Rapid Fleet Management Services Ltd Management Discussions

OF FINANCIAL CONDITION AND RESULT OF

OPERATIONS

You should read the following discussion of our financial condition and results of operations together with our Financial Statements as Restated which is included in this Draft Red Herring Prospectus. The following discussion and analysis of our financial condition and results of operations is based on our Financial Statements as Restated, for the years ended March 31, 2024, 2023 and 2022 including the related notes and reports, included in this Draft Red Herring Prospectus is prepared in accordance with requirements of the Companies Act, 2013 and restated in accordance with the SEBI (ICDR) Regulations, 2018, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Our Financial Statements, as restated have been derived from our audited statutory financial statements. Accordingly, the degree to which our Financial Statements as Restated will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity with Indian GAAP, Companies Act, SEBI Regulations and other relevant accounting practices in India.

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 described under chapters titled "Risk Factors" and "Forward Looking Statements" beginning on pages 30 and 24, respectively of this Draft Red Herring Prospectus.

Our Financial Year ends on March 31 of each year. Accordingly, all references to a particular Financial Year are to the 12 months ended March 31 of that year.

Our Company was originally incorporated on December 26, 2017 as a Private Limited Company in the name of "Rapid Fleet Management Services Private Limited". with Corporate Identity Number of the company as U60232TN2017PTC120205. Subsequently, our Company was converted from a Private Limited Company to Public Limited Company and consequently, the name of our Company was changed to ‘Rapid Fleet Management Services Limited and a Fresh Certificate of Incorporation consequent to Conversion was issued on August 30, 2023 by the Registrar of Companies, Chennai bearing Corporate Identification Number U60232TN2017PLC120205.

We are a Chennai based company who provides road transportation logistics services tailored to the diverse needs of our B2B and B2C clientele. Our process begins with order booking, followed by route planning to optimize efficiency. Each shipment is carefully matched with an appropriate vehicle, factoring in cargo specifics for safe transit. Whether loading from designated stops or our warehouse, our team ensures goods are secured for the journey ahead. Utilizing GPS navigation systems, we track and monitor every movement, providing real-time updates. Upon arrival at the destination, our unloading procedures guarantee safe delivery.

We serve a wide array of industries, including but not limited to FMCG, Tyre, Electronics, Power, Infrastructure, Energy, and Oil & Gas. We pride ourselves on reliability and adaptability in meeting our clients transportation needs.

Significant developments subsequent to the last financial year

In the opinion of the Board of Directors of our Company, since the date of the last financial statements disclosed in this Draft Red Hearting Prospectus, there have not arisen any circumstance that materially or adversely affect or are likely to affect the profitability of our Company or the value of its assets or its ability to pay its material liabilities within the previous twelve months except:

> Our Company was converted from a Private Limited Company to Public Limited Company vide resolution passed in its members meeting dated July 06, 2023 and a fresh certificate of incorporation consequent to conversion was issued on August 30, 2023 by the Registrar of Companies, Chennai bearing Corporate Identification Number U60232TN2017PLC120205.

> The Board of our Company has approved to raise funds through initial public offering in the Board Meeting held on March 25, 2024.

> The members of our Company approved proposal of Board of Directors to raise funds through initial public offering in the Extra Ordinary General Meeting held on March 28, 2024.

> The company increased itss Authorised equity share capital from Rs10,00,000/- to Rs5,00,00,000/- vide resolution passed in its members meeting dated September 19, 2023.

> The company increased itss Authorised equity share capital from Rs5,00,00,000/- to ^10,00,00,000/- vide resolution passed in its members meeting dated January 23, 2024.

> The Company allotted 49,00,000 bonus Equity Shares in the proportion of 49:1, i.e. 49 (Forty Nine) fully paid Equity Share of Rs10.00 each allotted against 1(One) Equity Shares of Rs10.00 each vide resolution passed at the Board Meeting dated April 10, 2024.

> The Company allotted 1,50,000 Equity Shares of the Company of face value of Rs. 10/- (Rupees Ten Only) each ("Shares") at a price of Rs. 120/- per Share at premium of Rs. 110/- through Preferential Issue vide resolution passed at the Board Meeting dated June 19, 2024.

