Sathlokhar Synergys E&C Global Ltd Management Discussions

You should read the following discussion and analysis of financial condition and results of operations together with our financial statements included in this Draft Red Herring Prospectus. The following discussion relates to our Company and is based on our restated financial statements. Our financial statements have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be "Forward looking statement" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws and other Statutes and incidental factors.

BUSINESS OVERVIEW

Our Company was originally incorporated as ‘Lohats Ventures Private Limited a private limited company under the Companies Act, 1956 at Chennai, Tamil Nadu, pursuant to a certificate of incorporation dated September, 13, 2013, issued by the Registrar of Companies, Tamil Nadu, Chennai, Andaman and Nicobar Islands ("RoC"). Thereafter, name of our Company was changed from ‘Lohats Ventures Private Limited to ‘Sathlokhar Synergys Private Limited, consequent to name change, pursuant to a special resolution passed by the shareholders of our Company on July 10, 2014, and a fresh certificate of incorporation consequent to change of name was issued by the Registrar of Companies, Chennai on August 06, 2014. Thereafter, name of our Company was changed from

‘Sathlokhar Synergys Private Limited to ‘Sathlokhar Synergys E&C Global Private Limited, consequent to name change, pursuant to a special resolution passed by the shareholders of our Company on December 23, 2023, and a fresh certificate of incorporation consequent to change of name was issued by the Registrar of Companies, Chennai on January 09, 2024. Thereafter, name of our Company was changed from ‘Sathlokhar Synergys E&C Global Private Limited to ‘Sathlokhar Synergys E&C Global Limited, consequent to conversion of our Company from private to public company, pursuant to a special resolution passed by the shareholders of our Company on January 22, 2024 and a fresh certificate of incorporation consequent to change of name was issued by the Registrar of Companies, Chennai on February 15, 2024. Our Companys Corporate Identity Number is

U45400TN2013PLC092969.

We have consistently grown in terms of our revenues over the past years. In the recent periods our revenues from operations were 24697.37 lakhs, 8,710.91 lakhs and 5,848.68 lakhs in F.Y. 2023-24, F.Y. 2022-23 and F.Y. 2021-22 respectively. Our Net Profit after tax for the above-mentioned periods were 2,621.43 lakhs, 545.55 lakhs and 87.87 lakhs respectively.

Factors contributing to the growth of our Revenue:

1. For FY 2021-22 the following were the factors that contributed to growth of our revenue:

Significant Surge in Revenue from Operations:

Our revenue from operations saw substantial expansion, increasing from 3244.29 Lakhs in FY 2020-21 to 5848.68 Lakhs in FY 2021-22, reflecting an impressive growth of almost 80.28%. This growth was primarily attributed to the successful realization of organic opportunities within our current product offerings, particularly attributed to the increase in contract revenue from diversified clients.

Strategic Initiatives:

As part of our growth strategy, the company focused on promoting their capabilities and successes stories with significant projects like factory building including MNC clients, aligning well with the companys growth objectives. Increased visibility and accessibility, played a pivotal role in the overall revenue surge.

2. For FY 2022-23 the following were the factors that contributed to growth of our revenue:

Steady Revenue Increase:

Our revenue from operations experienced a positive trajectory, escalating from 5,848.68 Lakhs in FY 2021-22 to 8,710.91 lakhs in FY 2022-23, marking a substantial growth of almost 48.94%. This increase was primarily a result of increase in number of contracts awarded during FY 2022-23.

Strategic Marketing:

The Company created a track record of positive testimonials and timely project delivery which clearly built trust and credibility in the market, which is crucial for winning new contracts and maintaining a competitive edge in the market.

3. For FY 2023-24 the following were the factors that contributed to growth of our revenue:

Steady Revenue Increase:

Our revenue from operations experienced a positive trajectory, escalating from 8,710.91 Lakhs in FY 2022-23 to 246,97.37 lakhs in FY 2023-24, marking a substantial growth of almost 183.50%. This noteworthy increase was primarily a result of strategic expansions in our business operations across south namely in the state of Karnataka.

Strategic expansion:

The Company expanded by taking projects in other states and this expansion significantly enhanced their market presence organically.

FINANCIAL KPIs OF THE COMPANY:

Key Financial Performance	Fiscal 2024	Fiscal 2023	Fiscal 2022
Revenue from Operations	24,697.37	8,710.91	5,848.68
Growth in revenue from operations (%)	183.52%	48.94%	80.28%
Total Income	24,732.09	8,715.66	5,851.51
EBITDA(1)	3,572.45	837.32	176.49
EBITDA Margin (%) (2)	14.44%	9.61%	3.02%
Restated profit for the period/year	2,621.43	545.55	87.87
Restated profit for the period/year Margin (%) (3)	10.61%	6.26%	1.50%
Return on Net Worth	64.68%	38.11%	9.92%
Return on Average Equity ("RoAE") (%) (4)	95.59%	47.08%	10.28%
Return on Capital Employed("RoCE")(%) (5)	87.33%	40.56%	10.87%
Debt- Equity Ratio	0.00	0.43	0.76

FACTORS AFFECTING OUR RESULT OF OPERATIONS

Except as otherwise stated in this Draft Red Herring Prospectus and the Risk Factors given in the Draft Red Herring Prospectus, the following important factors could cause actual results to differ materially from the expectations include, among others:

Regulatory Framework

We have obtained all regulatory permissions which are necessary to run our business, Further, some of the approvals are granted for fixed periods of time and need renewals, which are obtained in the course of business, however, there may be change in statutory regulations at any time which cannot be predicted by us. There can be no assurance that the change in regulations will not impact our operations in the future.

