Sati Poly Plast Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in the Red Herring Prospectus. You should also read the section entitled "Risk Factors" beginning on page 24, which discusses several factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and is based on our restated financial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year ("Fiscal Year") are to the twelve-month period ended March 31 of that year.

The financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditors dated June 06, 2024 which is included in this Red Herring Prospectus under the section titled "Restated Financial Information" beginning on page 168 of this Red Herring Prospectus. The restated financial statements have been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. We do not provide a reconciliation of our restated financial statements to US GAAP or IFRS and we have not otherwise quantified or identified the impact of the differences between Indian GAAP and U.S. GAAP or IFRS as applied to our restated financial statements. This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those described under "Risk Factors" and "Forward Looking Statements" beginning on pages 24 and 15 respectively, and elsewhere in this Red Herring Prospectus Accordingly, the degree to which the financial statements in this Red Herring Prospectus will provide meaningful information depend entirely on such potential investors level of familiarity with Indian accounting practices. Please also refer to section titled "Presentation of Financial, Industry and Market data" beginning on page 13 of this Red Herring Prospectus.

BUSINESS OVERVIEW

Our Company was originally incorporated as ‘Sati Poly Plast Private Limited as a Private Limited Company, under the provisions of the Companies Act, 1956 vide Certificate of Incorporation dated July 14, 1999, issued by the Registrar of Companies, Bihar. Subsequently, pursuant to a special resolution passed by our Shareholders in the Extra-Ordinary General Meeting held on November 1, 2023, our Company was converted from a private limited company to public limited company and consequently, the name of our Company was changed from ‘Sati Poly Plast Private Limited to Sati Poly Plast Limited with a fresh certificate of incorporation dated December

26, 2023 issued to the Company by the Registrar of Companies-Bihar. The Corporate Identification Number of our Company is U82920BR1999PLC008904. Our Company is an ISO Certified Company engaged in the manufacturing of flexible packaging material which is multi-functional and caters to the packaging requirements of various industries. We provide end-to-end solution for various flexible packaging needs. Till year 2015, our company was engaged in the business of trading of flexible packaging material. From 2017, our Company commenced the manufacturing of flexible packaging material. Our Company has set up two manufacturing units, of which "Plant 1" is situated at C44, Phase II, Gautam Budh Nagar Noida-201305 with an installed capacity of 540 tones per month and "Plant 2" is situated at Plot No. 85 Udhyog Kendra, Noida -201306 with an installed capacity of 540 tones per month. Our Company has been consistently expanding its business operations by increasing its installed capacity from 250 tonnes per month to 400 tonnes per month in 2018 and to 500 tonnes per month in 2019. Our range of packaging solutions span a variety of products in the food and beverage category, including salty snacks, snack bars, dry fruits, confectionery and dry foods. We utilise the advanced equipment available and continually invest to maintain the quality of product, process efficiency and the superior service that we are renowned for. Our products are crafted out of an extensive range of industry approved materials such as polyethylene terephthalate, biaxially-oriented polypropylene, polythene, cast polypropylene, foil, paper, bio-degradable films, etc. Since, flexible packaging material predominantly consists of plastic as a major raw material, we aim to manufacture our products sustainably by aiming towards "Reuse, Recycle and Upcycle". One of the key ways we achieve this is by recycling the waste generated in our flexible packaging production process. This waste is processed and transformed into recycled plastic material, which we do not use in our production process due to low grade quality of recycled plastic material and therefore we sold recycled plastic material in the market for use in various applications. By doing so, we not only reduce the amount of waste sent to landfills but also contribute to the circular economy by reintroducing recycled materials into the production chain. We stringently maintain the processes and accreditation required to ensure the quality needs of the customers we supply in the food and beverages. We have also installed Automated Machine with Auto Gauge Control with minimum gauge variation specially for Edible Oil Industries. Currently we are working with Pidilite, Adani Wilmar, JVL and have also started vacuum bags for cashews. We are supplying packaging material to Pidilite, Adani Wilmar and JVL as per their usage requirements. Following is meaning, usage and requirement of vacuum bags for various nuts and pulses:

Vacuum bags are pouches or bags made from materials that can withstand vacuum sealing. They are used to package various edible products like Nuts, Pulses etc. (herein after referred to as the Products) while removing air from the package to extend the shelf life of the Products and preserve their freshness. Vacuum bags are used to package the Products for retail sale or storage. The vacuum sealing process helps to prevent oxidation and moisture absorption, which can lead to spoilage. By removing air from the package, the Products stay fresher for longer periods, maintaining their quality and flavour. Flexible packaging refers to a type of packaging material that is made from non rigid materials such as plastic, paper, or aluminum foil to create pouches, bags, and other pliable product containers. Flexible packages are particularly useful in industries that require versatile packaging, such as the food and beverage, personal care, and pharmaceutical industries. Flexible packaging offers several advantages, including its ability to conform to the shape of the product, its lightweight nature, and its ability to provide barrier properties to protect the contents from moisture, oxygen, and other external factors. Additionally, flexible packaging is often considered more sustainable compared to rigid packaging, as it typically requires fewer resources to produce and transport.