Factors affecting our results of operations

Our companys future results of operations could be affected potentially by the following factors:

1. Strong execution capabilities with industry experience

2. Existing client relationship

3. Quality Assurance

4. Experienced management team

The following table set forth certain key performance indicators for the years indicated:

Key Performance Indicators of Our Company

Key Financial Performance	FY 2023-24	FY 2022-23	FY 2021-22
Revenue from operations^	11558.61	10,552.33	11,369.85
EBITDA(2)	1696.65	1,213.32	872.32
EBITDA Margin(3)	14.68%	11.50%	7.67%
PAT	807.19	471.34	339.59
PAT Margin(4)	6.98%	4.47%	2.99%
Networth(5)	2014.98	1,207.79	741.45
RoE %(6)	50.09%	48.36%	59.40%
RoCE% (7)	43.11%	36.85%	21.98%

Notes:

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 Expenses - Other Income

(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 of the company less deferred tax assets.

Return on Equity is ratio of Profit after Tax and Average Shareholder Equity 7 Return on Capital Employed is calculated as EBIT divided by capital employed, which is defined as shareholders equity plus long term borrowings.

Explanations for KPI Metrics

KPI	Explanation
Revenue from Operation	Revenue from Operations is used by our management to track the revenue profile of the business and in turn helps to assess the overall financial performance of our Company and volume of our business in key verticals
EBITDA	EBITDA provides information regarding the operational efficiency of the business
EBITDA Margin (%)	EBITDA Margin (%) is an indicator of the operational profitability and financial performance of our business
PAT	Profit after tax provides information regarding the overall profitability of the business
PAT Margin (%)	PAT Margin (%) is an indicator of the overall profitability and financial performance of our business.
Net Worth	Net worth is used by the management to ascertain the total value created by the entity and provides a snapshot of current financial position of the entity.
RoE%	RoE provides how efficiently our Company generates profits from Shareholders Funds
RoCE%	ROCE provides how efficiently our Company generates earnings from the capital employed in the business.

STATEMENT OF SIGNIFICANT POLICIES

Corporate Information:

Rapid Fleet Management Services Limited is a Public Company domiciled in India originally incorporated as Rapid Fleet Management Services Private Limited having Corporate Identification Number U60232TN2017PLC120205. The company got converted into Public Limited vide resolution passed by the Shareholders dated August 30, 2023. The company is engaged in Transportation Service Activities in India. The Company primarily caters to the Indian market.

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of preparation of financial statements

(a) The financial statements are prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP) under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are consistently applied by the Company.

(b) The financial statements are prepared to comply in all material respects with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and provisions of Companies Act, 2013.

(c) The preparation of the financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialize.

1.2 Revenue Recognition

(a) The company generally follows the mercantile system of accounting and recognizes Income & Expenditure on accrual basis.

(b) Revenue is recognised to the extent that it is possible that, the economic benefits will flow to the company and the revenue can be reliably estimated and collectability is reasonably assured.

(c) Revenue from sale of services are recognised when service is fully provided to our customer and when there are no longer any unfulfilled obligations. The performance obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.

(d) Revenue is measured on the basis of sale price, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government such as goods and service tax etc. Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.

(e) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.3 Property, Plant & Equipment and Intangible Assets & Depreciation

(a) Property, Plant and Equipment is stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. Cost of acquisition or construction of property, plant and equipment comprises its purchase price including import duties and non-refundable purchase taxes after deducting trade discounts, rebates and any directly attributable cost of bringing the item to its working condition for its intended use.

(b) Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when 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. All other repairs and maintenance cost are charged to the statement of profit and loss during the period in which they are incurred.

(c) Gains or losses that arise on disposal or retirement of an asset are measured as the difference between net disposal proceeds and the carrying value of property, plant and equipment and are recognised in the statement of profit and loss when the same is derecognised.

(d) Depreciation is calculated on pro rata basis on straight line method (SLM) based on estimated useful Life as prescribed under Part C of Schedule - II of the Companies Act, 2013. Freehold land is not depreciated.

(e) Intangible asset purchased are initially measured at cost. The cost of an intangible assets comprises its purchase price including duties and taxes and any costs directly attributable to making the assets ready for their intended use. The useful lives of intangible assets are assessed as either finite or indefinite. Finite-life intangible assets are amortised on a straight-line basis over the period of their estimated useful lives.

1.4 Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of the assets net selling price and value in use, which is determined by the present value of the estimated future cash flows.

1.5 Investments

Investments classified as long-term investments are stated at cost. Provision is made to recognize any diminution other than temporary in the value of such investments. Current investments are carried at lower of cost and fair value.

1.6 Inventories

Since the company is engaged in transportation business, it does not hold any inventories during the year.

1.7 Employee Benefits

Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the provident fund is charged to the statement of profit and loss for the year when an employee renders the related services.

Provision for Gratuity has been considered as per Actuarial valuation report.

Leave encashment to the employees are accounted for as & when the same is claimed by eligible employees.

1.8 Borrowing Costs

(a) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use.

