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PDP Shipping & Projects Ltd Management Discussions

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May 30, 2025|12:00:00 AM

PDP Shipping & Projects Ltd Share Price Management Discussions

You should read the following discussion of our financial condition and results of operations together with our restated financial information as of and for the period ended January 31, 2024 and financial years ended March 31, 2023, 2022 and 2021, all prepared in accordance with the Companies Act and Indian GAAP and restated in accordance with the SEBI ICDR Regulations, including the schedules, annexures and notes thereto and the reports thereon, included in the section titled "Financial Information" on page 152. Unless otherwise stated, the financial information used in this section is derived from the restated financial statements of our Company.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in the sections titled "Risk Factors" and "Forward-Looking Statements" on pages 25 and 19 respectively.

These financial statements have been prepared in accordance with Indian GAAP and the Companies Act. Indian GAAP differs in certain significant respects from U.S. GAAP, IFRS and Ind AS. We have neither attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in this Draft Prospectus nor do we provide a reconciliation of our financial statements to those under U.S. GAAP or IFRS or Ind AS. Accordingly, the degree to which the Indian GAAP financial statements included in this Draft Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with the Companies Act, Indian

GAAP and the SEBI ICDR Regulations. Any reliance on the financial disclosure in this Draft Prospectus, by persons not familiar with Indian Accounting Practices, should accordingly be limited.

References to the "Company", "we", "us" and "our" in this chapter refer to PDP Shipping & Projects Limited, as applicable in the relevant fiscal period, unless otherwise stated.

Note: some of the statements in the Chapter describing our objectives, outlook, estimates, expectations or prediction may be the "Forward Looking Statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions that may be affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws and other Statutes, geo political limitations, conditions & sanctions which may affect international shipping routings, freight rates & business and incidental factors.

OVERVIEW OF OUR BUSINESS

Our Company was incorporated as a private limited company in 2009 and converted into a public limited company in 2015. We are an accredited Authorized Economic Operator (AEO) providing end to end logistics services and licensed by the Directorate General of Shipping, Government of India to work as a Multi Modal Transport Operator (MTO) and a Customs Broker, Licensed by Mumbai Customs, Department of Revenue of Government of India. We are into business of International Freight Forwarding and providing global end to end transportation solutions and offering specialized services in project logistics (including super heavylift super Over Dimension Cargo (ODC) handlings, floating & beaching roll on roll off (RoRo) loadouts, sea towing operations, sea fastening and other engineering solutions in project cargo and transportation). Our team comprise of experienced and competent personnel trained in providing quality tailored made global transportation solutions to meet requirements of our clients at competitive costs.

We transport cargo worldwide which are of various shapes, sizes, and weights via sea, air, road, rail, coastal barges, or through multi-modal transportation. We accept cargo as Full Container Load (FCL), Less than Container Load (LCL), breakbulk, ODC, heavy lift and project cargo. Our Company is into end-to-end solutions in the logistics & supply chain industry involving MTO, sea and air freight, transportation, custom clearance services and handling of project cargo.

We are into business segment of logistic and transport and providing services of international freight forwarding, air freight, sea freight [including documentation, customs clearance, packaging, warehousing, and distribution, pre-carriage, onwards carriage, cargo tracking, port or Container Freight Station (CFS) operations & ocean freight services], custom broker, project cargo, sea towage, breakbulk, heavy lifts including RoRo loadouts, spreading weight techniques, making suitable temporary jetties & RoRo ramps, route survey & reinforcements of transit roads - bridges-vessels, structural calculations - stowage sea fastening designing, multi modal transportation. Our core speciality is handling pre-defined project transports dynamics, super heavy lifts, super over dimensional cargo (ODC), offshore cargo & heavy engineering transportations, integrated logistics solutions, time-bound shipments, temperature-critical cargo, exhibition cargo, door-to-door services etc. We use innovative lifting and shifting methods, applying competent structural & designs, analysis, calculations and execution thereof based on a meticulously worked out method statement.

