Sahaj Solar Ltd Management Discussions

RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together with our restated financial information as of for the financial year ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021, all prepared in accordance with the Companies Act and Indian GAAP and restated in accordance with the SEBI ICDR Regulations, including the schedules, annexures and notes thereto and the reports thereon, included in the section titled ‘Financial Information beginning on page 217 of this Red Herring Prospectus. Unless otherwise stated, the financial information used in this section is derived from the restated financial statements of our Company.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in the sections titled ‘Forward Looking Statements and ‘Risk Factors beginning on page 23 and 34 respectively, of this Red Herring Prospectus.

These financial statements have been prepared in accordance with Indian GAAP and the Companies Act. Indian GAAP differs in certain significant respects from U.S. GAAP, IFRS and Ind AS. We have neither attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in this Red Herring Prospectus nor do we provide a reconciliation of our financial statements to those under U.S. GAAP or IFRS or Ind AS. Accordingly, the degree to which the Indian GAAP financial statements included in this Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with the Companies Act, Indian GAAP and the SEBI ICDR Regulations. Any reliance on the financial disclosure in this Red Herring Prospectus, by persons not familiar with Indian Accounting Practices, should accordingly be limited.

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

OVERVIEW OF OUR BUSINESS

Our company is a Solar Solutions providing company having experience of almost one decade in majority of the verticals of renewable power generation. We are a manufacturing as well as a service provider company which gives us an edge in the solar power market. We are engaged in three businesses of PV Module manufacturing, providing solar pumping systems and providing EPC Services.

First being PV Module manufacturing, for which our company has a PV module manufacturing plant having a capacity of 100 MWs at our plant in Bavla, Ahmedabad, Gujarat, India on a land admeasuring approximately 2,883.77 square metres; having a construction of 2445.5 square metres comprising of factory as well as office premises enabling the company to deliver quality and affordable solar panels to its customers. Our Companys automated production facility offers mono & poly crystalline PV Modules for various solar projects across India and abroad. The plant is an integrated manufacturing facility for PV modules. Apart from polycrystalline module, the facility manufactures Mono PERC (Passivated Emitter and Rear Contact) module, with not less than 21% and higher efficiency also. To enhance efficiency and brand positioning, we use Crystalline Photovoltaic Technology for manufacturing Solar PV Modules. Our plant has the capacity to manufacture customized size PV modules. Our Company has built a reputation for solar PV modules and is sold under the brand name of ‘SAHAJ. We strive to deliver reliable solar solutions through our products and we achieve this majorly through our streamlined PV module manufacturing line and comprehensive EPC solutions.

Secondly, our company is engaged in providing solar water pumping systems. A solar water pump is an application of Solar PV System which converts solar energy into electricity to run motor and pump. The motor energized by solar power delivers water out of bore well, river, lake or pond. The key components of solar water pumping system is solar panel which is manufactured by our company. The second important component of the solar water pumping system is the module mounting structure (MMS) is manufactured by Veracity Energy and Infrastructure Private Limited (one of our subsidiary company). The controller for solar water pumping system is designed by Veracity Powertronics Private Limited (one of our subsidiary company). These components comprise of more than 70% of the total system cost. The balance components of the solar water pumping system are being outsourced. As a part of the Central Governments initiative to increase farmers income, the Ministry of New and Renewable Energy (MNRE) has launched the Pradhan Mantri Kisan Urja Suraksha evem Utthan Mahabhiyan (PM KUSUM) Scheme for farmers for installation of solar pumps and grid connected solar and other renewable power plants in the country. Through this scheme, more than 20 lakh farmers (MNRE PM KUSUM scheme) will benefit with standalone solar water pumping system which will enable them to produce crops in multiple seasons and thereby increase their incomes. The standalone solar water pump has provided the farmers with the opportunity to work independent of grid power.

Our company also designs and customizes solar mobile trolleys for the usage in rural and remote areas as and when required to produce electricity for solar water pumping, for off grid power and to run other utilities by producing electricity on the move.

Thirdly, our Company being an integrated solar energy solutions provider, also offers engineering, procurement, and construction ("EPC") services to our customers. Our EPC services include design, supply, installation, testing, commissioning and maintaining of all sizes of projects ranging from simple domestic solar installation to setting up a large scale Solar Power Plant.

Our Company adheres to accepted industry product accreditations. Our Company has obtained certifications such as MNRE registered company, ISO 9001:2015, ISO 14001:2015, ISO 45000:2018, CE 2010, IS 14286/ IEC 61215; 2005, IS/IEC 61730 1;2004, IS/IEC 61730-2;2004, IEC TS 62804-1, and IEC 61701 : 2011.

Under our company, we have three subsidiaries as follow;

1. Veracity Energy and Infrastructure Private Limited ("VEIPL") was incorporated as a Private limited company under the provisions of the Companies Act, 1956 vide Certificate of Incorporation dated on December 20, 2012. The registered office of the company is situated at Office No. 301,

Ashirvad Paras, Opp. Prahladnagar Garden, Satellite, Ahmedabad 380051. The Corporate Identification Number of the company U40106GJ2012PTC073056. VEIPL is engaged in the business of assembling and manufacturing of Solar Modules mounting structure and other structure related manufacturing activities. As on date, our Company holds 80% equity stake in VEIPL.

2. Veracity Powertronics Private Limited ("VPPL") was incorporated as a Private limited company under the provisions of the Companies Act, 1956 vide Certificate of Incorporation dated on January 01, 2013. The registered office of the company is situated at Office No. 301, Ashirvad Paras, Opp. Prahladnagar Garden, Satellite, Ahmedabad 380051. The Corporate Identification Number of the company U74140GJ2013PTC073203. VPPL is engaged in the business of assembling and trading of Solar water pump, motor and controller. As on date our Company holds 80% equity stake in VPPL.