(b) Other Borrowing costs are recognized as expense in the period in which they are incurred.

1.9 Taxes on Income

Tax expense comprises of current tax and deferred tax.

Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the applicable tax rates and tax laws.

Deferred Tax arising on account of "timing differences" and which are capable of reversal in one or more subsequent periods is recognized, using the tax rates and tax laws that are enacted or substantively enacted. Deferred tax asset is recognized only to the extent there is reasonable certainty with respect to reversal of the same in future years as a matter of prudence.

1.10 Earnings per Share (EPS)

(a) Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

(b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.11 Prior Period Items

Prior Period and Extraordinary items and Changes in Accounting Policies having material impact on the financial affairs of the Company are disclosed in financial statements if any.

1.12 Provisions / Contingencies

(a) Provision involving substantial degree of estimation in measurements is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

(b) Contingent Liabilities are shown by way of notes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable.

(c) A Contingent Asset is not recognized in the Accounts.

1.13 Segment Reporting

A. Business Segments:

Based on the guiding principles given in Accounting Standard 17 (AS - 17) on Segment Reporting issued by ICAI, the Company has only one reportable Business Segment, which is engaged in Transportation Service Activities. Accordingly, the figures appearing in these financial statements relate to the Companys single Business Segment.

B. Geographical Segments:

The Company activities / operations are confined to India and as such there is only one geographical segment. Accordingly, the figures appearing in these financial statements relate to the Companys single geographical segment.

1.14 Foreign Currency Transactions

Foreign exchange transactions are recorded at the rate prevailing on the date of respective transaction. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rates on that date. Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction. Exchange differences arising on foreign exchange transactions settled during the year and on restatement as at the balance sheet date are recognized in the statement of profit and loss for the year.

1.15 Warranty

The company sells its product carrying a warranty. No provision is made in the accounts toward warranty expenses. The same is accounted on actuals basis.

1.16 Balance Confirmations

Balance of Debtors & Creditors & Loans & advances Taken & giving are subject to confirmation and subject to consequential adjustments, if any. Debtors & creditors balance has been shown separately and the advances received and paid from/to the parties is shown as advance from customer and advance to suppliers.

1.17 Regrouping

Previous years figures have been regrouped and reclassified wherever necessary to match with current year grouping and classification.

1.18 Pandemic (Covid-19) impact

The World Health Organization announced a global health emergency because of a new strain of coronavirus ("COVID-19") and classified its outbreak as a pandemic on 11 March 2020. On 24 March 2020, the Indian government announced a strict 21 -day lockdown across the country to contain the spread of the virus. The management has made an assessment of the impact of COVID-19 on the Companys operations, financial performance and position for the year ended 31 March 2023 and has concluded that no there is no significant impact which is required to be recognized in the financial statements. Accordingly, no adjustments are required to be made to the financial statements.

1.19 Events Occurring after Balance Sheet date

The Authorised Share Capital of the company was increased from 50,00,000 Equity Shares of Rs.10/- each to 1,00,00,000 Equity Shares of Rs. 10/- each vide resolution passed in EGM dated 23rd January, 2024.\

1.20 Changes in Accounting Policies in the Period/Years Covered in The Restated Financial Statements

There is no change in significant accounting policies adopted by the Company.

1.21 Other Notes on Restated Financial statements

a) The financial statements including financial information have been prepared after making such regroupings and adjustments, considered appropriate to comply with the same. As result of these regroupings and adjustments, the amount reported in the financial statements/information may not necessarily be same as those appearing in the respective audited financial statements for the relevant years.

b) Contingent liabilities and commitments (to the extent not provided for) - A disclosure for a contingent liability is also made when there is a possible obligation that may, require an outflow of the Companys resources.

c) Figures have been rearranged and regrouped wherever practicable and considered necessary.

d) The management has confirmed that adequate provisions have been made for all the known and determined liabilities and the same is not in excess of the amounts reasonably required to be provided for.

e) The balances of trade payables, trade receivables, loans and advances are unsecured and considered as good are subject to confirmations of respective parties concerned.

f) Realizations: In the opinion of the Board and to the best of its knowledge and belief, the value on realization of current assets and loans and advances are approximately of the same value as stated.

g) Contractual liabilities: All other contractual liabilities connected with business operations of the Company have been appropriately provided for.

h) Amounts in the restated standalone financial statements: Amounts in the restated standalone financial statements are rounded off to nearest Lakhs. Figures in brackets indicate negative values.

