Patel Retail Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with the Restated Financial Statements as of and for the six-months period ended September 30, 2023 and Fiscals 2023, 2022 and 2021, including the notes and significant accounting policies thereto and the report thereon, which appear on page 383. These financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act), Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.

Our fiscal year ends on March 31 of each year, so all references to a particular Fiscal or fiscal year are to the twelve-month period ended March 31 of that year. Financial information for the six months period ended September 30, 2023 is not indicative of full year results and is not comparable with the annual financial statements presented in this Draft Red Herring Prospectus.

The following 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 the section titled "Risk Factors" and "Forward Looking Statements" on page 35 and 24, respectively of this Draft Red Herring Prospectus and elsewhere in this Draft Red Herring Prospectus.

We have included various operational and financial performance indicators in this Draft Red Herring Prospectus, including certain non-GAAP financial measures and operational measures and certain other industry measures related to our operations and financial performance, that may vary from any standard methodology that is applicable across our industry and some of which may not be derived from our Restated Financial Statements or otherwise subjected to an audit or review by our auditors. The manner in which such operational and financial performance indicators, including non-GAAP financial measures, are calculated and presented, and the assumptions and estimates used in such calculation, may vary from that used by other companies. Investors are accordingly cautioned against placing undue reliance on such information in making an investment decision, and should consult their own advisors and evaluate such information in the context of the Restated Financial Statements and other information relating to our business and operations included in this Draft Red Herring Prospectus. For further details on risks related to reliance on non-GAAP financial measures, please see "Risk Factors –Significant differences exist between Indian Accounting Standards and other accounting principles, such as United States Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), which investors may consider material to their assessment of our financial condition on page 76.

"Industry Report on Food & Grocery Retailing and Food Processing" dated March 27, 2024 ("D&B Report"), has been commissioned and paid for by us, pursuant to an engagement letter executed on February 12, 2024, only for the purposes of understanding the industry exclusively in connection with the Offer. Unless otherwise indicated, all financial, operational, industry and other related information derived from the D&B Report and included herein with respect to any particular year refers to such information for the relevant financial year.

Some of the information contained in this section, including information with respect to our strategies, contain forward- looking statements that involve risks and uncertainties. You should read the section titled "Forward- Looking Statements" on page 24 for a discussion of the risks and uncertainties related to those statements and also the section titled "Risk Factors" and "Our Business" on pages 35 and 251, respectively, for a discussion of certain factors that may affect our business, results of operations andfinancial condition. The actual results of the Company may differ materially from those expressed in or implied by these forward-looking statements.

Unless otherwise stated, references to "the Company", "our Company", "we", "us", and "our" are to Patel Retail Limited.

Overview

We are primarily engaged as a retail supermarket chain operating in Tier-III cities and the nearby suburban areas, with focus on "value retail", offering food, non-food (FMCG), general merchandise and apparel catering to the needs of the entire family. Incorporated in Fiscal 2008, our Company started its first store under the brand "Patels

R Mart" at Ambernath, Maharashtra and since then, our operations are spread across the suburban area of Thane and Raigad district in Maharashtra. As on December 31, 2023 we operate and manage 31 supermarkets, with a Retail Business Area³⁰ of approx. 1,26,000 sq.fts.

With our objective to increase margin and to promote our brand "Patels R Mart", we launched our private label goods comprising of mens wear ("Blue Nation"), home improving products ("Patel Essentials"), ready-to-cook

/ instant mix ("Patel Fresh"), ghee and papad ("Indian Chaska"), Pulses ("Patel Fresh") and spices ("Indian Chaska"), which we buy in bulk quantities and package and brand after our quality checks and inspections at our processing and packing facility at Ambernath, Maharashtra ("Facility 1"). Sinceincorporation in Fiscal 2008, we have increased our product offerings and as on December 31, 2023, we offer around thirty-eight (38) product categories with over ten thousand (10,000) product SKUs in our stores.

As our backward integration strategy and to control our supply chain, we started our production facility at Survey No. 145/1, Bhuj Bachau Highway, Village Dudhai, Taluka Anjar, District Kutch, Gujarat - 370115 ("Facility 2"), where we process peanuts and whole spices, such as coriander seed and cumin seeds. Further as a part of our strategy to broaden our product offering across the value chain, we built an agri processing cluster, spread over 15.925 acres of land area at Survey No. 170/2, Bhuj Bachau Highway, Village Dudhai, Taluka Anjar, District Kutch, Gujarat – 370115, comprising of five (5) production units collectively ("Facility 3"), 1 one (1) fruit pulp processing unit ("F&V Unit"), dry warehouse of 2546.29 sq. mtr. with storage capacity of 3040 MT, cold storage with capacity of 3000 MT and also our in-house testing and research laboratory ("Agri-cluster"). Our Facility 1, Facility 2 and Facility 3 will be hereinafter collectively referred to as "Facilities", our Facility 1, Facility 2 and Agri-cluster will be hereinafter collectively referred to as "Manufacturing Facilities", and Facility 2 and Agri- cluster will be collectively referred to as "Kutch Facilities"

Further, by capitalizing our sourcing strength we ventured into export of staples, groceries, pulses, spices and pulps. We export these products under our brands- Patel Fresh and Indian Chaska and also that of the brand of our customers, from our Manufacting Facilities. Furthermore, we also undertake domestic and export trading of assorted / mix containers of food and non-food products, such as FMCG goods, household items, kitchen appliances, etc. from reputed third party brands and also are into bulk trading of agri commodities such as, rice, sugar, pulses, edible oil etc. We have exported to over forty (40) countries during the disclosed financial period.

Our business can be categorized (Retail and Non-Retail) as detailed herein below:

For Fiscal 2023, Fiscal 2022, and Fiscal 2021, our total income was ?1,01,980.36 Lakhs, ?77,183.58 Lakhs and

?82,775.34 Lakhs, respectively, and our profit after tax for the year was ?1,637.97 Lakhs, ?1,137.03 Lakhs and

?1,149.74 Lakhs, respectively. Our EBITDA in Fiscal 2023, Fiscal 2022 and Fiscal 2021 was ?4,323.96 Lakhs,

?2,677.79 Lakhs and ?2,773.69 Lakhs, respectively. For the six months period ended September 30, 2023, our total income, profit after tax and EBITDA were ?44,681.97 Lakhs, ?977.98 Lakhs and ?2,489.77 Lakhs, respectively. In Fiscal 2023, Fiscal 2022 and Fiscal 2021 and in the six months period ended September 30, 2023,

30 The total built-up area of a store as per the lease/leave and license/sale agreement, as the case maybe (carpert area * 1.64)

we generated ?66,962.58 lakhs, ?46,767.38 lakhs, ?53,472.70 lakhs and ?24,567.11 lakhs, respectively, from export sales (processing plus trading sales), representing approximately 65.74%, 61.04%, 64.94% and 55.09%, respectively, of our revenue from operations.

Principal Factors Affecting our Results of Operations

Our financial performance and results of operations are influenced by a variety of factors, including without limitation, severe weather conditions, global and domestic competition, conditions in the markets of our customers, general economic conditions,change in costs of raw materials and government regulations and policies. Some of the more important factors are discussed below, as well as in "Risk Factors" on page 35.

Availability of Commercial Real Estate

Our ability to increase our sales and our profitability is directly affected by the total number of stores we operate. Most of our stores operate from premises which we have acquired on a leave and license/ leasehold basis. Our average leave and license/ lease period is around five (5) years.

Our ability to continue to secure densely populated residential neighborhood locations is a key factor in our success. As we expand our store network, we will need to secure more locations that meet our business needs whether on an ownership, long-term leasehold or rental basis, as we determine on a case-by-case basis. We have no control over future increases in real estate prices. If real estate prices increase, we will require greater capital to buy land or incur higher operational costs due to higher leasing or rental costs.

If there is limited availability of real estate in the future, competition for such real estate may increase which may result in a further increase in prices. This may lead to delays and cost overruns in opening new stores.

Expansion of our Store Network

Since establishing our Company in Fiscal 2008, we have expanded our network to a total of thirty-one (31) stores as of December 31, 2023. We expanded our store network from twenty-five (25) to twenty-seven (27) stores in Fiscal 2021, twenty-eight (28) stores in Fiscal 2022 and thirty (30) stores in Fiscal 2023. Our stores are located across ten (10) cities / suburbans areas, within the Thane and Raigad district of Maharashtra. We plan to deepen our store network in the central suburban area of the MMR such as Bhiwandi, Padgha, Diva, Vasind, Vangani & Neral and gradually expand our network in the western suburban area of the MMR such as Mira Road, Bhayander, Virar and Vasai, following our cluster-focused expansion strategy. We believe that selection of suitable locations for our stores has been critical to our expansion plans. We aim to enter our target markets to take advantage of the opportunities offered by these under-served regions and actively search for suitable locations. We follow a cluster approach and target densely-populated neighbourhoods and residential areas with a majority of lower-middle, middle class and aspiring upper-middle class consumers. Our revenue from retail sales increased at a CAGR of 6.14% between Fiscal 2021 and Fiscal 2023 and continued expansion of our store network has been an important factor in contributing to revenue growth.

Furthermore, our revenue growth can vary according to the level of maturity of our stores. The revenue a store generates depends on its stage of operation. Generally, revenue generated by a new store is lower at its initial stage of operations and tends to increase after the first few years of operation as the store gains customer loyalty and market recognition. Following this initial stage, growth in the revenue of a store will also depend on various factors such as the level of customer traffic, quality of store management, extent of redecoration and renovation, and rate of growth in the local economy.