3. Sustainable Plant Green Energies Private Limited ("SPGEPL") was incorporated as a Private limited company under the provisions of the Companies Act, 2013 vide Certificate of Incorporation dated on April 29, 2023. The registered office of the company is situated at 301- Plot No- 9, Sur No- 913 TP No 25, Aashirwad, Opp. Krashna Bunglows, Prahalad Nagar, Nr. AUDA Gardan, And Nagar Road, Vejalpur, Ahmedabad 380051. The Corporate Identification Number of the company U27104GJ2023PTC140657. SPGEPL is exploring the opportunities for hydro power projects and utilities in power plant projects. As on date our Company holds 51% equity stake in SPGEPL.

We have established a geographically diversified presence in India. Our local presence backed with our track record makes us capable of coping up the pace of this growing market. In India, we have developed a decent client base purchasing our solar PV modules, solar water pumping systems and EPC services. Also, the remote monitoring system provided by us helps the clients to monitor performance and take pre-emptive measures. Our customer base includes government projects as well as private projects.

Our key domestic customers are divided as below: -

a) Government Customers

MGVCL, DGVCL, PGVCL, GEDA, HAREDA, MEDA, Maharashtra State Electricity Distribution co. Ltd.

b) Private Customers

Mahindra Susten Private Limited, Mahindra Solarize Private Limited, Secured Meters, Eglo, Shekhani Industries, Nuvoco Cements (Lafarge Cements), Tenneco, Valeo, Rotomag, Premier Solar and Iron Mountain.

Our products and services have enabled us secure a healthy order book in coming years which shall further strengthen our market presence and growth. Our team undertakes project implementation with two aspects: Prolonged life of the equipment; and Optimum return on investment.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our financial condition and results of operations are affected by numerous factors and uncertainties, including those discussed in the section titled ‘Risk Factors beginning on page 34 of this Red Herring Prospectus. The following are certain factors that have had, and we expect will continue to have, a significant effect on our financial condition and results of operations:

Outlook and performance of Solar industry as a whole;

Strength of our Order Book;

Companys ability to successfully implement its growth expansion plan;

Our dependence on limited number of customers/suppliers/brands for a significant portion of our revenues;

Pricing pressures from the competitive business environment, including the price of raw materials like solar cells, glass, EVA sheets, back-cover, aluminum frame, Junction box, batteries and other solar equipment used in the manufacturing process;

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

Reliance on the government schemes / initiatives including but not limited to PM-KUSUM, Roof Top Solar (RTS) Programme Phase-II, PLI Scheme, etc. and alteration in such schemes, government policies and regulations;

Restrictions on the export - import imposed by the Government of India or of any other country;

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

Companys ability to successfully implement its growth expansion plan;

Access to capital, restrictive covenants under our financing arrangements and cost of financing;

Occurrence of Environmental Problems & Uninsured Losses

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies have been applied consistently to the periods presented in the Restated Financial Statements. For details of our significant accounting policies, please refer section titled ‘Financial Information beginning on page 217 of this Red Herring Prospectus.

RESULTS OF OUR OPERATIONS

Sahaj Solar Limited is a Solar Solutions providing company having experience in majority of the verticals of renewable power generation. The Company is a manufacturer as well as a service provider company having well established position in medium sized solar panel manufacturers. We are engaged in the businesses of PV Module manufacturing, solar pumping systems and EPC Services. The Company is an empaneled partner of various Government schemes and tenders and follows the best International Industry Standards and Practices.

On a macro economic outlook, the Indian solar energy market has witnessed remarkable growth in recent years. Key drivers of such growth are significant reduction in the cost of solar power technology over the past decade and solar systems becoming more flexible allowing for diverse applications beyond just electricity production. The market is also propelled by the supportive government policies, particularly the Ministry of New and Renewable Energy (MNRE) encouraging the renewable-based power generation.

The following discussion on the results of operations should be read in conjunction with the Restated Financial Statements of the Company for the financial years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021:

( in lakhs)

	2023-24		2022-23		2021-22		2020-21
Particulars	Amount	% of Total Revenue	Amount	% of Total Revenue	Amount	% of Total Revenue	Amount	% of Total Revenue
Revenue From Operations	20,117.41	99.73%	18,536.15	99.76%	6,677.00	99.23%	6,193.36	99.59%
Other Income	54.14	0.27%	44.33	0.24%	51.96	0.77%	25.42	0.41%
Total Revenue	20,171.55	100.00%	18,580.48	100.00%	6,728.96	100.00%	6,218.78	100.00%

 

	2023-24		2022-23		2021-22		2020-21
Particulars	Amount	% of Total Revenue	Amount	% of Total Revenue	Amount	% of Total Revenue	Amount	% of Total Revenue
Cost of Material Consumed	14,961.06	74.17%	16,175.39	87.06%	5,598.57	83.20%	4,853.22	78.04%
Purchase of Stock-in-trade	974.46	4.83%	-	0.00%	-	0.00%	-	0.00%
Changes in inventories of finished goods, WIP and	(673.73)	(3.34)%	350.20	1.88%	(68.51)	(1.02)%	259.45	4.17%
Stock-in-Trade
Employee Benefits Expenses	416.08	2.06%	254.62	1.37%	283.87	4.22%	281.08	4.52%
Finance Costs	417.18	2.07%	197.12	1.06%	166.95	2.48%	109.63	1.76%
Depreciation and Amortization Expense	116.44	0.58%	124.32	0.67%	132.74	1.97%	117.55	1.89%
Other Expenses	2,001.40	9.92%	622.94	3.35%	473.80	7.04%	498.40	8.01%
Total Expenses	18,212.89	90.29%	17,724.59	95.39%	6,587.42	97.90%	6,119.33	98.40%
Profit before tax	1,958.66	9.71%	855.89	4.61%	141.54	2.10%	99.45	1.60%
Tax Expense
- Current Tax	673.67	3.34%	212.60	1.14%	44.55	0.66%	37.57	0.60%
- Deferred Tax	(56.71)	(0.28)%	(5.76)	(0.03)%	(5.98)	(0.09)%	(0.11)	0.00%
- Other tax Adjustments	4.41	0.02%	0.66	0.00%	0.46	0.01%	(8.60)	(0.14)%
Profit (Loss) for the period	1,337.29	6.63%	648.39	3.49%	102.51	1.52%	70.59	1.14%