Results of Our Standalone Operations

The following table sets forth select financial data from our financial statements as restated of profit and loss for the financial years ended on March 31, 2024, 2023 and 2022 the components of which are also expressed as a percentage of total revenue for such periods:

Particulars	For the year ended 31.03.2024	% of Total income	For the year ended 31.03.2023	% of Total income	For the year ended 31.03.2022	% of Total income
Revenue from Operations	11,558.61	99.37%	10,552.33	99.53%	11,369.85	99.72%
Other income	73.53	0.63%	50.25	0.47%	32.37	0.28%
Total Revenue (A)	11,632.15	100%	10,602.58	100%	11,402.23	100%
Expenses:
Cost of Operations	9,216.74	79.24%	8,825.18	83.24%	9,961.41	87.36%
Employee benefits expense	259.86	2.23%	210.14	1.98%	178.48	1.57%
Other expenses	370.26	3.18%	294.18	2.77%	357.64	3.14%
Total Expenses (B)	9,846.86	84.65%	9,329.50	87.99%	10,497.53	92.07%
Earnings Before Interest, Taxes, Depreciation & Amortization(C=A-B)	1,785.29	15.35%	1,273.08	12.01%	904.70	7.93%
Finance costs (D)	117.86	1.01%	145.21	1.37%	128.29	1.13%
Depreciation and amortization expenses (E)	553.59	4.76%	485.04	4.57%	316.67	2.78%
Profit before exceptional items, extraordinary items and tax (F=C-D-E)	1,113.85	9.58%	642.83	6.06%	459.73	4.03%
Exceptional Items	14.81	0.13%	9.51	0.00	-	-
Profit before tax (F=C- D-E)	1,099.04	9.45%	633.32	5.97%	459.73	4.03%
Tax Expenses
- Current Tax	285.30	2.45%	139.88	0.00	73.39	0.00
- Deferred Tax	6.55	0.06%	22.10	0.00	46.75	0.00
Tax Expense For The Year (G)	291.85	2.51%	161.98	1.53%	120.14	1.05%
Profit after tax (H=F-G)	807.19	6.94%	471.34	4.45%	339.59	2.98%

Overview of Revenue and expenditure Revenue and Expenditure

Total Revenue: Our total revenue comprises of revenue from operations and Other Income.

Revenue from operations: Our revenue from operations comprises of Sale of Services and Other Operating Revenue.

Expenses: Our expenses comprise of Cost of Operations, Employee Benefit Expenses, Finance Cost, Depreciation and Amortisation Expenses and Other Expenses.

Cost of Operations: Our Cost of Operations comprises of Freight Expenses, Halting charges, Hire Charges and Other Direct Expenses.

Employee Benefit Expenses: Our employee benefit expense consists of Salaries, Wages & Bonus, Directors Remuneration, Gratuity, Contribution to Provident and other funds and Staff Welfare Expenses.

Finance Cost: Our finance costs comprise of Interest expenses.

Depreciation and amortisation expenses: Tangible assets are depreciated over periods corresponding to their estimated useful lives. Depreciation includes depreciation charged on tangible assets.

Other expenses: Other expenses include Insurance expenses, Legal & Profession Charges, Postage & Telecommunication, Communication expenses, Printing & Stationery, Rates & Taxes, Rent, Repairs & Maintenance, Travelling and conveyance, Miscellaneous, Bank & Other charges, Fuel Charges, Loss in Transit, Auditor Remuneration, Software Expenses, Business promotion, G.P.S Tracking Charges, Interest paid on TDS, Interest paid on GST, Penalty for GST, Roc Fees, Bad Debt and Commission on sales.

Exceptional Items: The exceptional items comprise of CSR Provision and Prior Period Items.

Provision for Tax: Income taxes are accounted for in accordance with Accounting Standard - 22 on "Accounting for Taxes on Income" ("AS-22"), prescribed under the Companies (Accounting Standards) Rules, 2006. Our Company provides for current tax, as well as deferred tax, as applicable.

Provision for current taxes is made at the current tax rates after taking into consideration the benefits available to our Company under the provisions of the I. T. Act.

Deferred tax arises from the timing differences between book profits and taxable profits that originate in one period and are capable of reversal in one or more subsequent periods and is measured using the tax rates and laws applicable as of the date of the financial statements. Our Company provides for deferred tax asset / liability on such timing differences subject to prudent considerations in respect of deferred tax assets.

COMPARISON OF FY 2023-24 WITH FY 2022-23

Income

Our Total Income increased by Rs 1029.57 lakhs, from Rs 10,602.58 lakhs for the financial year ended March 31, 2023 to Rs 11,632.15 lakhs for the financial year ended March 31, 2024, due to the factors described below:

Revenue from operations

Our Revenue from operations increased by Rs 1006.28 lakhs, from Rs 10,552.33 lakhs for the financial year ended March 31, 2023, to Rs 11,558.61 lakhs for the financial year ended March 31, 2024, representing a growth of 9.54% on account of increase and expansion of sale of Services.