FINANCIAL SNAPSHOT

The financial performance of the company for stub period and last three years as per restated financial Statement:

Particulars		For the Year ended
	March 31, 2024	March 31, 2023	March 31, 2022
Revenue from Operations ( in Lakhs)	17,935.48	19,091.77	17,516.08
Growth in Revenue from Operations (YoY %)	-6.06%	9.00%	39.28%
Gross Profit ( in Lakhs)	3,430.29	3,439.84	2,648.95
Gross Profit Margin (%)	19.13%	18.02%	15.12%
EBITDA ( in Lakhs)	926.72	876.53	511.38
EBITDA Margin (%)	5.17%	4.59%	2.92%
Profit After Tax ( in Lakhs)	328.67	308.89	28.23
PAT Margin (%)	1.83%	1.62%	0.16%
RoE (%)	40.38%	127.02%	37.83%
RoCE (%)	20.45%	22.63%	9.21%
Net Fixed Asset Turnover (In Times)	14.08	16.57	14.47
Operating Cash Flows ( in Lakhs)	735.81	310.69	348.98

SIGNIFICANT 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;

Note:

Nil

FACTORS AFFECTING OUR FUTURE RESULTS OF OPERATIONS:

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

COVID-19 Pandemic;

Natural Calamities e.g., Tsunami

Global GDP growth and seaborne trade growth

Changes in laws or regulations

Political Stability of the Country;

Competition from existing players;

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

Any failure to comply with the financial and restrictive covenants under our financing arrangements;

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

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

Price of raw materials

Change in technology with respect to our manufacturing process

Occurrence of Environmental Problems & Uninsured Losses;

Conflicts of interest with affiliated companies, the promoter group and other related parties;

The performance of the financial markets in India and globally;

Our ability to expand our geographical area of operation;

Concentration of ownership among our Promoters.

OUR SIGNIFICANT ACCOUNTING POLICIES:

For Significant accounting policies please refer Significant Accounting Policies and Notes to accounts, under

Chapter titled "Restated Financial Information" beginning on page 168 of this Red Herring Prospectus.

PRINCIPAL COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS

The following descriptions set forth information with respect to the key components of our statement of profit and loss.

Our Income

Revenue from Operations

Our revenue from operations only consists of sale of products.

Our Company is engaged in the manufacturing of flexible packaging material which is multi-functional and caters to the packaging requirements of various industries. We provide end-to-end solution for various flexible packaging needs. Our Product range of flexible packaging material includes Roll form packaging, Pouch form packaging and Coextruded Films.

Other Income

The key components of our other income are: (i) interest income; (ii) Other Non-Operating Income

Our Expenses

Our expenses primarily consist of the following:

Cost of material consumed, consisting of Opening stock of, purchase during the year and closing stock of raw material.

Changes in inventories of Finished Goods and WIP are an adjustment of the opening and closing stock of Finished Goods and WIP at the end of the Financial year;

Employee benefits expense consists of salaries and wages, contribution to provident and other funds, Gratuity expense and Remuneration paid to Directors/KMPs;

Finance costs includes interest expense on borrowings from banks and other borrowing costs such as Processing and Renewal Charges and other finance cost;

Depreciation and amortization expense comprise of depreciation expense on property, plant and equipment; and

Other expenses primarily include Custom duty and clearing expenses, Electricity, Gas and Diesel Expenses, Freight, Rent and other miscellaneous expenses.

Our Tax Expenses

Elements of our tax expense are as follows:

Current tax: Our current tax is the amount of tax payable based on the taxable profit for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961.

Deferred tax: Deferred tax is recognized based on the difference between taxable profit and book profit due to the effect of timing differences. Our deferred tax is measured based on the applicable tax rates and tax laws that have been enacted or substantively enacted by the relevant balance sheet date.

RESULTS OF OUR OPERATION

			For the Year ended on
Particulars	March 31, 2024		March 31, 2023		March 31, 2022
	Amount in	(%) of Total	Amount in	(%) of Total	Amount in	(%) of Total
	Lakhs	Income	Lakhs	Income	Lakhs	Income
Revenue from operations	17,935.48	99.97	19,091.77	99.97	17,516.08	99.96
Other Income	5.50	0.03	4.92	0.03	6.31	0.04
Total Income (I+II)	17,940.98	100.00	19,096.69	100.00	17,522.39	100.00
Expenses:
Cost of materials consumed	14,492.76	80.78	16,123.08	84.43%	14,817.48	84.56%
Changes in inventories of Finished Goods, WIP and Traded
	12.43	0.07	(471.14)	(2.47)	49.65	0.28
Goods
Employee Benefits Expense	395.40	2.20	449.09	2.35%	451.42	2.58
Finance Costs	223.42	1.25	199.81	1.05	198.66	1.13
Depreciation and amortisation Expense	274.86	1.53	269.27	1.41	280.72	1.60
Other Expenses	2,123.90	11.84	2,132.46	11.17	1,709.35	9.76
Total expenses	17,522.77	97.67	18,702.58	97.94	17,507.28	99.91
Profit /(Loss) before tax and Exceptional Items (III-IV)	418.21	2.33	394.11	2.06	15.11	0.09
Exceptional Items	15.72	-0.09	18.25	0.10	23.20	0.13
Profit /(Loss) before tax (V-VI)	433.93	2.42	412.36	2.56	38.31	0.26
Tax expense:
(a) Current tax expense	116.00	0.65	107.69	0.56	16.50	0.09
(b) Short/(Excess) provision of tax for earlier years	-	-	-	-	-	-
(c) MAT Credit Entitlement	-	-	-	-	-	-
(d) Deferred tax charge/(credit)	(10.73)	(0.06)	(4.21)	(0.02)	(6.42)	(0.04)