Mr. Animesh Kumar, our Promoter and founder director, is a first-generation entrepreneur with more than two decades of enriched experience in the Shipping and Logistics industry. He has vast knowledge and experience in project logistics. He is also active as a panellist, speaker and visiting faculty in the Shipping & Logistics industry.

DISCUSSION OF RESULT OF OPERATION

As a result of the various factors discussed above that affect our income and expenditure, our results of operations may vary from period to period. The following table sets forth certain information with respect to our results of operations for the period ended January 31, 2024 and Fiscal Years 2023, 2022 and 2021 as derived from our restated financial statements:

Brief Key Financials of our Company:

(Rs. in lakh except percentages and ratios)

As of and for the year/period ended

Particulars January 31, 2024 March 31, 2023 March 31, 2022 March 31, 2021
Revenue from Operations (1) 1,759.79 2,248.19 2,871.88 755.05
EBITDA (2) 267.27 231.07 265.71 4.39
EBITDA Margin (3) 15.19% 10.21% 9.25% 0.58%
Profit After Tax (PAT) 193.95 168.19 190.99 2.75
PAT Margin (4) 11.02% 7.48% 6.65% 0.36%
Net Worth (5) 547.01 353.06 184.87 18.12
ROE (6) 35.46% 47.64% 103.31% 15.20%
ROCE (7) 43.54% 59.85% 140.06% 13.61%

Notes:

(1) Revenue from Operations means the Revenue from Operations as appearing in the Restated Financial Statements. (2) EBITDA is calculated as Profit before tax + Depreciation + Interest Cost (3) ‘EBITDA Margin is calculated as EBITDA divided by Revenue from Operations (4) ‘PAT Margin is calculated as PAT for the period/year divided by revenue from operations.

(5) Net worth means the aggregate value of the paid-up share capital and reserves and surplus. (6) Return on Equity is ratio of Profit after Tax divided by Shareholder Equity

(7) Return on Capital Employed is calculated as EBIT (i.e. Profit Before Tax + Interest) divided by capital employed, which is defined as total equity and long term/short term debt.

Our Strengths:

Integrated, end-to-end logistics services and solutions provider

Our large existing Network

Diversified clientele;

Strong knowledge and expertise of Senior management team

Strong existing client relationship

Prepared to grow and reap benefit of available huge potentials in the sector of Infrastructure, Defence, Automobile, Power & Energy and heavy engineering industries and capital goods;

A successful and proven track record of handling Over Dimension, Breakbulk and Project Cargo;

Offering total global Supply Chain solutions in international transportation under a single window;

Strong technical and execution capabilities in turnkey projects and critical consignments;

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our financial condition and results of operations are affected by numerous factors and uncertainties, including those discussed in the section entitled "Risk Factors" on page 25. The following are certain factors that have had, and we expect will continue to have, a significant effect on our financial condition and results of operations:

General geopolitical and other global risks;

General economic and business conditions in the markets in which we operate and in the local, regional, national and international;

Economies changes in laws and regulations that apply to the industry;

Increasing competition in the industry;

Companys inability to successfully implement its future growth plans;

Our ability to retain our key clients;

Our ability to retain our key managerial persons and other employees.

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies have been applied consistently to the periods presented in the Restated Financial Statements. For details of our significant accounting policies, please refer section titled "Financial information" starting on page 152.