Other Income

Our other income increased by Rs 23.29 lakhs, from Rs 50.25 lakhs for the financial year ended March 31, 2022, to Rs 73.53 lakhs for the financial year ended March 31, 2024, representing a growth of 46.34%. on account of increase in interest income, other non-operating income additionally due to profit on sale of asset.

Expenses

Our Total Expenses excluding finance cost, depreciation and tax expenses was Rs 9,846.86 lakhs for the year ended March 31, 2024, as compared to Rs 9,329.5 Lakhs for the financial year March 31, 2023, representing increase of 5.55% due to the factors described below: -

Cost of Operations

Our Cost of Operation increased by Rs 391.56 lakhs, from Rs 8825.18 lakhs for the financial year ended March 31, 2023, to Rs 9216.74 lakhs for the financial year ended March 31, 2024, representing a growth of 4.44% Mainly because of the increase in Freight Expenses, Halting charges, Hire Charges and Other Direct Expenses.

Employee benefits expenses

Our Employee Benefit Expenses increased by Rs 49.72 lakhs, from Rs 210.14 lakhs for the financial year ended March 31, 2023, to Rs 259.86 lakhs for the financial year ended March 31, 2024, representing a growth of 23.66% due to Increase Salaries, wages & Bonus, Directors Remuneration, Gratuity Expenses, Contribution to provident and other funds and Staff Welfare Expenses.

Finance costs

Our Finance Cost decreased by Rs 27.35 lakhs from Rs 145.21 lakhs for the financial year ended March 31, 2023 to Rs 117.86 lakhs for the financial year ended March 31, 2024 representing a decline of 18.84% due to decrease in Interest on Term Loan and Interest on Other loans.

Depreciation and amortization expense

Our Depreciation and Amortization Expenses increased by Rs 68.54 lakhs, from Rs 485.04 lakhs for the financial year ended March 31, 2023, to Rs 553.59 lakhs for the financial year ended March 31, 2024, representing a growth of 14.13% due to additions to fixed assets of the company.

Other expenses

Our Other Expenses increased by Rs 76.08 lakhs, from Rs 294.18 lakhs for the financial year ended March 31, 2023, to Rs 370.26 lakhs for the financial year ended March 31, 2024, which is 2.77% and 3.18% of the total revenue of respective years, representing a growth of 25.86%. The increase was mainly due to increase in Insurance expenses, Legal & Profession Charges, Postage & Telecommunication, Communication expenses, Printing & Stationery, Rates & Taxes, Rent, Repairs & Maintenance, Travelling and conveyance, Miscellaneous, Bank & Other charges, Fuel Charges, Auditor Remuneration, Software Expenses, Interest paid on TDS, Interest paid on GST, Penalty for GST, Roc Fees, Bad Debt and Commission on sales.

Exceptional Items

There was increase in Exceptional Items by Rs5.30 lakhs from Rs9.51 lakhs in financial year March 31,2023 to Rs 14.81 Lakhs lakhs in financial year March 31,2024 due to increase in CSR expenditure.

Profit before tax

Our Profit before Tax increased by Rs 465.72 lakhs, from Rs 633.32 lakhs for the financial year ended March 31, 2023, to Rs 1099.04 lakhs for the financial year ended March 31, 2024, representing a growth of 73.54%. The increase was mainly due to the factors described above.

Tax expenses

Our tax expenses for the financial year 2023-24 amounted to 291.78 Lakhs as against tax expenses of 161.98 Lakhs for the financial year 2022-23. The net increase of 129.87 is on account of increase in Current tax and Deferred Tax.

Profit After Tax

Our Profit for the year increased by Rs 335.85 lakhs, from Rs 471.34 lakhs for the financial year ended March 31, 2023, to Rs 807.19 lakhs for the financial year ended March 31, 2024 representing a growth of 71.25%, due to aforementioned reasons.

COMPARISON OF FY 2022-23 WITH FY 2021-22

Income

Our Total Income decreased by Rs 799.65 lakhs, from Rs 11,402.23 lakhs for the financial year ended March 31, 2022 to Rs 10,602.58 lakhs for the financial year ended March 31, 2023, due to the factors described below :

Revenue from operations

Our Revenue from operations decreased by Rs 817.52 lakhs, from Rs 11,369.85 lakhs for the financial year ended March 31, 2022, to Rs 10,552.33 lakhs for the financial year ended March 31, 2023, representing a decline of 7.19% on account of decrease in Sale of Services.

