MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 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 Prospectus. The following discussion and analysis of our financial condition and results of operations is based on our Financial Statements as Restated, for the financial years ended March 31, 2024, 2023 and 2022 including the related notes and reports, included in this 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 27 and 20, respectively of this 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 incorporated as a Private Limited Company on July 04, 2020, as "Rapid Multimodal Logistics Private Limited" Vide Registration No. 136171 And Certificate of Incorporation Dated July 04, 2020 Under the Provisions of The Companies Act, 2013 Issued by The Registrar of Companies, Central Registration Centre. Subsequently pursuant to a Special Resolution of our Shareholders passed in the Extra-Ordinary General Meeting held on October 14, 2023, our Company was converted from a Private Limited Company to Public Limited Company and consequently, the name of our Company was changed to ‘Rapid Multimodal Logistics Limited and a Fresh Certificate of Incorporation consequent to Conversion was issued on November 06, 2023, by the Registrar of Companies, Chennai. The Corporate Identification Number of Our Company Is U63030TN2020PLC136171.
We are a Chennai based company engaged in the business of providing one-stop logistical solution to our clients. We cater to the B2B segment of the industry. We provide an end-to-end logistics solution to manufacturers/traders to transport raw materials or finished goods. We are involved in the management and coordination of the movement of raw materials or finished goods throughout the supply chain, from the point of origin to the destination. We provide single as well as multimodal transportation services which involves the coordinated use of multiple modes of transportation (such as road, rail, sea) within a single, integrated supply chain to optimize efficiency and meet the unique requirements of shipments. Right from shipment planning, Route Optimization, Carrier Selection, Documentation, Containerization, Tracking and to Communication and Coordination, Last-Mile Delivery, Performance Evaluation.
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 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:
The company increased itss Authorised Share Capital from 5,00,000.00 to 4,00,00,000.00 vide resolution passed in its members meeting dated December 01, 2023.
The Board of our Company has approved to raise funds through initial public offering in the Board meeting held on December 23, 2023.
The members of our Company approved proposal of Board of Directors to raise funds through initial public offering in the general meeting held on December 29, 2023.
Our Company was converted from a private limited company to public limited company vide resolution passed in its members meeting dated October 14, 2023 and a fresh certificate of incorporation consequent to conversion was issued on November 06, 2023 by the Registrar of Companies, Chennai bearing Corporate Identification Number U63030TN2020PLC136171.
The Company issued 27,50,000 bonus Equity Shares in the proportion of 55:1 (Fifty-five) fully paid equity shares of 10.00 each allotted against 1(One) Equity Shares of 10.00 each vide resolution passed in its members meeting dated December 29, 2023 effect of this bonus issue has been considered to calculate EPS.
Factors affecting our results of operations
Our companys future results of operations could be affected potentially by the following factors:
1. Versatile Range of Transportation Solutions with Exemplary Route Optimization
2. Cultivating Resilient Collaborations with Lorry Vendors
3. Optimal Cost Management
4. Fostering Long-Term Partnerships
5. Word-of-Mouth Acclaim and Informal Advocacy
6. Proximity and Accessibility for Clients
The following table set forth certain key performance indicators for the years indicated:
Key Performance Indicators of our Company
| (Rs. in lakhs) | |||
| Key Financial Performance | FY 2023-24 | FY 2022-23 | FY 2021-22 |
| Revenue from operations (1) | 7,182.36 | 7,272.75 | 4,771.26 |
| EBITDA (2) | 275.78 | 267.29 | 141.59 |
| EBITDA Margin (3) | 3.84% | 3.68% | 2.97% |
| PAT | 179.23 | 200.48 | 95.43 |
| PAT Margin (4) | 2.50% | 2.76% | 2.00% |
| Net Worth (5) | 471.55 | 300.59 | 100.11 |
| RoE % (6) | 46.42 | 100.07 | 182.12 |
| RoCE% (7) | 48.98 | 69.55 | 83.06 |
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 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.(6)
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 MULTIMODAL LOGISTICS LIMITED is a Public Company domiciled in India originally incorporated as RAPID MULTIMODAL LOGISTICS PRIVATE LIMITED vide certificate of incorporation consequent upon conversion to Public Limited Company dated 16th November, 2023 issued by Registrar of Companies, Chennai, being Corporate Identification Number U63030TN2020PLC136171.