Government policies, macro-economic environment and performance of the civil infrastructure sector

Our business is substantially dependent on civil construction and infrastructure facilities in India undertaken privately or awarded by governmental authorities and other entities funded by the central and state Governments. We currently and in the future expect to derive a significant portion of our revenue from EPC and Turnkey focused infrastructure projects in India. These are primarily dependent on budgetary allocations made by central and state Governments, participation from multilateral agency sponsored developments, public bodies as well as access to private sector funding. We believe that sustained increase in budgetary allocation for and the participation of public bodies, multilateral agencies in and the development of comprehensive infrastructure policies that encourage greater private sector participation and funding will result in several infrastructure projects being launched in India.

Macroeconomic factors in India relating to the civil construction sector will have a significant impact on our prospects and results of operations. Overall economic growth in manufacturing, services and logistics sectors will lead to demand for better infrastructure facilities, which would entail demand for construction and upgradation of buildings. Other macroeconomic factors like global GDP growth, Indian foreign investment regulations, oil prices, financial stability may impact the economic environment of India and the policies of the government with respect to the infrastructure sector. A change in policy resulting from a change in government (including change in central government and/or state governments of regions where our projects are under construction) may also impact our business.

Ability of Management

Our success depends on the continued services and performance of the members of our management team and other key employees. Competition for senior management in the industry is intense, and we may not be able to retain our existing senior management or attract and retain new senior management in the future. The loss of any member of our senior management or other key personnel may adversely affect our business, results of operations and financial condition.

Market & Economic conditions

India is one of the largest economies and is growing at a rapid pace. But in this globalised economy, all the businesses face an uncertain level of volatility from unexpected global events which ranges from global pandemics to wars, to weather changes to supply chain disruption, which may change the economic dynamics and the purchasing capability of the end customers. At the time of market slowdown, the demand falls which has adverse impact on our business.

Our bidding and execution capabilities

Infrastructure projects on a public private partnership basis in India are typically awarded through a competitive bidding process. This process therefore involves pre-qualifying for bids based on the companys technical and financial strengths, and an evaluation of the nature and value of contracts executed in the past to determine a companys eligibility to bid for new projects. Further, the ability to strategically partner with other players also determines the outcome of pre-qualification and consequently the award of projects.

While evaluating our performance in contracts previously executed, our project management capabilities are also assessed. This would require continuing and improving on our project management practices which includes amongst others efficient equipment and material sourcing, good communication between the site office and head office and project planning and monitoring to suit the projects under execution. Should we opt to sub-contract any projects in the future, we would need to monitor the performance of our sub-contractors. Our ability to continue implementation of such practices as our business grows would determine our overall performance, which is likely to impact our profitability.

Availability of cost-effective funding sources

As of March 31, 2024, our total borrowings were 7.92 Lakhs. Our projects are funded to a extent by debt and any increase in interest expense may have an adverse effect on our results of operations and financial condition. In cases, significant amounts of working capital are required to finance the purchase of materials, the hiring of equipment and the performance of engineering, construction and other work on projects before payments are received from clients. In certain cases, we are contractually obligated to our clients to fund the working capital requirements of our projects. Our finance costs are dependent on various external factors, including Indian and global credit markets and, in particular, interest rate movements and adequate liquidity. We believe that we have been able to maintain relatively stable finance costs. Our ability to maintain our finance costs at optimum levels will continue to have a direct impact on our profitability, results of operations and financial condition.

Ability to effectively execute and expand our Order Book

Our Companys Order Book as of a particular date comprises the estimated revenues from the unexecuted portions of all the existing contracts. Further, our Companys Order Book as of a particular date is calculated on the basis of the aggregate contract value of our ongoing construction projects as of such date reduced by the value of work executed by us until such date, as certified by the relevant client. For the purposes of calculating the Order Book value, our Company does not take into account any escalation or change in work scope of our ongoing projects as of the relevant date, or the work conducted by us in relation to any such escalation of change in work scope of such projects until such date. The manner in which we calculate and present our Order Book is therefore not comparable to the manner in which our revenue from operations is accounted, which takes into account revenue from work relating to escalation or changes in scope of work of our projects. The manner in which we calculate and present our Companys Order Book information may vary from the manner in which such information is calculated and presented by other companies, including our competitors. The Order Book information included in this Draft Red Herring Prospectus is not audited and does not necessarily indicate our future earnings. Our Order Book should not be considered in isolation or as a substitute for performance measures.

Our Order Book and the new projects that we have bid for and will continue to bid for in the future will have an effect on the revenues we will earn in the future. Our EPC projects are relatively large sized contracts and our results of operations may vary from Fiscal to Fiscal depending on the project implementation schedule. In addition, our project implementation schedule may vary due to various factors that may be beyond our control, including availability of land from the clients and timely commencement of work. These depend on various factors such as the value of these projects, the timeline for completion and payments to be made as per the agreed timelines.

