reetech international cargo & courier ltd share price Management discussions

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 Draft Prospectus. The following discussion and analysis of our financial condition and results of operations is based on our Audited Restated Consolidated Financial Statements for the Financial Years ended on March 31, 2022, 2021 and 2020 including the related notes and reports, included in this Draft 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 page 27 and 20, respectively of this Draft 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 in the year 2008, in the name and style of M R Agriculture Private Limited by the joint efforts of Mr. Mahendra Ahuja and Ms. Roma Ahuja. Company started its operation in the year 2009-10 Initially the Company was engaged in the business of agriculture goods such as Rice Milling, Rice Sorting, Dal Milling, Dal Processing and Agriculture Products. The business of trading of Agriculture goods had been operated by the Company successfully in the past. In the year 2020, our promoters commenced business of trading of coal. In the year 2021, the company changed its name from M R Agriculture Private Limited to Reetech International Cargo and Courier Private Limited. Our Promoters has a vision to look beyond the ordinary; to foresee opportunities; to attain the unattainable; to create in-roads into newer vistas of change and above all, to bridge the demand-supply gap for coal, the worlds fossil fuel.

Mr. Mahendra Ahuja started as a small trader of coal in 2020, and within a short span of time, Reetech has emerged as one of the recognised suppliers of coal in the state of Chhattisgarh. We are based at Raipur, Chhattisgarh, and our operations are spread across India, with a vide network of Customers. Our diversified product portfolio comprises coal from Indonesia, South Africa, Australian and India, among other origins. We supply our products to the customers in various sectors i.e., Power, Steel, Rolling and other industries. An effective handling and transportation of the orders is facilitated through Road transportation and Railway. In a very short span of time, our Company has been able to recognize itself as a trusted name in the coal industries due to its commitment to quality and reliability since its inception. Our Company is one of the recognised traders of Coal and perform its operations from Gangavaram and other ports.

OUR PRODUCTS

South African Coal

We are currently importing the entire spectrum of South African coal that comprises 6000 NAR, 5500 NAR & 4800 NAR. The coal is transported in multifarious vessels such as Supramax, Panamax, Babycape & Capesize vessels. It is then stored in various locations including Gangavaram port, Vizag port.

Indonesian Coal

We importing the entire spectrum of Indonesian coal grades, extending from Low Calorific Value and Medium Calorific Value to High Calorific Value.

Indian Coal

We procure Indian coal through e-auctions conducted by the various subsidiaries of Coal India Limited (WCL, ECL, SECL, CCL, MCL, NCL, SCCL). The coal is procured keeping in mind the quality and quantity requirements of our customers. We pride ourselves on the ability to provide end-to-end logistics solutions to our clients together with flexibility in payment terms, which bring in a great value proposition.

US Coal

We import US coal on Kandla port of GCV higher than 7000.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST BALANCE SHEET DATE I.E. MARCH 31, 2022

In the opinion of the Board of Directors of our Company, since the date of the last financial statements disclosed in this Draft 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 next twelve months.

> The company increased its s Authorised equity share capital from Rs. 10,000,000 to Rs. 60,000,000 of Rs. 10/- each vide resolution passed in its members meeting dated June 18, 2022

> The Board of our Company has approved to raise funds through initial public offering in the Board meeting held on July 15, 2022.

> 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 August 01, 2022.

> Our Company was converted from a private limited company to public limited company and the name of our Company was changed to "Reetech International Cargo and Courier Limited" and a fresh certificate of incorporation consequent to conversion was issued on April 12, 2022 by the Registrar of Companies, Chhattisgarh bearing Corporate Identification Number U51100CT2008PLC020983.

