Herring Prospectus.
6. Status of any publicly announced new products or business segments.
Our Company has not announced any new products or segment, other than through this Red Herring Prospectus.
7. The extent to which the business is seasonal.
Our Company business is not seasonal in nature.
8. Any significant dependence on a single or few clients.
Our business is significantly dependent on few customers. Top 10 customers contributed 65.56 % of our total sales for the year ended March 31, 2025.
9. Competitive Conditions.
We face competition from existing and potential competitor. Please refer to "Risk Factors", and "Our Business" on page nos. 27 and 122 for further information on our industry and competition.
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