The company primary focus on to establish, organize, manage, run, charter, conduct, contract, develop, handle, own, operate and to do business as fleet carriers, transporters, in all its branches on by land, road, railway, sea, river, canal, water or air, for transporting goods, cargo, articles, or things on all routes and lines on National and International level subject to law in force through buses, omnibuses, motor taxis, railways, tramways, aircrafts, hovercrafts, all sorts of carries like trucks, lorries, trawlers, dumpers, coaches, tankers, tractors, haulers, jeeps, trailers, motorvessels, boats and barges and to act as clearing and forwarding agents.
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 goods and services are recognised when control of the products being sold is transferred to our customer and even 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 Written down value method (WDV) 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
The company do not have any inventory during the period under review.
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 expenses have been considered as per actuarial valuation report for respective years.
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
(a) Tax expense comprises of current tax and deferred tax.
(b) 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.
(c) 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 business of providing one-stop logistical solution in India. 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 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.
1.16 Regrouping
Previous years figures have been regrouped and reclassified wherever necessary to match with current year grouping and classification
1.17 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.
Discussion on Results of Operation
The following discussion on results of operations should be read in conjunction with the Audited Financial Results of our Company for the financial year ended on March, 31 2024, 2023 and 2022.
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:
| (Rs. in lakhs) | ||||||
| Particulars | 31-03- 2024 | % of total income | 31-03- 2023 | % of total income | 31-03- 2022 | % of total income |
| Revenue from Operations | 7,182.36 | 99.97% | 7,272.75 | 99.68% | 4,771.26 | 99.93% |
| Other income | 1.89 | 0.03% | 23.42 | 0.32% | 3.14 | 0.07% |
| Total Revenue (A) | 7,184.25 | 100% | 7,296.17 | 100.00% | 4,774.40 | 100.00% |
| Expenses: | ||||||
| Cost of Services Consumed | 6,597.53 | 91.83% | 6,672.77 | 91.46% | 4,447.42 | 93.15% |
| Employee benefits expense | 147.69 | 2.06% | 152.20 | 2.09% | 61.51 | 1.29% |
| Other expenses | 161.37 | 2.25% | 180.50 | 2.47% | 120.74 | 2.53% |
| Total Expenses (B) | 6,906.58 | 96.14% | 7,005.46 | 96.02% | 4,629.67 | 96.97% |
| Earnings Before Interest, Taxes, | 277.66 | 3.86% | 290.71 | 3.98% | 144.73 | 3.03% |
| Depreciation & Amortization(C=A- B) | ||||||
| Finance costs (D) | 25.73 | 0.36% | 17.78 | 0.24% | 13.33 | 0.28% |
| Depreciation and amortization expenses (E) | 8.69 | 0.12% | 8.96 | 0.12% | 3.99 | 0.08% |
| Profit before exceptional items, extraordinary items and tax (F=C-D- E) | 243.24 | 3.39% | 263.97 | 3.62% | 127.42 | 2.67% |
| Exceptional Items | - | 0.00% | - | 0.00% | - | 0.00% |
| Profit before tax (F=C-D-E) | 243.24 | 3.39% | 263.97 | 3.62% | 127.42 | 2.67% |
| Tax Expenses | ||||||
| - Current Tax | 67.05 | 0.93% | 65.80 | 0.90% | 33.32 | 0.70% |
| - Deferred Tax | (3.04) | (0.04)% | (2.31) | -0.03% | (1.33) | (0.03)% |
| Tax Expense for The Year (G) | 64.01 | 0.89% | 63.49 | 0.87% | 31.99 | 0.44% |
| Profit after tax (H=F-G) | 179.23 | 2.49% | 200.48 | 2.75% | 95.43 | 2.00% |
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.
Other Income: Our other income comprises of Interest Income, Commission Income, Subsidy Received and Interest on Income Tax Refund.
Expenses: Our expenses comprise of Cost of operation, Employee Benefit Expenses, Finance Cost, Depreciation and Amortisation Expenses and Other Expenses.
Cost of Operation: Our Cost of Services provided comprises of Transportation Charges, Handling Charges, Loading & Unloading Charges and Other Direct Expenses.
Employee Benefit Expenses: Our employee benefit expense consists of Salaries, Wages & Bonus, Directors Remuneration, Gratuity and Staff Welfare Expenses.
Finance Cost: Our finance costs comprise of Interest on Borrowings from Bank and Others and Bank Charges.
