Nukleus Office Solutions Ltd Management Discussions

The following discussion is intended to convey the managements perspective on our financial condition and results of operations for the Fiscal 2024, 2023 and 2022 and should be read in conjunction with ‘Restated Financial Information on page 192.

The Draft Prospectus may include forward-looking statements that involve risks and uncertainties, and our actual financial performance may materially vary from the conditions contemplated in such forward-looking statements as a result of various factors, including those described below and elsewhere in the Draft Prospectus. For further information, see ‘Forward-Looking Statements on page 15.

Our Companys Fiscal commences on April 1 and ends on March 31 of the immediately subsequent year, and references to a particular Fiscal are to the 12 months ended March 31 of that particular year. Unless otherwise indicated or the context otherwise requires, the financial information for the Fiscal 2024, 2023 and 2022 included herein is derived from the Restated Financial Information, included in the Draft Prospectus. For further information, see ‘Restated Financial Information on page 192. Indian GAAP differs in certain respects from IndAS, IFRS and U.S. GAAP and other accounting principles with which prospective investors may be familiar.

Unless otherwise indicated, industry and market data used in this section has been derived from the report titled ‘Research Report on Commercial Office Space & Flexible Office Space in India released on September 03, 2024, prepared by Dun & Bradstreet ("Industry Report"), which has been commissioned and paidfor by our Company in connection with the Issue. Unless otherwise indicated, all financial, operational, industry and other related information derived from the Industry Report and included herein with respect to any particular year, refers to such information for the relevant calendar year. Duns and Bradstreet was appointed by our Company and is not connected to our Company, our Directors, our Promoters, our Key Managerial Personnel, Senior Management or Lead Manager. A copy of the Industry Report is available on the website of our Company at www.nukleus.work. Unless otherwise indicated, financial, operational, industry and other related information derived from the Industry Report and included herein with respect to any particular calendar year/ Fiscal refers to such information for the relevant calendar year / Fiscal. For further information, see ‘Risk Factor - Certain sections of the Draft Prospectus contain information from the Industry Report which we commissioned and paid for and any reliance on such information for making an investment decision in the Issue is subject to inherent risks on page 37. Also see, ‘Certain conventions, presentation of financial, industry and market data and currency of presentation on page 13.

BUSINESS OVERVIEW

We are co-working and managed office space provider which provides range of fully furnished, flexible workspaces, dedicated desks, private cabins, meeting rooms, innovative spaces, startup zones, virtual office etc. in Delhi NCR region. Our range of office solutions cater to diverse range of occupants including startups, SMEs, large enterprises, professionals, and entrepreneurs. We also offer fully serviced and managed workspace solution for enterprises ranging from 50-500 seats. As of July 31, 2024, we have 7 centres in Delhi NCR region with flexible workspaces and also manage 4 Managed Offices with an aggregate of 2,750 total seats.

For details, see chapter titled "Our Business" on page 147.

Hybrid and Mixed Office Models:

To accommodate the evolving needs of modern businesses, we provide hybrid and mixed models that blend elements of fully furnished and serviced models. These options may include customized workspaces or a mix of shared and private areas, as well as the inclusion of some or all available services. We work closely with our clients to create personalized solutions that fit their unique requirements.

Value proposition

Flexible office space has long been a viable solution for freelancers, remote workers, and start-ups. Now it is rapidly gaining ground among large enterprises / corporates / MNCs because of its flexibility, speed and capital deferral benefits not widely available through traditional leasing. As Indias capital, with strong trade and commerce environment and excellent employment opportunities, Delhi has attracted people from all over India. Further, accelerated demand for flexible workspaces due to emergence of Gurgaon and Noida as the IT / ITES hub of North India and increased number of start up businesses has enabled the Delhi NCR see growth in the flexible workspace segment.

Also, in the past 2-3 years, post COVID-19 Pandemic, there has been a rising trend of companies adopting the ‘distributed workforce model, which has provided companies with easier access to workplaces, enabled companies to optimally utilize their resources and reduced commute time for their respective employees.