Other Income

Our Other income increased by Rs 17.87 lakhs, from Rs 32.37 lakhs for the financial year ended March 31, 2022, to Rs 50.25 lakhs for the financial year ended March 31, 2023, representing a growth of 55.21% due to increase in Interest income.

Expenses

Our Total Expenses excluding finance cost, depreciation and tax expenses was Rs 9,329.5 lakhs for the year ended March 31, 2023 as compared to Rs 10,497.53 Lakhs for the financial year March 31, 2022, representing decreased of 11.13% due to the factors described below: -

Cost of Operations

Our Cost of Operations decreased by Rs 1,136.23 lakhs, from Rs 9,961.41 lakhs for the financial year ended March 31, 2022, to Rs 8,825.18 lakhs for the financial year ended March 31, 2023 mainly because of decrease in in Freight Expenses, Halting charges, Hire Charges and Other Direct Expenses.

Employee benefits expenses

Our Employee Benefit Expenses increased by Rs 31.66 lakhs, from Rs 178.48 lakhs for the financial year ended March 31, 2022 to Rs 210.14 lakhs for the financial year ended March 31, 2023 mainly due to increase in Salary and wages, Directors Remuneration and Gratuity expenses.

Finance costs

Our Finance Cost was Rs 145.21 lakhs for the year ended March 31, 2023 as compared to Rs 128.29 Lakhs for the financial year March 31, 2022, representing increase of 13.19%.

Depreciation and amortization expense

Our Depreciation and Amortization Expenses increased by Rs 168.37 lakhs, from Rs 316.67 lakhs for the financial year ended March 31, 2022, to Rs485.04 lakhs for the financial year ended March 31, 2023.

Other expenses

Our Other Expenses decreased by Rs 63.46 lakhs, from Rs 357.64 lakhs for the financial year ended March 31, 2022, to Rs 294.18 lakhs for the financial year ended March 31, 2023, which is 3.14% and 2.77% of the total revenue of respective years, representing a decline of 17.74%. The decrease was mainly due to Insurance expenses, Legal & Profession Charges, Postage & Telecommunication, Communication expenses, Printing & Stationery, Rates & Taxes, Rent, Repairs & Maintenance, Travelling and conveyance, Miscellaneous, Bank & Other charges, Fuel Charges, Loss in Transit, Auditor Remuneration, Software Expenses, G.P.S Tracking Charges, Interest paid on TDS and Bad Debt.

Exceptional Items

There was an exceptional expenditure during the financial year ended March 31, 2023 amounting to Rs 9.51 lakhs due to provision for CSR expenditure.

Profit before tax

Our Profit before Exceptional Items increased by Rs 173.59 lakhs, from Rs 459.73 lakhs for the financial year ended March 31, 2022, to Rs 633.32 lakhs for the financial year ended March 31, 2023, representing a growth of 37.75%. The increase was mainly due to the factors described above.

Tax expenses

Our tax expenses for the financial year 2022-23 amounted to ^161.98 Lakhs as against tax expenses of Rs120.14 Lakhs for the financial year 2021-22. The net increase of Rs41.83 is on account of increase in Current tax and Deferred Tax.

Profit After Tax

Our Profit for the year increased by Rs 131.75 lakhs, from Rs 339.59 lakhs for the financial year ended March 31, 2022, to Rs 471.34 lakhs for the financial year ended March 31, 2023 representing a growth of 38.80%.

Changes in Cash Flows

The table below summaries our cash flows from our Restated Financial Statements for the period ended December 31, 2023 and financial years ended March 31, 2023, 2022 and 2021:

Particulars	For the year ended March 31, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022
Net cash (used in)/ generated from operating Activities	645.94	743.06	2,438.72
Net cash (used in)/ generated from investing Activities	(944.56)	(439.22)	(1,773.76)
Net cash (used in)/ generated from financing Activities	(203.51)	(1,314.37)	806.88
Net increase/ (decrease) in cash and cash Equivalents	(502.14)	(1,010.53)	1,471.83
Cash and Cash Equivalents at the beginning of the period	1,064.16	2,074.68	602.85
Cash and Cash Equivalents at the end of the Period	562.02	1,064.16	2,074.68

Operating Activities Financial year 2023-24

Our net cash generated in operating activities was Rs645.94 Lakhs for the period ended March 31, 2024. Our operating profit before working capital changes was Rs1734.10 Lakhs for the financial year 2022-24 which was primarily adjusted against Increase in trade receivables by Rs106.21 Lakhs, decrease in Short Term Loans & Advances Rs369.21 Lakhs, increase in Other Current Assets by Rs212.55 Lakhs, decrease in Trade payable Rs1441.92 Lakhs, increase in other current liabilities by Rs289.32 Lakhs, increase in short term provision by Rs 299.28 Lakhs which was further decreased by payment of Income Tax of Rs285.30 Lakhs.