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 includes Business Promotion, Computer service, Legal & Profession Charges, Electricity Charges, Repairs & Maintenance, Travelling and conveyance, Rent, Insurance, Postage & Courier, Printing & Stationery, Petrol & Diesel Expenses, Telephone Charges, Office Expenses, Delivery Charges, General Expenses, Commission Expenses, Loss in Transit, Auditor Remuneration, Miscellaneous expenses, Interest paid on TDS, GST payment fees, Bank charges, Incorporation Expenses, Diwali Expenses, Pooja Expenses, Bond Paper expenses, ROC Filing fees, Concor Expenses, Claim Expenses, Tender Charges.
Exceptional Items: There are no Exceptional Items in our company.
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 Income Tax 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 revenue decreased by 111.92 lakhs from 7,296.17 lakhs for the financial year ended 31 March, 2023 to 7,184.25 lakhs for the financial year ended 31 March, 2024, due to the factors described below:
Revenue from operations
Our revenue from operations decreased by 90.39 lakhs from 7,272.75 lakhs for the financial year ended 31 March, 2023 to 7,182.36 lakhs for the financial year ended 31 March, 2024 due to decrease in the market orders of the company.
Other Income
Our Other Income decreased by 21.53 lakh from 23.42 lakhs for the financial year ended 31 March, 2023 to 1.89 lakhs for the financial year ended 31 March, 2024 due to decrease in Commission Income and Interest on Income Tax refund.
Expenses
Our total expenses excluding finance cost, depreciation and tax expenses was 6,906.58 lakhs for the year ended 31 March, 2024 as compared to 7,005.46 Lakhs for the financial year 31 March, 2023, representing decrease of 1.41% due to the factors described below : -
Cost of Operation
Our Cost of Services Consumed decreased by 75.24 lakhs from 6,672.77 lakhs for the financial year ended 31 March, 2023 to 6,597.53 lakhs for the financial year ended 31 March, 2024 which is majorly due to reduction in Revenue from Operation.
Employee benefits expenses
Our employee benefit expenses decreased by 4.51 lakhs from 152.20 lakhs for the financial year ended 31 March, 2023 to 147.69 lakhs for the financial year ended 31 March, 2024 due to Decrease in Salaries, Wages & Bonus, Staff Welfare Expenses which was partially set off by Increase in Gratuity Expenses.
Finance costs
Our finance cost was 25.73 lakhs for the year ended 31 March, 2024 as compared to 17.78 Lakhs for the financial year 31 March, 2023, representing an increase of 44.67% due to Increase in Interest on borrowings from Banks and Bank Charges.
Depreciation and amortization expense
Our depreciation and amortization expense decreased by 0.27 lakhs from 8.96 lakhs for the financial year ended 31 March, 2023 to 8.69 lakhs for the financial year ended 31 March, 2024.
Other expenses
Our other expenses decreased by 19.13 lakhs from 180.5 lakhs for the financial year ended 31 March, 2023 to 161.37 lakhs for the financial year ended 31 March, 2024 due to economies of scale and reduction of fixed costs.
Exceptional Items
There are no exceptional items for the financial year ended March 31, 2024 and March 31, 2023.
Profit before tax
Our profit before tax decreased by 20.73 lakhs from 263.97 lakhs for the financial year ended 31 March, 2023 to
243.24 lakhs for the financial year ended 31 March, 2024 due to factors mentioned above.
Tax expenses
Our tax expenses increased by 0.53 lakhs, from 63.49 lakhs for the financial year ended 31 March, 2023 to 64.01 lakhs for the financial year ended 31 March, 2024 due to Increase in Current Tax which was partially setoff by decrease in Deferred Tax Expenses.
Profit After Tax
Our profit after tax decreased by 21.25 lakhs from 200.48 lakhs for the financial year ended 31 March, 2024 to 179.23 lakhs for the financial year ended 31 March, 2024.
COMPARISON OF FY 2022-23 WITH FY2021-22
Income
Total Revenue: Our total revenue increased by 2,521.77 lakhs or 52.82% to 7,296.17 Lakh for the financial year 2022-23 from 4,774.40 Lakh for the financial year 2021-22 due to the factors described below:
Revenue from operations
Our revenue from operations is 7,272.75 Lakhs for the financial year 2022-23 as compared to 4,771.26 Lakhs for the financial year 2021-22 representing an incline of 52.43% on account of increase in sale of services.
Expenses
Our total expenses excluding finance cost, depreciation and tax expenses is 7,005.46 Lakhs for the financial year 2022-23 as compared to 4,629.67 Lakhs for the financial year 2021-22 representing an increase of 51.32% due to the factors described below: -
Cost of Operation
Our Cost of Operation is 6,672.77 Lakhs for the financial year 2022-23 as compared to 4,447.42 Lakhs for the financial year 2021-22 representing an increase of 50.04% due to increase in Transportation charges, Handling charges and Other Direct Expenses which was partially setoff by decrease in Loading & Unloading Expenses.