Product Assortment

We offer an extensive range of products in a number of categories at our stores such as, food, non-food (FMCG), general merchandise and apparel. We strive to provide products at value for money for our customers and to respond to their needs and tastes by optimising the range of products we offer, in order to attract and maintain a large base of customers. We focus on providing our customers with basic, everyday products rather than luxury products or those which require discretionary spending. Our success in part depends upon our continued ability to understand evolving customer trends and accordingly achieving the correct product assortment. We will continue to manage the changing requirements of our customers by changing our product assortment, as necessary. Changes in the assortment of products we sell can impact our sales and operating profit and our profit margins also may vary across different product categories and different product sub-categories within each category.

Further, the key driver in the growth of our revenue from manufacturing operations has been the volume of products we produce and sell. Increased production and sales volume favourably affect our results of operations as it enables us to benefit from economies of scale in procurement of raw materials and may improve our operating margins through our ability to leverage our fixed cost base. Our Manfacturing Facilities are relatively new and are yet to reach maximum production, we endeavour to increase our sales by adding new products and increasing our market presence.

Cost and Availability of Raw Materials

Our material costs constitute the largest component of our cost structure. Our material costs comprise cost of materials consumed, purchases of stock-in-trade and changes in inventories. For the Fiscal 2023, Fiscal 2022 and Fiscal 2021 and for the six months period ended September 30, 2023, our material costs were ?86,019.61 Lakhs,

?65,035.17 Lakhs and ?71,024.18 Lakhs and ?36,929.72 Lakhs (not annualised), or 84.35%, 84.26% and 85.80% and 82.65% of our total income, respectively. We are thus exposed to fluctuations in cost and availability of our raw materials and there may be a time lag before we may effectively pass on all increases in cost of raw materials to our customers. Our ability to pass on the increases in cost of raw materials to our customers is also subject to prevailing market conditions. If we fail to pass on the increases in cost of raw materials, our margins, sales and overall results may be negatively affected. For further details, please see "Risk Factors- Our operations are dependent on the supply of large amounts of raw material such as wheat, spices and peanuts. We do not have long term agreements with suppliers for our raw materials and any increase in the cost of, or a shortfall in the availability of, such raw materials could have an adverse effect on our business and results of operations, and seasonable variations could also result in fluctuations in our results of operations" on page 63.

Foreign exchange rate risk

Our financial statements are prepared in Indian Rupees. However, our sales from exports and a portion of our raw material expenditures are denominated in foreign currencies, mostly the U.S. Dollar. Accordingly, we have currency exposures relating to buying, selling and financing in currencies other than in Indian Rupees, particularly the U.S. Dollar. The following table sets out our revenues denominated in foreign currencies and their percentage in comparison with revenue from operations for the six-months period ended September 30, 2023 and Fiscal 2023, Fiscal 2022 and Fiscal 2021:

(? in Lakhs, except percentage)

Our revenue and profit are affected by volatility in the currencies in which we earn our revenues. Our results of operations will be impacted by the relative value of the rupee compared to other currencies. Unfavourable fluctuations in foreign currency exchange rates have had an adverse effect and could in the future have a material adverse effect, on our results of operations. To manage our foreign exchange risk, we hedge our foreign exchange exposure. Our Company has hedged its foreign currency risk and the forward contract cover position as on September 30, 2023 is ?1662.95 Lakhs (equivalent to US Dollar 20.00 Lakhs), against total foreign currency receivable of ?6475.28 (equivalent to US Dollar 77.96 Lakhs).

For the Fiscal 2022 and Fiscal 2021, we have recorded foreign exchange fluctuation gain of ?460.61 Lakhs and

?346.04 Lakhs, respectively, while we have recorded foreign currency loss of ?328.62 Lakhs for Fiscal 2023. For the six months period ended September 30, 2023, we have recorded foreign exchange fluctuation gain of ?67.31 Lakhs. There can be no assurance that we will continue to record gains from foreign exchange fluctuations or any

hedging measures we take will enable us to avoid the effect of any adverse fluctuations in the value of the Indian Rupee against the U.S. Dollar or other foreign currencies.

Reliance on major customers

Our customer base under our processing division and our trading activities currently comprises a host of international and domestic customers. However, our top five (5) customers represent a significant portion of our revenue. Of our revenue from operations in the six months period ended September 30, 2023, Fiscal 2023, Fiscal 2022 and Fiscal 2021, our largest customer contributed approximately 6.09%, 6.02%, 5.99% and 5.72% of our revenue from operations, respectively; our top 5 customers contributed to approximately 21.47%, 21.59%, 17.45% and 20.08% of our revenue from operations, respectively; and our top 10 customers contributed 31.07%, 32.21%, 26.67% and 28.42% of our revenue from operations, respectively. We expect that we will continue to be reliant on our major customers for the foreseeable future. We have long-term relationships and ongoing active engagements with many of our customers. For instance, our top 5 customers as on September 30, 2023 are associated with us for over 3 years. Accordingly, any decrease in orders from any of these select customers and/or failure to retain such customers on terms that are commercially viable could adversely affect our business, financial condition and results of operations. In addition, any defaults or delays in payments by a major customer or a significant portion of our customers may have an adverse effect on business, financial condition and results of operations. We do not have any supply contracts with our customers.

Competition and Pricing Pressure

We are facing increasing competition from a number of domestic and international market players in each of the businesses we operate. Some of our competitors may be larger than us, may have more financial and other resources and have products with greater brand recognition than ours. Our competitors in certain regions may also have better access to raw materials required in our operations and may procure them at lower costs than us. Some of our international competitors may be able to capitalize on their overseas experience to compete in the Indian market and also in the markets we operate. They may also significantly increase their advertising expenses to promote their brands and products, which may require us to similarly increase our advertising and marketing expenses.

The success of our business is dependent on our ability to competitively price our products, and to also compete against lower-priced products from our competitors based on the higher quality of our products. Our pricing policy is based on several factors including the cost of operations and raw material, customer demands, our competitive position and the pricing of certain products in the markets. We seek to offset the effect of this pricing pressure by increasing the efficiency of our manufacturing operations at our facilities.

Distribution Network

Our processing business is relatively new and our growth in this business will be largely driven by the distribution network that we would create for distribution of our products in India. We have built a network of wholesalers and retail touch points to whom we sell through our wholesalers and also directly through our sales and marketing team. Further, we also undertake domestic trading through our network of wholesalers and retailers.

We sell our products across eleven (11) states with the majority of our sales coming from the state of Gujarat and Maharashtra. Our network of wholesalers and retailers with whom we have had business during the respective year is as detailed herein below:

• The number of wholesalers and retailers represent those parties with whom we had business transactions during the period.

As of December 31, 2023, we have a four (4) member sales team that visits shop-to-shop on a daily basis to cater to our existing and potential customers. We constantly seek to grow our product reach to under-penetrated geographies, increase the penetration of our products in markets in which we are currently present and widen the portfolio of our products available in those markets by growing our distribution network. We may, however, not be successful in appointing new distributors / wholesalers to expand our network or effectively manage our existing distribution network. Further, we may also face disruptions in the delivery of our products for reasons beyond our control, including poor handling of our products by third parties, transportation bottlenecks, natural disasters and labour issues, which could lead to delayed or lost deliveries.

Government Regulations and Policies

Government regulations and policies in India and in countries to which we export can affect the demand for our products. These regulations and policies are extensive and cover a broad range of industries, some of which are politically sensitive. These regulations and policies and the tax regimes to which we are subject to could change at any time, with little or no warning or time for us to prepare. For further details, please see "Risk Factors – Our business is operating under various laws which require us to obtain approvals from the concerned statutory/ regulatory authorities in the ordinary course of business. Some of our approvals are required to be transferred in the name of Patel Retail Limited from Patel Retail Private Limited, pursuant to change of name of our Company. Our inability to obtain, maintain or renew requisite statutory and regulatory permits and approvals for our business operations in a timely manner could materially and adversely affect our business, prospects, results of operations and financial condition" on page 37 and Any inability to comply with food safety laws, environmental laws and other applicable regulations in relation to our manufacturing facilities and stores may adversely affect our business, financial condition and results of operations" on page 38.

We are currently entitled to certain export benefits received from the Government of India under export promotion schemes like the Duty Drawback Scheme ("DDS") and the Remission of Duties or Taxes on Export Products ("RODTEP"). The DDS and the RODTEP, enable us to claim rebate of all hidden central, state and local duties

/taxes/levies on the goods exported which have not been refunded under any other existing scheme. Changes in regulations or withdrawal of such incentives and schemes could impact our revenues. We are also subject to the regulatory framework of the various international markets where we export our products. The markets where we export our products to, may become inaccessible or less accessible as a result of trade embargoes, import restrictions, quotas, anti-dumping duties, tariffs or other forms of trade barriers introduced by countries where we export our products.

Further, export and import of agricultural products is closely monitored and regulated by Ministry of Commerce, GoI such as ban on export or import of agricultural products, imports quota on warehousing, etc. considering factors such as domestic crops, demand and supply gap, etc. For instance, the Ministry of Commerce, GoI has restricted export of sugar and wheat flour. Additionally, import of wheat is subject to condition that wheat flour is exported. These conditions / restrictions are imposed periodically and from time to time by the Government. Please see "Risk Factors- Failure to comply with export obligation may expose us to significant import duties and other penalties" on page 61.

Transition from Indian GAAP to Ind AS

The Ministry of Corporate Affairs, Government of India, has through a notification dated February 16, 2015, set out the Ind AS and the timelines for their implementation and applicability. As per the requirement of the SEBI, our Company is required to adopt and prepare its financial statements in accordance with Ind AS for periods beginning on or after April 1, 2020. Given that Ind AS differs in certain material aspects from Indian GAAP under which our financial statements are currently prepared, our financial statements for the periods commencing on or after April 1, 2020 may not be fully comparable to our statutory historical financial statements.

We have quantified the impact of IND_AS on the financial data included in this Draft Red Herring Prospectus and have provided a reconciliation of the financial statements to those under Ind AS. (Refer note no. 46 of the restated financial statements.