We offer the following to our clients:

Prime Locations

• Strategically located in prime business districts, ensuring easy access to metro stations and public transit.

• Enhances convenience and facilitates client meetings.

Competitive Pricing

• Cost-effective solutions without compromising on quality.

• Ensures maximum value for investment and efficient resource allocation.

Customization

• High degree of customization to align with unique needs.

• Offers collaborative open layouts, private offices, or a combination of both.

Excellence in Service

• Personalized attention from an in-house team.

• Includes facilities management, administrative assistance, and technical support.

Innovative Technology

• Utilizes state-of-the-art security systems and digital communication tools.

• Enhances functionality and productivity with cutting-edge amenities

Others

• Operating centre with a multi role Centre in-charge

• Dedicated team managing relationships with IPCs and large brokers

• Outsourced tasks: housekeeping, maintenance, security, cafeteria and pantry services

• Leveraging technology for optimal performance

• Real time day passes available directly and through partners

• NukleuSocial platform

Summary of Significant Accounting Policies

The discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with Indian GAAP. The notes to the financial statements contain a summary of our significant accounting policies. Set forth below is a summary of our most significant critical accounting policies under Ind AS. For further information, see "Restated Financial Information - Significant accounting policies and explanatory notes to Restated Financial Statements" on page 192.

Basis of preparation and presentation

The Restated Financial Information have been prepared on a going concern basis, the historical cost basis and on an accrual basis, except for certain financial assets and liabilities measured at fair value.

The accounting policies have been consistently applied by us in preparation of the Restated Financial Information and are consistent with those adopted in the preparation of Restated Financial Information for the Fiscal 2023. The Restated Financial Information does not reflect the effects of events that occurred subsequent to the respective

dates of auditors reports on the audited financial statements mentioned above. All amounts disclosed in the Restated Financial Information and notes have been rounded off to the nearest Indian Rupee lakhs as per the requirement of Schedule III, unless otherwise stated.

The preparation of the Restated Financial Information requires the use of certain critical accounting judgements and estimates. It also requires the management to exercise judgement in the process of applying the accounting policies.

Principal Components of Income and Expenditure Income

Our total income comprises (i) revenue from operations; and (ii) other income.

Revenue from Operations

Revenue from operations comprises (i) revenue from sale of co-working or managed office basis; (ii) common area maintenance charges and (iii) other operational income.

Other Income

Other income primarily comprises of interest income earned on income tax refund / income tax adjusted upon assessment.

Expenses

Our expenses comprise (i) direct expenses including, rent, rates and taxes, power and fuel and repairs and maintenance of building and / or machinery; (ii) employee benefits expense; (iii) finance costs; (iv) depreciation and amortization expense; and (v) other expenses.

Employee Benefits Expense

Employee benefits expense primarily comprises (i) salaries, wages, bonus and allowances; (ii) directors remuneration; (iii) contributions to provident fund; (iv) Provision for Gratuity; and (v) staff welfare expenses.

Finance Costs

Finance cost refers to (i) interest expense on loans from banks; and (ii) other bank charges such as processing fee on loans. The loans extended by the Promoter and Promoter Group to the Company did not carried any interest.

Depreciation and amortization expenses

Depreciation and amortization expenses comprise of depreciation of plant and equipment and other tangible assets.

Other expenses

Other expenses primarily comprises of direct expenses incurred towards power & fuel and freight & cartage; and indirect expenses comprising of (i) housekeeping; (ii) commission and brokerage expenses; (iii) advertisement; (iv) legal, professional and consultancy fees; (v) repairs and maintenance expenses; (vi) telephone and internet; and (vii) other expenses.

Results of Operations

The following table sets forth certain selected financial information from our restated financial information of profit and loss with respect to our results of operations for the Fiscal 2024, 2023 and 2022, the components of which are also expressed as a percentage of our total income for such periods.