In FY 2020-21, with an average capacity utilization of 26.59 MW, the Company achieved revenue from operations of INR 6,193.36 Lakhs, with the PV Module Segment contributing ~91% of the total revenue. This was primarily with the expertise of our key management personnel, project management and operations team, we earned a Profit After Tax of INR 70.59 Lakhs.

In FY 2021-22, despite the decline in average capacity utilization to 17.21 MW, the Company achieved revenue from operations of INR 6,677.00 Lakhs, marking a nominal growth of ~8% on a Y-O-Y basis, with the PV Module Segment being the predominant contributor. However, during this period, we secured substantial orders for Solar Pumping Systems, which yield better profit margins compared to other products. The Solar Pumping System contributed to ~30% of the total revenue from operations, resulting in a nominal increase of ~0.40% in the PAT Margin in FY 2021-22 compared to FY 2020-21.

In FY 2022-23, the Company leveraged its quality, experience, and brand in the market to obtain Government Contracts. Additionally, a substantial project worth approximately INR ~120 crores, which was bid in Feb21, got delayed due to the impact of the Covid-19 Pandemic, commenced in Jan22. Government initiatives, including the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM KUSUM) scheme, have played a pivotal role in incentivizing the adoption of solar-powered water pumps. As a result, Solar Pumping Systems contributed to ~70% of the total revenue from operations, leading to a substantial growth in revenue from operations to INR 18,536.15 Lakhs, with average capacity utilization increasing to 25.04 MW. Despite an increase in the net cost of goods sold, we maintained an EBITDA margin of ~6.3%. Moreover, due to finance costs and statutory depreciation, the PAT margin improved to ~3.5% compared to historical periods.

In FY 2023-24, the Company achieved revenue of INR 20,171.55 Lakhs registering a growth of ~8.5% Y-o-Y. During the period, the average capacity utilization was of 25.39 MW. Solar Pumping Systems contributed to ~70% of the total revenue from operations. The Company was able to achieve an EBITDA Margin of ~12.3% and PAT margin of ~6.6%, doubling from the previous year.

PRINCIPAL COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS ACCOUNT Income

Our total revenue for the financial years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 amounted to 20,171.55 lakhs, 18,580.48 lakhs, 6,728.96 lakhs & 6,218.78 lakhs respectively. Our revenue comprises of:

Revenue from operations

Our revenue from operations primarily comprises revenue from domestic and export (including deemed export) sales of the PV Module Segment, Solar Pumping Systems, Solar Rooftop/ground mount, Solar street light/home light / off-grid systems, AMC, Consultancy & Customer Support Services. Our revenue from operations accounted for 99.73%, 99.76%, 99.23% and 99.59% of our total income for the financial years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 respectively. The category-wise breakup of revenue from operations is presented below:

	2023-24		2022-23		2021-22		2020-21
Particular	Amount	% of Total Revenue	Amount	% of Total Revenue	Amount	% of Total Revenue	Amount	% of Total Revenue
	R.		s.		R.		s.
Domestic
Sale of Goods & Services
PV Module Segment	5,393.92	26.81%	3,999.06	21.57%	4,387.91	65.72%	5,646.51	91.17%
Solar Pumping System	14,134.48	70.26%	13,213.74	71.29%	2,039.87	30.55%	322.33	5.20%
Solar Rooftop/ground mount segment	382.33	1.90%	452.28	2.44%	187.63	2.81%	214.97	3.47%
Solar street light/home light / off-grid systems	-	0.00%	-	0.00%	-	0.00%	-	0.00%
AMC, Consultancy & Customer Support Services	50.75	0.25%	30.77	0.17%	-	0.00%	-	0.00%
Total Domestic (A)	19,961.47	99.22%	17,695.85	95.47%	6,615.41	99.08%	6,183.81	99.85%
Export (including Deemed Exports)
Sale of Goods
PV Module Segment	60.36	0.30%	57.23	0.31%	0.11	0.00%	-	0.00%
Solar Pumping System	45.47	0.23%	-	0.00%	35.18	0.53%	-	0.00%
Solar Rooftop/ground mount segment	30.50	0.15%	-	0.00%	-	0.00%	-	0.00%
Solar street light/home light / off-grid systems	13.29	0.07%	363.69	1.96%	20.84	0.31%	-	0.00%
Miscellaneous	6.32	0.03%	-	0.00%	-	0.00%	-	0.00%
Total Export (B)	155.94	0.78%	420.92	2.27%	56.13	0.84%	-	0.00%
Other Operating Revenue (C)	-	0.00%	419.38	2.26%	5.46	0.08%	9.55	0.15%
Total (A+B+C)	20,117.41	100.00%	18,536.15	100.00%	6,677.00	100.00%	6,193.36	100.00%

Other revenue

Other revenue primarily comprises of Interest income, Gain (Net of losses) on Disposal of Investments/PPE, Foreign exchange gains and Other incomes. Our other income accounted for 0.27%, 0.24%, 0.77% and 0.41% of our total income for the financial years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 respectively.