Significant Accounting Policies

The notes to the Restated Summary Statements included in this Draft Red Herring Prospectus contain a summary

of our significant accounting policies. Set forth below is a summary of our most significant accounting policies adopted in preparation of the Restated Summary Statements.

1. Basis of preparation

1. Statement of compliance:

"The Restated Balance Sheets of the company as at 30 September 2023, 31 March 2023, 31 March 2022, 31 March 2021; the related Restated Statement of Profit and Loss (including Other Comprehensive Income), the Restated Statement of Changes in Equity, and the Restated Statement of Cash Flows for the six months period ended 30 September 2023 and year ended 31 March 2023, 31 March 2022 and 31 March 2021 and the Significant accounting policies have been extracted by the management from the audited financial statements for the September 30, 2023, March 31, 2023, 2022, and 2021, approved by the respective Board of Directors of the companies.

The financial statements Complies in all material aspects with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended and notified under Section 133 of the Companies Act, 2013 (the "Act"") and other relevant provisions of the Act and other accounting principles generally accepted in India.

The Restated Financial Statements were approved by the Board of Directors of our Company on March 20, 2024.

These financial statements are presented in Indian Rupees (INR), which is also the functional currency. All the amounts have been rounded off to the nearest Lakhs, unless otherwise indicated.

2. Basis of measurement:

"The Restated Financial Statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the Restated Financial Statements except where a newly issued accounting standard is initially adopted or revision to an existing accounting standard where a change in accounting policy hitherto in use. The Restated Financial Statements have been prepared under the historical cost convention except for certain financial instruments measured at fair value as explained in the accounting policies. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services at the time of their acquisition."

1. Current vs non-current classification:

"The Company presents assets and liabilities in the balance sheet based on current / non-current classification.

An asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months after the reporting period, or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other assets are classified as non-current. A liability is current when:

• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle."

1. Use of estimates and judgements:

"The preparation of financial statements requires management to make judgments, estimates and assumptions in the application of accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Continuous evaluation is done on the estimation and judgments based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Revisions to accounting estimates are recognised prospectively."

2. Financial Instruments:

"A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

1. Financial Asset
1. Classification

The Company classifies its financial assets in the following measurement categories:

1. Those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss); and
2. Those measured at amortised cost.

The classification depends on the entitys business model for managing the financial assets and the contractual terms of the cash flows.

1. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income.
2. For investments in debt instruments, this will depend on the business model in which the investment is held.
3. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

The Company reclassifies debt investments when and only when its business model for managing those assets changes.

1. Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not measured at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

1. Debt instruments

Subsequent measurement of debt instruments depends on the Companys business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:

Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is included in other income using the effective interest rate method.

Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other income or other expenses (as applicable). Interest income

from these financial assets is included in other income using the effective interest rate method.

Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented net in the statement of profit and loss within other income or other expenses (as applicable) in the period in which it arises. Interest income from these financial assets is included in other income or other expenses, as applicable.

2. Equity instruments

The Company subsequently measures all equity investments at fair value. Where the Companys management has selected to present fair value gains and losses on equity investments in other comprehensive income and there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such investments are recognised in profit or loss as other income when the Companys right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognised in other income or other expenses, as applicable in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

1. Impairment of financial assets

"The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime credit losses (ECL) to be recognised from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed."

For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.

2. Derecognition of financial assets

1. The Company has transferred the rights to receive cash flows from the financial asset or
2. Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.

1. Financial Liabilities

1. Measurement

Financial liabilities are initially recognised at fair value, reduced by transaction costs (in case of financial liability not at fair value through profit or loss), that are directly attributable to the issue of financial liability. After initial recognition, financial liabilities are measured at amortised cost using effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash outflow (including all fees paid, transaction cost, and other premiums or discounts) through the expected life of the financial liability,

or, where appropriate, a shorter period, to the net carrying amount on initial recognition. At the time of initial recognition, there is no financial liability irrevocably designated as measured at fair value through profit or loss.

2. Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

5. Inventories Valuation

1. Raw materials, components, stores & spares, packing material, semi-finished goods & finished goods are valued at lower of cost and net realisable value
2. Cost of Raw Materials, components, stores & spares and packing material is arrived at Weighted Average Cost and Cost of semi-finished good and finished good comprises, raw materials, direct labour, other direct costs and related production overheads is arrived through Weighted Average Cost.
3. Scrap is valued at net realisable value.
4. Due allowances are made in respect of slow moving, non-moving and obsolete inventories based on estimate made by the Management.

5. Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty and net of returns, trade discount taxes and amounts collected on behalf of third parties. Discount is recognised on cash basis in accordance with the contractual term of the agreement with the customers. The Company recognises revenue as under:

"(i) The Company recognizes revenue from sale of goods when:"

"(a) The significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, which coincides with the delivery of goods."

2. The Company retains neither continuing managerial involvement to the degree usually associated with the ownership nor effective control over the goods sold.
3. The amount of revenue can be reliably measured.
4. It is probable that future economic benefits associated with the transaction will flow to the Company.
5. The cost incurred or to be incurred in respect of the transaction can be measured reliably.
6. The company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Interest on deployment of funds is recognised on accrual basis. Dividend income is recognised when right to receive dividend is established. Profit on sale of investments is recognised on sale of investments.

7. Property, plant and equipment

(i) Recognition and measurement

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1 April 2020 measured as per the previous GAAP and used those carrying value as the deemed cost of the property, plant and equipment.

Freehold land is carried at historical cost. All other items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. The cost of an item of property, plant and equipment comprises:

"a) its purchase price, including import duties and non-refundable taxes (net of GST), after deducting trade discounts and rebates.

2. any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
3. borrowing costs for long-term construction projects if the recognition criteria are met.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment."

Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance Sheet date is classified as capital advances under other non-current assets and the cost of assets not ready to use before such date are disclosed under ‘Capital work-in-progress.

"(ii) Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the Statement of Profit and Loss when incurred."

(iii) Depreciation

Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values, if any, over their estimated useful lives using the Reduced Balance method in the manner and at the rates prescribed by Part ‘C of Schedule II of the Act, except as stated below. Depreciation on additions/(disposals) is provided on a pro-rata basis i.e. from/ (upto) the date on which asset is ready for use

/ disposed off.

The estimated useful lives of assets are as taken as per Companies Act, 2013

2. Intangible assets

On transition to Ind AS, The Company has elected to continue with the carrying value of all of its intangible assets recognised as at 1 April 2020 measured as per the previous GAAP and used those carrying value as the deemed cost of the intangible assets.

3. An intangible asset shall be recognised if, and only if: (a) it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and (b) the cost of the asset can be measured reliably.

(iii) Computer software is capitalised where it is expected to provide future enduring economic benefits. Capitalisation costs include licence fees and costs of implementation / system integration services. The costs are capitalised in the year in which the relevant software is implemented for use. The same is amortised over a period of 5 years on straight-line method.

9. Leases

"Company as lessee:

Lease under which the Company assumes substantially all the risks and rewards of ownership are classified as Finance Leases. The leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items, are classified as operating lease. Operating lease payments are recognised as expenses in the Statement of Profit and Loss."

10. Employee Benefit

1. Defined Contribution Plan

Contribution to defined contribution plans are recognised as expense in the Statement of Profit and Loss, as they are incurred.

2. Defined Benefit Plan

Companys liabilities towards gratuity and leave encashment are determined using the projected unit credit method as at Balance Sheet date. Actuarial gains / losses are recognised immediately in the Statement of Profit and Loss.

9. Foreign currency translation

1. Functional and presentation currency

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (‘the functional currency). The financial statements are presented in Indian rupee (INR), which is Companys functional and presentation currency.

2. Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. All the foreign exchange gains and losses are presented in the statement of Profit and Loss on a net basis within other expenses or other income as applicable.

9. Borrowing cost

Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

1. Commencement of capitalisation

"Capitalisation of borrowing cost as part of the cost of a qualifying asset shall begin on the commencement date. The commencement date for capitalisation is the date when the entity first meets all of the following conditions:

1. it incurs expenditures for the asset;
2. it incurs borrowing costs; and
3. it undertakes activities that are necessary to prepare the asset for its intended use or sale."

1. Cessation of capitalisation

"Cessation of capitalisation shall happen when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

Other borrowing costs are recognised as an expense in the period in which they are incurred."

Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

• the profit attributable to owners of the Company; and
• by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year.

1. Diluted earnings per share

Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account:

• the after income tax effect of interest and other financing costs associated with dilutive potential equity shares; and
• the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

14. Impairment of Assets

Intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are Companyed at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or Companys of assets (cash-generating units). Non- financial assets that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

15. Provisions, contingent liabilities and contingent assets

1. Provisions:

" Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and loss."

2. Contingent liabilities:

" A contingent liability is a possible obligation that arises from past events whose existence will be confirmed 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 recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.

3. Contingent Assets: Contingent Assets are disclosed, where an inflow of economic benefits is probable.

14. Investments

On transition to Ind AS, equity investments are measured at fair value, with value changes recognised in Other Comprehensive Income, except for those mutual fund for which the Company has elected to present the fair value changes in the Statement of Profit and Loss.

15. Trade receivables

Trade receivables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

16. Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are recognised, initially at fair value, and subsequently measured at amortised cost using effective interest rate method.

(f) Operating Cycle

Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non current.

20. Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest Rupees Lakhs (upto two decimals), unless otherwise stated as per the requirement of Schedule III (Division II).

21. "Government Grants, subsidies and export incentives"

Government grants and subsidies are accounted when there is reasonable assurance that the Company will comply with the conditions attached to them and it is reasonably certain that the ultimate collection will be made. Capital grants relating to specific fixed assets are reduced from the gross value of the respective fixed assets. Revenue grants are recognised in the Statement of Profit and Loss. Export benefits available under prevalent schemes are accrued in the year in which the goods are exported and there is no uncertainty in receiving the same.