Particulars	March . 31, 2024		March . 31, 2023		March , 31, 2022
	Amou nt	%age	Amou nt	%age	Amou nt	%age
Income
Revenue from operations	1,712.7	99.79%	1,088.0	99.84%	340.78	99.52%
	6		7
Other income	3.65	0.21%	1.70	0.16%	1.63	0.48%

 

Particulars	March 31, 2024		March 31, 2023		March 31, 2022
	Amou nt	%age	Amou nt	%age	Amou nt	%age
Total Income	1,716.4	100.00	1,089.7	100.00	342.42	100.00
	1	%	6	%		%
Expenses
Direct cost	949.45	55.32%	607.23	55.72%	253.68	74.09%
Employee benefits expense	155.47	9.06%	101.39	9.30%	24.00	7.01%
Finance cost	19.16	1.12%	0.30	0.03%	0.09	0.03%
Other expenses	283.95	16.54%	240.90	22.11%	45.73	13.36%
Depreciation and amortisation expense	148.39	8.65%	49.82	4.57%	4.66	1.36%

 

Total expenses	1,556.4 2	90.68%	999.65	91.73%	328.17	95.84%
Profit / (Loss) before exceptional and extraordinary items and tax	159.98	9.32%	90.11	8.27%	14.25	4.16%
Exceptional items	-		-		-
Profit / (Loss) before extraordinary items and tax	159.98	9.32%	90.11	8.27%	14.25	4.16%
Extraordinary items	-		-		-
Prior period items	-		-		-
Profit / (Loss) before tax	159.98	9.32%	90.11	8.27%	14.25	4.16%
Tax expense
1. current tax	61.64	3.59%	28.51	2.62%	4.14	1.21%
2. deferred tax (charge) / credit	-21.37	-1.25%	-5.67	-0.52%	-0.53	-0.16%
Profit / (Loss) for the period from continuing operations	119.72	6.98%	67.27	6.17%	10.64	3.11%

Comparison of Fiscal 2024 to Fiscal 2023 Revenue

Total Revenue

Our total revenue increased by 57.50% to t 1716.41 lakhs for the Fiscal 2024 from t 1089.76 lakhs for the Fiscal 2023 primarily due to expansion of the operations of the Company.

Revenue from Operations

Revenue from operations increased by 57.41% to t 1712.76 lakhs for the Fiscal 2024 from t 1088.07 lakhs for the Fiscal 2023.

The revenue from sale of co-working or managed office basis increased by 59.48% to t 1709.62 lakhs for the Fiscal 2024 from t 1072.00 lakhs for the Fiscal 2023 primarily due to expansion of the operations of the Company. The Company was having 7 centres with 2,186 operational seats as on March 31, 2024 vis-a-vis 6 centres with 1,522 operational seats as on March 31, 2023. For details of the centre, refer to "Our Business" on page 147.

The common area maintenance charges reduced to t 1.81 lakhs in Fiscal 2024 against t 15.68 lakhs in Fiscal 2023. The Company is gradually discontinuing the practice of charging common area maintenance as a separate item and giving all inclusive cost to its clients.

Further, other miscellaneous income aggregated to t 1.33 lakhs in Fiscal 2024 against t 0.39 lakhs in Fiscal 2023.

Other Income

In the Fiscal 2024, other income aggregated to t 3.65 lakhs as compared to t 1.70 lakhs for the Fiscal 2023 which shows an increase of 114.92%. The change is primarily on account higher interest received on income tax refund.

Expenditure

Direct Cost

The aggregate of direct cost in Fiscal 2024 was Rs 949.45 lakhs representing 55.32% of the total income compared to Rs 607.23 lakhs in Fiscal 2023 representing 55.72% of the total income earned. The direct cost had been at similar level in terms of percentage to the total revenue earned by the Company. The major component of the direct cost comprised of rent, rates and taxes, which aggregated to 76.75% of the total direct cost in the Fiscal 2024 vis-a-vis 82.31% in the Fiscal 2023. This has resulted due to higher occupancy of our centres and increase of operational efficiency.

Employee Benefits Expenses

The Employee benefits expenses for Fiscal 2024 increased by 53.33% to t 155.47 lakhs as compared from Rs 101.39 lakhs in Fiscal 2023. The same has been primarily on account of increase in the total employee due to expansion of the business operations. The number of employees as on March 31, 2024 were 27 vis-a-vis 14 as on March 31, 2023.