 

			For the Year ended on
Particulars	March 31, 2024		March 31, 2023		March 31, 2022
	Amount in	(%) of Total	Amount in	(%) of Total	Amount in	(%) of Total
	Lakhs	Income	Lakhs	Income	Lakhs	Income
Total Tax Expenses	105.27	0.59	103.48	0.54	10.08	0.06
Profit after tax for the year (VII-VIII)	328.64	1.83	308.89	1.62	28.23	0.16

COMPARISON OF FY 2023-24 WITH FY 2022-23: REVENUE: Revenue from operations

Our Company is engaged in the manufacturing of flexible packaging material which is multi-functional and caters to the packaging requirements of various industries. We provide end-to-end solution for various flexible packaging needs. Our Product range of flexible packaging material includes Roll form packaging, Pouch form packaging and Coextruded Films. The Total Revenue from operations for the year ended on FY 2023-24 was 17,935.48 Lakhs as compared to 19,091.77 Lakhs during the FY 2021-22. Revenue from operations was decreased by 6.06% in FY 2022-23. The reason for the decrease in sales in FY 2024 is due to the reduction in cost price of raw material and due to which selling price of our finished products also decreases, resulting in slight decrease in our turnover. However, the same has not been affected to our profit margins.

Particulars of Geography-wise Bifurcation

	For the Year Ended 31st March, 2024		For the Year Ended 31st March, 2023
Particulars	Amount in Lakhs	% of Total Revenue from Operations	Amount in Lakhs	% of Total Revenue from Operations
Sale of products
Domestics Sales	17,784.15	99.16	19,035.83	99.71
Export Sales	151.33	0.84	55.94	0.29
Total	17,935.48	100.00	19,091.77	100.00

 

	For the Year Ended 31st March, 2024		For the Year Ended 31st March, 2023
Particulars	Amount in Lakhs	% of Total Revenue from Operations	Amount in Lakhs	% of Total Revenue from Operations
Andhra Pradesh	-	-	-	-
Assam	0.82	0.00	9.19	0.05
Bihar	796.67	4.44	651.85	3.41
Chhattisgarh	8.99	0.05	-	-
Dadra and Nagar Haveli and Daman
	99.72	0.56	97.39	0.51
and Diu
Delhi	3,334.60	18.59	3,808.69	19.95
Gujarat	2,232.77	12.45	644.48	3.38
Haryana	1,159.18	6.46	858.41	4.50
Himachal Pradesh	-	-	16.89	0.09
Jammu and Kashmir	61.76	0.34	62.45	0.33
Jharkhand	3.36	0.02	6.06	0.03
Karnataka	3.20	0.02	-	-
Madhya Pradesh	49.80	0.28	(2.28)	(0.01)
Maharashtra	317.54	1.77	0.86	0.00
Meghalaya	-	-	-	-
Odisha	4.27	0.02	6.13	0.03
Puducherry	36.67	0.20	36.22	0.19
Punjab	47.54	0.27	33.61	0.18
Rajasthan	902.85	5.03	1,049.77	5.50
Telangana	-	-	-	-
Uttar Pradesh	7,252.97	40.44	9,633.25	50.46
Uttarakhand	753.73	4.20	1,477.02	7.74
West Bengal	717.71	4.00	645.84	3.38
Total Domestics Sales	17,784.15	99.16	19,035.83	99.71
Export Sales	151.33	0.84	55.94	0.29

 

	For the Year Ended 31st March,		For the Year Ended 31st March, 2024 2023
Particulars	Amount in Lakhs	% of Total Revenue from Operations	Amount in Lakhs	% of Total Revenue from Operations
Total Sales	17,935.48	100.00	19,091.77	100.00

As evident from the above data, our substantial (More than 90%) revenue from operations is derived from Domestic sales and in particular State of Uttar Pradesh which contributes majority of our revenue of operations (i.e., 40.44%) in FY 2023-24. Our export revenue contributes only 0.84% of total revenue from operations in 2023-24 against 0.29% in FY 2022-23.

Other Income:

Other income of the company were 5.50 lakhs and 4.92 lakhs for FY 2023-24 and FY 2022-23 respectively. Interest income such as Interest income on Fixed Deposits and other interest income was the only constituents in Other Income for the year FY 2023-24.

EXPENDITURE:

Cost of Material Consumed

Cost of Material Consumed decreased by 10.11% from 16,123.08 lakhs In FY 2022-23 to 14,492.76 lakhs In FY 2023-24, the primary reason for such increase was increase in sales volume of overall products. Cost of Material Consumed consists of Opening of Stock and Purchase of stock during the year reduced by Closing stock at the end of the financial year. Our primary raw material consists polyester, polyethylene, polypropylene along with other raw material such as ink, granules and adhesive.