RESULTS OF OUR OPERATIONS

As a result of the various factors discussed above that affect our income and expenditure, our results of operations may vary from period to period. The following discussion on results of operations should be read in conjunction with the Restated Financial Statements of Company for the period ended January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021:

(Amount in lakhs)

For period ended January 31, 2024

Financial Year 2023

Financial Year 2022

Financial Year 2021

Particulars Amount % of Total Income Amount % of Total Income Amount % of Total Income Amount % of Total Income
Revenue from Operations 1,759.79 99.79% 2,248.20 99.46% 2,871.88 99.97% 755.05 99.64%
Other Income 3.70 0.21% 12.30 0.54% 0.86 0.03% 2.75 0.36%
Total Income 1,763.49 100% 2,260.50 100% 2,872.74 100% 757.80 100%
Expenditure Operating expenses 1,261.60 71.54% 1,705.86 75.46% 2,430.43 84.60% 649.85 85.75%
Employee Benefits expenses 113.43 6.43% 104.20 4.61% 84.00 2.92% 71.60 9.45%
Finance costs 5.33 0.30% 2.10 0.09% 0.50 0.02% 0.40 0.05%
Depreciation and Amortization expenses 7.15 0.41% 1.80 0.08% 1.30 0.05% 1.70 0.22%
Other Expenses 121.20 6.87% 219.30 9.70% 92.60 3.22% 31.94 4.21%
Total Expenses 1,508.71 85.55% 2,033.26 89.95% 2,608.83 90.81% 755.57 99.71%

 

For period ended January 31, 2024

Financial Year 2023

Financial Year 2022

Financial Year 2021

Particulars Amount % of Total Income Amount % of Total Income Amount % of Total Income Amount % of Total Income
Profit /(Loss) before tax 254.79 14.45% 227.16 10.05% 263.88 9.19% 2.23 0.29%
Tax expense:
- Current Tax 61.52 3.49% 58.49 2.59% 72.11 2.51% 1.67 0.22%
- Deferred Tax -0.69 -0.04% 0.47 0.02% 0.78 0.03% -2.20 -0.29%
Net Tax expenses 60.84 3.45% 58.96 2.61% 72.89 2.54% -0.53 -0.07%
Profit/(Loss) after tax 193.95 11.00% 168.19 7.44% 190.99 6.65% 2.75 0.36%

PRINCIPAL COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS ACCOUNT

Total Income

Our Total Income for period ended January 31, 2024 and financial years ended March 31, 2023, March 31, 2022 and March 31, 2021, were amounting to 1,763.49 lakh, 2,260.49 lakh, 2,872.74 lakh and 757.79 lakh respectively. Following is the break-up of our total revenue from operations for period ended January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021.

Our revenue comprises of:

Revenue from Operations

Our revenue from operations consists of revenue from Custom Housing agent, Carrying & Forwarding agent, shipper, transport commission agent, freight agents, steamer agents, chartering agents, clearing and forwarding agents, consulting in maritime etc. Our revenue from operations as a percentage of total income was 99.79, 99.46%, 99.97%, and 99.64% for period ended January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021 respectively.

Other Income

Our other income comprises of Foreign Exchange Fluctuation Gain, Discount, Interest income, Profit on sale of assets and Sundry balances written off. Other income, as a percentage of total income was 0.21%, 0.54%, 0.03% and 0.36% for period ended January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021 respectively.

Total Expenses

Our total expenses for period ended January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively. Our total expenses primarily consist of the following:

Operating Expense

Operating expenses comprises of fuel, packaging, transport, direct labour, warehousing, repair, insurance etc. Operating expenses, as a percentage of total income was 71.54%, 75.46%, 84.60% and 85.75% for period ended January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021 respectively.

Employee Benefit Expenses

Expenses in relation to employees benefit expenses include Salary & Wages, Directors remuneration and

Gratuity Expenses. Employee benefit expenses, as a percentage of total income was 6.43%, 4.61%, 2.92% and 9.45% for period ended January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021 respectively.

Finance costs

Finance cost primarily consists of interest payable on loans availed by our Company from bank & finance charges, if any. Finance cost, as a percentage of total income was 0.30%, 0.09%, 0.02% and 0.05% for period ended January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021 respectively.

Depreciation Expenses

Depreciation expenses consist of depreciation on the tangible and intangible assets of our Company which includes Computer, Furniture and Fixtures, Office Equipment and Motor Vehicle. Depreciation expenses, as a percentage of total income was 0.41%, 0.08%, 0.04% and 0.22% for period ended January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021 respectively.