Expenses

Our total expenses for the financial years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 amounted to 18,212.89 lakhs, 17,724.59 lakhs, 6,587.42 lakhs and 6,119.33 lakhs respectively. Our expenses primarily consist of the following:

Cost of materials consumed

Cost of materials consumed consists of the consumption of raw materials and raw materials purchased for services which amounted to 14,961.06 lakhs, 16,175.39 lakhs, 5,598.57 lakhs and 4,853.22 lakhs for financial years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 respectively accounting for 74.17%, 87.06%, 83.20% and 78.04% of the total income respectively.

Purchase of Stock-in-trade

There was a purchase of Stock-in-trade amounting to 974.46 lakhs for the financial year ended March 31, 2024 which account for 4.83% of the total income.

Changes in inventories of finished goods, WIP and Stock-in-Trade

Changes in inventories of finished goods, WIP and Stock-in-Trade which amounted to (673.73) lakhs, 350.20 lakhs, (68.51) lakhs and 259.45 lakhs for the financial years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 respectively accounting for (3.34)%, 1.88%, (1.02)% and 4.17% of the total income respectively.

Employee Benefits Expense

Employee Benefits expenses primarily consist of (i) Salaries, Wages and Bonus, (ii) Directors Remuneration, (iii) Staff welfare Expenses and (iv) Contribution to Provident Fund, Gratuity Fund Provision & Other Contributions. Employee Benefits expenses for financial years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 amounted to 416.08 lakhs, 254.62 lakhs, 283.87 lakhs and 281.08 lakhs respectively which accounted to 2.06%, 1.37%, 4.22% and 4.52% of our total income respectively.

Finance Costs

Finance cost consists of financing cost on loan, working capital facilities, other interest cost and financial charges such as bank charges totaling to 417.18 lakhs, 197.12 lakhs, 166.95 lakhs and 109.63 lakhs for the financial years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 which accounted to 2.07%, 1.06%, 2.48% and 1.76% of our total income respectively.

Depreciation and amortization

Depreciation represents depreciation on our Property, Plant and Equipment & Intangible Assets. Depreciation and amortization expenses amounted to 116.44 lakhs, 124.32 lakhs, 132.74 lakhs and 117.55 lakhs for the financial year ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 respectively which accounted to 0.58%, 0.67%, 1.97% and 1.89% of our total income respectively.

Other Expenses

Other expenses primarily include Manufacturing & Operating Costs like Consumption of Electric, Power and Fuel Charges, Freight Inward Charges, Custom Duty, Installation Expenses; Other Manufacturing & Operating Expenses; Sales & Distribution Expenses like Advertising Expenses, Sales Promotion Expenses, Transportation & Loading Expenses, Other Export Expenses, Bad Debts and Balances Written Off, Rent, Rates & Taxes; General & Administrative Expenses like Rent, Rates & Taxes, Conveyance, Tour and Travelling Expenses, Legal & Professional Expenses, Insurance, Loss on Disposal of Fixed Assets, General Administration Expenses & Corporate Social Responsibility Expenses. These Manufacturing & Operating Costs, Sales & Distribution Expenses and General & Administration expenses for the financial years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 amounted to 2,001.40 lakhs, 622.94 lakhs, 473.80 lakhs and 498.40 lakhs respectively accounted for 9.92%, 3.35%, 7.04% and 8.01% of our total income respectively.

Financial Year 2024 compared to Financial Year 2023

Total Income

Our total income increased by 8.56% from 18,580.48 lakhs in financial year ended March 31, 2023 to 20,171.55 lakhs in financial year ended March 31, 2023 primarily due to increase in revenue from operations.

Revenue from operations

Our revenue from operations increased by 8.53% from 18,536.15 lakhs in financial Year ended March 31, 2023 to 20,117.41 lakhs in financial Year ended March 31, 2024 primarily due to increase in revenue from Solar Pumping System and Solar Panels by 7.31% and 34.46% as compared to financial year ended March 31, 2022 respectively.

Other Income

Other Income increased by 22.13% from 44.33 lakhs in financial year ended March 31, 2023 to 54.14 lakhs in financial year ended March 31, 2024. Other Income primarily consists of gain on foreign exchange, Interest on advance given and Balance written-back.

Expenses

Total expenses increased by 2.75% from 17,724.59 lakhs in financial year ended March 31, 2023 to

18,212.89 lakhs in financial year ended March 31, 2024 primarily due to increase in cost of material consumed and other expenses.

Cost of materials consumed

Cost of materials consumed decreased by 7.51% from 16,175.39 lakhs in financial year ended March 31, 2023 to 14,961.06 lakhs in financial year ended March 31, 2024. As a percentage to total income, cost of material decreased to 74.17% in financial year ended March 31, 2022 from 87.06% in financial year ended March 31, 2023. Further, there has been purchase of Stock-in-trade amounting to INR 974.46 lakhs for the financial year ended March 31, 2024 accounting to 4.83% of the total income.

Changes in inventories of finished goods, WIP and Stock-in-Trade

Changes in inventories of finished goods, WIP and Stock-in-Trade increased from 350.20 lakhs in financial year ended March 31, 2023 to (673.73) lakhs in financial year ended March 31, 2024.

Employee Benefits Expense

Employee Benefits Expense increased by 63.41% from 254.62 lakhs in financial year ended March 31, 2023 to 416.08 lakhs in financial year ended March 31, 2024. As a percentage to total income, employee benefits expenses increased to 2.06% in financial year ended March 31, 2024 from 1.37% in financial year ended March 31 2023.

Finance Costs

Finance costs for the financial year ended March 31, 2024 amounted to 417.18 lakhs as compared to 197.12 lakhs in financial year ended March 31, 2023 which is an increase of 111.64% primarily on account of increase in interest on working capital facilities and other financial charges. As a percentage to total income, finance costs increased to 2.07% in financial year ended March 31, 2024 from 1.06% in financial year ended March 31, 2023.