Particulars	For the Year Ended 31st March, 2024	For the Year Ended 31st March, 2023
Opening Stock	1230.7	999.10
Add: Domestic Purchases	6,895.80	9,256.80
Add: Imported Purchases	7,985.66	7,097.88
Less: Closing Stock	1,619.40	1,230.70
	14,492.76	16,123.08

Our Total purchase for the FY 2023-24 was 14,881.46 lakhs as compared to 16,354.68 lakhs showing an decrease of 9.01% in line with the revenue from operations. Out of total 14,881.46 lakhs purchased during the FY 2023-24, Domestic purchase contributed 6,895.80 lakhs amounting to 46.34% of total purchase as compared to Import purchase of 7,985.66 lakhs amounting to 53.66% of total purchase.

Change in Inventory of Finished Goods and WIP

Our opening stock of (i) Finished Goods was 193.94 lakhs as at April 1, 2023, while it was 98.00 lakhs as at April 1, 2022. Our closing stock of (i) Finished Goods was 225.62 lakhs as at March 31, 2024, while it was 193.94 lakhs as at March 31, 2023. Our opening stock of (i) Work in Progress was 673.61 lakhs as at April 1, 2023, while it was 298.41 lakhs as at April 1, 2022. Our closing stock of (i) Work in Progress was 629.50 lakhs as at March 31, 2024, while it was 673.61 lakhs as at March 31, 2023 The changes in inventories of Finished Goods and WIP increased to 12.43 lakhs in FY 2023-24 from (471.14) lakhs in FY 2022-23 primarily due to increased closing stock of WIP in FY 2023-24.

Employee Benefit Expenses

Employee Benefit expenses decreased to 395.40 lakhs for FY 2023-24 from 449.09 lakh for FY 2022-23 showing a decrease of 11.96%. Employee Benefit Expenses mainly includes Wages, Salary, Director Remuneration, Gratuity and Contribution to Provident and other funds.

Finance Cost

Finance expense were 223.42 lakhs in FY 2023-24 as against 199.81 lakhs in FY 2022-23 showing increase of 11.82%. Finance Cost mainly Includes Interest cost on borrowings and Other Borrowing cost such as Processing and renewal charges etc.

Depreciation

The Depreciation and amortization expense for FY 2023-24 was 274.86 lakhs as against 269.27 lakhs for FY 2022-23 showing a increase of 2.08%.

Other Expenses

Other Expenses decreased to 2,123.90 lakhs for FY 2023-24 from 2,132.46 lakh for FY 2022-23 showing an decrease of 0.40%. Other expenses primarily include Custom duty and clearing expenses, Electricity, Gas and Diesel Expenses, Freight, Rent and other miscellaneous expenses.

Profit before Extra-Ordinary Items and Tax

As a result of the foregoing, we recorded an increase of 418.22 lakhs in our profit before Extra-Ordinary Items and tax, which amounted to 2.33% of our total revenue from operations in FY 2023-24, as compared to 2.06% in FY 2022-23.

Exceptional Items

Exceptional items consist of 15.72 Lakhs in FY 2023-24, which occurred due to sale of fixed assets.

Tax Expenses

Our total tax expenses increased to 105.27 lakhs in FY 2023-24 from 103.48 lakhs in FY 2022-23, primarily due to an increase in current tax to 116.00 lakhs in FY 2023-24 from 107.69 lakhs in FY 2022-23. The increase in current tax was mainly on account of an increase in our restated profit before tax to 433.93 lakhs in FY 2023-24 from 412.37 lakhs in FY 2022-23.

Profit after Tax (PAT)

As a result of the foregoing, we recorded an increase of 6.40% in our profit for the period from 308.88 lakhs in the year ended on March 31, 2023 to 328.64 lakhs in the year ended on March 31, 2024. The Profit after Tax for the FY 2023-24 was 1.66% of the total revenue from operations and it was 1.62% of total revenue from operations for the FY 2022-23. The increase in Profit after Tax is mainly due to decrease in cost of material consumed as there was reduction in cost price of raw material resulting into decrease in selling price of finished product and slight decrease in our turnover. However, the same has not been affected to our profit margins.

COMPARISON OF FY 2022-23 WITH FY 2021-22: REVENUE: Revenue from operations

Our Company is engaged in the manufacturing of flexible packaging material which is multi-functional and caters to the packaging requirements of various industries. We provide end-to-end solution for various flexible packaging needs. Our Product range of flexible packaging material includes Roll form packaging, Pouch form packaging and Coextruded Films. The Total Revenue from operations for the year ended on FY 2022-23 was 19,091.77 Lakh as compared to 17,516.08 Lakh during the FY 2021-22. Revenue from operations was increased by 9.00% in FY 2022-23. Income from operation showed steady growth in FY 2022-23 in the normal course of business due to increase in sales volume of overall products.