Other Expenses

Other expenses include professional fees, business promotion, conveyance, audit Fees, rent, repair and maintenance, travelling expenses, Consultancy charges, office expenses, printing & stationery, commission, Insurance etc. Other expenses, as a percentage of total income was 6.87%, 9.70%, 3.22% and 4.33% for period ended January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021 respectively.

Provision for Tax

Income tax has been provided on the basis of current income tax rate on taxable income. Advance tax and TDS deducted has been set off against provisions for taxation at the time of finalization of Income tax assessment proceedings. The deferred tax assets are recognized and carried forward only to the extent that there is virtual certainty that the asset will be realized in future. Provision for tax, as a percentage of total income was 3.45%, 2.61%, 2.54% and 0.07% for period ended January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021 respectively.

Financial Year 2023 compared to Financial Year 2022:

(Amount in lakhs)

Sr. No. Particulars For Fiscal 2023 For Fiscal 2022 % Change
1 Revenue from Operation 2,248.19 2,871.88 -21.72%
2 Other Income 12.30 0.86 1330.23%
Total Income (1+2) 2,260.49 2,872.74 -21.31%
3 Expenditure
(a) Operating Expenses 1,705.86 2,430.43 -29.81%
(b) Employee Benefit Expenses 104.23 83.95 24.16%
(c ) Finance Cost 2.10 0.49 328.57%
(d) Depreciation & Amortization 1.81 1.33 36.09%
(e) Other Expense 219.34 92.65 136.74%
4 Total Expenditure 3(a) to 3(e) 2,033.34 2,608.85 -22.06%
5 Profit/(Loss) Before Tax (1+2-4) 227.15 263.89 -13.92%
6 Tax Expense:
(a) Current Tax 58.49 72.11 -18.89%
(b) Deferred Tax 0.47 0.78 -39.74%
Net Current Tax Expenses 58.96 72.89 -19.11%
7 Profit/(Loss) for the Period/Year (5-6) 168.19 191.00 -11.94%

Revenue from Operation

Revenue from operations had decreased by 21.72%, from Rs. 2,871.88 lakh in Fiscal 2022 to Rs. 2,248.19 lakh in Fiscal 2023. This decrease in Revenue was on account of a sharp fall in global ocean freight rates with respect to previous year, which impacted our revenue from operations.

Other Income

Other income had increased by 1330.23%, from Rs. 0.86 lakh in Fiscal 2022 to Rs. 12.30 lakh in Fiscal 2023 on account of mainly foreign exchange fluctuation gain of Rs. 10.76 lakh in Fiscal 2023 compared to Rs. 0,71 lakh in Fiscal 2022.

Operating Expenses

Operating expenses had been decreased by 29.81%, from Rs. 2,430.43 lakh in Fiscal 2022 to Rs. 1,705.86 lakh in Fiscal 2023, as revenue from operation had been decreased by 21.72%. This was due to sharp fall in global ocean freight rates and correspondingly, we offered lower rates to our clients by passing this lower rate benefits to them.

Employee Benefit Expenses

Employee benefit expenses had been increased by 24.16%, from Rs. 83.95 lakhs in Fiscal 2022 to Rs. 104.23 lakhs in Fiscal 2023 on account of increase in salaries of employees and new recruitment which has resulted into increase in the cost of the Employee benefit expenses.

Finance Cost

Finance Cost had increased by 328.57% from Rs. 0.49 lakhs in Fiscal 2022 to Rs. 2.10 lakhs in Fiscal 2023. This is primarily due to increase in bank charges.

Depreciation and Amortization Expenses

Depreciation had increased by 36.09%, from Rs. 1.33 lakhs in Fiscal 2022 to Rs. 1.81 lakhs in Fiscal 2023 as fixed assets addition of Rs. 24.08 lakh in during Fiscal 2023.