For further discussion on various factors that may affect the execution of our projects and consequently the realization of our Order Book as of a particular date, see "Risk Factors Our Order Book may not be representative of our future results and our actual income may be significantly less than the estimates reflected in our Order Book, which could adversely affect our results of operations" on page 40. Accordingly, the realization of our Order Book and the effect on our results of operations may vary significantly from reporting period to reporting period depending on the nature of such contracts, actual performance of such contracts, as well as the stage of completion of such contracts as of the relevant reporting date as it is impacted by applicable accounting principles affecting revenue and cost recognition. The value of the orders we receive and our ability to execute them in a timely manner therefore impacts our future performance. As we expand our Order Book, the modified terms of payments for new projects may necessitate higher working capital requirements and therefore impact our financial performance. Any cancellation of orders or termination of projects under construction by our customers may result in a reduction of our future revenue. Any delay in payments that are due and payable to us will affect our operations and have an impact on our cash flows. This may result in an increase in our working capital borrowings thereby affecting our business and results of operations.

Ability to execute larger capacity projects

In order to bid for higher value projects, we are required to meet certain pre-qualification criteria based on technical capability and performance, reputation for quality, safety record, financial strength and experience in, and size of previous contracts in, similar projects. In selecting contractors for major projects, customers generally limit the tender to contractors they have pre-qualified based on these criteria, although price competitiveness of the bid is one of the most important selection criterion, pre-qualification still remains key to our securing larger projects. In addition, our ability to strategically partner with other companies also determines our success in bidding for and being granted such large projects.

Operational uncertainties

Our business is subject to various operational uncertainties that may affect our results of operations. These operational uncertainties including the availability and retention of skilled manpower, could affect our ability to complete the project and/ or ensure delivery of our manufactured products on time, delays in meeting agreed milestones or ensuring commencement of operations of projects undertaken by us within the scheduled completion date. These could lead to increased financing costs, delayed payments from the client, invocation of liquidated damages or penalty clauses by the client in accordance with terms agreed with the client, and in certain circumstances, even termination of the contract. In addition, any loss of goodwill arising from our inability to meet such agreed terms or deadlines could affect our ability to pre-qualify for future projects. We are typically required to provide bank guarantees for advances as well as performance guarantees. Our projects are typically fixed-price or lump-sum contracts, and under the terms of such fixed-price or lumpsum contracts, we generally agree on a fixed price for providing engineering, procurement and construction services for part of the project that is contracted to us. For further details of the nature of project related contracts entered into by us, see "Our Business" on page 100. The actual expenditure incurred by us in connection with such contracts may, however, vary from the assumptions underlying our bid as a result of various project uncertainties, including unanticipated changes in engineering design of the project or any escalation or change in work scope of our ongoing projects, resulting in delays and increased costs. While some of these projects provide for cost escalation provisions, there is no assurance that our clients will not dispute the increased costs, which could adversely affect our results of operations and financial condition. For further details, see "Risk Factors Our actual cost in executing an EPC contract or in constructing a project may vary substantially from the assumptions underlying our bid. We may be unable to recover all or some of the additional expenses, which may have a material adverse effect on our results of operations, cash flows and financial condition." and "Risk Factors - Increases in the prices of construction materials, fuel, labour and equipment could have an adverse effect on our business, results of operations and financial condition." beginning on page 42.

Geographic locations, seasonality and weather conditions

Our business operations are dependent on the location where the project to be executed is situated, the weather conditions there which could include factors such as heavy rains, landslides, floods including during the monsoon season, each of which may restrict our ability to carry on construction activities and fully utilize our resources during the season. Our ability to transport the required manpower and machinery to location are also critical to our timely completion of the projects. During periods of curtailed activity due to adverse weather conditions, particularly unseasonal rains, we may continue to incur overhead and financing expenses, but our revenues from operations may be delayed or reduced. Weather conditions may also require us to evacuate personnel or curtail services, may result in damage to a portion of our fleet of equipment or facilities resulting in the suspension of operations, and may prevent us from delivering materials to our project sites in accordance with contract schedules or generally reduce our productivity.

Competition

We face significant competition for the award of projects from a large number of infrastructure companies who also operate in the same regional markets as us. Further, some of our competitors are larger than us, have stronger financial resources or a more experienced management team, or have stronger engineering capabilities in executing technically complex projects. Our competition depends on various factors, such as the type of project, total contract value, potential margins, complexity, location of the project and risks relating to revenue generation.

While service quality, technical ability, performance record, experience, health and safety records and the availability of skilled personnel are key factors in client decisions among competitors, price often is the deciding factor in most tender awards. Competition from other infrastructure and road development companies may impact our ability to successfully bid for projects at price levels which would generate desired returns for us.

Significant Developments after March 31, 2024 that may affect our Future Results of Operations

The directors confirm that there have been no other events or circumstances since the date of the last financial statements as disclosed in the Draft Red Herring Prospectus which materially or adversely affect or is likely to affect the business or profitability of our Company or the value of our assets, or our ability to pay liabilities within next twelve months.

SIGNIFICANT ACCOUNTING POLICY

a) Basis of preparation:

The Summary Statement of Restated Assets and Liabilities of the Company as at 31st March 2024 and 31st March, 2023 & 2022 and the related Summary Statement of Restated Profit and Loss and Cash Flows for the year ended 31st March 2024, and for the year ended 31st March 2023 & 2022 (collectively referred to as the

"Restated summary of Financial Information) have been prepared specifically for the purpose of inclusion in the offer document to be filed by the Company in connection with the proposed Initial Public Offering (hereinafter referred to as ‘IPO). The Restated Summary of Financial Information has been prepared by applying necessary adjustments to the financial statements (‘financial statements) of the Company. The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable and Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) regulations 2018, as amended (the "Regulations"). The financial statements have been prepared on accrual basis under the historical cost convention. The Accounting Policies adopted in the preparation of the Financial Statements are consistent with those followed in the previous year.

b) Use of estimates:

The preparation of the financial statements in conformity with Generally Accepted Accounting Principles requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and the reported amounts of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, income taxes, post - sales customer support and the useful lives of Property Plant and Equipments and intangible assets.

c) Revenue Recognition:

Contract receipts have been recognised as per AS-7. Revenue from EPC services, where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration is recognized. When it is probable that the total contract cost will exceed the total contract revenue, the company recognises the estimated loss. Revenue in respect of Contracts is recognised as and when progressive bills are raised based on customers measurement acceptance and terms of the Contract, taking into consideration technical estimate revision, costs to complete and stages of completion. Profits are recognised after charging corresponding proportionate costs relating to the Contractual billings. Escalation, which in the opinion of the Management is recoverable on the contract are also recognised as and when the claims are accepted by the customers.