22. Segment reporting

Operating segment are reported in a manner consistent with the internal reporting provided to the Chief operating decision maker (CODM). Identification of segments: In accordance with Ind As 108 "operating segment", the operating segment used to present segment information reviewed by CODM to allocate resources to the segments and assess their performance. An operating segment is a component of the group that engages in the business activities from which it earns revenues and incurs expenses, including revenues and expenses that relate to transactions with any of the groups other components.

23. Dividend

The Company recognises a liability for any dividend declared but not distributed at the end of the reporting period, when the distribution is authorised and the distribution is no longer at the discretion of the Company on or before the end of the reporting period. As per Corporate laws in India, a distribution in the nature of final dividend is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.

24. Income tax

Tax expense comprise of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act.

Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

At each balance sheet date unrecognized deferred tax assets are re-assessed. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

25. Cash and cash equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from date of purchase to be cash equivalents.

26. Cash Flow Statement

Cash flows are reported using the indirect method, whereby net profit 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.

(aa) Interest income

Interest income from debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.

(? in Lakhs, except for ratios and percentages)

*Not annualized as on September 30, 2023 Notes:

(1) EBITDA is calculated as the sum of (i) profit before tax and prior period items for the period/year, (ii) depreciation and amortization expenses, and (iii) finance costs.

(2) EBITDA Margin is calculated as EBITDA divided by revenue from operations.

(3) PAT Margin is calculated as profit for the period/year divided by revenue from operations.

(4) Net worth attributable to the Equity Shareholders of our Company has been defined as the aggregate value of the paid-up equity share capital and all reserves created out of the profits and securities premium account and debit or credit balance of profit and loss account, after deducting, if any the aggregate value of the accumulated losses, prepaid expenses, deferred expenditure and miscellaneous expenditure not written off as per the Restated Financial Statement, but does not include reserves created out of revaluation of assets and write-back of depreciation, if any as on March 31, 2021, March 31, 2022, March 31, 2023 and ended September 30, 2023 in accordance with Regulation 2(1)(hh) of the SEBI ICDR Regulations, as amended. It also excludes OCI, NCI and deeply subordinate debt, as applicable.

(5) Return on Equity (%) refers to restated profit after tax divided by Net worth attributable to the Equity Shareholders of our Company for the year/period. Restated profit after tax means restated profit / (loss) for the period/year as appearing in the Restated Financial Information.

(6) Capital Employed is calculated as total equity plus total borrowings plus total lease liabilities and deferred tax liabilities(net) minus deferred tax assets (net).

(7) Return on Capital Employed is calculated as adjusted EBITDA less depreciation and amortisation divided by Capital Employed. Adjusted EBITDA is calculated as EBITDA less other income.

(8) Debt is calculated as the sum of current borrowings and non-current borrowings.

(9) Net Debt is calculated as Debt plus lease liabilities less cash & cash equivalents.

(10) Debt-Equity Ratio is calculated as Debt divided by Net worth attributable to the Equity Shareholders of our Company.

(11) Net Debt-EBITDA Ratio is calculated as Net Debt divided by EBITDA.

(12) Net Tangible Assets is calculated as the sum of all the net assets of our Company excluding, right of use assets, other intangible assets, deferred tax liabilities and prepaid expenses

(13) Monetary Assets is calculated as cash and cash equivalents and bank balances and fixed deposits held as margin money.

(14) % of Monetary Assets to Net Tangible Assets is calculated as Monetary Assets divided by Net Tangible Assets, expressed as a percentage.

(15) Net Asset Value per Equity Share is calculated as Net worth attributable to the Equity Shareholders of our Company as at the end of Fiscal divided by the number of Equity Shares used in calculating basic earnings per share.

EBITDA, EBITDA Margin, PAT Margin and ROE

The following table sets forth our EBITDA, EBITDA Margin, PAT Margin and ROE, including a reconciliation

of (i) EBITDA and EBITDA Margin to our restated profits/losses before tax and prior period items, and (ii) PAT Margin and ROE to our restated profits/losses, in each of the six months ended September 30, 2023 and Fiscal 2023, Fiscal 2022 and Fiscal 2021.

(? in Lakhs, except percentages)

*Not annualized as on September 30, 2023

Capital Employed and Return on Capital Employed (ROCE)

The following table sets forth our Capital Employed and Return on Capital Employed (ROCE), including a reconciliation of ROCE to our restated profits/losses before tax and prior period items in each of the six months ended September 30, 2023 and Fiscal 2023, Fiscal 2022 and Fiscal 2021.

(? in Lakhs, except percentages)

*Not annualized as on September 30, 2023

Debt, Net Debt, Debt-Equity Ratio and Net Debt-EBITDA Ratio

The following table sets forth our Debt, Net Debt, Debt-Equity Ratio and Net Debt-EBITDA Ratio as at the six months ended September 30, 2023 and Fiscal 2023, Fiscal 2022 and Fiscal 2021.

(? in Lakhs, except ratios)

• Not annualized for the periods ended September 30, 2023

Net Tangible Assets, Monetary Assets, % of Monetary Assets to Net Tangible Assets, Net Worth, Return on Net Worth, Pre-Tax Operating Profit and Net Asset Value per Equity Share

Our Net Tangible Assets, Monetary Assets, % of Monetary Assets to Net Tangible Assets, Net Worth, Return on Net Worth, Pre-Tax Operating Profit and Net Asset Value per Equity Share, including a reconciliation to our Restated Financial Information as at September 30, 2023 and for the three Financial Years ended on March 31, 2023, 2022 and 2021 are set forth below:

(? in Lakhs, except as provided)

*Not annualized as on September 30, 2023

Key Components of our Statement of Profit and Loss

The following descriptions set forth information with respect to the key components of our profit and loss statements.

Revenue

Total income consists of revenue from operations and other income.

Revenue from operations: Revenue from operations comprises revenue from sale of products, and other operating revenue. Other operating revenue includes, export benefit, display & listing income and miscellaneous operating income.

Other income: Other income comprises of interest income, rent income, foreign exchange fluctuation gain and other non-operating income. Interest income primarily relates to interest income earned on bank deposits and financial assets (at amortized cost). Other non-operating income primarily relates to, profit on sale of fixed assets, miscellaneous income.

Expenses

Expenses consist of cost of materials consumed, purchase of stock-in-trade, changes in inventories of finished goods, employee benefits expense, finance costs, depreciation and amortization expense and other expenses.

Cost of materials consumed: Cost of materials consumed comprises of purchase of raw materials and changes in opening and closing inventories of raw materials.

Purchase of stock-in-trade: Purchase of stock-in-trade comprises of purchases of retail store merchandise and traded goods.

Changes in inventories of finished goods and stock in trade: Changes in inventories of finished goods comprise net (increase)/decrease in inventories of finished goods and stock in trade.

Employee benefit expenses: Employee benefit expenses comprises salaries, wages and bonus, contribution to provident and other funds, gratuity, staff welfare expenses, employee medical insurance expenses and other employee related expenses. Further, employee benefit expenses also include contract labour expenses.

Finance costs: Finance costs comprises interest expenses on term loan, cash credit, packing credit loan, stand by letter of credit (SLC), car loans, other unsecured loans from directors and interest on lease liability. Loan processing fees consist of bank charges, professional fees and others.

Depreciation and amortization expenses: Depreciation and amortization expenses comprises depreciation of tangible assets including our plant and machinery, building, furniture and fixture, vehicles, computer, electrical equipments, office equipments and amortization of intangible assets including computer software and trademark.

Other expenses: Other expenses comprise primarily of labour charges, consumption of consumables, stores & spares, power, fuel and water charges, job work charges, laboratory expenses, amongst others. The largest components of expenses under the head selling and administration expenses include export expenses, freight outward, forex fluctuations, legal and professional expenses, advertisement & business promotion, vehicle expenses, corporate social responsibility expenditure and miscellaneous expenses. Other components of other expenses include rent, expenses relating to the repair and maintenance of machinery, building and others, insurance, payments to auditors, loss on sale of fixed assets, donation, loss on forward contracts and other expenses.

Tax Expense

Tax expense consists of current tax, deferred tax and adjustment of tax relating to earlier periods. Our Results of Operations

The following tables set forth our selected financial data from our Restated Financial Statement of profit and loss for the six months period ended September 30, 2023, the components of which are also expressed as a percentage of total income for such years/periods:

(? in Lakhs, except for percentage)

The following tables set forth our selected financial data from our Restated Financial Statement of profit and loss for the Fiscal 2023, 2022 and 2021 the components of which are also expressed as a percentage of total income for such years/periods:

Financial performance highlights for the sixmonths period ended on September 30, 2023 Total Income

Our total income during the six months period ended September 30, 2023 was ?4,4681.97 Lakhs. The revenue from operations was ?44,598.21 Lakhs which is almost 99.81% of our total income. Our revenue from operations comprises of sale of products and other operating revenue.

Revenue from operations: Our revenue from operations comprises of sale of processed / manufactured goods, retail sales and trading sales. Further, our revenue from operations also includes other operating revenues like

export benefits, display / listing income and others. The table below set forth the details of our revenue from operations:

Other Income: For the six months period ended September 30, 2023, our other income was ?83.76 Lakhs which is 0.19% of our total income. Other income comprises of foreign exchange fluctuation gain, interest income, rental income from leasing of space at our Facility 1 to telecom operator for installation of tower and miscellaneous income. Miscellaneous income primarily comprises of scrap sales.

Total Expenses:

The total expenditure for the six months period ended September 30, 2023 was ?43,366.43 Lakhs which is about 97.06% of the total income. The main constituent of total expenditure is cost of material consumed and purchase of stock-in-trade which constitutes 44.33% and 40.24%, respectively of the total income.