Other Expenses

Other expenses had increased by 136.74% from Rs. 92.65 lakh in Fiscal 2022 to Rs. 219.34 lakh in Fiscal 2023. This is primarily due to increase in commission expenses and increase in professional fees expense in Fiscal 2023.

Tax Expenses

The Companys tax expenses had decreased by 19.11% from Rs. 72.89 lakh in the Fiscal 2022 to Rs. 58.96 lakh in Fiscal 2023. This is primarily due to decrease in profit before tax from Rs. 263.88 Lakh in Fiscal 2022 to Rs. 227.16 Lakh in Fiscal 2023.

Profit after Tax

The Companys profit after tax had decreased by 11.94% from Rs. 191 lakhs in the Fiscal 2022 to Rs. 168.19 lakhs in Fiscal 2023. This decrease in Profit After Tax was on account of increased in the total expenses on accounts of factors as explained above under various head of total expenses.

Financial Year 2022 compared to Financial Year 2021:

(Amount in lakhs)

Sr. No. Particulars For Fiscal 2022 For Fiscal 2021 % Change
1 Revenue from Operation 2,871.88 755.05 280.36%
2 Other Income 0.86 2.75 -68.73%
Total Income (1+2) 2,872.74 757.80 279.09%
3 Expenditure
(a) Operating Expenses 2,430.43 649.85 274.00%
(b) Employee Benefit Expenses 83.95 71.62 17.22%
(c) Finance Cost 0.49 0.42 16.67%

 

Sr. No. Particulars For Fiscal 2022 For Fiscal 2021 % Change
(d) Depreciation & Amortization 1.33 1.74 23.56%
(e) Other Expense 92.65 31.94 190.07%
4 Total Expenditure 3(a) to 3(e) 2,608.85 755.57 245.28%
5 Profit/(Loss) Before Tax (1+2-4) 263.89 2.23 11733.63%
6 Tax Expense:
(a) Current Tax 72.11 1.67 4217.96%
(b) Deferred Tax 0.78 -2.20 NA
Net Current Tax Expenses 72.89 -0.53 NA
7 Profit/(Loss) for the Period/Year (5-6) 191.00 2.75 6845.45%

Revenue from Operation

Revenue from operations had increased by 280.36%, from Rs. 755.05 lakh in Fiscal 2021 to Rs. 2,871.88 lakh in Fiscal 2022. This increase in Revenue was on accounts of increased business volume and increased global ocean freight rate.

Other Income

Other income had decreased by 68.73%, from Rs. 2.75 lakh in Fiscal 2021 to Rs. 0.86 lakh in Fiscal 2022. In the Fiscal Year 2022, there had been reduction in realization of foreign exchange gain, this has resulted into decrease in the other income as compared to Fiscal 2021.

Operating Expenses

Operating expenses had been increased by 274.00%, from Rs. 649.85 lakh in Fiscal 2021 to Rs. 2,430.43 lakh in Fiscal 2022, as revenue from operation had been increased, this has resulted into correspondingly increase in the cost of the operating expenses.

Employee Benefit Expenses

Employee benefit expenses had been increased by 17.22%, from Rs. 71.62 lakh in Fiscal 2021 to Rs. 83.95 lakh in Fiscal 2022 on account of increase in salaries of employees and new recruitment which has resulted into increase in the cost of the Employee benefit expenses.

Finance Cost

Finance Cost had increased by 16.67% from Rs. 0.42 lakhs in Fiscal 2021 to Rs. 0.49 lakhs in Fiscal 2022. This is primarily due to increase in bank charges.

Depreciation and Amortization Expenses

Depreciation had decreased by 23.56%, from Rs. 1.74 lakh in Fiscal 2021 to Rs. 1.33 lakh in Fiscal 2022 as Company follows written down value (WDV) method of depreciation and no major fixed assets addition happened during Fiscal 2022.