> The Company issued 31,11,000 bonus Equity Shares in the proportion of 6:1 (6-Six) fully paid equity shares of Rs.10/- each allotted against 1(One) Equity Shares of Rs. 10/- each vide resolution passed in members meeting dated August 01, 2022 and allotted on August 08, 2022, 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. Impact of the COVID-19 pandemic on our business and operations;

2. General economic and business conditions in India and other countries;

3. Our reliance on internet network and our ability to utilize systems in an uninterrupted manner; Effect of lack of infrastructure facilities on our business;

4. Our ability to attract, retain and manage qualified personnel;

5. Our ability to successfully implement our growth strategy and expansion plans, technological changes;

6. Changes in fiscal, economic or political conditions in India;

7. Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

8. Any adverse outcome in the legal proceedings in which we are involved;

9. The occurrence of natural disasters or calamities;

10. Failure to adapt to the changing technology in our industry of operation may adversely affect our business and financial condition;

11. Failure to obtain any approvals, licenses, registrations and permits in a timely manner;

12. Conflict of Interest with group companies, the promoter group and other related parties

INTERNATIONAL

13. Changes in the value of the Rupee and other currencies;

14. Other factors beyond our control; and

15. Our ability to manage risks that arise from these factors.

OUR SIGNIFICANT ACCOUNTING POLICIES AND NOTES

Corporate Information

The Company was originally incorporated on December 18, 2008 as a Private Limited Company in the name of "M R Agriculture Private Limited" vide Registration No. 020983 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Madhya Pradesh and Chhattisgarh. Further, pursuant to a Special Resolution of our Shareholders passed in the Extra Ordinary General Meeting held on June 15, 2020 name of our Company was changed to "Reetech International Cargo and Courier Private Limited" and a Fresh Certificate of Incorporation was issued by Registrar of Companies, Chhattisgarh. Subsequently, pursuant to a Special Resolution of our Shareholders passed in the Extra Ordinary General Meeting held on February 15, 2022 our Company was converted from a Private Limited Company to Public Limited Company and the name of our Company was changed to "Reetech International Cargo and Courier Limited" and a Fresh Certificate of Incorporation consequent to Conversion was issued on April 12, 2022 by the Registrar of Companies, Chhattisgarh bearing Corporate Identification Number U51100CT2008PLC020983.

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.

(d) The company holds 36.36% equity shares of M/s. M AHUJA PROJECT (INDIA) PRIVATE LIMITED, hence Restated Consolidated Financial statements has been prepared in accordance with Accounting Standard-23 on the basis of Audited Consolidated financial statements of the company, however statutory audit of Consolidated financial statements for the F.Y. 2020-21 and 2019-20 have not been conducted by the company.

1.2 Revenue Recognition: -

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

(b) Sales are recognized on accrual basis, and only after transfer of goods or services to the customer, Sales are recognized at the time of passage of the title that generally coincides with their delivery. Sales are net of GST and Trade discounts.

(c) Dividend on Investments are recognized on receipt basis.

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

1.3 Property, Plant and Equipment and Intangible Assets & Depreciation:

(a) Fixed Assets are stated at Cost less accumulated depreciation. The Company has capitalized all cost relating to the acquisition and installation of Fixed Assets.

(b) Depreciation is provided on Fixed Assets on Written down value Method on the basis of Useful Life as prescribed under Part C of Schedule - II of the Companies Act, 2013.

(c) Cost of the fixed assets not ready for their intended use at the Balance Sheet date together with all related expenses are shown as Capital Work-in-Progress.

(d) There are no Intangible Assets in the company.

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:

Inventories consisting of Traded goods and are valued at lower of cost and net realizable value in accordance with Accounting Standard- 2. Cost of inventories comprises of material cost on FIFO basis and expenses incurred in bringing the inventories to their present location and condition

1.7 Employee Benefits:

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

1.8 Borrowing Cost:

(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.

d) 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.

1.12 Provisions and Contingent Liabilities:

(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 Construction contract and Works contract. 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.

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, 2022, 2021 and 2020.

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 Goods.

Other Income: Our Other income consists of Interest on fixed deposit, Interest on delayed payment, Plot Rent, Handling and Distribution Services, Commission on Sales, Sundry Balance Written Off, Miscellaneous Income, Rounding Off.