Cost of Materials Consumed: Our Company has incurred ?19,807.98 Lakhs towards cost of materials consumed during the six months period ended September 30, 2023 which is about 44.33% of the total income. Cost of material consumed comprises of purchase of raw materials and changes in opening and closing inventories of raw materials

Purchases of Stock-in-Trade: Our Company has incurred ?17,978.87 Lakhs towards cost of materials consumed during the six months period ended September 30, 2023 which is about 40.24% of the total income. Purchases of Stock-in-Trade includes store merchandising such as, food, non-food (FMCG), general merchandise and apparels and also inventory forming part of our trading business such as, food and non-food products of third party reputed brand, sugar, rice, and edible oils. These expenses are incurred towards retail sales and trading sales.

Change in inventories: Changes in inventories reduced to ? (857.14) Lakhs during the six months period ended September 30, 2023 as compared to ?(1,839.72) Lakhs in Fiscal 2023. In relation to inventories of finished goods, we had an opening stock of ?7,191.86 Lakhs and a closing stock of ?8,049.00 Lakhs for the six months period ended September 30, 2023.

Employee benefits expense: Our Company has incurred ?1,295.18 Lakhs towards employee benefit expenses during the six months period ended September 30, 2023. Our employee benefit expenses comprise of Directors remuneration, salaries, wages and allowances such as, employee medical insurance expenses and other employee related expenses, contribution to provident and other funds, including gratuity funds and staff welfare expenses which stands at 2.90% of total income. As on September 30, 2023 we had 167 permanent employees, across our retail stores, Facilities and registered office. We also engage manpower agencies to provide us with a temporary workforce which as on September 30, 2023 is 663 and 127 contract labours at our Facility 1 (including Distribution Centre, Retail Stores & Office) and Kutch Facilities, respectively.

Finance costs: Finance cost was ?690.05 Lakhs for the six months period ended September 30, 2023 which comprises interest expenses on loan from bank, other unsecured loans, processing cost and interest on lease liability. Our finance cost is 1.54% of our total income.

Depreciation and amortization expenses: Depreciation and amortization expenses comprises depreciation of tangible assets including our plant and machinery, building, furniture and fixture, vehicles, computer, office equipment and amortization of intangible assets including computer software and others; and depreciation of right- of-use asset. Depreciation for six months period ended September 30, 2023 is ?484.18 Lakhs which is about 1.08% of the total income.

Other Expenses: Other expenses comprise primarily of advertisement & sales promotion, carriage inward, clearing and forwarding, commission & brokerage, electricity charges, packing expenses, rents, rates & taxes, repairs & maintenance and other expenses. Our Company has incurred ?3,967.29 Lakhs for the six months period ended September 30, 2023 on other expenses which comprises of 8.88% of the total income.

Profit before exceptional items and tax for the six months period ended September 30, 2023 stood at ?1315.54 Lakhs which is 2.94% of the total income.

Restated profit after tax:

The profit after tax for the six months period ended September 30, 2023 stood at ?977.99 Lakhs which is 2.19% of the total income.

Total other comprehensive income for the period, net of taxes:

Our total other comprehensive income for the period, net of taxes, was ?0.34 Lakhs for six months ended September 30, 2023. This income is on account of remeasurement of defined benefits obligations.

Since the Results are for six months, Comparison with previous fiscal would not reflect actual performance of the Company, Comparison has not been provided.

Financial Year 2023 compared to Financial Year 2022

(? in Lakhs)

Total Income: Total income increased by 32.13% to ?1,01,980.36 Lakhs for the Fiscal 2023 from ?77,183.58 Lakhs for the Fiscal 2022 due to increase in revenue from operations. However, other income has reduced by 77.88% during Fiscal 2023 as compared to in Fiscal 2022.

Revenue from operations: Revenue from operations increased by 32.94% to ?1,01,854.78 Lakhs for the Fiscal 2023 from ?76,615.91 Lakhs for the Fiscal 2022, primarily due to an increase in domestic sale from ?28,669.07 Lakhs for the Fiscal 2022, to ?34,541.89 Lakhs for the Fiscal 2023 representing an increase of 20.48% and also increase in export sales from ?46,767.38 Lakhs for the Fiscal 2022 to ?66,962.58 Lakhs for the Fiscal 2023 representing an increase of 43.18%.

The increase in domestic and export sales are primarily due to increase in revenue from processed sales from

?18,549.70 Lakhs for the Fiscal 2022 to ?31,042.15 Lakhs for the Fiscal 2023 representing an increase of 67.35%. The increase in processed sales is primarily attributable to commencement of production at our Unit 1, Unit 2, Unit 3, Unit 4 and F&V Unit of our Agri-cluster which constituted an amount of ?10,594.12 Lakhs for Fiscal 2023 as against an amount of ?12.72 Lakhs for Fiscal 2022. Further, retail sales increased from ?24,971.45 Lakhs for the Fiscal 2022 to ?26,655.66 Lakhs for the Fiscal 2023, representing an increase of 6.74%. The increase in retail sales is attributable to increase in sale volumes from existing stores and also contribution to revenue from the newly opened 4 (four) stores. The number of stores increased from twenty-eight (28) stores in Fiscal 2022 to thirty-two (32) stores in Fiscal 2023, while we have closed two stores during the Fiscal 2023. New stores opened in the Fiscal 2023, contributed to our revenue from operations by a sum of ?990.29 Lakhs.

Further, during the Fiscal 2023, we have witnessed an increase in trading sales by 35.59% to ?43,120.98 Lakhs for the Fiscal 2023 as against ?31,801.55 Lakhs for the Fiscal 2022. The increase in trading sales is primarily attributable to bulk export sales of 76,084 MT of sugar aggregating to an amount of ?30,881.27 Lakhs which represented 71.62% of trading sales.

The increase in revenue from sale of products was partially offset by reduction in other operating revenue from

?1,293.22 Lakhs in Fiscal 2022 to ?1,035.99 Lakhs in Fiscal 2023 representing a change of 19.89%. The reduction in other operating revenue is attributable to reduction in miscellaneous operating income (majorly includes scrap sales, insurance claim received) from ?211.20 Lakhs in Fiscal 2022 to ?32.97 Lakhs in Fiscal 2023 and reduction in export benefits income from ?939.71 Lakhs in Fiscal 2022 to ? 908.81 Lakhs in Fiscal 2023.

Other Income: Other income decreased by 77.88% from ?567.67 Lakhs in Fiscal 2022 to ?125.58 Lakhs in Fiscal 2023 primarily due to exchange loss in Fiscal 2023 as against exchange gain of ?460.61 Lakhs in Fiscal 2022 and also due to NIL income from sale of fixed assets in Fiscal 2023 as against from ?13.16 Lakhs in Fiscal 2022. This was partially off-set by an increase in interest income from ?25.86 Lakhs in Fiscal 2022 to ?28.60 Lakhs in Fiscal 2023 and rent income from ?3.16 Lakhs in Fiscal 2022 to ?8.21 Lakhs in Fiscal 2023.

Total expenses: Total expenses increased by 31.86% to ?99,755.63 Lakhs for the Fiscal 2023 from ?75,654.32 Lakhs in the Fiscal 2022 primarily due to increases in cost of material consumed, purchase of stock-in trade, employee benefits expenses, finance costs, depreciation and amortization and other expenses.

Cost of Materials Consumed: Cost of materials consumed increased by 56.05% to ?32,407.46 Lakhs in Fiscal 2023 from ?20,766.85 Lakhs in Fiscal 2022, primarily due to higher volumes of products manufactured corresponding to higher sales and also on account of marginal increase in commodity prices. Cost of materials consumed comprises of purchase of raw materials and changes in opening and closing inventories of raw materials

Purchases of Stock-In-Trade: Purchases of stock-in-trade increased by 27.33% to ?55,451.87 Lakhs in Fiscal 2023 from ?43,548.89 Lakhs in Fiscal 2022, primarily due to higher volumes of retail sales and trading sales during the period under consideration. The increase is primarily attributable to sugar purchased in bulk (76,543.30 Mt.) representing an amount of ?27,180.18 Lakhs during Fiscal 2023 as against purchase of 65,199.00 Mt. representing an amount of ?20,204.51 Lakhs during Fiscal 2022.

Change in inventories of finished goods: Changes in inventories of finished goods increased to ?1,839.72 Lakhs during Fiscal 2023 as compared to reduction of by ?719.42 Lakhs in Fiscal 2022. In relation to inventories of finished goods, we had an opening stock of ?5,352.15 Lakhs and a closing stock of ?7,191.86 Lakhs for the Fiscal 2023, and an opening stock of ?6,071.57 Lakhs and a closing stock of ?5,352.15 Lakhs for the Fiscal 2022. The higher closing inventories for Fiscal 2023 can be attributed to higher production during the period mainly due to commencement of operations of the Agri-cluster. The closing inventory for Fiscal 2023 is twenty-seven (27) days

of revenue from operations which is line with our normal inventory level.

Employee Benefits Expense: Our employee benefits expense increased by 19.00% from ?1,902.59 Lakhs in Fiscal 2022 to ?2,264.15 Lakhs in Fiscal 2023, due to an increase in basic salary, wages and allowances to ?2,124.66 Lakhs in the Fiscal 2023 from ?1,788.89 Lakhs for the Fiscal 2022. While there was a decrease in the number of overall employee counts during the Fiscal 2023, the increase in basic salary, wages and allowances is mainly attributable to annual increments in employee salaries, wages and bonus paid during the Fiscal 2023 including, the increase in salary payable to our Directors, KMPs and SMPs. Further, increase in salary also contributed towards increase in contribution towards provident fund and other funds from ?31.80 Lakhs in Fiscal 2022 to

?36.69 Lakhs in Fiscal 2023 and also increase in staff welfare expenses from ?81.90 Lakhs in Fiscal 2022 to

?102.81 Lakhs in Fiscal 2023.