Particulars of Geography-wise Bifurcation

	For the Year Ended 31st March, 2023		For the Year Ended 31st March, 2022
Particulars	Amount in Lakhs	% of Total Revenue from Operations	Amount in Lakhs	% of Total Revenue from Operations
Sale of products
Domestic Sales	19,035.83	99.71	17,431.79	99.52
Export Sales	55.94	0.29	84.29	0.48
Total	19,091.77	100.00	17,516.08	100.00

 

	For the Year Ended 31st March, 2023		For the Year Ended 31st March, 2022
Particulars	Amount in Lakhs	% of Total Revenue from Operations	Amount in Lakhs	% of Total Revenue from Operations
Andhra Pradesh	-	-	-	-
Assam	9.19	0.05	4.39	0.03
Bihar	651.85	3.41	676.39	3.86
Chhattisgarh	-	-	-	-
Dadra and Nagar Haveli and Daman
	97.39	0.51	110.63	0.63
and Diu
Delhi	3,808.69	19.95	2,728.31	15.58
Gujarat	644.48	3.38	3.03	0.02
Haryana	858.41	4.50	1,330.71	7.60
Himachal Pradesh	16.89	0.09	9.80	0.06
Jammu and Kashmir	62.45	0.33	39.56	0.23
Jharkhand	6.06	0.03	-	-
Karnataka	-	-	-	-
Madhya Pradesh	(2.28)	(0.01)	110.90	0.63
Maharashtra	0.86	0.00	-	-
Meghalaya	-	-	4.70	0.03
Odisha	6.13	0.03	15.19	0.09
Puducherry	36.22	0.19	40.19	0.23
Punjab	33.61	0.18	32.25	0.18
Rajasthan	1,049.77	5.50	1,178.71	6.73
Telangana	-	-	22.75	0.13
Uttar Pradesh	9,633.25	50.46	8,736.03	49.87
Uttarakhand	1,477.02	7.74	1,684.99	9.62
West Bengal	645.84	3.38	703.26	4.01
Total Domestic Sales (A)	19,035.83	99.71	17,431.79	99.52
Export Sales (B)	55.94	0.29	84.29	0.48
Total (A+B)	19,091.77	100.00	17,516.08	100.00

As evident from the above data, our substantial (More than 90%) revenue from operations is derived from Domestic sales and in particular State of Uttar Pradesh which contributes majority of our revenue of operations (i.e., 50.46%) in FY 2022-23. Our export revenue contributes 0.29% of total revenue from operations in 2022-23 against 0.48% in FY 2021-22.

Other Income:

Other income of the company were 4.92 lakhs and 6.31 lakhs for FY 2022-23 and FY 2021-22 respectively. Interest income such as Interest income on Fixed Deposits and other interest income was the only constituents in Other Income for the year FY 2022-23.

EXPENDITURE: Cost of Goods sold

Our cost of goods sold (which is the aggregate of our cost of material consumed and changes in inventories of Finished Goods and WIP) makes up a large portion of our operating expenses. During the year ended on March 31, 2023, and March

31, 2022 our cost of goods sold (purchase of stock in trade and changes in inventories of stock in trade) amounted to 15,651.94 lakhs, and 14,867.13 lakhs, respectively, which represents 81.98%, and 84.88%, of our revenue from operations for the respective periods. Our primary raw material consists polyester, polyethylene, polypropylene along with other raw material such as ink, granules and adhesive.

Cost of Material Consumed

Cost of Material Consumed increased by 8.81% from 14,817.48 lakhs In FY 2021-22 to 16,123.08 lakhs In FY 2022-23, the primary reason for such increase was increase in sales volume of overall products. Cost of Material Consumed consists of Opening of Stock and Purchase of stock during the year reduced by Closing stock at the end of the financial year.

Particulars	For the Year Ended 31st March, 2023	For the Year Ended 31st March, 2022
Opening Stock	999.10	846.25
Add: Domestic Purchases	9,256.80	10,106.21
Add: Imported Purchases	7,097.88	4,864.12
Less: Closing Stock	1,230.70	999.10
	16,123.08	14,817.48

Our Total purchase for the FY 2022-23 was 16,354.68 lakhs as compared to 14,970.33 lakhs showing an increase of 9.25% in line with the growth of our revenue from operations. Out of total 16,354.68 lakhs purchased during the FY

2022-23, Domestic purchase contributed 9,256.80 lakhs amounting to 56.60% of total purchase as compared to Import purchase of 7,097.88 lakhs amounting to 43.40% of total purchase.

Change in Inventory of Finished Goods and WIP

Our opening stock of (i) Finished Goods was 98.00 lakhs as at April 1, 2022, while it was 89.59 lakhs as at April 1, 2021. Our closing stock of (i) Finished Goods was 193.94 lakhs as at March 31, 2023, while it was 98.00 lakhs as at

March 31, 2022.

Our opening stock of (i) Work in Progress was 298.41 lakhs as at April 1, 2022, while it was 356.47 lakhs as at April 1, 2021. Our closing stock of (i) Work in Progress was 673.61 lakhs as at March 31, 2023, while it was 298.41 lakhs as at March 31, 2022

The changes in inventories of Finished Goods and WIP decreased to (471.14) lakhs in FY 2022-23 from 49.65 lakhs in FY 2021-22 primarily due to increased closing stock of WIP in FY 2022-23.