Expenses: Our expenses comprise of Purchase of Stock in Trade, Change in Inventory, Employee Benefit Expenses, Finance Cost and Other Expenses.

Purchase of Stock in Trade: Our Purchase of Stock in Trade comprises direct expenses.

Changes in Inventory: Our Changes in Inventory comprises difference between opening stock of Consumables and closing stock of Consumables.

Employee Benefit Expenses: Our employee benefit expense consists of Salaries and Wages and Directors Remuneration Finance Cost: Our finance costs comprise of Interest on Overdraft Fund and Bank Charges.

Other expenses: Other expenses includes Audit Fees & Legal Fees, Plot Rent, GST Expenses, Interest and Penalties on Statutory Dues, Office Expenses, Tour and Travelling Expenses, Commission and Brokerage on Coal, Marketing and Promotion Expenses, ROC Fees Expenses, Bad Debts, Advertisement Expenses, Domain Registration Charges, Misc. Expenses.

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 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.

RESULTS OF OUR CONSOLIDATED OPERATIONS

The following table sets for the select financial data from our financial statements as restated of profit and loss for the financial year ended on March 31, 2022, 2021 and 2020 the components of which are also expressed as a percentage of total revenue for such periods:

Particulars	March 31, 2022	% of total income	March 31, 2021	% of total income	March 31, 2020	% of total income
Revenue from Operations	11,373.97	97.30%	1,840.26	99.88%	-	-
Other income	315.13	2.70%	2.15	0.12%	18.99	100.00%
Total Revenue (A)	11,689.10	100.00%	1,842.41	100.00%	18.99	100.00%
Expenses:
Purchase of Stock In Trade	11,103.65	94.99%	1,876.66	101.86%	-	-
Changes in Inventories	-110.15	-0.94%	-79.01	-4.29%	-	-
Employee benefits expense	25.59	0.22%	-	0.00%	-	-
Other expenses	82.49	0.71%	4.06	0.22%	0.10	0.53%
Total Expenses (B)	11,101.58	94.97%	1,801.71	97.79%	0.10	0.53%
Earnings Before Interest, Taxes, Depreciation & Amortization (C=A-B)	587.53	5.03%	40.70	2.21%	18.89	99.47%
Finance costs (D)	0.09	0.00%	0.19	0.01%	-	-
Depreciation and amortization expenses (E)	-	-	-	-	-	-
Profit before exceptional items, extraordinary items and tax (F=C-D-E)	587.44	5.03%	40.51	2.20%	18.89	99.47%
Exceptional Items	4.31	0.04%	-	-	-	-
CSR	4.31	0.04%	-	-	-	-
Profit before tax (F=C-D-E)	583.13	4.99%	40.51	2.20%	18.89	99.47%
Tax Expenses
- Current Tax	165.84	1.42%	10.41	0.57%	4.91	25.86%
- Short/(Excess) Provision of Earlier Year	-	-	-	-	-	-
- Deferred Tax	-	-	-	-	-	-
Tax Expense For The Year (G)	165.84	1.42%	10.41	0.57%	4.91	25.86%
Profit after tax (H=F-G)	417.29	3.57%	30.10	1.63%	13.98	73.62%
Minority Interest	23.18	-	10.43	-	-0.22	-
Restated profit after tax from Continuing Operations (H=F-G)	440.47	3.77%	40.53	2.20%	13.75	72.41%

COMPARISON OF FY 2021-22 WITH FY 2020-21

Income

Total Revenue: Our total revenue increased by Rs.9,846.69 lakhs or 534.45% to Rs.11,689.10 Lakh for the financial year 2021-22 from Rs.1,842.41 Lakh for the financial year 2020-21 due to the factors described below:

Revenue from operations

Our revenue from operations is Rs.11,373.97 Lakhs for the financial year 2021-22 as compared to Rs.1,840.26 Lakhs for the financial year 2020-21 representing an incline of 518.06% on account of incline in sales due to rapid recovery from the pandemic.