Financial year 2022-23

Our net cash generated in operating activities was Rs743.06 Lakhs for the period ended March 31, 2023. Our operating profit before working capital changes was Rs1,221.43 Lakhs for the financial year 2022-23 which was primarily adjusted against increase in trade receivables by Rs166.87 Lakhs, increase in Short Term Loans & Advances Rs617.69 Lakhs, decrease in Other Current Assets by Rs134.20 Lakhs, increase in Trade payable Rs300.25 Lakhs, decrease in other current liabilities by Rs0.73 Lakhs, increase in short term provision by Rs 12.36 Lakhs which was further decreased by payment of Income Tax of Rs139.88 Lakhs.

Financial year 2021-22

Our net cash generated from operating activities was Rs2,438.72 Lakhs for the period ended March 31, 2022. Our operating profit before working capital changes was Rs879.10 Lakhs for the financial year 2021 -22 which was primarily adjusted against increase in trade receivables by Rs1,027.09 Lakhs, increase in Short Term Loans & Advances by Rs 17.23 Lakhs, increase in Other Current Assets by Rs 60.00 Lakhs, increase in trade payables by Rs2,733.47 Lakhs, increase in other current liabilities by Rs1.80 Lakhs, increase in short term provision by Rs 2.05 Lakhs which was further decreased by payment of Income Tax of Rs73.39 Lakhs.

Investing Activities

Financial year 2023-24

Our net cash utilised in investing activities was Rs 944.56 Lakhs for the period ending March 31, 2024. These were on account of Increase in Non-current Investments of Rs 180.25 Lakhs, Addition in Plant and Equipment of Rs 836.82 Lakhs, Decrease in Other Non current assets of Rs 13.74 Lakhs, Sale of Fixed Assets of Rs 13 Lakhs and Interest Income of Rs 45.11.

Financial year 2022-23

Our net cash utilised in investing activities was Rs 439.22 Lakhs for the period ending March 31, 2023. These were on account of Increase in Non-current Investments of Rs 150.00 Lakhs, Addition in Plant and Equipment of Rs 330.90 Lakhs, Increase in Other Non current assets of Rs 8.56 Lakhs and Interest Income of Rs50.24.

Financial year 2021-22

Our net cash utilised in investing activities was Rs 1,773.76 Lakhs for the period ending March 31, 2022. These were on account of Increase in Non-current Investments of Rs 140.00 Lakhs, Addition in Plant and Equipment of Rs 1,653.74 Lakhs, Increase in Other Non current assets of Rs 8.76 Lakhs and Interest Income of Rs28.74.

Financing Activities

Financial year 2023-24

Net cash utilised in financing activities for the financial year ended March 31, 2024 was Rs 203.51 Lakhs which was primarily on account of Re-payment of long term borrowings Rs 97.31 lakhs, Net-Proceeds of short term borrowings of Rs 11.66 lakhs and Finance cost of Rs 117.86 lakhs.

Financial year 2022-23

Net cash utilised in financing activities for the financial year ended March 31, 2023 was Rs 1,314.37 Lakhs which was primarily on account of Re-payment of long term borrowings Rs 1,028.68 lakhs, re-payment of short term borrowings of Rs 135.48 lakhs, Finance cost of Rs 145.21 lakhs and IPO Expenses of Rs5.00 lakhs.

Financial year 2021-22

Net cash generated in financing activities for the period ending March 31, 2022 was Rs 806.88 Lakhs which was primarily on account of disbursement of long term borrowings Rs 577.26 lakhs, disbursement of short term borrowings of Rs 357.91 lakhs and Finance cost of Rs128.29 lakhs.

Other Key Ratios

The table below summaries key ratios in our Restated Financial Statements for the period ended December 31, 2023 and financial years ended March 31, 2024, 2023 and 2022:

Particulars	For the year ended March 31, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022
Fixed Asset Turnover Ratio	4.32	4.39	4.45
Current Ratio	0.96	0.91	1.02
Debt Equity Ratio	0.74	1.31	3.70
Inventory Turnover Ratio	-	-	-

Fixed Asset Turnover Ratio: This is defined as revenue from operations divided by total fixed assets based on Financial Statements as Restated.

Current Ratio: This is defined as current assets divided by current liabilities, based on Financial Statements as Restated.