Employee Benefit Expenses

Employee Benefit expenses decreased to 449.09 lakhs for FY 2022-23 from 451.42 lakh for FY 2021-22 showing a decrease of 0.51%. Employee Benefit Expenses mainly includes Wages, Salary, Director Remuneration, Gratuity and Contribution to Provident and other funds.

Finance Cost

Finance expense were 199.81 lakhs in FY 2022-23 as against 198.66 lakhs in FY 2021-22 showing increase of 0.58%. Finance Cost mainly Includes Interest cost on borrowings and Other Borrowing cost such as Processing and renewal charges etc.

Depreciation

The Depreciation and amortization expense for FY 2022-23 was 269.27 lakhs as against 280.72 lakhs for FY 2021-22 showing a decrease of 4.08%.

Other Expenses

Other Expenses increased to 2,132.46 lakhs for FY 2022-23 from 1,709.35 lakh for FY 2021-22 showing an increase of 24.75%. Other expenses primarily include Custom duty and clearing expenses, Electricity, Gas and Diesel Expenses, Freight, Rent and other miscellaneous expenses. Primary reason for the increase is mentioned below:

Custom duty and clearing expenses amount to 925.93 lakhs contributing 43.42% of total other expenses in FY 2022-23 as compared to 34.50% in FY 2021-22. The primary reason for such increase is increase in import of purchase of raw materials. As import purchase for FY 2022-23 stands at 7,097.88 lakhs compare to 4,864.12 lakhs in FY 2021-22, showing an increase of 2,233.76 lakhs.

Electricity, Gas and Diesel Expenses amounts to 674.89 lakhs compared to 660.62 lakhs of total other expenses in

FY 2022-23 and FY 2021-22, respectively. Such expenses are in line with the sales growth our company.

Other miscellaneous expenses amount to 531.64 lakhs compared to 458.97 lakhs of total other expenses in FY 2022-23 and FY 2021-22, respectively. Such expenses mainly include freight, rent, repair and maintenance, Printing Cylinder Engraving/Service Expenses and security expenses.

Profit before Extra-Ordinary Items and Tax

As a result of the foregoing, we recorded profit before Extra-Ordinary Items and tax at 394.12 lakhs, which amounted to 2.06% of our total revenue from operations in FY 2022-23, as compared to 0.09% in FY 2021-22.

Exceptional Items

Exceptional items consist of 18.25 Lakhs in FY 2022-23, which occurred due to profit on sale of fixed assets.

Tax Expenses

Our total tax expenses increased to 103.48 lakhs in FY 2022-23 from 10.08 lakhs in FY 2021-22, primarily due to an increase in current tax to 107.69 lakhs in FY 2022-23 from 16.50 lakhs in FY 2021-22. The increase in current tax was mainly on account of an increase in our restated profit before tax to 412.37 lakhs in FY 2022-23 from 38.31 lakhs in FY 2021-22.

Profit after Tax (PAT)

As a result of the foregoing, we recorded an increase of 994.22% in our profit for the period from 28.23 lakhs in the year ended on March 31, 2022 to 308.89 lakhs in the year ended on March 31, 2023. The Profit after Tax for the FY 2022-23 was 1.62% of the total revenue from operations and it was 0.16% of total revenue from operations for the FY 2021-22. The primary reason for increase in profit after tax of the company is attributable to increase in closing stock of 673.61 Lakhs for the FY 2022-23 as compared to 298.41 Lakhs for the FY 2021-22, resulting into decrease in inventories (changes in inventories of Finished Goods, WIP and Traded Goods) of (471.14) Lakhs as compared to change in inventory of Finished Goods, WIP and Traded Goods of mere 49.65 Lakhs in the FY 2021-22, therefore the profit of 308.89 Lakhs in the year ended is majorly attributed due to change in inventory. Due to such reason, the PAT margin of the company also increased to 1.62% in FY 2023 as compared to 0.16% in FY 2022.

RELATED PARTY TRANSACTIONS

For further information please refer "Annexure 27 - Related Party Transaction" under section "Restated Financial Information" beginning from page no. 168 of this Red Herring Prospectus.

DISCUSSION ON THE STATEMENT OF CASH FLOWS

The following table sets forth certain information relating to our Companys statement of cash flows for the periods indicated:

Particulars		For the Year Ended
	March 31, 2024	March 31, 2023	March 31, 2022
Net cash flows (used in)/generated from operating activities	735.81	310.69	348.98
Net cash flows (used in)/generated from investing activities	(539.76)	(235.96)	(187.36)
Net cash flows (used in)/generated from financing activities	14.56	(76.63)	(418.87)
Net (decrease)/ increase in cash & cash equivalents	210.61	(1.89)	(257.26)
Cash and cash equivalents at the beginning of the period/ year	81.49	83.38	340.64
Cash and cash equivalents at the end of the period/ year	292.10	81.49	83.38

Operating Activities

Net cash generated from operating activities was 735.81 lakhs for FY 2023-24. Our profit before tax of 433.93 lakhs, was adjusted primarily for depreciation and amortization expense of 274.86 lakhs, finance cost of 223.42 lakhs and Interest income of (5.50) lakhs. Our changes in working capital for FY 2023-24 primarily consisted of an increase in inventories of 376.27 lakhs, other current liabilities of 148.73 lakhs, Shot-term provision of 14.05 lakhs and increase in trade receivables of 690.28 lakhs, trade payables of 1130.35 lakhs and Non-current assets by 2.00 lakhs.