Other Income

Our Other Income is Rs.315.13 Lakhs for the financial year 2021-22 as compared to Rs.2.15 Lakhs for the financial year 2020-21 representing an increase of 14,557.21% on account of increase in Plot Rent, Handling and Distribution Charges, Commission on Sales, Sundry Balance Written Off, Miscellaneous Income which was partially set off with decrease in Interest on Fixed Deposit and Interest on Delayed Payment.

Expenses

Our total expenses excluding finance cost, depreciation and tax expenses is Rs.11,101.58 Lakhs for the financial year 202122 as compared to Rs.1,801.71 Lakhs for the financial year 2020-21 representing an increase of 516.17% due to the factors described below: -

Purchase of Stock in Trade

Our Purchase of Stock in Trade is Rs.11,103.65 Lakhs for the financial year 2021-22 as compared to Rs.1,876.66 Lakhs for the financial year 2020-21 representing an increase of 491.67% due to increase in our scale of operations.

Changes in Inventories

Our changes in inventories is Rs.(110.15) Lakhs for the financial year 2021-22 which is 39.41% more than the changes in inventories for the financial year 2020-21 of Rs.(79.01) Lakhs.

Employee benefits expenses

Our employee benefit expenses is Rs.25.59 Lakhs for the financial year 2021-22 where there was no Employee Benefits Expenses for the financial year 2020-21.

Finance costs

Our finance cost is Rs.0.09 Lakhs for the financial year 2021-22 as compared to Rs.0.19 Lakhs for the financial year 202021 representing a decrease of 52.63% on account of decrease in Interest on Overdraft Fund and Bank Charges.

Depreciation and amortization expense

There is no Depreciation for the financial year 2021-22 as well as for the financial year 2020-21.

Other expenses

Our other expenses increased by 1,931.77% to Rs.82.49 Lakhs for the financial year 2021-22 from Rs.4.06 Lakhs for the financial year 2020-21, which is 0.71% and 0.22% of the total revenue of respective years. The increase was mainly due to increase in Audit Fees & Legal Fees, Plot Rent, GST Expenses, Interest and Penalties on Statutory Dues, Office Expenses, Commission and Brokerage on Coal, Marketing and Promotion Expenses, Bad Debts, Advertisement Expenses, Domain Registration Charges, Misc. Expenses which partially set off with decrease in Tours and Travelling Expenses and ROC Expenses.

Exceptional Items

As per The Companies Act, 2013 our company attracts the provision of CSR, and for that purpose we have created a CSR provision in our books, which is of Rs.4.31 Lakhs.

Profit before tax

Our profit before tax increased by 1,339.47% to Rs.583.13 Lakhs for the financial year 2021-22 from Rs. 40.51 Lakhs for the financial year 2020-21. The increase was mainly due to the factors described above.

Tax expenses

Our tax expenses for the financial year 2021-22 amounted to Rs.165.84 Lakhs as against tax expenses of Rs.10.41 Lakhs for the financial year 2020-21. The net increase of Rs.155.43 Lakhs is on account of increase in Current tax.

Profit After Tax

Our profit after tax increased by 1,286.35% to Rs.417.29 Lakhs for the financial year 2021-22 from Rs.30.10 Lakhs for the financial year 2020-21, reflecting a net increase of Rs.387.19 Lakhs due to aforementioned reasons.

COMPARISON OF FY 2020-21 WITH FY2019-20

Income

Total Revenue: Our total revenue increased by Rs.1823.42 lakhs or 9602.00% lakh to Rs.1842.41 Lakh for the financial year 2020-21 from Rs.18.99 Lakh for the financial year 2019-20 due to the factors described below:

Revenue from operations

Our revenue from operations is Rs.1840.26 Lakhs for the financial year 2020-21 where there was no revenue in the financial year 2020-21. The growth was due to increase and expansion of sale of goods.