Finance Cost

For the expansion of the business operations, our Company had availed loan facility from HDFC Bank during the Fiscal 2024. As a result of the same, our Company has paid an interest and bank charges of Rs 19.16 lakhs during the Fiscal 2024 as against payment of bank charges of Rs 0.30 lakhs during the Fiscal 2023. For the Fiscal 2024, the finance cost aggregated to 1.12% of the total income.

Depreciation and Amortization Expenses

The depreciation and amortisation expense increased by 197.84% to Rs 148.39 lakhs in the Fiscal 2024 from Rs 49.82 lakhs in the Fiscal 2023 primarily on account of additional capex of t 464.89 lakhs towards furniture and fixtures and office equipments on account of expansion of the number of centres and relative seats during the Fiscal 2024.

Other Expenses

The other expenses increased by 17.87% to t 283.95 lakhs in the Fiscal 2024 (representing 16.54% of the total income) as compared to t 240.90 lakhs in the Fiscal 2023 (representing 22.11% of the total income) due to overall increase in the operations of the Company. The year-on-year changes in the material other expenditure incurred by the Company for an amount exceeding Rs 8.58 lakhs (i.e. 0.50% of the total income) in Fiscal 2023 is as under:

Expenditure head	Fiscal 2024 Amount %age (Rs in of total lakhs) income		Fiscal 2023 Amount %age (Rs in of total lakhs) income		%age change in Fiscal 2024 vis-a-vis Fiscal 2023	Reason
Advertisement Expenses	12.08	0.70%	7.01	0.64%	72.26%	Increase in expenditure to build brand visibility with increase in business operations.
Commission and brokerage expenses	22.69	1.32%	34.93	3.20%	(35.04%)	Company has put more efforts in own marketing network, including digital marketing, which has resulting in acquiring higher number of direct customers.
Housekeeping Expenses	125.53	7.31%	92.06	8.45%	36.36%	The house keeping expenses has increased due to over all increase in the size of business operations. However due to increase in size of operations and gaining operational efficiency, the percentage of the same to total income has reduced in the Fiscal 2024 vis-a-vis Fiscal 2023.
Legal, professional and consultancy fees	30.65	1.79%	22.26	2.04%	37.66%	The said comprises of consultancy charges for setting up of processes, creation of reporting formats and retainership cost. The

 

Expenditure head	Fiscal 2024 Amount %age (Rs in of total lakhs) income		Fiscal 2023 Amount %age (Rs in of total lakhs) income		%age change in Fiscal 2024 vis-a-vis Fiscal 2023	Reason
						same has reduced as a overall percentage to the total revenue in Fiscal 2024 as compared to Fiscal 2023.
Repairs and maintenance of other items	21.20	1.24%	4.21	0.39%	403.98%	Such repairs and maintenance comprise of routine day to day expenses incurred. The same is higher in Fiscal 2024 due to increase in number of centres and operative seats.
Telephone and Internet Expenses	19.76	1.15%	14.46	1.33%	36.69%	The telephone and internet expenses has increased due to over all increase in the size of business operations. However due to increase in size of operations and gaining operational efficiency, the percentage of the same to total income has reduced in the Fiscal 2024 vis-a-vis Fiscal 2023.
Travelling expenses other than on foreign travel	9.19	0.54%	13.92	1.28%	(33.99%)	The said expenses were incurred on account of travel involved for identification of business expansion opportunities beyond Delhi NCR region in which the Company operates. Due to increase in revenue from operations, the percentage of such cost to total revenue has reduced.

Profit before tax

On account of increase in business operations and for the reasons discussed above, profit before tax was Rs 159.98 lakhs in Fiscal 2024 compared to Rs 90.11 lakhs in Fiscal 2023.