Finance Costs: Our finance costs increased by 64.02% from ?678.83 Lakhs in Fiscal 2022 to ?1,113.45 Lakhs in Fiscal 2023, primarily due to an increase in interest on loan from bank by ?419.81 Lakhs which is attributable to an increase in working capital loan from bank from ?12,854.14 Lakhs in Fiscal 2022 to ?14,406.41 Lakhs in Fiscal 2023. Further, interest on loan from directors increased from ?248.77 Lakhs in Fiscal 2022 to ?287.44 Lakhs in Fiscal 2023 due to an increase in loan from directors by ?298.19 Lakhs in Fiscal 2023.

Depreciation and Amortization Expense: Our depreciation and amortization expense increased by 109.88% from

?469.69 Lakhs in Fiscal 2022 to ?985.78 Lakhs in Fiscal 2023, primarily due to increase in fixed assets on account of commencement of production in the units of Agri-cluster / Facility 3.

Other expenses: Other expenses increased by 23.85% from ?7,568.03 Lakhs in Fiscal 2022 to ?9,372.63 Lakhs in Fiscal 2023, generally in line with the increase in our revenue from operations. The increase in other expenses was primarily due to (i) carriage inward charges to ?855.21 Lakhs for the Fiscal 2023 from ?394.74 Lakhs for the Fiscal 2022, which was mainly attributable to increase in purchase of raw material and traded goods; (ii) clearing and forwarding charges to ?4,021.93 Lakhs for the Fiscal 2023 from ?3,957.01 Lakhs for the Fiscal 2022, which was mainly attributable to increase in export sales; (iii) commission & brokerage expenses to ?386.66 Lakhs for the Fiscal 2023 from ?311.79 Lakhs for the Fiscal 2022, which was mainly attributable to increase in export sales;

1. electricity charges to ?550.65 Lakhs for the Fiscal 2023 from ?312.84 Lakhs for the Fiscal 2022, which was mainly attributable to an increase in electricity and fuel costs on account of commencement of production in Agri- cluster; (iv) Forex exchange fluctuation loss to ?328.62 Lakhs for the Fiscal 2023 from ?NIL Lakhs for the Fiscal 2022; (v) Legal and professional expense to ?187.06 Lakhs for the Fiscal 2023 from ?152.83 Lakhs for the Fiscal 2022; (vi) Packaging expense to ?651.46 Lakhs for the Fiscal 2023 from ?387.22 Lakhs for the Fiscal 2022 primarily due to increase in sales; (vii) rents, rates and taxes to ?601.83 Lakhs for the Fiscal 2023 from ?572.63 Lakhs for the Fiscal 2022 primarily due increase in number of stores; (viii) repairs and maintenance to ?323.34 Lakhs for the Fiscal 2023 from ?202.23 Lakhs for the Fiscal 2022, which was mainly attributable to higher machinery maintenances on account of increased production activities and reconditioning; (v) Travel & conveyance expenses to ?247.30 Lakhs for the Fiscal 2023 from ?142.01 Lakhs for the Fiscal 2022, which was mainly attributable to increase in marketing and sales activities; (vi) Advertisement & Sales Promotion Expenses to ?154.77 Lakhs for the Fiscal 2023 from ?129.10 Lakhs for the Fiscal 2022, which was mainly attributable to increase in marketing and sales activities.

Profit before exceptional items and tax increased by 45.48% to ?2224.73 Lakhs in Fiscal 2023 from ?1529.26 Lakhs in Fiscal 2022 as total expense to total income reduced to 97.82% in Fiscal 2023 as against 98.02% during Fiscal 2022.

Profit before tax: As a result of the foregoing, we recorded an increase of 45.48% in our profit before tax, which amounted to ?2224.73 Lakhs in Fiscal 2023 as compared to ?1529.26 Lakhs in Fiscal 2022.

Tax expenses: Our tax expenses (current, earlier year and deferred) increased by 49.59% from ?392.23 Lakhs in Fiscal 2022 to ?586.75 Lakhs in Fiscal 2023. Our effective tax rate in Fiscal 2023 and Fiscal 2022 was 26.37% and 25.65%, respectively.

Restated Profit for the period: As a result of the foregoing, we recorded an increase of 44.06% in our profit for the Fiscal 2023 from ?1137.03 Lakhs in Fiscal 2022 to ?1637.97 Lakhs in Fiscal 2023.

Financial Year 2022 compared to Financial Year 2021

(? in Lakhs)

Total Income: Total income decreased by 6.76% to ?77183.58 Lakhs for the Fiscal 2022 from ?82775.34 Lakhs for the Fiscal 2021 due to decrease in revenue from operations. However, other income has increased by 29.64% during Fiscal 2022 as compared to in Fiscal 2021.

Revenue from operations: Revenue from operations decreased by 6.95% to ?76615.91 Lakhs for the Fiscal 2022 from ?82337.46 Lakhs for the Fiscal 2021, primarily due to decrease in export sale from ?53472.70 Lakhs for the Fiscal 2021 to ?46767.38 Lakhs for the Fiscal 2022 representing a decrease of 12.54%. However, the decrease in export sales were partially off-set against increase in domestic sales from ?28,017.10 Lakhs for the Fiscal 2021 to ?28,669.07 Lakhs for the Fiscal 2022 representing an increase of 2.33%.

The decrease in revenue from operations are primarily due to decrease in revenue from processed sales from

?23941.78 Lakhs for the Fiscal 2021 to ?18549.70 Lakhs for the Fiscal 2022 representing a decrease of 22.52% which is attributable to reduction in export sales of branded export and unbranded export by ?5219.79 lakhs. Further, during the Fiscal 2022 we have witnessed a decrease in trading sales by 5.13% to ? 31801.55 Lakhs for the Fiscal 2022 as against ?33522.29 Lakhs for the Fiscal 2021. The reduction in export sales is due to limitation in availability of freight containers during the initial period of Fiscal 2022 on account of Covid-19 Pandemic. The reduction in sales was partially off-set by increase in retail sales from ?23659.43 Lakhs for the Fiscal 2021 to

?24971.45 Lakhs for the Fiscal 2022 representing an increase of 5.55%. The increase in retail sales is attributable to increase in in sale volumes of existing stores and from the newly opened stores. The number of stores increased

from 27 stores in Fiscal 2021 to 28 stores in Fiscal 2022. Increase in sales volume is reflected by way of an increase in our average revenue per store from ?876.28 Lakhs in Fiscal 2021 to ?891.84 Lakhs in Fiscal 2022 with an increase in the number of bill cuts from 26.29 lakhs during the Fiscal 2021 to 28.53 lakhs during the Fiscal 2022.

Further, other operating revenue increased from ? 1213.95 Lakhs in Fiscal 2021 to ?1293.22 Lakhs in Fiscal 2022 which also contributed to our increase in revenue from operations. Increase in other operating revenue is primarily attributable to increase in revenue from export benefits from ? 327.99 Lakhs in Fiscal 2021 to ?939.71 Lakhs in Fiscal 2022 and display/listing income increased from ?53.67 Lakhs in Fiscal 2021 to ?103.63 Lakhs in Fiscal 2022 and also due to increase in miscellaneous operating income from ?138.90 Lakhs in Fiscal 2021 to ?211.20 Lakhs in Fiscal 2022.

Other Income: Other income increased by 29.64% from ?437.88 Lakhs in Fiscal 2021 to ?567.67 Lakhs in Fiscal 2022 primarily due to exchange gain of ? 460.61 Lakhs in Fiscal 2022 as against ? 346.04 Lakhs in Fiscal 2021, increase in interest income from ? 18.05 Lakhs in Fiscal 2021 to ?25.86 Lakhs in Fiscal 2022; and also due to income from sale of fixed assets in Fiscal 2022 of ? 13.16 Lakhs as against ? NIL in Fiscal 2021.

Total expenses: Total expenses decreased by 6.85% to ? 75654.32 Lakhs for the Fiscal 2022 from ?81220.23 Lakhs in the Fiscal 2021 primarily due to decreases in cost of material consumed, purchase of stock in trade and finance costs.

Cost of Materials Consumed: Cost of materials consumed decreased by 24.69% to ?20766.85 Lakhs in Fiscal 2022 from ?27573.69 Lakhs in Fiscal 2021, primarily due to reduction in processed sales.

Purchases of Stock-In-Trade: Purchases of Stock-In-Trade reduced marginally by 1.59% to ?43548.89 Lakhs in Fiscal 2022 from ?44251.39 Lakhs in Fiscal 2021, primarily due to reduction in trading sales, which was off-set partially by an increase in retail sales.

Change in inventories of finished goods: Changes in inventories of finished goods decreased to ?719.42 Lakhs in the Fiscal 2022 as compared to increase by ?800.90 Lakhs in Fiscal 2021. In relation to inventories of finished goods, we had an opening stock of ? 6071.57 Lakhs and a closing stock of ?5352.15 Lakhs for the Fiscal 2022, and an opening stock of ?5270.66 Lakhs and a closing stock of ?6071.57 Lakhs for the Fiscal 2021. The lower closing inventories for Fiscal 2022 can be attributed to reduction in level of processed sale & trading sales. The closing inventory for Fiscal 2022 is 26 days of revenue from operations which is line with our normal inventory level.

Employee Benefits Expense: Our employee benefits expense increased by 6.87% from ?1780.29 Lakhs in Fiscal 2021 to ?1902.59 Lakhs in Fiscal 2022, due to an increase in basic salary, wages & allowances to ?1788.90 Lakhs in the Fiscal 2022 from ?1687.59 Lakhs for the Fiscal 2021. The increase in basic salary, wages & allowances is mainly attributable to an increase in our permanent and temporary employee head count to 1002 employees in Fiscal 2022 from 788 employees in Fiscal 2021. Further, increase in head count also contributed towards increase in contribution towards PF & other funds from ? 19.47 Lakhs in Fiscal 2021 to ?31.80 Lakhs in Fiscal 2022 and also increase in staff welfare expenses from ?73.23 Lakhs in Fiscal 2022 to ?81.90 Lakhs in Fiscal 2021.