The following other revenues are recognized and accounted on their accrual with necessary provisions for all known liabilities and losses as per AS 9.

Interest Income: Revenue is recognized on the time proportion basis after taking into account the amount outstanding and the rate applicable.

Other Income: Other items of income and expenditure are recognized on accrual basis and as a going concern basis, and the accounting policies are consistent with the generally accepted accounting policies. d) Property, Plant and Equipment including Intangible Assets:

Property Plant and Equipments are stated at cost, less accumulated depreciation. Cost includes cost of acquisition including material cost, freight, installation cost, duties and taxes, and other incidental expenses, incurred up to the installation stage, related to such acquisition.

e) Depreciation & Amortisation:

The Company has provided depreciation under the written down method as per the estimated useful lives as specified in Schedule II of the Companies Act 2013. Depreciation on new assets acquired during the year is provided from the date of acquisition to the end of the financial year. In respect of the assets sold during the year, depreciation is provided from the beginning of the year till the date of its disposal. Residual values of assets are measured at not more than 5% of their original cost.

Individual low-cost assets (acquired for less than 5000) are depreciated within a year of acquisition.

Estimated Useful life of Property, Plant and Equipments:

Category	Schedule - II Part C	Useful life
Computer & Accessories	XII (ii)	3 years
Furniture & Fittings	V (i)	10 years
Office Equipments	XI	5 years
Electrical Equipments	XIV	10 years
Plant & Machinery - General	IV (i) (a)	15 Years
Vehicles - General	VI (3)	8 years
Building	I (a)	60 years

f) Employee Benefits:

Short-term employee Benefits:

Benefits such as salaries, wages and performance incentives are charged to the statement of profit and loss at the actual amounts due in the period in which the employee renders the related service. However, the Company has not adopted any policy for payment of Bonus and thus no amount has been charged to proft and loss account or provisioned in the balance sheet.

Post-Employment Benefits: Defined Benefit Plan: Defined Contribution Plans:

Payments made to defined contribution plans such as provident and pension fund are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees.

Defined Benefit Plans:

Gratuity liability is a defined benefit obligation and is unfunded. The Company accounts for liability for future gratuity benefits based on the actuarial valuation using Projected Unit Credit Method carried out as at the end of each financial year.

g) Taxes on Income:

Income Tax expense is accounted for in accordance with AS-22 "Accounting for Taxes on Income" for both Current Tax and Deferred Tax stated below:

A. Current Tax:

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

B. Deferred Tax:

Deferred tax is recognised, subject to the consideration of prudence, as the tax effect of timing difference between the taxable income and accounting income computed for the current accounting year using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carried forward losses, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

h) Provisions and Contingent Liabilities:

A provision is recognised if, as a result of past event, the Company has a present legal obligation that can be estimated reliably and it is probable that an outflow of economic benefit will be required to settle the obligation. Provisions are determined by the best estimate of outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

i) Earnings Per Share:

In determining earnings per share, the Company considers the net profit after tax attributable to equity shareholders. The number of shares used in computing basic earnings per share is the weighted average number of equity shares outstanding during the year. The number of equity shares used in computing diluted earnings per share comprises weighted average number of equity shares considered for deriving basic earnings per share and also weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

j) Current and Non-current classification:

"An asset shall be classified as current when it satisfies any of the following criteria:

(a) it is expected to be realized in, or is intended for sale or consumption in, the companys normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is expected to be realized within twelve months after the reporting date; or it is Cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

All other assets shall be classified as non-current."

"An operating cycle is the time between the acquisition of assets for processing and their realization in Cash or cash equivalents. Where the normal operating cycle cannot be identified, it is assumed to have a duration of twelve months."

"A liability shall be classified as current when it satisfies any of the following criteria: (a) it is expected to be settled in the companys normal operating cycle; (b) it is held primarily for the purpose of being traded; (c) it is due to be settled within twelve months after the reporting date; or

(d) the company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other liabilities shall be classified as non-current."

k) Cash and Cash Equivalents:

Cash and cash equivalents comprises Cash-in-hand, Current Accounts, Fixed Deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Other Bank Balances are short-term balance ( with original maturity is more than three months but less than twelve months).

l) Corporate Social Responsibility (CSR):

The applicability towards CSR has commenced from the financial year 2023-2024 onwards and the company has contributed Rs. 6,18,635/- in financial year 2023-2024.

	Amount
Particulars	(in lakhs)
(a) Amount required to be spent by the company during the year	6.19
(b) amount of expenditure incurred,	6.19
(c) shortfall at the end of the year	-
(d) total of previous years shortfall	-
(e) reason for shortfall	-
(f) nature of CSR activities	Note 1
(g) details of related party transactions, e.g., contribution to a trust controlled by the company in relation to CSR expenditure as per relevant Accounting Standard	Nil
(h) where a provision is made with respect to a liability incurred by entering into a contractual obligation, the movements in the provision during the year should be shown separately.	Nil

Note 1

The company spent Rs 4,13,635/- towards CSR through PM care fund and Rs 2,05,000/- for Empowerment of poor through education.