Tax Expenses

Current tax provision increased to Rs 61.64 lakhs in the Fiscal 2024 compared to Rs 28.51 lakhs in the Fiscal 2023 due to increase in overall profitability and taxable income of the Company. Further, the depreciation charge on fixed assets under the Companies Act, 2013 was higher vis-a-vis the Income Tax Act during the Fiscal 2024. Due to this difference in depreciation under Companies Act and Income Tax Act, the incremental deferred tax asset was t 21.37 lakhs during the Fiscal 2024 as compared to t 5.67 lakhs during the Fiscal 2023.

Profit after Tax

For the various reasons discussed above, we recorded a profit after tax of Rs 119.72 lakhs in Fiscal 2024 compared to Rs 67.27 lakhs in Fiscal 2023.

Comparison of Fiscal 2023 to Fiscal 2022

Revenue

Total Revenue

Our total revenue increased by 218.26% to Rs 1089.76 lakhs for the Fiscal 2023 from Rs 342.42 lakhs for the Fiscal 2022 primarily due to expansion of the operations of the Company.

Revenue from Operations

Revenue from operations increased by 219.28% to Rs 1088.07 lakhs for the Fiscal 2023 from Rs 340.78 lakhs for the Fiscal 2022.

The revenue from sale of co-working or managed office basis increased by 230.35% to Rs 1072.00 lakhs for the Fiscal 2023 from Rs 324.51 lakhs for the Fiscal 2022 primarily due to expansion of the operations of the Company. The Company was having 6 centres with 1,522 operational seats as on March 31, 2023 vis-a-vis 3 centres with 1176 operational seats as on March 31, 2022. For details of the centre, refer to Our Business on page 147.

The common area maintenance charges marginally reduced to Rs 15.68 lakhs in Fiscal 2023 against Rs 15.87 lakhs in Fiscal 2022.

Further, other miscellaneous income aggregated to Rs 0.39 lakhs in Fiscal 2024 against Rs 0.41 lakhs in Fiscal 2023.

Other Income

In the Fiscal 2023, other income aggregated to Rs 1.70 lakhs as compared to Rs 1.63 lakhs for the Fiscal 2022 which shows a marginal increase of 3.89%. The change is primarily on account higher interest received on income tax refund.

Expenditure

Direct Cost

The aggregate of direct cost in Fiscal 2023 was Rs 607.23 lakhs representing 55.72% of the total income compared to Rs 253.68 lakhs in Fiscal 2022 representing 74.09% of the total income earned. The direct cost has reduced significantly due to expansion of business operations and. The major component of the direct cost comprised of rent, rates and taxes, which aggregated to 82.31% of the total direct cost in the Fiscal 2023 vis-a-vis 85.15% in the Fiscal 2022.

Employee Benefits Expenses

The Employee benefits expenses for Fiscal 2023 increased by 322.40% to t 101.39 lakhs as compared from Rs 24.00 lakhs in Fiscal 2022. The same has been primarily on account of increase in the total employee on account of expansion of the business.

Finance Cost

Finance cost for the period comprise only of bank charges, which aggregated to t 0.30 lakhs during the Fiscal 2023 vis-a-vis Rs 0.09 lakhs during the Fiscal 2022. For the Fiscal 2023, the finance cost aggregated to 0.03% of the total income.

Depreciation and Amortization Expenses

The depreciation and amortisation expense increased by 968.86% to Rs 240.90 lakhs in the Fiscal 2023 from Rs 45.73 lakhs in the Fiscal 2022 primarily on account of additional capex of t 260.61 lakhs primarily towards furniture and fixtures, office equipments and computers on account of expansion of the number of centres and relative seats during the Fiscal 2023.

Other Expenses

The other expenses increased by 426.76% to Rs 240.90 lakhs in the Fiscal 2023 (representing 22.11% of the total income) as compared to t 45.73 lakhs in the Fiscal 2022 (representing 13.36% of the total income) due to overall increase in the operations of the Company. The year-on-year changes in the material other expenditure incurred by the Company for an amount exceeding Rs 5.44 lakhs (i.e. 0.50% of the total income) in Fiscal 2023 is as under:

Expenditure head	Fiscal 2023		Fiscal 2022		%age change	Reason
	Amount (Rs in lakhs)	%age of total income	Amount (Rs in lakhs)	%age of total income	in Fiscal 2023 vis-a-vis Fiscal 2022
Advertisement Expenses	7.01	0.64%	3.50	1.02%	100.18%	Increase in expenditure to build brand visibility with increase in business operations.
Commission and brokerage expenses	34.93	3.20%	3.86	1.13%	804.59%	With the initial phase of business of the Company, higher revenues were received by our Company from broker & dealer network vis- s-vis generation of clients from own marketing efforts. Hence the expenditure on commission and
						brokerage increased in Fiscal 2023 vis-a-vis Fiscal 2022.
Housekeeping Expenses	92.06	8.45%	5.81	1.70%	1483.75%	The house keeping expenses has increased due to over all increase in the size of business operations.
Legal, professional and consultancy fees	22.26	2.04%	0.91	0.27%	2346.70%	The said comprises of consultancy charges for setting up of processes, creation of reporting formats and retainership cost. The same has increased due to over all increase in the size of business operations.
Office Expenses	21.19	1.94%	7.76	2.27%	172.97%	The office expenses comprises of routine office set up expenses and has increased due to over all increase in the size of business operations.
Repairs and maintenance of other items	4.21	0.39%	2.29	0.67%	83.51%	Such repairs and maintenance comprise of routine day to day expenses incurred. The same is higher in Fiscal 2023 due to increase in number of centres and operative seats.
Telephone and Internet Expenses	14.46	1.33%	6.20	1.81%	133.08%	The telephone and internet expenses has increased due to over all increase in the size of business operations.
Travelling expenses other than on foreign travel	13.92	1.28%	1.33	0.39%	944.68%	The said expenses were incurred on account of travel involved for identification of business expansion opportunities beyond Delhi NCR region in which the Company operates. Due to increase in revenue from operations, the percentage of such cost to total revenue has reduced.
Water Charges	6.06	0.56%				The said expenses has been incurred upon operationalisation of new centres and increase in the number of seats in Fiscal 2023 visa-vis Fiscal 2022.
Website and domain maintenance expenses	9.63	0.88%	3.11	0.91%	209.38%	The Company being in initial phase, the proportionate amount spent on website, domain and maintenance of the same was higher in Fiscal 2023 compared to Fiscal 2022.

Profit before tax

On account of increase in business operations and for the reasons discussed above, profit before tax was Rs 90.11 lakhs in Fiscal 2023 compared to Rs 14.25 lakhs in Fiscal 2022.

Tax Expenses

Current tax provision increased to Rs 28.51 lakhs in the Fiscal 2023 compared to Rs 4.14 lakhs in the Fiscal 2022 due to increase in overall profitability of the Company. Further, the depreciation charge on fixed assets under the Companies Act, 2013 was higher vis-a-vis the Income Tax Act during the Fiscal 2023. Due to this difference in depreciation under Companies Act and Income Tax Act, the incremental deferred tax asset was Rs 5.67 lakhs during the Fiscal 2023 as compared to Rs 0.53 lakhs during the Fiscal 2022.

Profit after Tax

For the various reasons discussed above, we recorded a profit after tax of Rs 67.27 lakhs in Fiscal 2023 compared to Rs 10.64 lakhs in Fiscal 2022.

CASH FLOWS

The following table sets forth certain information relating to our cash flows in the periods indicated: (A in lakhs)

Particulars	Fiscal ended March 31
	2024	2023	2022
Net cash flows from / (used in) operating activities	1003.93	133.31	111.74
Net cash flows from / (used in) investing activities	(749.91)	(378.45)	(68.08)
Net cash flows from / (used in) financing activities	323.58	245.07	165.82
Net Increase/(Decrease) In Cash & Cash Equivalents	577.60	(0.06)	(14.00)
Cash equivalents at the beginning of the year	4.58	4.65	18.65
Cash equivalents at the end of the year	582.18	4.58	4.65

The reconciliation of the movements of liabilities to cash flows arising from financing activities:

(Rs in lakhs)

Particulars	Fiscal ended March 31
	2024	2023	2022
Opening balance
Working Capital Facility	-	-	-
Loan from Related Parties	28.23	-	-
Total	28.23	-	-
Movement			-
Working Capital Facility	558.33	-	-
Loan from Related Parties	(9.92)	28.23	-
Interest expenses	18.31	-	-
Closing Balance
Working Capital Facility	558.33	-	-
Loan from Related Parties	13.11	28.23	-
Total	571.45	28.23	-

CONTINGENT LIABILITIES AND OFF-BALANCE SHEET ARRANGEMENTS

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. Contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company has NIL Contingent liabilities.