Finance Costs: Our finance costs decreased by 10.40% from ? 757.66 Lakhs in Fiscal 2021 to ?678.83 Lakhs in Fiscal 2022, primarily due to decrease in interest on loan from directors from ? 331.68 Lakhs in Fiscal 2021 to

?248.77 Lakhs in Fiscal 2022 and decrease in interest on bank loan from ? 404.10 Lakhs in Fiscal 2021 to ?383.20 Lakhs in Fiscal 2022. The decrease in interest is attributable to reduction in long term borrowings from ?3788.11 Lakhs in Fiscal 2021 to ?3693.94 Lakhs in Fiscal 2022 and reduction in short-term borrowing from ?13848.88 Lakhs in Fiscal 2021 to ? 13396.51 Lakhs in Fiscal 2022. The reduction in interest expense is partly off-set by higher loan processing fees during the year from ? 21.89 Lakhs in Fiscal 2021 to ?44.37 Lakhs in Fiscal 2022. The higher loan processing fees is attributable to additional bank borrowings availed by the company during the Fiscal 2022. Further, interest expense on lease liability increased from ? NIL Lakhs in Fiscal 2021 to ?2.49 Lakhs in Fiscal 2022. The increase in interest expense on lease liability is attributable to adoption of IND-AS.

Depreciation and Amortization Expense: Our depreciation and amortization expense increased marginally by 1.90% from ?460.92 Lakhs in Fiscal 2021 to ?469.69 Lakhs in Fiscal 2022, primarily due to increase in fixed assets on account of capitalization of Unit 1 & Unit 2 of Facility 3.

Other expenses: Other expenses increased by 5.15% from ?7197.18 Lakhs in Fiscal 2021 to ?7568.03 Lakhs in

Fiscal 2022, generally in line with our revenue from operations. The increase in other expenses was primarily due to (i) clearing & forwarding charges to ?3957.01 Lakhs for the Fiscal 2022 from ?3413.80 Lakhs for the Fiscal 2021, which was mainly attributable to increase in freight and other cost; (ii) advertisement & sales promotion expenses increased to ?129.10 Lakhs for the Fiscal 2022 from ?94.40 Lakhs for the Fiscal 2021, which was mainly attributable to increase in retail sales; (iii) miscellaneous expenses to ?138.57 Lakhs for the Fiscal 2022 from

?102.76 Lakhs for the Fiscal 2021; (iv) Rents, rates & taxes to ?572.63 Lakhs for the Fiscal 2022 from ?523.61 Lakhs for the Fiscal 2021; (v) stamp charges to ?44.93 Lakhs for the Fiscal 2022 from ?4.95 Lakhs for the Fiscal 2021 due to stamp duty cost on mortgage of property; (vi) Travel & conveyance expense to ?142.01 Lakhs for the Fiscal 2022 from ?125.57 Lakhs for the Fiscal 2021.

Profit before exceptional items and tax decreased by 1.66% to ?1529.26 Lakhs in Fiscal 2022 from ?1555.11 Lakhs in Fiscal 2021 as total expense to total income reduced to 98.02% in Fiscal 2022 as against 98.12% during Fiscal 2021.

Profit before tax: As a result of the foregoing, we recorded a marginal decrease of 1.66% in our profit before tax, which amounted to ?1529.26 Lakhs in Fiscal 2022, as compared to ?1555.11 Lakhs in Fiscal 2021.

Tax expenses: Our tax expenses (current, earlier year and deferred) decreased marginally by 3.24% from ?405.37 Lakhs in Fiscal 2021 to ?392.23 Lakhs in Fiscal 2022. Our effective tax rate in Fiscal 2022 and Fiscal 2021 was 25.65% and 26.07%, respectively.

Restated Profit for the period: As a result of the foregoing, we recorded a marginal decrease of 1.11% in our profit for the Fiscal 2022 from ?1149.74 Lakhs in Fiscal 2021 to ?1137.03 Lakhs in Fiscal 2022.

Liquidity and Capital Resources Capital Requirements

Our primary sources of liquidity include cash generated from operations and from borrowings, both short-term and long-term, including cash credit, term and working capital facilities and unsecured loan from directors. As of September 30, 2023, we had cash and cash equivalents and other bank balances of ?502.46 Lakhs.

Our financing requirements are primarily for working capital and investments in our business such as capital expenditures to upgrade and increase the capacities of our Manufacturing Facilities. We expect that cash flow from operations and borrowings will continue to be our principal sources of funds in the long-term. We evaluate our funding requirements periodically in light of our net cash flow from operating activities, the requirements of our business and operations, acquisition opportunities and market conditions.

Our net working capital days (which represents working capital divided by revenue from operations for the relevant year multiplied by 365 days) was 61 days, 62 days and 67 days for the Fiscal 2023, 2022 and 2021 and 67 days for the six months ended September 30, 2023, respectively. The increase in our net working capital days between the Fiscal 2023 and the six months ended September 30, 2023 was primarily due to increases in our inventories and reduction in trade payables and provision for current tax liabilities. The increase in working capital would reach normalcy by end of the fiscal.

Cash Flows

The following table summarizes our cash flows for the six months period ended September 30, 2023, Fiscal 2023, Fiscal 2022 and Fiscal 2021:

(? in Lakhs)

Cash flows generated from operating activities

We generated ?3179.36 Lakhs net cash from operating activities during the six months period ended September 30, 2023. While our net profit before tax was ?1315.54 Lakhs, we had an operating profit before working capital changes of ?2478.85 Lakhs, primarily due to adjustments for depreciation and amortization expenses of ?484.18 Lakhs and interest expenses of ?690.05 Lakhs, which were partially offset by unwinding of discount of security deposit of ?10.05 Lakhs and dividend and interest income ?1.34 Lakhs, respectively. Our adjustments for working capital changes for the six months period ended September 30, 2023 primarily consisted of decrease in trade receivables of ?2629.51 Lakhs, decrease in trade payables of ?1108.70 Lakhs, increase in inventories by ?1907.37 Lakhs and decrease in current assets by ?1860.43 Lakhs. Our cash generated from operating activities was

?3650.66 Lakhs, adjusted by tax paid of ?471.30 Lakhs.

We generated ?(556.18) Lakhs net cash from operating activities during Fiscal 2023. While our net profit before tax was ?2224.73 Lakhs, we had an operating profit before working capital changes of ?4215.62 Lakhs, primarily due to adjustments for depreciation and amortization expenses of ?985.78 Lakhs and finance cost of ?1113.45 Lakhs, which were partially offset by provision for expected credit loss reversed ?84.00 Lakhs, unwinding of discount on security deposit ?16.89 Lakhs, dividend and interest income of ?11.99 Lakhs. Our adjustments for working capital changes for Fiscal 2023 primarily consisted of increase in trade receivables of ?1908.07 Lakhs and increase in inventories of ?2220.02 Lakhs, increase in trade payable by ?1119.82 Lakhs, increase in other financial assets of ?276.24 Lakhs, increase in other non-current assets of ?206.15 Lakhs, decrease in other current assets of ?427.69 Lakhs and decrease in other current liabilities of ?1238.15 Lakhs. Our cash generated from operating activities was ?(119.41) Lakhs, adjusted by tax paid of ?436.77 Lakhs.

We generated ?3400.71 Lakhs net cash from operating activities during Fiscal 2022. While our net profit before tax was ?1529.26 Lakhs, we had an operating profit before working capital changes of ?2571.65 Lakhs, primarily due to adjustments for depreciation and amortization expenses of ?469.69 Lakhs and finance cost of ?678.83 Lakhs, which were partially offset by provision for expected credit loss reversed ?63.00 Lakhs, unwinding of discount on security deposit ?12.44 Lakhs, dividend and interest income of ?13.77 Lakhs, and loss on disposal of property of ?13.16 Lakhs. Our adjustments for working capital changes for Fiscal 2022 primarily consisted of decrease in trade receivables of ?489.62 Lakhs, decrease in inventories of ?666.13 Lakhs, increase in trade payable by ?855.19 Lakhs and increase in other financial assets of ?9.30 Lakhs, increase in other non-current assets of

?374.66 Lakhs, increase in other current assets of ?1661.61 Lakhs and increase in other current liabilities of

?1229.09 Lakhs. Our cash generated from operating activities was ?3773.80 Lakhs, adjusted by tax paid of

?373.09 Lakhs.

We generated ?(3925.84) Lakhs net cash from operating activities during Fiscal 2021. While our net profit before tax was ?1555.11 Lakhs, we had an operating profit before working capital changes of ?2697.49 Lakhs, primarily due to adjustments for depreciation and amortization expenses of ?460.92 Lakhs and finance cost of ?757.66 Lakhs, which were partially offset by provision for expected credit loss reversed ?63.00 Lakhs, unwinding of discount on security deposit ?8.81 Lakhs and dividend and interest income of ?4.39 Lakhs. Our adjustments for working capital changes for Fiscal 2022 primarily consisted of increase in trade receivables of ?3836.54 Lakhs, increase in inventories of ?807.93 Lakhs, increase in trade payable by ?571.39 Lakhs and increase in other financial assets of ?173.85 Lakhs, increase in other non-current assets of ?379.70 Lakhs, increase in other current assets of ?970.78 Lakhs and increase in other current liabilities of ?27.16 Lakhs. Our cash generated from operating activities was ?(3354.04) Lakhs, adjusted by tax paid of ?571.81 Lakhs.