RESULTS OF OUR OPERATIONS

(Amount in Lakhs)

Particulars	For the year ended March 31, 2024	% of Total**	For the year ended March 31, 2023	% of Total**	For the year ended March 31, 2022	% of Total**
INCOME
Revenue from Operations	24,697.37	99.86%	8,710.91	99.95%	5,848.68	99.95%
Other Income	34.71	0.14%	4.75	0.05%	2.83	0.05%
Total Income (A)	24,732.09	100.00%	8,715.66	100.00%	5,851.51	100.00%
EXPENDITURE
Cost of Material Consumed	13,786.91	55.75%	4,890.13	56.11%	3,434.96	58.70%
Direct Expenses	6,130.56	24.79%	2,216.46	25.43%	1,626.47	27.80%
Employee benefits expense	844.41	3.41%	539.25	6.19%	439.24	7.51%
Finance costs	66.25	0.27%	107.80	1.24%	56.51	0.97%
Depreciation and amortization expense	26.18	0.11%	8.37	0.10%	6.56	0.11%
Other expenses	377.51	1.53%	222.08	2.55%	170.10	2.91%
Total Expenses (B)	21,231.82	85.85%	7,984.09	91.61%	5,733.83	97.99%
Profit before extraordinary items and tax	3,500.26	14.15%	731.57	8.39%	117.68	2.01%
Exceptional items
Profit before extraordinary items and tax	3,500.26	14.15%	731.57	8.39%	117.68	2.01%
Extraordinary items (C-D)
Profit before tax (A-B)	3,500.26	14.15%	731.57	8.39%	117.68	2.01%
Tax Expense/ (benefit)
(i) Current tax	881.16	3.56%	188.28	2.16%	32.55	0.56%
(ii) Deferred tax expenses/(credit)	(2.33)	-0.01%	(2.27)	-0.03%	(2.74)	-0.05%
Net tax expense / (benefit)	878.83	3.55%	186.02	2.13%	29.81	0.51%
Profit/(Loss) for the Period	2,621.43	10.60%	545.55	6.26%	87.87	1.50%

Components of our Profit and Loss Account Income

Our total income comprises of revenue from operations and other income.

Revenue from Operations

Our revenue from operations as a percentage of our total income was 99.86%, 99.95% and 99.95% for the Financial Years ended March 31, 2024, March 31, 2023 and March 31, 2022 respectively. ( In Lakhs)

Particulars	For the year ended March 31, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022
Sale from Service Activities
- Contract Receipts	24,697.37	8,710.91	5,848.68
Total Revenue from Operations	24,697.37	8,710.91	5,848.68

Other Income

Our Other Income primarily consists of Discount Received, Interest Income, Profit/Loss on Sale of Assets, Write Back and Round off, Refund Income etc.

( In Lakhs)

Particulars	For the year ended March 31, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022
a. Interest Income from FD	23.52	0.98	0.04
b. Other Non-operating Income:
Interest from Income Tax refund	-	3.71	0.81
Income from sale of property	7.71	-	-
Discount received	2.65	0.06	1.76
Write back and round off	0.84	-	0.21
Subtotal	11.20	3.77	2.79
Total (a+b)	34.71	4.75	2.83

Expenditure

Our total expenditure primarily consists of Direct Expenses, Employee benefit expenses, Finance costs, Depreciation & Amortization Expenses and Other Expenses.

Direct Expenses

Our direct expenses comprise of Power & Fuel Expenses, Wages & Sub Contract Payments, Machinery Rent, Professional fees-Survey and others, Transportation Charges, Site Maintenance, Site Staff Accomodation, Site Security Charges.

( In Lakhs)

Particulars	For the year ended March 31, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022
Power & Fuel Expenses	113.11	17.49	21.31
Wages & Sub Contract Payments	4,239.39	1,558.31	1,131.89
Machinery Rent	1,180.16	388.38	279.98
Professional fees-Survey and others	129.40	53.34	65.32
Transportation Charges	350.84	116.64	49.04
Site Maintenance	36.49	34.56	35.27
Site Staff Accomodation	28.69	23.82	15.31
Site Security Charges	52.47	23.93	28.35
Total of Direct Expenses	6,130.56	2,216.46	1,626.47

Employee Benefit Expenses

Our employee benefits expense comprises of Salaries & Wages, Directors Remuneration, Employers EPF and ESI contribution, Provision for Gratuity, Staff Welfare.

Finance costs

Our Finance cost expenses comprises of Bank Charges, Interest on Borrowings and Interest Expenses-Statutory.

Other Expenses

Other expenses primarily include Professional & Consulting fee, Travelling & Conveyance Expense, Advertisement Expenses, Repairs & Maintenance, Rates and Taxes and Sundry written off.