CAPITAL EXPENDITURES

Our capital expenditures include expenditures on property, plant and equipment and intangible assets (including under development). Property, plant and equipment include freehold land, buildings, plant and machinery, furniture and fittings, office equipment, computers and vehicles. Intangible assets comprises of internally generated intangible for Train Collision Avoidance System.

The following table sets forth our fixed assets for the periods indicated:

Particulars	Fiscal ended March 31
	2024	2023	2022
Property, Plant and Equipment (net block)	543.13	226.64	15.86
Capital Work in Progress (Tangible Assets)	204.50	-	-

Our historical capital expenditures were primarily in relation to capacity enhancement, creation of fixed assets in new centre and ancillary support infrastructure including computers. We expect our future capital expenditures to consist of various similar investments with the expansion of our centres. We plan to fund these investments through funds generated from our operations in a manner that is generally consistent with our past practice in relation thereto and also from long term capital including bank borrowings. We may further evaluate other sources of financing as well depending on our capital requirements, market conditions and other factors.

DETAILS ON WORKING CAPITAL REQUIRED FOR OUR BUSINESS OPERATIONS

The details of holding period for the working capital deployed by our Company is as under:

(in number of days)

Particulars	Fiscal ended March 31
	2024	2023	2022
Trade receivables	21	39	56
Short term loans and advances	-	3	150
Other current assets	47	66	62
Trade payables	70	44	36
Other current liabilities	49	28	150
Short term provisions	18	10	7

RELATED PARTY TRANSACTIONS

We enter into various transactions with related parties in the ordinary course of business and at arms length basis. These related party transactions principally include (i) agreement with Krishna Infosolutions Private Limited; (ii) unsecured loan from / to related parties; (iii) remuneration paid to Directors and KMPs; (iv) expenses incurred on behalf of related parties and (v) guarantees given to lenders against borrowings.

For further information relating to our related party transactions, see "Restated Financial Information - Note 22: Related Party Transactions" on page 224.

CHANGES IN ACCOUNTING POLICIES

There have been no changes in our accounting policies during the Fiscals 2024, 2023 and 2022, except as disclosed under "Restated Financial Information - Note IV: Changes in accounting policies in the years covered in the restated financials" on page 239. The details of the same is as under:

The company has adopted a new accounting policy regarding the capitalization of certain development expenses. This policy is summarized as follows:

o Capital Work in Progress (CWIP): Expenses incurred up to the date of the centers commencement of operations, as certified by the architect (Technical Expert), are now recognized as Capital Work in Progress (CWIP). These expenses include costs directly attributable to the construction, renovation, or improvement of the center, such as labor, materials, and overhead costs. Additionally, indirect costs, such as common salary, directors remuneration and other overhead expenses, have also been attributed toward CWIP. o Capitalization as Fixed Assets: Upon the architects certification of commencement of operations, the CWIP is reclassified and capitalized as fixed assets under the category of Furniture & Fixture - Office Interior in the balance sheet. This reclassification reflects the companys operations that these expenses represent investments in the development of the center, contributing to the companys revenue generating asset base. o Amortization: The capitalized development expenses are amortized over the lease period or the expected useful life of the assets, whichever is earlier. Amortization commences after the architect has issued the certificate of commencement. This amortization method reflects the consumption of economic benefits derived from the development expenses over time.

Impact on Financial Statements: The adoption of this new accounting policy has been applied retrospectively, with adjustments made to the opening balance of retained earnings in the period of initial application. Comparative financial statements have been restated accordingly to ensure comparability.