Cash flows used in investing activities

Net cash used in investing activities was ?(346.50) Lakhs in the six months period ended September 30, 2023, primarily on account of purchase of property, plant and equipment, capital advance, proceeds from sale of

property, plant and equipment and interest received.

Net cash used in investing activities was ?(488.46) Lakhs in Fiscal 2023, primarily on account of purchase of property, plant and equipment, capital advance, proceeds from sale of property, plant and equipment, dividend received and interest received.

Net cash used in investing activities was ?(1619.45) Lakhs in Fiscal 2022, primarily on account of purchase of property, plant and equipment, proceeds from sale of property, plant and equipment, dividend received and interest received.

Net cash used in investing activities was ?(1307.60) Lakhs in Fiscal 2021, primarily on account of purchase of property, plant and equipment, proceeds from sale of property, plant and equipment, dividend received and interest received.

Cash flows generated from / (used in) financing activities

Net cash used in financing activities in the six months period ended September 30, 2023 amounted to ?(2661.25) Lakhs, which primarily consisted of fresh and increased borrowing, decrease in long term borrowing, finance lease payment and interest paid.

Net cash generated from financing activities in Fiscal 2023 amounted to ?(3.98) Lakhs, which primarily consisted of fresh and increased borrowing, decrease in long term borrowing, finance lease payment and interest paid.

Net cash generated from financing activities in Fiscal 2022 amounted to ?(1234.44) Lakhs, which primarily consisted of fresh and increased borrowing, decrease in long term borrowing, finance lease payment and interest paid.

Net cash generated from financing activities in Fiscal 2021 amounted to ?5674.70 Lakhs, which primarily consisted of fresh and increased borrowing, proceeds from issue of shares, decrease in long term borrowing and interest paid.

Capital Expenditure

Capital expenditures consist primarily of investments in new manufacturing facilities and equipment. We also make investments at our manufacturing facilities to improve our manufacturing capacity, upgradation and improvements. Capital expenditure will vary from year to year depending upon a number of factors, including the need to replace and update equipment. In the six months period ended September 30, 2023, Fiscal 2023, Fiscal 2022 and Fiscal 2021, we incurred capital expenditure of ?344.86 Lakhs, ?873.32 Lakhs, ?1659.01 Lakhs and

?1312.00 Lakhs, respectively. A significant amount of our capital expenditure was incurred towards setting up of or Agri-cluster facility.

Financial indebtedness

As of September 30, 2023, our total borrowings (current and non-current) were ?16339.35 Lakhs, which primarily consisted of term loans from banks, working capital loans and overdraft facility. For further details related to our indebtedness, see "Financial Indebtedness" on page 411 of this Draft Red Herring Prospectus.

Capital and Other Commitments

As of September 30, 2023, the estimated amounts of contract remaining to be executed on capital account and not provided for was ?NIL.

The following table sets forth a summary of the maturity profile of our contractual undiscounted cash obligations with definitive payment terms as of September 30, 2023.

Contingent Liabilities

Contingent liabilities, to the extent not provided for, as of September 30, 2023, March 31, 2023, 2022 and 2021, as determined in accordance with Ind AS 37, are described below.

Off-Balance Sheet Commitments and Arrangements

We do not have any off-balance sheet arrangements, derivative instruments swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off-balance sheet arrangement.

Quantitative and Qualitative Analysis of Market Risks

We are exposed to various types of market risks during the normal course of business. The market risks we are exposed to include credit risk, liquidity risk, interest rate risk, commodity price risk and foreign currency risk.

Credit risk

Credit risk is the risk that the counter party will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. We are exposed to credit risk from our operating activities, primarily from trade receivables, and from our financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

We manage our credit risk through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which we grant credit terms in the normal course of business. We establish an allowance for doubtful debts and impairment that represents our estimate of incurred losses in respect of trade and other receivables and investments. Moreover, given the diverse nature of our business, trade receivables are spread over a number of customers with no significant concentration of credit risk.

In addition, we hold bank balances with reputed and creditworthy banking institutions within the approved exposures limit of each bank. None of our cash equivalents, including time deposits with banks, are past due or impaired. Credit risk from balances with banks and financial institutions is managed by our treasury department in accordance with our policy. Investments of surplus funds are made in bank deposits and other risk-free securities. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterpartys potential failure to make payments.

Liquidity risk

Liquidity risk is defined as the risk that we will not be able to settle or meet our obligations on time or at reasonable

price. Our objective is to at all times maintain optimum levels of liquidity to meet our cash and liquidity requirements. We closely monitor our liquidity position and deploy a robust cash management system. We maintain adequate sources of financing through the use of short term bank deposits and cash credit facilities. Processes and policies related to such risks are overseen by senior management, who monitor our liquidity position through rolling forecasts on the basis of expected cash flows.

Interest rate risk

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. We are exposed to market risk with respect to changes in interest rates related to our borrowings. Interest rate risk exists with respect to our indebtedness that bears interest at floating rates tied to certain benchmark rates as well as borrowings where the interest rate is reset based on changes in interest rates set by RBI. Interest rates are highly sensitive to many factors beyond our control, including the monetary policies of the RBI, domestic and international economic and political conditions, inflation and other factors. Upward fluctuations in interest rates increase the cost of servicing existing and new debts, which adversely affects our results of operations and cash flows. As a part of our interest rate risk management policy, our treasury department closely tracks interest rate movements on a regular basis and determines investments of surplus funds.

Commodity price risk

Exposure to market risk with respect to commodity prices primarily arises from our purchases and sales of our raw materials. These are commodity products and also subject to various uncertainties including climate change, rainfall, the prices of which may fluctuate significantly over short periods of time. The prices of our raw materials generally fluctuate in line. Commodity price risk exposure is evaluated and managed through operating procedures, sourcing policies and also increasing the selling price. As of March 31, 2021, March 31, 2022, March 31, 2023 and September 30, 2023 we had not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Our exposure to the risk of changes in foreign exchange rates relates primarily to our operating activities (when revenue or expense is denominated in a foreign currency). Foreign currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. We evaluate our exchange rate exposure arising from foreign currency transactions and follow established risk management policies.

Unusual or Infrequent Events or Transactions

Except as disclosed in this Draft Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.

Known Trends or Uncertainties

Our business has been subject, and we expect it to continue to be subject, to the trends identified above in "Significant Accounting Policies" and the uncertainties described in "Risk Factors -The occurrence of natural or man-made disasters, fires, epidemics, pandemics, acts of war, terrorist attacks, civil unrest and other events could materially and adversely affect the financial markets and our business", on page 75. Except as disclosed in this Draft Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

Significant Economic Changes

Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations. Please see "Risk Factors" and "Significant Accounting Policies" on pages 35 and 383 of this Draft Red Herring Prospectus respectively.

Future Relationship between Cost and Revenue

Other than as described in "Risk Factors", "Our Business" and above in "Significant Accounting Policies" on pages 35, 251 and 383, respectively, to our knowledge, there are no known factors that may adversely affect our business prospects, results of operations and financial condition.

New Products or Business Segments

Except as disclosed in this Draft Red Herring Prospectus, including as described in "Our Business" on page 251, of this Draft Red Herring Prospectus there are no new products or business segments that have or are expected to have a material impact on our business prospects, results of operations or financial condition.

Supplier or Customer Concentration

We have a wide customer base and have served around five hundred (500) customers for the six months period ended September 30, 2023. However, our top two (2) customers contributed around 10.51% of our revenue from operations. We do not have any material dependence on a single or few suppliers. We procure our key raw materials from various parts of the country and process our products with utmost care without the use of artificial preservatives or chemicals, thereby creating a product portfolio of spices, peanut, flour, pulses, staples & groceries and mango pulp, which carry the freshness and goodness of each ingredient. We believe our unique business model has helped us to penetrate the niche segment of our market and establish a customer base in India and overseas. Systematic procurement of raw material in their respected seasons helps us to provide linear quality of our products for the whole year. We also source our raw materials directly from farmers, to ensure that we use absolutely natural ingredients in our products and also through traders and APMC markets. We source our raw materials from across the country to ensure that the products we manufacture have an authentic taste without artificially disturbing the natural taste of the spices or other food products. For instance, we source chillies from the APMC market of Guntur, Warangal, Gondal and our wheat flour is made from wheat grains which are sourced from Dahod, Rajkot, Gondal, Nimbahera, Jaipur and also sourced directly from Food Corporation of India (FCI) and the pulses / dal are sourced from Jalgaon, Rajkot and Dhanduka.

Competitive Conditions

We operate in a highly competitive industry and we expect competition from existing and new competitors to intensify. For details, please refer to the discussions of our competition in the sections "Risk Factors", "Industry Overview" and"Our Business" on pages 35, 150 and 251 of this Draft Red Herring Prospectus.

Seasonality

We typically experience higher sales during the second half of the Financial Year as compared to the first half of the Financial Year due to change in the climatic conditions prevailing in India. Please see "Risk Factors- Our operations are dependent on the supply of large amounts of raw material such as wheat, spices and peanuts. We do not have long term agreements with suppliers for our raw materials and any increase in the cost of, or a shortfall in the availability of, such raw materials could have an adverse effect on our business and results of operations, and seasonable variations could also result in fluctuations in our results of operations" on page 63.

Change in Accounting Policies

There have been no material changes in our accounting policies for the six months period ended September 30, 2023 and for the Fiscal 2023, 2022 and Fiscal 2021.

Significant Developments Occurring after September 30, 2023

Except as disclosed in this Draft Red Herring Prospectus, there are no circumstances that have arisen since September 30, 2023, the date of the last financial statements included in this Draft Red Herring Prospectus, which materially and adversely affect or is likely to affect our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next twelve months.

Recent Accounting Pronouncements

As of the date of this Draft Red Herring Prospectus, there are no recent accounting pronouncements, which would have a material effect on our financial condition or results of operations.