Other Income

Our other income is Rs.2.15 Lakhs for the financial year 2020-21 compared to Rs.18.99 Lakhs for the financial year 2019-20 due to increase in Interest on Fixed Deposit, Interest on Delayed Payment, Plot Rent which was partially set off with Sundry Balance Written Off.

Expenses

Our total expenses excluding finance cost, depreciation and tax expenses is Rs.1801.71 Lakhs for the financial year 202021 as compared to Rs.0.10 Lakhs for the financial year 2019-20 representing an increase of 1801.61 Lakhs due to the factors described below:

Purchase of Stock in Trade

Our Purchase of Stock in Trade is Rs.1876.66 Lakhs for the financial year 2020-21 while there was no purchase of stock in trade in the financial year 2019-20.

Changes in Inventories

Our changes in inventories is Rs.79.01 Lakhs for the financial year 2020-21 where there was no changes in inventories for the financial year 2019-20.

Employee Benefits Expenses

There was no Employee Benefits Expenses in both the financial year.

Finance costs

Our finance cost is Rs.0.19 Lakhs for the financial year 2020-21 as there was no finance cost in the financial year 2019-20. The increase was due increase in Interest on Overdraft Loan and Bank Charges.

Depreciation and amortization expense

As there is no fixed assets so no depreciation or amortization expenses happened.

Other expenses

Our other expenses increased by 3960% to Rs.4.06 Lakhs for the financial year 2020-21 from Rs.0.10 Lakhs for the financial year 2019-20 which is 0.22% and 0.53% of the total revenue of respective years. The increase was mainly due to increase in Audit Fees & Legal Fees, Plot Rent, GST Expenses, Interest and Penalties on Statutory Dues, Office Expenses, Tour and Travelling Expenses, Commission and Brokerage on Coal, ROC Fees Expenses.

Profit before tax

Our profit before tax increased by 114.45% to Rs.40.51 Lakhs for the financial year 2020 -21 from Rs.18.89 Lakhs for the financial year 2019-20. The increase was mainly due to the factors described above.

Tax expenses

Our tax expenses for the financial year 2020-21 amounted to Rs.10.41 Lakhs as against tax expenses of Rs.4.91 Lakhs for the financial year 2019-20. The net increase is on account of increase in Current Tax.

Profit After Tax

Our profit after tax increased by 115.31% to Rs.30.10 Lakhs for the financial year 2020 -21 from Rs.13.98Lakhs for the financial year 2019-20, reflecting a net increase of Rs.16.12 Lakhs due to aforementioned reasons.

Cash Flows

The table below summaries our cash flows from our Restated Financial Statements for the financial years 2022, 2021 and 2020:

			(<in Lakh)
Particulars	For the year ended March 31,
	2022	2021	2020
Net cash (used in)/ generated from operating Activities	334.51	69.68	17.20
Net cash (used in)/ generated from investing Activities	(343.11)	0.13	11.79
Net cash (used in)/ generated from financing Activities	(50.70)	(9.80)	(28.99)
Net increase/ (decrease) in cash and cash Equivalents	(59.30)	60.00	(0.00)
Cash and Cash Equivalents at the beginning of the period	60.32	0.31	0.32
Cash and Cash Equivalents at the end of the Period	1.02	60.32	0.31

Operating Activities Financial year 2021-22

Our net cash generated from operating activities was Rs.334.51 Lakhs for the financial year ended on March 31, 2022. Our operating profit before working capital changes was Rs.587.48 Lakhs for the financial year 2021-22 which was primarily adjusted against increase in inventories by Rs.110.51 Lakhs, increase in trade receivables by Rs.25.68 Lakhs, increase in short term loans and advances by Rs.416.43 Lakhs, increase in other current assets by Rs.114.28 Lakhs, increase in trade payables by Rs.85.54 Lakhs, increase in other current liabilities by Rs.328.04 Lakhs.