INFORMATION REQUIRED AS PER ITEM (II) (C) (IV) OF PART A OF SCHEDULE VI TO THE SEBI REGULATIONS:

An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:

1. Unusual or infrequent events or transactions

There has not been any unusual trend on account of our business activity. There are no Unusual or infrequent events or transactions in our Company. The transactions are as per usual business operations.

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

We do not foresee any significant economic changes that will affect our operations.

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

Apart from the risks as disclosed under Section "Risk Factors" on page 23, 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

Our Companys future costs and revenues will be determined by growth of industry in which we operate, economic activities and government policies and consumer preferences.

5. Increases in net sales or revenue and Introduction of new services or increased sales prices.

Our Company commenced its operations in the Fiscal 2020. Post commencement of our operations, the mandatory lockdown under COVID-19 was implemented and therefore the business operations of the Company were impacted to certain extent. However, post release of sanctions on movement across the country and improvement in the business scenario, the Company rapidly increased its operations. Being in the high growth phase and to capture the opportunities in the market, the number of centres and area being managed by the Company has also increased significantly. This has resulted in increase in the revenue of the Company over the last three financial years. Further, our Company has not introduced any new service, except for the business in which it continues to open new centres.

6. Total turnover of each major industry segment in which the Issuer company operates.

The Company operates in only one industry segment and therefore no details are required to be disclosed

7. Status of any publicly announced New Service or Business Segment There is no new service of business segment of our Company.

8. The extent to which business is seasonal

We have not seen any seasonality impact in our business vertical.

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

Our business from customers is dependent on our continuing relationship with such customers, the high quality of our fully serviced and managed workspace solution, interiors, competitive pricing and our ability to meeting the evolving needs of our client and there can be no assurance that such customers will continue to do business with us in the future on commercially acceptable terms or at all. The following table provides a breakdown of total sales amounts and the percentage of total sales contributed by the top 5 and top 10 customers of our Company for the periods indicated:

(T in lakhs)

Revenue from operations	For the year ended 31st March, 2024		For the year ended 31st March, 2023		For the year ended 31st March, 2022
	Rs in Lakhs	% of total income	Rs in Lakhs	% of total income	Rs in Lakhs	% of total income
Top ten customers	947.22	55.19%	788.01	72.31%	912.04	56.08%

 

Revenue from operations	For the year ended 31st March, 2024		For the year ended 31st March, 2023		For the year ended 31st March, 2022
	Rs in Lakhs	% of total income	Rs in Lakhs	% of total income	Rs in Lakhs	% of total income
Top five customers	730.45	42.56%	659.50	60.52%	174.57	50.98%
Largest customer	289.06	16.84%	213.17	19.56%	76.07	22.22%

Our top 10 customers include Nuvama Wealth and Investment Limited, Veersa Technologies India Private Limited and Splendor Information Technology Private Limited. Certain customers have not been disclosed here due to non-receipt of consent / confidentiality. Further, contribution of each individual customer to the total income of our Company has not been separately disclosed to preserve confidentiality of our business.

10. Competitive conditions

Competitive conditions are as described under the section titled "Industry Overview" and "Our Business" on pages 111 and 147, respectively.

11. Details of material developments after the date of last balance sheet i.e. March 31, 2024

Except as stated below no material developments have arisen after the date of last balance sheet i.e. March 31, 2024, that could materially and adversely affect or are likely to affect, our trading, our operations or profitability,

or the value of our assets or our ability to pay our material liabilities within the next twelve months:

(a) Issue of Equity Shares on private placement basis: The Company has issued and allotted 159,600 Equity Shares on August 23, 2024 to non promoter individuals / entities a price of Rs 188 per Equity Share.

(b) Sanction of credit facility by HDFC Bank Limited: The Company has availed Business Banking Working Capital facility and term loan from the HDFC Bank Limited aggregating to Rs 1,400 lakhs which was sanctioned to the Company by the said bank vide its sanction letter dated July 25, 2024. The said secured cash credit facility and term loan was availed by the Company by creating on the self occupied commercial property of our Promoter Group companies.