Debt Equity Ratio: This is defined as total debt divided by total shareholder funds. Total debt is the sum of long-term borrowings, short-term borrowings and current maturities of long-term debt, based on Financial Statements as Restated.

Inventory Turnover Ratio: This is defined as average inventory divided by cost of operations based on Financial Statements as restated.

Financial Indebtedness

For the year ended March 31, 2024, the total outstanding borrowings of our Company is Rs 1493.71 Lakhs. For further details, refer to the chapter titled "Statement of Financial Indebtedness" beginning on page 207 of this Draft Red Herring Prospectus.

(Rs in Lakh)

Particulars	For the year ended 31, 2024
Loans from Banks & Financial Institutions	1493.71
Unsecured Loans from directors	-
Total	1493.71

Related Party Transactions

Related party transactions with our promoters, directors and their entities and relatives primarily relate to purchase and sale of products and services. For further information, please refer to the chapter titled "Financial Statements as Restated on page 191 of this Draft Red Herring Prospectus.

Off-Balance Sheet Items

We do not have any other off-balance sheet arrangements, derivative instruments or other relationships with any entity that have been established for the purposes of facilitating off-balance sheet arrangements.

Qualitative Disclosure about Market Risk

Financial Market Risks

Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk. We are exposed to interest rate risk, inflation and credit risk in the normal course of our business.

Interest Rate Risk

Our financial results are subject to changes in interest rates, which may affect our debt service obligations and our access to funds.

Effect of Inflation

We are affected by inflation as it has an impact on the raw material cost, wages, etc. In line with changing inflation rates, we rework our margins so as to absorb the inflationary impact.

Credit Risk

We are exposed to credit risk on monies owed to us by our customers. If our customers do not pay us promptly, or at all, we may have to make provisions for or write-off such amounts.

Reservations, Qualifications and Adverse Remarks

Except as disclosed in chapter titled "Financial Statements as Restated" beginning on page 191 of this Draft Red Herring Prospectus, there have been no reservations, qualifications and adverse remarks.

Details of Default, if any, including therein the Amount Involved, Duration of Default and Present Status, in Repayment of Statutory Dues or Repayment of Debentures or Repayment of Deposits or Repayment of Loans from any Bank or Financial Institution.

Except as disclosed in chapter titled "Financial Statements as Restated" beginning on 191 of this Draft Red Herring Prospectus, there have been no defaults in payment of statutory dues or repayment of debentures and interest thereon or repayment of deposits and interest thereon or repayment of loans from any bank or financial institution and interest thereon by the Company.

FACTORS THAT MAY AFFECT THE RESULTS OF THE OPERATIONS

Unusual or infrequent events or transactions

There are no transactions or events, which in our best judgment, would be considered unusual or infrequent that have significantly affected operations of the Company.

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

There are no significant economic changes that materially affected Companys operations or are likely to affect income from continuing operations. Any slowdown in the growth of Indian economy or future volatility in global commodity prices, could affect the business including the future financial performance, shareholders funds and ability to implement strategy and the price of the Equity Shares.

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 disclosed in the chapter titled "Risk Factors " beginning on 30 of this Draft Red Herring Prospectus to our knowledge, 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.

Future changes in relationship between costs and revenues in case of events such as future increase in labour or material cost or prices that will cause material change

According to our knowledge, there are no future relationship between cost and income that would be expected to have a material adverse impact on our operations and revenues. However, increase in the cost of the goods in which the Company deals, will affect the profitability of the Company. Further, the Company may not be able to pass on the increase in prices of the services to the customers in full and this can be offset through cost reduction.

The extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased prices

The increase in revenue is by and large linked to increase in volume of all the activities carried out by the Company.

Total turnover of each major industry segment in which the Issuer Company operates

The Company is in the business of road transportation logistics services tailored to the diverse needs of our B2B and B2C clientele. Relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on 96 of this Draft Red Herring Prospectus.

Competitive Conditions

We have competition with Indian and international manufacturing companies and our results of operations could be affected by competition in the manufacturing industry in India and international market in the future. We expect competition to intensify due to possible new entrants in the market, existing competitors further expanding their operations and our entry into new markets where we may compete with well-established unorganized companies/ entities. This we believe may impact our financial condition and operations. For details, please refer to the chapter titled "Risk Factors" beginning on 30 of this Draft Red Herring Prospectus.

Increase in income

Increases in our income are due to the factors described above in this chapter under "Factors Affecting Our Results of Operations" and chapter titled "Risk Factors " beginning on 30 of this Draft Red Herring Prospectus.

Status of any Publicly Announced New Business Segments

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