Other Expenses

Other expenses had increased by 190.07% from Rs. 31.94 lakh in Fiscal 2021 to Rs. 92.65 lakh in Fiscal 2022. This is in line with increase in Revenue from operations and primarily due to increase in commission expenses, conveyance expenses, rent, rates and taxes and foreign exchange realized loss in Fiscal 2022.

Tax Expenses

The Companys tax expenses had increased from Rs. -0.53 lakh in the Fiscal 2021 to Rs. 72.89 lakhs in Fiscal 2022. This is primarily due to increase in profit before tax from Rs. 2.23 lakh in Fiscal 2021 to Rs. 263.89 lakh in Fiscal 2022.

Profit after Tax

The Companys profit after tax had increased by 6845.45% from Rs. 2.75 lakh in the Fiscal 2021 to Rs. 191 lakh in Fiscal 2022. This increase in Profit After Tax was on account of less increased in the overall total expenses due to all above mentioned facts when compared with the increased in Total Income.

Cash flows

The following table sets forth our cash flows with respect to operating activities, investing activities and financing activities for the period indicated:

( in lakh)

Particulars January 31, 2024 Fiscal 2023 Fiscal 2022 Fiscal 2021
Net cash flow from/ (used in) operating activities 80.99 149.35 240.30 -10.58
Net cash flow from/ (used in) investing activities -108.95 -184.87 -32.55 -0.28
Net cash flow from/ (used in) financing activities -5.35 -61.67 -38.23 -0.41
Net increase/(decrease) in cash and cash equivalents -33.31 -97.19 169.52 -11.27
Cash and cash equivalents at the beginning of the year 76.88 174.07 4.54 15.81
Cash and cash equivalents at the end of the year 43.57 76.87 174.07 4.54

Cash Flows from Operating Activities

The following is the Cash Flows from Operating Activities for the following periods

Period ended January 31, 2024

Our net cash flow from operating activities was 80.99 lakh for the period ended January 31, 2024 as compared to the Restated Profit Before Tax of 254.79 lakh for the same period. Our operating profit before changes in working capital changes was 268.68 lakh which was primarily adjusted against increase in trade receivables, increase in other current assets, increase in short term loans and advances, increase in short term borrowing, decrease in trade payables and increase in other liabilities.

Financial Year 2022-23

Our net cash flow from operating activities was 149.35 lakh for the Fiscal 2023 as compared to the Restated Profit Before Tax of 227.16 lakh for the same period. Our operating profit before changes in working capital changes was 232.75 lakh which was primarily adjusted against increase in trade receivables, increase in other current assets, increase in short term loans and advances, increase in short term borrowing, decrease in trade payables and increase in other liabilities.

Financial Year 2021-22

Our net cash from operating activities was 240.30 lakh for the Fiscal 2022 as compared to the Restated Profit Before Tax of 263.88 lakh for the same period. Our operating profit before changes in working capital changes was 267.11 lakh which was primarily adjusted against increase in trade receivables, increase in other assets, increase in short term loans and advances, increase in short term borrowing, increase in trade payables and decrease in other liabilities.

Financial Year 2020-21

Our net cash from operating activities was -10.58 lakhs for the Fiscal 2021 as compared to the Restated Profit

Before Tax of 2.23 lakh for the same period. Our operating profit before changes in working capital changes was -6.47 lakh which was primarily adjusted against increase in trade receivables, increase in other assets, decrease in short term loans and advances, decrease in short term borrowing, increase in trade payables and increase in other liabilities.

Cash Flows from Investing Activities

Our net cash flow changes due to investing activities are significant compared to our cash flow from operating activities for period ended January 31, 2024 and the Fiscal 2023 on account of investment in fixed assets amounting Rs. 108.95 lakh and 184.87 lakh respectively. For Fiscal 2022 and Fiscal 2021, our net cash flow changes due to investing activities are insignificant compared to our cash flow from operating activities for respective periods.