Net cash generated from operating activities was 310.69 lakhs for FY 2022-23. Our profit before tax of 412.37 lakhs, was adjusted primarily for depreciation and amortization expense of 269.27 lakhs, finance cost of 199.81 lakhs and Interest income of (4.92) lakhs. Our changes in working capital for FY 2022-23 primarily consisted of an increase in inventories of 702.74 lakhs, other current liabilities of 98.54 lakhs, Shot-term provision of 88.59 lakhs and decrease in trade receivables of 208.33 lakhs, trade payables of 152.08 lakhs and Non-current assets by 2.01 lakhs.

Net cash generated from operating activities was 348.98 lakhs for FY 2021-22. Our profit before tax of 38.31 lakhs, was adjusted primarily for depreciation and amortization expense of 280.72 lakhs, finance cost of 198.66 lakhs and Interest income of (6.31) lakhs. Our changes in working capital for FY 2021-22 primarily consisted of an increase in inventories of 103.20 lakhs, trade receivables of 48.24 lakhs, Other current assets of 14.66 lakhs, trade payables of 35.27 lakhs and decrease in other current liabilities of 11.42 lakhs and Non-current assets by 5.90 lakhs.

Net cash generated from operating activities was 610.36 lakhs for FY 2020-21. Our loss before tax of 30.42 lakhs, was adjusted primarily for depreciation and amortization expense of 284.98 lakhs, finance cost of 167.54 lakhs, Prior period adjustments of (54.33) lakhs and Interest income of (5.20) lakhs. Our changes in working capital for FY 2020-21 primarily consisted of an increase in trade receivables of 44.44 lakhs, trade payables of 26.99 lakhs, other current liabilities of 201.72 lakhs, and decrease in inventories of 40.74 lakhs, Short term provisions of 2.71 lakhs, Other current assets of 4.74 lakhs and Non-current assets by 4.09 lakhs.

Investing Activities

Net cash used in investing activities was 539.76 lakhs for FY 2023-24, primarily due to 545.26 lakhs used for purchase of property, plant and equipment, net of disposal.

Net cash used in investing activities was 235.96 lakhs for FY 2022-23, primarily due to 240.88 lakhs used for purchase of property, plant and equipment, net of disposal.

Net cash used in investing activities was 187.36 lakhs for FY 2021-22, primarily due to 193.67 lakhs used for purchase of property, plant and equipment, net of disposal.

Net cash used in investing activities was 186.26 lakhs for FY 2021-20, primarily due to 191.46 lakhs used for purchase of property, plant and equipment, net of disposal.

Financing Activities

Net cash used in financing activities was 14.56 lakhs for FY 2023-24, due to increase in short term loans and advances of 124.33 lakhs, finance cost paid of 223.42 lakhs, proceeds received from securities premium of 254.80 lakhs, increase in long term loans and advances of 249.20, repayment of long term borrowings of 482.15 lakhs and proceeds received from short term borrowings of 124.33 lakhs.

Net cash used in financing activities was 76.63 lakhs for FY 2022-23, primarily due to decrease in short term loans and advances of 148.43 lakhs, finance cost paid of 199.81 lakhs and proceeds received from borrowings of 271.61 lakhs. Net cash used in financing activities was 418.87 lakhs for FY 2021-22, primarily due to increase in short term loans and advances of 18.12 lakhs, finance cost paid of 198.66 lakhs and cash outflows due to payment of borrowings of 238.33 lakhs, net of repayment of borrowings during the year.

Net cash used in financing activities was 175.33 lakhs for FY 2020-21, primarily due to decrease in short term loans and advances of 22.08 lakhs, finance cost paid of 167.54 lakhs and proceeds received from borrowings of 14.28 lakhs, net of repayment of borrowings during the year.

CAPITAL EXPENDITURE IN LAST THREE YEARS

Our net capital expenditures include expenditures on Property, Plant and Equipment. The following table sets out our net capital expenditures for the for the year ended March 31, 2024, 2023 and 2022:

Particulars		For the Year Ended
	March 31, 2024	March 31, 2023	March 31, 2022
Tangible Assets
Laptop and Computers	0.89	1.35	2.83
Plant and Machinery	1037.32	928.01	954.66
Vehicles	336.00	178.17	175.56
Furniture And Fixtures	0.23	0.27	0.33
Office Equipments	0.88	0.17	0.18
Electricity Installation	30.49	27.14	29.60
Tin shade	2.89	3.19	3.53
Sub-Total (A)	1408.70	1138.30	1166.69
Intangible Assets (B)	-	-	-
Total (A+B)	1408.70	1138.30	1166.69
INDEBTNESS

As of March 31, 2024, we had total outstanding indebtedness of 2,240.15 lakhs, which comprises of long-term borrowings amounting to 1,705.39 lakhs and short-term borrowings of 534.75 lakhs. The following table sets out our indebtedness for the year ended as on March 31,2024, 2023 and 2022.