( In Lakhs)

Particulars	For the year ended March 31, 2024	For the year ended March 31, 2023	For the year ended March 31, 2022
Office Rent	3.54	5.64	4.70
Audit Fee	8.50	7.50	0.90
Printing & Stationery	9.66	3.78	2.86
Professional & Consulting fee	43.20	57.19	25.69
Travelling & Conveyance Expense	44.41	32.58	19.06
CSR Activity	6.19	-	-
Telephone & Internet Expenses	2.56	1.39	1.43
Advertisement Expenses	36.73	81.32	90.00
Repairs & Maintenance	10.01	4.49	6.14
Rates and Taxes	33.52	6.53	2.74
Postage & Courier	0.63	1.38	1.62
Insurance	8.01	1.82	3.75
Electricity	5.21	6.62	3.18
Sundry written off	147.68
Membership subscription	4.41
Miscellaneous expenses	13.24	11.82	8.03
Total Other Expenses	377.51	222.08	170.10

Provision for Tax

The provision for current taxation is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.

For the period ended March 31, 2024 Revenue from Operations

The revenue from operations of our company for financial year ended March 31, 2024 was 24,697.37 Lakhs.

Other Income

The Other Income of our company for financial year ended March 31, 2024 was 34.71 Lakhs.

Total Revenue

The Total Income of our company for financial year ended March 31, 2024 was 24,732.09 Lakhs.

Expenditure cost of material consumed

For Financial year ended March 31, 2024 our companys cost of material consumed was 13,786.91 lakhs.

Direct Expenses

For Financial year ended March 31, 2024 our companys direct expenses was 6,130.56 lakhs.

Employee Benefit Expenses

For Financial year ended March 31, 2024 our Company incurred for employee benefits expense 844.41 Lakhs.

Finance Costs

The finance costs for financial year ended March 31, 2024 was 66.25 Lakhs.

Depreciation & Amortization Expense

The depreciation and amortization expense for financial year ended March 31, 2024 was 26.18 Lakhs.

Other Expenses

For Financial year ended March 31, 2024 our other expenses were 377.51 Lakhs.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for financial year ended March 31, 2024 of 3,500.26 Lakhs.

Profit/ (Loss) after Tax

Our Company had reported a profit after tax for financial year ended March 31, 2024 was at 2,621.43 Lakhs.

Fiscal 2024 compared with fiscal 2023 Revenue from Operations

The revenue from operations of our company for fiscal year 2024 was 24697.37 lakhs against 8710.91 lakhs revenue from operations for Fiscal year 2023. An increase of 183.52% in revenue from operations. This increase was due to the addition of new customers in our customer portfolio and additional orders from our existing clientele. The improvement is also due to the business vintage, quality execution of projects, service diversification in projects, market expansion, strategic partnerships, innovation and technology, brand value, trust among the network which eventually yields the YoY result in work orders.

Other Income

The other income of our company for fiscal year 2024 was 34.71 lakhs against 4.75 lakhs other income for Fiscal year 2023. There is an increase of 631.4% in other income majorly on account of interest income from fixed deposits which are deposited as part of liquid collateral for our business loan and BG margin fixed deposits which are deposited for our projects. In the FY 22-23, the Company did not have any interest income pertaining to BG and collateral deposits hence the variance. Further, the deposit income is expected to increase in the coming year and is also recurring in nature. The other income comprises of less than 1% of the total income for the FY23-24.

Total Income

The total income of our company for fiscal year 2024 was 24732.09 lakhs against 8715.66 lakhs total income for fiscal year 2023. An increase of 183.77% in total income. This increase was due to overall increase in topline mainly due to increase in operating revenue as stated above.

Expenditure

Cost of Material Consumed

In fiscal year 2024, our cost of material consumed were 13,786.91 lakhs against 4,890.13 lakhs cost of material consumed in fiscal year 2023. An increase of 181.93%. This increase in cost of material consumed is line with the increase in revenue which predominantly consists of materials purchased for the business.

Direct Expenses

In fiscal year 2024, our direct expenses were 6,130.56 lakhs against 2,216.46 lakhs direct expenses in fiscal year 2023. An increase of 176.59%. This increase in direct expenses are line with the increase in revenue, which predominantly consists of expenses such as labour wages, power and fuel, machinery rentals, technical & professional etc which are exclusive for operational activities of the business.

Employee Benefit Expenses

In fiscal year 2024, our Company incurred for employee benefits expense 844.41 lakhs against 539.25 lakhs expenses in fiscal year 2023. An increase of 56.59%. This increase is in line with the incremental topline of the business which requires expansion of team and their expenses.

Finance Costs

The finance costs for the Fiscal year 2024 was 66.25 lakhs while it was 107.80 lakhs for Fiscal year 2023. A decrease of 38.54% was due to non-utilisation of bank limit where sufficient cash was available for the conduct of the business which in turn reduced the bank interest and overall finance cost.

Other Expenses

In fiscal year 2024, our other expenses were 377.51 lakhs and 222.08 lakhs in fiscal year 2023. An increase of 69.99% is in line with the increase in overall revenue. However, write off of certain balances during the year increased the other expenses but still managed to be efficient comparing the incremental revenue.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal year 2024 of 3500.26 lakhs against profit before tax of

731.57 lakhs in Fiscal year 2023. An increase of 378.46%. This increase in margins are inclusive of many factors such as effective procurement of materials, project management efficiency, risk management, labour productivity, technology adoption and the evolvement of such practices YoY resulted in humble and considerable profit margin. Also undertaking of projects which provide sustainable margins in the recent times can be the major factor for the margin improvement.

Profit/ (Loss) after Tax

Profit after tax for the Fiscal year 2024 was at 2621.43 lakhs against profit after tax of 545.55 lakhs in fiscal year 2023. An increase of 380.51%. The bottom line has evolved YoY continuously and mainly post covid due to the effective management of optimum resources as highlighted above.