Cash Flows from Financing Activities

Period ended January 31, 2024

Net cash used in financing activities for the period ended January 31, 2024 was -5.35 lakh which was mainly on account of net interest payment and bank charges amounting to 5.33 lakh.

Financial Year 2022-23

Net cash used in financing activities for the Fiscal 2023 was -61.67 lakhs which was on account of mainly increase in long-term loans and advance amounting to 59.39 lakh and interest payment amounting to 2.10 lakh.

Financial Year 2021-22

Net cash used in financing activities for the Fiscal 2022 was -38.23 lakh which was on account of mainly payment of dividend 24.24 lakh and increase in loans and advance amounting to 13.50 lakhs

Financial Year 2020-21

Net cash used in financing activities for the Fiscal 2021 was -0.41 lakhs which was mainly on account of interest payment amounting to 0.42 lakhs.

OTHER INFORMATION

Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss related to adverse changes in market prices, including interest rates. In the normal course of business, we are exposed to certain market risks including interest risk.

Interest rate risk

Interest rate risk results from changes in prevailing market interest rates, which can cause a change in the fair value of fixed-rate instruments and changes in the interest payments of the variable-rate instruments. Our operations are funded to a certain extent by borrowings. Our current loan facilities carry interest at variable rates. We mitigate risk by structuring our borrowings to achieve a reasonable, competitive cost of funding. There can be no assurance that we will be able to do so on commercially reasonable terms, that our counterparties will perform their obligations, or that these agreements, if entered into, will protect us adequately against interest rate risks. Further, we also keep fixed deposits and any change in interest rate results change in our interest income.

Liquidity risk

Adequate and timely cash availability for our operations is the liquidity risk associated with our operations. Our

Companys objective is to all time maintain optimum levels of liquidity to meet its cash requirements. We employ prudent liquidity risk management practices which inter-alia means maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities.

Credit Risk

We are exposed to the risk that our counterparties may not comply with their obligations 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. Though, we believe that our customers to be creditworthy counterparties, which limits the credit risk, however, there can be no assurance that our counterparties may not default on their obligations, which may adversely affect our business and financial condition.

Material Frauds

There are no material frauds committed against our Company in the last three financial years.

Related Party Transactions

We enter into various transactions with related parties in the ordinary course of business. For information relating to our related party transactions, please see Note no. 24 titled as "Related Party Disclosures" under chapter titled

"Restated Financial Statement" beginning on page 156.

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

1. Unusual or infrequent events or transactions

Except impact of Covid -19 pandemic in past on our industry, there have been no events or transactions to our knowledge which may be described as "unusual" or "infrequent".

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

Domestic and international government policies governing the sector in which we operate as well as the overall growth of the Indian and global economies has a significant bearing on our operations. Major changes in these factors can significantly impact income from continuing operations. There are no significant economic changes that materially affected our Companys operations or are likely to affect income except as mentioned in the section titled "Risk Factors" starting on page 25.

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

Other than as described in the section titled "Risk Factors" starting on page 25 and this Chapter, to our best of knowledge there are no known trends or uncertainties that have or are expected to have a material adverse impact on our income from continuing operations.

4. Future changes in relationship between costs and revenues

Our Companys future costs and revenues will be determined by demand/supply situation, government policies, domestic and international freight rate and other domestic and international factors. Other than as described in the sections "Risk Factors", "Our Business" starting on pages 25 and 100 respectively and this Chapter, to our best of knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

5. Segment Reporting

Our Company operates only in single business segment i.e. Freight & Forwarding and Transport services, hence, we have only one reportable segment in context of Accounting Standard 17 on Segment Reporting issued by ICAI.

6. Status of any publicly announced New Products or Business Segment

The Company has not introduced any new product or services or business segment and does not expect to announce in the near future any new products/ services or business segment.

7. Seasonality of business

Our business is not subject to seasonality. For further information, see "Industry Overview" and "Our Business" starting on pages 91 and 100, respectively.