Financial year 2020-21

Our net cash generated from operating activities was Rs.69.68 Lakhs for the financial year ended on March 31, 2021. Our operating profit before working capital changes was Rs.40.57 Lakhs for the financial year 2020-21 which was primarily adjusted against increase in inventories by Rs.79.01 Lakhs, increased in trade receivables by Rs.148.64 Lakhs, increase in short term loans and advances by Rs.168.41 Lakhs, increase in other current assets by Rs.30.43 Lakhs, increase in trade payables by Rs.62.51 Lakhs, increase in other current liabilities by Rs.393.08 Lakhs.

Financial year 2019-20

Our net cash generated from operating activities was Rs.17.20 Lakhs for the financial year ended on March 31, 2020. Our operating profit before working capital changes was Rs.18.89 Lakhs for the financial year 2019-20 which was primarily adjusted against increase in short term loans and advances by Rs.15.16 Lakhs, decrease in other current assets by Rs.3.36, increase in other current liabilities by Rs.10.10 Lakhs.

Investing Activities

Financial year 2021-22

Our net cash used in investing activities was Rs.343.11 Lakhs for the financial year 2021-22. These were on account of increase long term loans and advances of Rs.343.16 Lakhs and interest income of Rs.0.05 Lakhs.

Financial year 2020-21

Our net cash generated from investing activities was Rs.0.13 Lakhs for the financial year 2020-21. These were on account of interest income of Rs.0.13 Lakhs.

Financial year 2019-20

Our net cash generated from investing activities was Rs.11.79 Lakh for the financial year 2019-20. These were on account of Purchase of Investment of Rs.15.00 Lakhs & Decrease in Long Term loan & Advances of Rs.26.79 Lakhs.

Financing Activities

Financial year 2021-22

Net cash used in financing activities for the financial year March 31, 2022 was Rs.50.70 Lakhs which was primarily on account of IPO expense of Rs.5.00 Lakhs, Finance Cost of Rs.0.09 Lakhs and repayment of Long term borrowings by Rs.45.61 Lakhs.

Financial year 2020-21

Net cash used in financing activities for the financial year March 31, 2021 was Rs.9.80 Lakhs which was primarily on account of repayment of long-term borrowings of Rs.9.61 Lakhs and finance cost was Rs.0.19 Lakhs.

Financial year 2019-20

Net cash used in financing activities for the financial year March 31, 2020 was Rs.28.99 Lakhs which was primarily on account of repayment of long-term borrowings of Rs.28.99 lakhs.

Other Key Ratios

The table below summaries key ratios in our Audited Restated Consolidated Financial Statements for the Financial Years ended on March 31, 2022, 2021 and 2020:

Particulars	For the year ended March 31,
	2022	2021	2020
Fixed Asset Turnover Ratio	-	-	-
Current Ratio	1.05	1.04	0.97
Debt Equity Ratio	-	0.12	0.17
Inventory Turnover Ratio	81.99	45.50	-

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 total turnover based on Financial Statements as restated.

Financial Indebtedness

As on March 31, 2022, the total outstanding borrowings of our Company is NIL. For further details, refer to the chapter titled "Statement of Financial Indebtedness" beginning on page 158 of this Draft Prospectus.

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" beginning on page 145 of this Draft 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 145 of this Draft 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 145 of this Draft 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 Draft 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 is primarily engaged in the business of trading of minerals, mainly trading of coal.

Relevant industry data, as available, has been included in the chapter titled "Our Industry" beginning on page 88 of this Draft Prospectus.

Any significant dependence on a single or few suppliers or customers

The % of Contribution of our Companys customer and supplier vis-a-vis the revenue from operations and expenses respectively as on March 31, 2022 is as follows:

Particulars	Customers	Suppliers
Top 5 (%)	67.62	44.33
Top 10 (%)	96.66	46.76

Competitive Conditions

We have competition with Indian and international financial service providing companies and our results of operations could be affected by competition in the financial services 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 Draft 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 Draft Prospectus.

Status of any Publicly Announced New Business Segments

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