Fiscal 2023 compared with fiscal 2022 Revenue from Operations

The revenue from operations of our company for fiscal year 2023 was 8,710.91 lakhs against 5,848.68 lakhs revenue from operations for Fiscal year 2022. An increase of 48.94% in revenue from operations. This increase was due to additional work orders from existing customers, expansion of market to West Bengal and addition of new customer base.

Other Income

The other income of our company for fiscal year 2023 was 4.75 lakhs against 2.83 lakhs other income for Fiscal year 2022. An increase of 67.84% in other income. This increase was mainly due to the income tax refund and other non-recurring income part of business.

Total Income

The total income of our company for fiscal year 2023 was 8715.66 lakhs against 5851.51 lakhs total income for fiscal year 2022. An increase of 48.95% in total income. This increase was mainly due to increase in operational revenue as discussed above in revenue from operations point.

Expenditure

Cost of Material Consumed

In fiscal year 2023, our cost of material consumed were 4,890.13 lakhs against 3,434.96 lakhs cost of material consumed in fiscal year 2022. An increase of 42.36%. This increase is in line with the revenue from operation which mainly consists of purchases of materials.

Direct Expenses

In fiscal year 2023, our direct expenses were 2,216.46 lakhs against 1,626.47 lakhs direct expenses in fiscal year 2022. An increase of 36.27% comparing fiscal FY22 was mainly due to increase in advertisement and business promotional expense and other professional charges.

Employee Benefit Expenses

In fiscal year 2023, our Company incurred for employee benefits expense 539.25 lakhs against 439.24 lakhs expenses in fiscal year 2022. An increase of 22.77% was in line with the increase in revenue due to team expansion and its inherent expense.

Finance Costs

The finance costs for the Fiscal year 2023 was 107.80 lakhs while it was 56.51 lakhs for Fiscal year 2022. An increase of 90.77% was due to increased working capital requirement during the fiscal FY23 where bank funds were utilised to meet out its requirement. The increase was mainly interest on borrowing.

Other Expenses

In fiscal year 2023, our other expenses were 222.08 lakhs and 170.10 lakhs in fiscal year 2022. An increase of 30.56% was due to increase in advertisement and business promotional expense and other professional charges.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal year 2023 of 731.57 lakhs against profit before tax of

117.68 lakhs in Fiscal year 2022. An increase of 521.65% was due to better management of resources which allowed the company to attain the sustainable margin.

Profit/ (Loss) after Tax

Profit after tax for the Fiscal year 2023 was at 545.55 lakhs against profit after tax of 87.87 lakhs in fiscal year 2022. An increase of 520.86% was due to the better project portfolio and service diversification in the operational revenue part mainly and optimum utilization of available resources and the continuous YoY improvement in overall costs.

Cash Flows

(Amount in Lakhs)

	For the year ended March 31,
Particulars	2024	2023	2022
Net Cash Flow from/(used in) Operating Activities	1,216.90	300.26	(121.06)
Net Cash Flow from/(used in) Investing Activities	(346.44)	(38.16)	(3.60)
Net Cash Flow from/(used in) Financing Activities	(628.99)	(150.46)	231.27

Cash Flows from Operating Activities

1. In F.Y. 2023-24, net cash flow from operating activities was 1,216.90 Lakhs. This comprised of the net profit before tax of 3,500.26 Lakhs, which was primarily adjusted for Finance Cost of 24.72 Lakhs, Gratuity Expenses of 19.02 Lakhs , Interest Income of 23.52 Lakhs , Sundry balance written off of 147.68 Lakhs , Profit on sale of fixed assets of 7.71 Lakhs , Depreciation and Amortisation Expense of 26.18 Lakhs . The resultant operating profit before working capital changes was 3,686.65 Lakhs , which was primarily adjusted for an increase in Inventories of 3,979.65 Lakhs , Trade Receivables of 577.35 Lakhs , Other Current Assets of 938.20 Lakhs , Trade Payables of 2356.30 Lakhs , Other Current Liabilities of 1186.05 Lakhs , and decrease in Short term Loans and Advances of 227.92 Lakhs , Long term Loans and Advances of 14.56 Lakhs .

Cash Generated from/(used in) Operations was 1,976.29 Lakhs which was reduced by direct tax paid for 759.40 Lakhs resulting into net cash flow from operating activities of 1216.90 Lakhs .

2. In F.Y. 2022-23, net cash flow from operating activities was 300.26 Lakhs . This comprised of the net profit before tax of 731.57 Lakhs , which was primarily adjusted for Finance Cost of 85.51 Lakhs , Gratuity Expenses of 9.94 Lakhs , Interest Income of 0.98 Lakhs , Depreciation and Amortisation Expense of 8.37 Lakhs . The resultant operating profit before working capital changes was 834.41 Lakhs , which was primarily adjusted for an increase in Inventories of 236.98 Lakhs , Trade Receivables of 141.09 Lakhs , Other Current Assets of 9.36 Lakhs , and decrease in Short term Loans and Advances of 294.67 Lakhs , Long term Loans and Advances of 82.95 Lakhs , Trade Payables of 235.01 Lakhs , Other Current Liabilites of 101.02 Lakhs .

Cash Generated from/(used in) Operations was 488.55 Lakhs which was reduced by direct tax paid for 188.28 Lakhs resulting into net cash flow from operating activities of 300.26 Lakhs .