Employee benefits expenses
Our employee benefit expenses are 152.20 Lakhs for the financial year 2022-23 as compared to 61.51 Lakhs for the financial year 2021-22 representing an increase of 147.45% due to increase in Salaries, Wages & Bonus, Directors Remuneration, Gratuity Expenses and Staff Welfare Expenses.
Finance costs
Our finance cost is 17.78 Lakhs for the financial year 2022-23 as compared to 13.33 Lakhs for the financial year 2021-22 representing an increase of 33.46% on account of increase in Interest on Borrowings from Banks and Others and Bank Charges.
Depreciation and amortization expense
Our depreciation increased by 124.79% to 8.96 Lakhs for the financial year 2022-23 from 3.99 Lakhs for the financial year 2021-22 due to increase in Assets.
Other expenses
Our other expenses increased by 49.49% to 180.50 Lakhs for the financial year 2022-23 from 120.74 Lakhs for the financial year 2021-22, which is 2.47% and 2.53% of the total revenue of respective years. The increase was mainly due to increase in Computer service, Electricity Charges, Travelling and conveyance, Rent, Insurance, Postage & Courier, Petrol & Diesel Expenses, Telephone Charges, Office Expenses, General Expenses, Commission Expenses, Auditor Remuneration, Incorporation Expenses, Diwali Expenses, Pooja Expenses, ROC Filing fees, Concor Expenses, Claim Expenses, Tender Charges which was partially setoff by decrease in Business Promotion, Legal & Profession Charges, Repairs & Maintenance, Printing & Stationery, Cleaning Charges, Miscellaneous expenses, Interest paid on TDS, Bond Paper expenses,
Exceptional Items
Our Company has no Exceptional Items for Financial year 2022-23 and 2021-22.
Profit before tax
Our profit before tax increased by 107.17% to 263.97 Lakhs for the financial year 2022-23 from 127.42 Lakhs for the financial year 2021-22. The increase was mainly due to the factors described above.
Tax expenses
Our tax expenses for the financial year 2022-23 amounted to 63.49 Lakhs as against tax expenses of 31.99 Lakhs for the financial year 2021-22. The net increase of 31.49 is on account of increase in Current tax which partially set off with Decrease in Deferred Tax.
Profit After Tax
Our profit after tax increased by 110.09% to 200.48 Lakhs for the financial year 2022-23 from 95.43 Lakhs for the financial year 2021-22, reflecting a net increase of 105.05 Lakhs due to aforementioned reasons.
Changes in Cash Flows
The table below summaries our cash flows from our Restated Financial Statements for the financial years 2024, 2023 and 2022:
| (Rs. in Lakh) | |||
| 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 | 72.91 | 173.38 | (312.37) |
| 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 investing Activities | 3.45 | (19.15) | (24.64) |
| Net cash (used in)/ generated from financing Activities | (60.81) | (147.49) | 344.26 |
| Net increase/ (decrease) in cash and cash Equivalents | 15.54 | 6.74 | 7.25 |
| Cash and Cash Equivalents at the beginning of the period | 18.95 | 12.21 | 4.96 |
| Cash and Cash Equivalents at the end of the Period | 34.49 | 18.95 | 12.21 |
Operating Activities
Financial year 2023-24
Our net cash generated from operating activities was 72.91 Lakhs for the financial year ended on March 31, 2024. Our operating profit before working capital changes was 286.04 Lakhs for the financial year 2023-24 which was primarily adjusted against increase in trade receivables by 130.79 Lakhs, increase in Short Term Loans & Advances by 23.93 Lakhs, Decrease in Other Current Assets by 22.34 Lakhs, Increase in Trade Payable by 7.05 lakhs, Decrease in Other Current Liabilities by 20.78 Lakhs, Decrease in Short term provision by 0.07 Lakhs, which was further decreased by payment of Income Tax of 66.91 Lakhs.
Financial year 2022-23
Our net cash generated from operating activities was 173.38 Lakhs for the financial year ended on March 31, 2023. Our operating profit before working capital changes was 293.27 Lakhs for the financial year 2022-23 which was primarily adjusted against increase in trade receivables by 13.18 Lakhs, increase in Short Term Loans & Advances 4.35 Lakhs, decrease in Other Current Assets by 11.80 Lakhs, decrease in trade payables by 44.08 Lakhs, decrease in other current liabilities by 4.33 Lakhs, increase in short term provision by 0.03 Lakhs which was further decreased by payment of Income Tax of 65.78 Lakhs.