Depreciation and amortization

Depreciation and amortisation expenses was 124.32 lakhs in financial year ended March 31, 2023 as compared to 116.44 lakhs in financial year ended March 31, 2024. As a percentage to total income, depreciation and amortisation expenses reduced to 0.58% in financial year ended March 31, 2024 from 0.67% in financial year ended March 31, 2023.

Other Expenses

Other expenses increased by 221.28% from 622.94 lakhs in financial year ended March 31, 2023 to 2,001.40 lakhs in financial year ended March 31, 2024. As a % of total income, other expense accounts for 9.92% for the financial year ended March 31, 2024 compared to 3.35% for the financial year ended March 31, 2023. This increase on Y-o-Y basis is primarily on account of increase in Manufacturing & Operating Cost like Custom Duty, Installation Expenses and Other Manufacturing & Operating Expenses. The expenses related to Custom Duty increased by 131.22% from 145.57 lakhs in financial year ended March 31, 2023 to 336.60 lakhs in financial year ended March 31, 2024. Installation Expenses increased from 40.97 lakhs in financial Year ended March 31, 2023 to 168.70 lakhs in financial year ended March 31, 2024. Other Manufacturing & Operating Expenses increased by 141.55% from 156.62 lakhs in financial Year ended March 31, 2023 to 378.31 lakhs in financial year ended March 31, 2024. Further, the Company has incurred an expense of 395.97 lakhs for the sales and promotion and expense of 199.66 lakhs for the legal and professional fees in the financial year ended on March 31, 2024.

Financial Year 2023 compared to Financial Year 2022

Total Income

Our total income increased by 176.13% from 6,728.96 lakhs in financial year ended March 31, 2022 to 18,580.48 lakhs in financial year ended March 31, 2023 primarily due to increase in revenue from operations.

Revenue from operations

Our revenue from operations increased by 177.61% from 6,677.00 lakhs in financial year ended March 31, 2022 to 18,536.15 lakhs in financial year ended March 31, 2023 primarily due to increase in revenue from domestic sales of Solar Pumping System, Solar Rooftop/ground mount and export sales of Solar street light / home light / off grid systems by 536.79%, 141.05% and 1645.15% as compared to financial year ended March 31, 2022 respectively.

Other Income

Other Income decreased by 14.68% from 51.96 lakhs in financial year ended March 31, 2022 to 44.33 lakhs in financial year ended March 31, 2023. Other Income for the financial year ended March 31, 2022 consists of non-recurring gain on disposal of investments amounting to 35.00 lakhs.

Expenses

Total expenses increased by 169.07% from 6,587.42 lakhs in financial year ended March 31, 2022 to 17,724.59 lakhs in financial year ended March 31, 2023 primarily due to increase in cost of material consumed and other expenses.

Cost of materials consumed

Cost of materials consumed increased by 188.92% from 5,598.57 lakhs in financial year ended March 31, 2022 to 16,175.39 lakhs in financial year ended March 31, 2023 primarily on account of increase in business volume. As a percentage to total income, cost of material increased to 87.06% in financial year ended March 31, 2023 from 83.20% in financial year ended March 31, 2022.

Changes in inventories of finished goods, WIP and Stock-in-Trade

Changes in inventories of finished goods, WIP and Stock-in-Trade increased from (68.51) lakhs in financial year ended March 31, 2022 to 350.20 lakhs in financial year ended March 31, 2023.

Employee Benefits Expense

Employee Benefits Expense decreased by 10.30% from 283.87 lakhs in financial year ended March 31, 2022 to 254.62 lakhs in financial year ended March 31, 2023. As a percentage to total income, employee benefits expenses decreased to 1.37% in financial year ended March 31, 2023 from 4.22% in financial year ended March 31 2022.

Finance Costs

Finance costs for the financial year ended March 31, 2023 amounted to 197.12 lakhs as compared to

166.95 lakhs in financial year ended March 31, 2022 which is an increase of 18.07% primarily on account of increase in working capital loans and short term borrowings. However, as a percentage to total income, finance costs decreased to 1.06% in financial year ended March 31, 2023 from 2.48% in financial year ended March 31, 2022.

Depreciation and amortization

Depreciation and amortisation expenses was 132.74 lakhs in financial year ended March 31, 2022 as compared to 124.32 lakhs in financial year ended March 31, 2023. As a percentage to total income, depreciation and amortisation expenses reduced to 0.67% in financial year ended March 31, 2023 from 1.97% in financial year ended March 31, 2022.

Other Expenses

Other expenses increased by 31.48% from 473.80 lakhs in financial year ended March 31, 2022 to 622.94 lakhs in financial year ended March 31, 2023. However, as a % of total income, other expense accounts for 3.35% for the financial year ended March 31, 2023 compared to 7.04% for the financial year ended March 31, 2022. This increase on Y-o-Y basis is primarily on account of increase in Manufacturing & Operating Cost like Custom Duty, Installation Expenses and Other Manufacturing & Operating Expenses. The expenses related to Custom Duty increased by 151.73% from 57.83 lakhs in financial year ended March 31, 2022 to 145.57 lakhs in financial year ended March 31, 2023. Installation Expenses increased from 1.47 lakhs in financial Year ended March 31, 2022 to 40.97 lakhs in financial year ended March 31, 2023. Other Manufacturing & Operating Expenses increased by 56.43% from 100.12 lakhs in financial Year ended March 31, 2022 to 156.62 lakhs in financial year ended March 31, 2023.

Financial Year 2022 compared to Financial Year 2021

Total Income

Our total income increased a normal growth of 8.20% from 6,218.78 lakhs in financial year ended March 31, 2021 to 6,728.96 lakhs in financial year ended March 31, 2022 primarily due to an increase in revenue from operations.