Particulars		For the Year Ended
	March 31, 2024	March 31, 2023	March 31, 2022
Long term borrowing (excluding current maturity)	1,705.39	1,613.60	1,470.17
Short term borrowings	254.76	734.83	612.06
Current maturity of long-term borrowing	279.99	282.07	276.66
Total	2,240.15	2,630.50	2,358.89

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the course of undertaking our business, we are exposed to the following risks arising from financial instruments, which include credit risk, liquidity risk and market risk. Our primary focus is to achieve better predictability of financial markets and seek to minimize potential adverse effects on our financial performance.

Credit Risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or fail to pay amounts due causing financial loss. The potential activities where credit risks may arise include from cash and cash equivalents, security deposits or other deposits and principally from credit exposures to customers relating to outstanding receivables. The maximum credit exposure associated with financial assets is equal to the carrying amount. Our exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Credit risk is managed through credit approvals, establishing credit limits, and continuously monitoring the creditworthiness of customers to which our Company grants credit terms in the normal course of business.

Liquidity Risk

Liquidity risk is the risk that we will encounter difficulty in meeting the obligations associated with its financial liabilities that are proposed to be settled by delivering cash or other financial asset. Our financial planning has ensured, as far as possible, that there is sufficient liquidity to meet the liabilities whenever due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation. We have practiced financial diligence and syndicated adequate liquidity in all business scenarios.

Market Risk

Market risk is the risk that results in changes in market prices, such as foreign exchange rates, interest rates and equity prices, which will affect our income or the value of our holdings of financial instruments. Our operations result in us being exposed to foreign currency risk on account of trade receivables, trade payables and borrowings. The foreign currency risk may affect our income and expenses, or our financial position and cash flows. The objective of our management of foreign currency risk is to maintain this risk within acceptable parameters, while optimising returns.

EFFECT OF INFLATION

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

INFORMATION REQUIRED AS PER ITEM (11) (II) (C) (iv) OF PART A OF SCHEDULE VI TO THE SEBI REGULATIONS, 2018:

1. Unusual or infrequent events or transactions

Except as described in this Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.

There have been no other events or transactions that, to our knowledge, that 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. 24 of the Red Herring Prospectus. To our knowledge, except as we have described in the 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 sales, revenue or 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 "Significant Factors affecting our Results of Operations" and the uncertainties described in the section titled "Risk Factors" beginning from page no. 24. To our knowledge, except as discussed in this Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

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.

Other than as described in "Risk Factors", "Business Overview" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 24, 108 and 171 respectively, to our knowledge there are no known factors that may adversely affect our business prospects, results of operations and financial condition.

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.

Other than as disclosed in this section and in "Business Overview" on page 108, we have not announced and do not expect to announce in the near future any new business segments.

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

Our Company is engaged in the manufacturing of flexible packaging material which is multi-functional and caters to the packaging requirements of various industries. We provide end-to-end solution for various flexible packaging needs. Our Product range of flexible packaging material includes Roll form packaging, Pouch form packaging and Coextruded Films. Relevant Industry data, as available, has been included in the chapter titled "Industry Overview" and "Business Overview" beginning on page no. 95 and 108 respectively, of this Red Herring Prospectus.

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

Other than as disclosed in this section and in "Business Overview" on page 108, we have not announced and do not expect to announce in the near future any new business segments.

8. The extent to which business is seasonal.

Our Company is engaged in the manufacturing of flexible packaging material which is multi-functional and caters to the packaging requirements of various industries. We provide end-to-end solution for various flexible packaging needs. Our Product range of flexible packaging material includes Roll form packaging, Pouch form packaging and Coextruded Films and Business of our company is not seasonal in nature except as mentioned in Risk Factor No. 12 under chapter titled "Risk Factor" beginning from page no. 24.

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

Our Company is engaged in the manufacturing of flexible packaging material which is multi-functional and caters to the packaging requirements of various industries. We provide end-to-end solution for various flexible packaging needs. Our Product range of flexible packaging material includes Roll form packaging, Pouch form packaging and Coextruded Films. Top ten customers of our company for the year ended as on FY 2023-24, 2022-23 and FY 2022-21 is provided in below-mentioned table

Particulars		Top Customers as a percentage (%) of revenue
		As at
	FY 2023-24	FY 2022-23	FY 2021-22
Top 1 Customers	17.57%	27.96%	22.12%
Top 3 Customers	46.30%	56.35%	38.35%
Top 5 Customers	56.17%	65.94%	50.87%
Top 10 Customers	70.97%	80.05%	71.15%

Top ten suppliers of our company for the year ended as on FY 2023-24, 2022-23 and FY 2022-21 is provided in below-mentioned table

Particulars		Top Suppliers as a percentage (%) of purchase
		As at
	FY 2023-24	FY 2022-23	FY 2021-22
Top 1 Suppliers	30.73%	36.86%	22.94%
Top 3 Suppliers	63.64%	64.93%	55.62%
Top 5 Suppliers	73.97%	74.89%	70.48%
Top 10 Suppliers	84.73%	85.36%	81.76%

10. Competitive conditions:

We face competition from existing and potential competitors which is common for any business. We have, over a period, developed certain competitors who have been discussed in section titles "Business Overview" beginning on page no. 108 of this Red Herring Prospectus.

.