Financial year 2021-22
Our net cash used in operating activities was 312.37 Lakhs for the financial year ended on March 31, 2022. Our operating profit before working capital changes was 148.88 Lakhs for the financial year 2021-22 which was primarily adjusted against increase in trade receivables by 579.98 Lakhs, increase in Short Term Loans & Advances by 2.95 Lakhs, increase in Other Current Assets by 56.28 Lakhs, increase in trade payables by 170.02 Lakhs, increase in other current liabilities by 41.23 Lakhs and increase in short term provision by 0.04 Lakhs which was further decreased by Income Tax of 33.34 Lakhs.
Investing Activities
Financial year 2023-24
Our net cash generated from investing activities was 3.45 Lakhs for the financial year ended on March 31, 2024. These were on account of Addition in Fixed Asset of 2.96 Lakhs, decrease in Non-current assets of 4.52 Lakhs, Interest income of 0.89 Lakhs and Profit on Sale of Fixed Assets of 1.00 Lakhs.
Financial year 2022-23
Our net cash used in investing activities was 19.15 Lakhs for the financial year 2022-23. These were on account of Purchase of Property, Plant & Equipment of 15.77 Lakhs, Interest income 0.66 Lakhs and increase in Non-current Assets 4.03 Lakhs.
Financial year 2021-22
Our net cash used in investing activities was 24.64 Lakhs for the financial year 2021-22. These were on account of Purchase of Property, Plant & Equipment of 24.27 Lakhs, Interest income 0.11 Lakhs and increase in Non-current Assets 0.49 Lakhs.
Financing Activities
Financial year 2023-24
Net cash used in financing activities for the financial year ended March 31, 2024 was 60.81 Lakhs which was primarily on account of disbursement of long-term borrowings 2.91 lakhs, Re-payment of short-term borrowings of 29.72 lakhs, IPO related expenses of 8.27 lakhs and Finance cost of 25.73 lakhs.
Financial year 2022-23
Net cash used in financing activities for the financial year March 31, 2023 was 147.49 Lakhs which was primarily on account of Net proceeds from Long-term Borrowings of 5.28 Lakhs, Repayment of Short-term Borrowings of 134.99 Lakhs and Finance cost of 17.78 Lakhs.
Financial year 2021-22
Net cash generated from financing activities for the financial year March 31, 2022 was 344.26 Lakhs which was primarily on account of Net proceeds from Long-term Borrowings of 65.56 Lakhs, Net proceeds from Short-term Borrowings of 292.03 Lakhs and Finance cost of 13.33 Lakhs.
Other Key Ratios
The table below summaries key ratios in our Restated Financial Statements for the 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 | 338.45 | 268.40 | 235.26 |
| Current Ratio | 2.93 | 2.07 | 1.29 |
| Debt Equity Ratio | 0.43 | 0.76 | 3.57 |
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.
Financial Indebtedness
As on March 31, 2024, the total outstanding borrowings of our Company is 201.07 Lakhs. For further details, refer to the chapter titled "Statement of Financial Indebtedness" beginning on page of this Prospectus.
| (Rs. in Lakh) | |
| Particulars | As at March 31, 2024 |
| Secured Loans from Banks & Financial Institutions | 17.32 |
| Unsecured Loans from Directors and Others | 183.75 |
| Total | 201.07 |
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 154 of this 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 154 of this 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 page 154 of this 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 page 27 of this 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
Our company primarily focus on to establish, organize, manage, run, charter, conduct, contract, develop, handle, own, operate and to do business as fleet carriers, transporters, in all its branches on by land, road, railway, sea, river, canal, water or air, for transporting goods, cargo, articles, or things on all routes and lines on National and International level subject to law in force through buses, omnibuses, motor taxis, railways, tramways, aircrafts, hovercrafts, all sorts of carries like trucks, lorries, trawlers, dumpers, coaches, tankers, tractors, haulers, jeeps, trailers, motor vessels, boats and barges and to act as clearing and forwarding agents.
Relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page 83 of this 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 page 27 of this Prospectus.
Increase in income
Increases in our income are due to the factors described above in in this chapter under "Factors Affecting Our Results of Operations" and chapter titled "Risk Factors" beginning on page 27 of this Prospectus.
Status of any Publicly Announced New Business Segments
Except as disclosed elsewhere in the Prospectus, we have not announced and do not expect to announce in the near future any new business segments.
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