Revenue from operations

Our revenue from operations increased by 7.81% from 6,193.36 lakhs in financial year ended March 31, 2021 to 6,677.00 lakhs in financial year ended March 31, 2022 primarily due to increase in revenue from domestic sales of Solar Pumping System by 543.77% from financial Year ended March 31, 2021.

Other Income

Other Income increased by 104.41% from 25.42 lakhs in financial year ended March 31, 2021 to 51.96 lakhs in financial year ended March 31, 2022, primarily due to non-recurring gain on disposal of investments amounting to 35.00 lakhs in in financial year ended March 31, 2022.

Expenses

Total expenses increased by 7.65% from 6,119.33 lakhs in financial year ended March 31, 2021 to 6,587.42 lakhs in financial year ended March 31, 2022 primarily due to increase in cost of material consumed in financial year ended March 31, 2022.

Cost of materials consumed

Cost of materials consumed increased by 15.36% from 4,853.22 lakhs in financial year ended March 31, 2021 to 5,598.57 lakhs in financial year ended March 31, 2022. As a percentage to total income, cost of material consumed increased to 83.20% in financial year ended March 31, 2022 from 78.04% in financial year ended March 31, 2021.

Changes in inventories of finished goods, WIP and Stock-in-Trade

Changes in inventories of finished goods, WIP and Stock-in-Trade was 259.45 lakhs in financial year ended March 31, 2021 and (68.51) lakhs in financial year ended March 31, 2022.

Employee Benefits Expense

Our Employee Benefits Expense increased by 0.99% from 281.08 lakhs in financial year ended March 31, 2021 to 283.87 lakhs in financial year ended March 31, 2022. As a percentage to total income, employee benefits expenses reduced to 4.22% in the financial year ended March 31, 2022 from 4.52% in financial year ended March 31, 2021.

Finance Costs

Financial costs for the financial year ended March 31, 2022 amounted to 166.95 lakhs as compared to 109.63 lakhs in financial year ended March 31, 2021 which is an increase of 52.28% primarily on account of increase in loans and other financial charges. As a percentage to total income, finance costs increased to 2.48% in the financial year ended March 31, 2022 from 1.76% in financial year ended March 31, 2021.

Depreciation and amortization

Depreciation and amortisation expenses was 117.55 lakhs in financial year ended March 31, 2021 compared to 132.74 lakhs in financial year ended March 31, 2022. As a percentage to total income, depreciation and amortisation expenses increased to 1.97% in the financial year ended March 31, 2022 from 1.89% in financial year ended March 31, 2021.

Other Expenses

Other expenses reduced by 4.94% from 498.40 lakhs in financial year ended March 31, 2021 to 473.80 lakhs in financial year ended March 31, 2022. However, as a % of total income, other expense accounts for 7.04% for the financial year ended March 31, 2022 compared to 8.01% for the financial year ended March 31, 2021. This decrease is primarily on account of decrease in Manufacturing & Operating Cost like Consumption of Electric, Power and Fuel and Other Manufacturing & Operating Expenses. The expenses related to Consumption of Electric, Power and Fuel decreased by 33.01% from

40.23 lakhs in the financial year ended March 31, 2021 to 26.95 lakhs in the financial year ended March 31, 2022. Other Manufacturing & Operating Expenses decreased by 49.82% from 199.53 lakhs in the financial year ended March 31, 2021 to 100.12 lakhs in the financial year ended March 31, 2022.

CASH FLOWS

The following table sets forth our cash flows for the period indicated:

( in Lakhs)

	March	March	March	March
Particulars	31, 2024	31, 2023	31, 2022	31, 2021
Net cash flow from/ (used in) operating activities	(3,476.51)	955.13	(166.50)	402.79
Net cash flow from/ (used in) investing activities	(33.71)	(86.95)	16.39	(257.68)
Net cash flow from/ (used in) financing activities	4,426.64	(738.29)	65.35	(184.15)
Net increase/(decrease) in cash and cash equivalents	916.42	129.89	(84.76)	(39.04)
Opening Balance of Cash and Cash Equivalents (Restated)	251.14	106.77	193.81	224.07
Add: Fixed Deposit Classified under Cash& Cash Equivalent of Subsidiary	2.21	-	-	-
Opening Balance of Cash and Cash Equivalents	253.35	106.77	193.81	224.07
Cash and Cash Equivalents of Subsidiary Companies 1 & 2 on the date on acquisition	-	14.48	-	8.77
Cash and Cash Equivalents of Subsidiary Companies 1 at the beginning of the year	-	-	(2.28)	-
Exchange Difference of Foreign Currency Cash & Cash Equivalents	13.37	-	-	-
Closing Balance of Cash and Cash Equivalents	1,183.14	251.14	106.77	193.81

Operating Activities

Financial Year 2023-24

Our net cash used in operating activities was (3,476.51) lakhs for the financial year ended March 31, 2024. Our operating profit before changes in operating assets & liabilities was 2,242.53 lakhs which was adjusted against changes in inventories, trade receivables, short term loans & advances, other current assets, other non-current assets, trade payables, other current liabilities, short-term provisions and long-term provisions by (320.37) lakhs, (3,491.42) lakhs, (407.13) lakhs, (615.85) lakhs, (92.39) lakhs, (1,333.78) lakhs, 586.64 lakhs, 479.95 lakhs and 118.67 lakhs respectively and Income Tax Adjustments of (643.36) lakhs.