3. In F.Y. 2021-22, net cash used in operating activities was (121.06) Lakhs . This comprised of the net profit before tax of 117.68 Lakhs , which was primarily adjusted for Finance Cost of 42.51 Lakhs , Gratuity Expenses of 9.93 Lakhs , Interest Income of 0.04 Lakhs , Depreciation and Amortisation Expense of 6.56 Lakhs . The resultant operating profit before working capital changes was 176.64 Lakhs , which was primarily adjusted for an increase in Inventories of 630.34 Lakhs , Trade Receivables of 166.17 Lakhs , Short term Loans and Advances of 856.15 Lakhs , Trade Payables of 887.45 Lakhs , Other Current Liabilites of 537.45 Lakhs , and decrease in Other Current Assets of 13.23 Lakhs , Long term Loans and Advances of 97.51 Lakhs .

Cash Generated from/ (used in) Operations was (135.41) Lakhs which was reduced by direct tax paid for 14.35 Lakhs resulting into net cash used in operating activities of (121.06) Lakhs .

Cash Flows from Investment Activities

1. In F.Y. 2023-24, net cash used in investing activities was (346.44) Lakhs , which primarily comprised of cash used for Purchase of property, plant & equipment and intangible assets of 363.58 Lakhs , Increase in Other Non-Current Assets of 42.87 Lakhs , proceeds from Sale including write off of fixed assets of 36.49 Lakhs , Interest Income Received of 23.52 Lakhs .

2. In F.Y. 2022-23, net cash used in investing activities was (38.16) Lakhs , which primarily comprised of cash used for Purchase of property, plant & equipment and intangible assets of 27.93 Lakhs , Increase in Other Non-Current Assets of 11.21 Lakhs , Interest Income Received of 0.98 Lakhs .

3. In F.Y. 2021-22, net cash used in investing activities was (3.60) Lakhs , which primarily comprised of cash used for Purchase of property, plant & equipment and intangible assets of 7.34 Lakhs , Increase in Other Non-Current Assets of 3.7 Lakhs , Interest Income Received of 0.04 Lakhs .

Cash Flows from Financing Activities

1. In F.Y. 2023-24, net cash used in financing activities was (628.99) Lakhs , which primarily comprised of cash used for Repayment of Short-term Borrowings of 596.25 Lakhs , Repayment of Long-term Borrowings of 8.02 Lakhs , Finance Cost Paid of 24.72 Lakhs .

2. In F.Y. 2022-23, net cash used in financing activities was (150.46) Lakhs , which primarily comprised of cash used for Repayment of Short--term Borrowings of 32.61 Lakhs , Repayment of Long-term Borrowings of 32.34 Lakhs , Finance Cost Paid of 85.51 Lakhs .

3. In F.Y. 2021-22, net cash flow used in financing activities was 231.27 Lakhs , which primarily comprised of cash used for Repayment of Long-term Borrowings of 25.79 Lakhs , Finance Cost Paid of 42.51 Lakhs , proceeds from

Proceeds of Short-term Borrowings of 299.57 Lakhs .

OTHER MATTERS

1. Unusual or infrequent events or transactions

There have been no events or transactions to the best of our knowledge which may be described as "unusual" or "infrequent".

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

Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described in the section entitled "Risk Factors" beginning on page no. 32 of the Draft Red Herring Prospectus. To our knowledge, except as we have described in the Draft Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

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

Apart from the risks as disclosed under Chapter titled "Risk Factors" beginning on page no. 32 in this Draft Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. 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

Our Companys future costs and revenues will be determined by demand/supply situation, both of the end products/services as well as the raw materials, government policies and other economic factors.

5. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or increased sales prices.

We are an integrated engineering, procurement and construction ("EPC") (design and build) & infra turnkey contracting company providing specialized services for construction of buildings and infrastructure facilities for industrial, warehousing, commercial, institutional, pharmaceutical projects, solar projects, hospitals, hotels, resorts & villas etc. Increase in revenues are by and large linked to increases in volume of business and also dependent on the price realization on our products/services.

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

We are an integrated engineering, procurement and construction ("EPC") (design and build) & infra turnkey contracting company providing specialized services for construction of buildings and infrastructure facilities for industrial, warehousing, commercial, institutional, pharmaceutical projects, solar projects, hospitals, hotels, resorts & villas etc. Relevant Industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page no. 94 of this Draft Red Herring Prospectus.

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

We are an integrated engineering, procurement and construction ("EPC") (design and build) & infra turnkey contracting company providing specialized services for construction of buildings and infrastructure facilities for industrial, warehousing, commercial, institutional, pharmaceutical projects, solar projects, hospitals, hotels, resorts & villas etc. Except as disclosed elsewhere in the Draft Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new products or business segments. Relevant Upcoming project data, as available, has been included in the chapter titled "Our Business" beginning on page no. 100 of this Draft Red Herring Prospectus.

8. The extent to which business is seasonal.

We are an integrated engineering, procurement and construction ("EPC") (design and build) & infra turnkey contracting company providing specialized services for construction of buildings and infrastructure facilities for industrial, warehousing, commercial, institutional, pharmaceutical projects, solar projects, hospitals, hotels, resorts & villas etc. Our Companys business is not seasonal in nature.

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

The percentage of contribution of our companys top ten customers vis-?-vis the total revenue from operations are 89.20%, 80.11% and 77.55% respectively for FY 2023-24, FY 2022-23 and FY 2021-22.

10. Competitive conditions:

We expect competition in our industry from existing and potential competitors to intensify. For details, please refer to the discussions of our competition in "Our Business", "Industry Overview" and "Risk Factors We operate in a competitive industry and our failure to successfully compete may adversely affect our business, financial condition and results of operations, and prospects" on pages 100, 94, 32 respectively.