8. Dependence on single or few customers

For period ended as on January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021, our top five customers accounted for about 97.45%, 93.76%, 93.54% and 86.16%, respectively and our largest customer accounted for 63.45%, 50.43%, 74.60%, and 52.41%, respectively of our Revenue from Operations.

Further, we do not have long-term contractual arrangements with our significant customers and conduct business with them on the basis of orders that are received from time to time.

For period ended as on January 31, 2024 and Fiscal 2023, Fiscal 2022 and Fiscal 2021, our top five creditors accounted for about 70.54%, 93.92%, 72.92% and 74.56%, respectively and our largest creditor accounted for 37.46%, 68.28%, 29.96%, and 53.97%, respectively of our Revenue from Operations.

We do not enter into any long- term contracts with our creditors and rates of their services are normally based on the quotes we receive from them. For further information, see "Risk Factors" on starting page 25.

9. Competitive conditions

We expect competition in our business from existing and potential competitors to intensify. We face competition from both organised and unorganised players in the market. We believe our expertise and quality service offerings with experience of our management, will be key to overcome competition posed by such players. We believe that the principal factors affecting competition in our business include client relationships, reputation, timely providing services, fulfilling client specific requirements, the quality and pricing of our services.

Further, competitive conditions are as described under the Chapters "Industry Overview" and "Our Business" starting on pages 91 and 100 respectively.

Material Developments subsequent to the period ended January 31, 2024

Except as disclosed below, in our opinion there are no circumstances have arisen past period ended January 31, 2024 being the date of the latest financial statements as disclosed in this Draft Prospectus until the date of filing this Draft Prospectus, which materially or adversely affect or are 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.

Our Company has allotted 19,67,168 Equity Shares on March 22, 2024 as bonus share in ratio of 28:1 (i.e. 28 Equity Shares for every one Equity Shares held), consequent to this bonus issue, our paid of Equity Capital has increased from Rs. 7.03 lakh to Rs. 203.74 lakh.

Our Company has purchased our registered office premises admeasuring about 555 square feet of carpet area vide sale deed registered on July 9, 2024 at a consideration of Rs. 215.00 Lakh.

Our Company has also purchased an office premises admeasuring about 616 square feet of carpet area vide sale deed registered on May 22, 2024 at a consideration of Rs. 184.39 Lakh.

FINANCIAL INDEBTEDNESS

Our Company has availed credit facilities in its ordinary course of business for meeting our working capital requirements and business requirements. For details regarding the borrowing powers of our Board of Director, please see section Borrowing Powers under chapter titled "Our Management" starting on page 129.

The following is details of our indebtedness:

Name of Lender Category of borrowing Sanctioned Amount as on July 8, 2024 (Rs. in Lakhs) Outstanding amount as on July 8, 2024 (Rs. in Lakhs)* Rate of Interest (per annum) Tenor
Union Bank of India Working Capital Loan - Cash Credit facilities 50.00 45.91 12.75% The tenor is due for renewal every 12 months and repayable on demand
Axis Bank AP- Self Commercial Property 125.82 125.65 10.50% 180 Months
ICICI Bank Loan Against Property- Non- Residential 140.00 140.00 9.50% 180 Months
Total 315.82 311.56

*Amount of Outstanding as on July 8, 2024 is amount including interest due.

Principal terms of borrowings availed by our Company:

The details provided below are indicative and there may be additional terms, conditions and requirements under various documentation executed by our Company in relation to our indebtedness:

Name of Lender Sanctioned Amount as on July 8, 2024 (Rs. in Lakhs) Asset Charged as Security
Union Bank of India 50.00 Hypothecation of Book Debts
Axis Bank 125.82 Flat No. 1201, 12th Floor, The Epicentre W.T. Patil Wadi, Village Borla, Chembur, Mumbai 400 071
ICICI Bank 140.00 A-606, Mahavir Icon, Plot No. 89/90, Sector-15, CBD Belapur, Navi Mumbai- 400614, India
Total 315.82

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