Financial Year 2022-23

Our net cash generated in operating activities was 955.13 lakhs for the financial year ended March 31, 2023. Our operating profit before changes in operating assets & liabilities was 1,164.42 lakhs which was adjusted against changes in inventories, trade receivables, short term loans & advances, other current assets, other non-current assets, trade payables, other current liabilities, short-term provisions and long-term provisions by 121.35 lakhs, (1,623.92) lakhs, 201.11 lakhs, (632.67) lakhs, (115.80) lakhs, 2,247.06 lakhs, (73.32) lakhs, 27.78 lakhs, and 5.24 lakhs respectively and Income Tax Adjustments of (366.12) lakhs.

Financial Year 2021-22

Our net cash generated in operating activities was 166.50 lakhs for the financial year ended March 31, 2022. Our operating profit before changes in operating assets & liabilities was 353.86 lakhs which was adjusted against changes in inventories, trade receivables, short term loans & advances, other current assets, other non-current assets, trade payables, other current liabilities and short-term provisions by (225.20) lakhs, (2,865.86) lakhs, 39.71 lakhs, 8.10 lakhs, (30.46) lakhs, 2,509.86 lakhs, 94.04 lakhs and (20.45) lakhs respectively and Income Tax Adjustments of (30.09) lakhs.

Financial Year 2020-21

Our net cash generated in operating activities was 402.79 lakhs for the financial year ended March 31, 2021. Our operating profit before changes in operating assets & liabilities was 318.27 lakhs which was adjusted against changes in inventories, trade receivables, short term loans & advances, other current assets, other non-current assets, trade payables, other current liabilities and short-term provisions by 627.90 lakhs, (242.73) lakhs, 269.62 lakhs, 11.77 lakhs, (12.60) lakhs, (404.56) lakhs, (137.96) lakhs and (5.87) lakhs respectively and Income Tax Adjustments of (21.05) lakhs.

Investing Activities

Financial Year 2023-24

Our net cash used in investing activities was (33.71) lakhs for the financial year ended March 31, 2024. It was on account of purchase of Fixed Assets of 56.38 lakhs and other non-operative receipts of 22.67 lakhs.

Financial Year 2022-23

Our net cash generated in investing activities was 86.95 lakhs for the financial year ended March 31, 2023. It was on account of investment in net fixed assets purchased of 23.57 lakhs, purchase of Current & Non-Current Investments of 70.23 lakhs and Interest Received/ Other Non-Operative Receipts of

6.85 lakhs.

Financial Year 2021-22

Our net cash generated in investing activities was 16.39 for the financial year ended March 31, 2022. It was on account of on purchase of fixed assets of 90.61 lakhs, Non-Current Investments of 67.20 lakhs and Interest Received/ Other Non-Operative Receipts of 39.80 lakhs.

Financial Year 2020-21

Our net cash generated in investing activities was 257.68 lakhs for the financial year ended March 31, 2021. It was on account of purchase of Purchase of Fixed Assets of 234.40 lakhs, Investment in Current & Non-Current Investments of 32.20 lakhs and Interest Received/ Other Non-Operative Receipts of 8.92 lakhs.

Financing Activities

Financial Year 2023-24

Net cash used in financing activities for the financial year ended March 31, 2024 was 4,426.64 lakhs which was on account of decrease in short term borrowings and long term borrowings amounting to 4,437.32 lakhs and (117.55) lakhs respectively, finance cost of 249.95 lakhs, Proceeds from issue of share capital amounting to 330.22 lakhs and minority interest movement of 26.60 lakhs.

Financial Year 2022-23

Net cash used in financing activities for the financial year ended March 31, 2023 was 738.29 lakhs which was on account of decrease in short term borrowings and long term borrowings amounting to 141.08 lakhs and 400.09 lakhs respectively and finance cost of 197.12 lakhs.

Financial Year 2021-22

Net cash generated from financing activities for the financial year ended March 31, 2022 was 65.35 lakhs which was on account of increase in short term borrowings and long term borrowings amounting to 109.56 lakhs and 120.20 lakhs respectively and interest cost of 164.41 lakhs.

Financial Year 2020-21

Net cash used in financing activities for the financial year ended March 31, 2021 was 184.15 lakhs which was on account of decrease in short term borrowings and long term borrowings amounting to 47.65 lakhs and 25.85 lakhs respectively and finance cost of 110.64 lakhs.

Contingent Liabilities

Following is the summary of the contingent liabilities of the Company for the period ended March 31, 2024:

Particulars	in Lakhs
Income Tax Demand	0.90
GST / Service Tax / VAT Matters under dispute	43.39
Claims against the company not acknowledged as debt (Interest Amount to Disputed MSME Dues) (Refer Note 1)	1.15
Letter of Credits & Guarantees	338.31
Performance Guarantees	1,580.09
Custom Duty related to export obligation (Refer Note 2)	108.39
Total	2,072.23

Note:

1. Claims against the company not acknowledged as debt comprises of interest amount on delayed

payment to disputed MSME Supplier. The case is pending at MSME Commissionerate, Gandhinagar for adjudication.

2. In relation to Custom Duty related to export obligation, Rs. 108.39 Lacs is the amount of duty saved in relation to which company was supposed to achieve total export obligation of $ 10,52,060 (Rs. 672.62 Lacs) against which the company has already executed exports amounting to $ 10,17,795 (Rs. 669.70 Lacs) till the date of signing of reaudited financial statements. Company is into the process of getting Export Obligation Discharge Certificates (EODC) for the licences wherein prescribed export obligation is duly achieved. For the balance export obligation, the company may or may not be required to pay duty amount along with applicable interest.

3. GST Matter dispute relates to GST Demand us 73(5) for FY 2019-20 notice received dt.19.04.24.

Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss related to adverse changes in market prices, including interest rates. In the normal course of business, we are exposed to certain market risks including interest rate risk, Liquidity risk and credit risk. We focus to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on our financial performance.

Interest rate risk

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

Liquidity risk

Liquidity risk is the risk that our Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk is managed by us through effective fund management of the groups short, medium and long-term funding and liquidity management requirements. Our Company employee prudent liquidity risk management practices by maintaining adequate reserves, banking facilities and other committed borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Credit Risk

Credit risk is the risk of financial loss to our Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from our Companys trade and other receivables, cash and cash equivalents and other bank balances. To manage this, we periodically assesses financial creditworthiness of customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts receivable. The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their respective carrying amount. However, there can be no assurance that our counterparties may not default on their obligations, which may adversely affect our business and financial condition.

Trade and other receivables from customers

Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. Our Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates.

Cash and cash equivalents

The cash and cash equivalents are held with bank with good credit ratings and financial institution counterparties with good market standing.

Material Frauds

There are no material frauds committed against our Company in the last three financials year.

Disclosure under Item (II)(C)(iv) of Part A of Schedule VI to the SEBI Regulations

A. Unusual or infrequent events or transactions including unusual trends on account of business activity, unusual items of income, change of accounting policies and discretionary reduction of expenses etc.

Except as described elsewhere in this Red Herring Prospectus, there have been no events or transactions to our knowledge which may be described as "unusual" or "infrequent".

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

Government policies governing the sector in which we operate as well as the overall growth of the Indian economy has a significant bearing on our operations. Major changes in these factors can significantly impact income from continuing operations.

There are no significant economic changes that materially affected our Companys operations or are likely to affect income except as mentioned in the section titled ‘Risk Factors beginning on page 34 of this Red Herring Prospectus.

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

Other than as described in the section titled ‘Risk Factors and ‘Managements Discussion and Analysis of Financial Conditions and Results of Operations beginning on page 34 and 225, respectively of this Red Herring Prospectus, to our knowledge there are no known trends or uncertainties that have or are expected to have a material adverse impact on our income from continuing operations.

D. Expected future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known

Other than as described in the section titled ‘Risk Factors and ‘Managements Discussion and Analysis of Financial Conditions and Results of Operations beginning on page 34 and 225, respectively of this Red Herring Prospectus, there are no known factors to our knowledge which would have a material adverse impact on the relationship between costs and income of our Company. Our Companys future costs and revenues will be determined by demand/supply situation, government policies and other economic factors.

E. 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 sales prices

For details, please see the section titled Operational Key Performance Indicators of our Company under the section ‘Basis for Offer Price on page 97 and the section titled Revenue from operations under the section ‘Principal Components of our Statement of Profit and Loss Account on page 230 of this Red Herring Prospectus.

F. Total turnover of each major industry segment in which the issuer operated

For details, please see the section titled Revenue from operations under the section ‘Principal Components of our Statement of Profit and Loss Account on page 230 of this Red Herring Prospectus.

G. Status of any publicly announced new products or business segment

Except as disclosed in this Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new products/ services or business segment.

H. The extent to which business is seasonal

Our company is a Solar Solutions providing company having experience of almost one decade in majority of the verticals of renewable power generation. We are a manufacturing as well as a service provider company which gives us an edge in the solar power market. We are engaged in three businesses of PV Module manufacturing, providing solar pumping systems and providing EPC Services. Our Companys business is not seasonal in nature.

I. Any significant dependence on a single or few suppliers or customers

Revenues from any particular customer may vary between financial reporting periods depending on the nature and term of ongoing contracts with such customer.

The table below sets forth our revenue from our top 10 customers of our Company as a percentage of our total revenue for the financial year ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 are as below:

( in lakhs)

	March 31, 2024		March 31, 2023		March 31, 2022		March 31, 2021
Particulars	Amt.	% of Total Revenue	Amt.	% of Total Revenue	Amt.	% of Total Revenue	Amt.	% of Total Revenue
Top 10	13,600.18	67.42%	16,631.05	89.72%	5,470.13	81.93%	5,049.98	81.54%

The table set forth our supplier dependence of top 10 supplier of our Company as a percentage of our total revenue for the financial year ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 are as below:

( in lakhs)

	March 31, 2024		March 31, 2023		March 31, 2022		March 31, 2021
Particulars	Amt.	% of Total Revenue	Amt.	% of Total Revenue	Amt.	% of Total Revenue	Amt.	% of Total Revenue
Top 10	8,548.79	42.38%	13,575.53	73.06%	4,869.87	72.37%	3,107.42	49.97%

J. Competitive conditions

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

Related Party Transactions

We have entered into transactions with certain related parties, including certain former and current Directors and company secretaries, relatives of Directors, other Key Managerial Personnel of our Company, enterprises owned or influenced by such key managerial personnel, enterprises owned or significantly influenced by key managerial personnel with whom there were transactions/balance during the year, associates and subsidiary companies. In particular, we have entered into various transactions with such parties in relation to, amongst others, remuneration, professional fees, rent expense, loans, etc.

For further information relating to our related party transactions see ‘Financial Information on page 217 of this Red Herring Prospectus.

Material Developments subsequent to last Audited Balance Sheet

After the date of last Audited accounts i.e. March 31, 2024, the Directors of our Company confirm that, there have not been any significant material developments except mentioned below:

1. Our Company has approved Audited Standalone Financial Statements for the financial year ended 2023-24 in the Board Meeting held on May 11, 2024.

2. Our Company has approved Audited Consolidated Financial Statements for the financial year ended 2023-24 in the Board Meeting held on June 04, 2024.

3. Our Company has approved Restated Standalone Financial Statements for the financial year ended March 31, 2024, 2023, 2022, 2021 in the Board Meeting held on June 13, 2024.

4. Our Company has approved Restated Consolidated Financial Statements for the financial year ended March 31, 2024, 2023, 2022, 2021 in the Board Meeting held on July 01, 2024.