Shubhshree Biofuels Energy Ltd Management Discussions

You should read the following discussion in conjunction with our restated financial statements attached in the chapter titled "Financial Information of the Company" beginning on page 140. You should also read the section titled "Risk Factors" on page 25 and the section titled "Forward Looking Statements" on page 19 of this Red Herring Prospectus, which discusses a number of factors and contingencies that could affect our financial condition and results of operations. The following discussion relates to us, and, unless otherwise stated or the context requires otherwise, is based on our Restated financial Statements. Our 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 auditor dated August 28, 2024 which is included in this Red Herring Prospectus under "Financial Statements". The Restated Financial Information has been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. Our financial year ends on March 31 of each year, and all references to a particular financial year are to the twelve-month period ended March 31 of that year.

Business Overview

Our Company is engaged in the business of manufacturing & supplying of biomass fuels, which includes biomass pellets and briquettes. These biomass fuels are an alternative source of energy which are basically used in commercial and industrial heating, cooking fuel, industrial burning and electricity generation, as an alternative to fossil fuels like coal, firewood, lignite, Agri-waste etc. The briquettes are majorly used for industrial purposes like running boilers etc. and the pellets are majorly used as cooking fuel or commercial purposes. We are currently selling these pellets and briquettes to customers who are engaged in the business of recycling material, textile processing, pharmaceutical, metal etc.

These Biomass pellets and briquettes are built from recycled green waste, producing less greenhouse gas emission. The main raw material used in the manufacturing of biomass fuels include Agri-waste, saw dust, farm waste etc. These raw materials are procured from the farmers and nearby sources either directly or through dealers and brokers. Apart, from the biomass manufactured by our company, we are also involved in the supplying of the biomass pellets and briquettes, which are procured from different vendors who are engaged in the manufacturing of these biomass fuels.

Our company was incorporated in 2013 post incorporation our company was undertaking the business of manufacturing and supplying of building and construction material like fly ash bricks etc. Later, during December 2021, the company discontinued the business of fly ash bricks and foray into the business of supplying of biomass pellets and biomass briquettes. Prior to the supplying of biomass pellets and biomass briquettes the company was undertaking supply of saw dust etc. which are used as raw material for manufacturing of biomass pellets and biomass briquettes. Looking at the market response and opportunity in this business, we established our manufacturing facility located at Khasra No 33/1, Village Pahadi , Teh. Niwai , District Tonk Rajasthan -304021 from October 2023, where we have installed 3 briquettes cum pelleting machines, one of which is owned by us and the rest 2 are taken on rent along with the premises, having a combined capacity of 132 tonnes per day. For the period October 2023 to March 2024, we have sold 14830 tonnes of biomass fuels from the biofuel manufactured by us against our total sales which was approximately 68900 tonnes and the share of manufactured goods were approximately 21.50% of our total sales.

Biomass pellet or briquettes are cylindrical and condensed form of organic material derived from various renewable sources. These pellets serve as an alternative to traditional fossil fuels and play a significant role in addressing energy and environmental challenges. These biomass fuels act as renewable energy source, reduce emissions, helps in utilization of the waste materials and are energy efficient. We have during the Fiscal year 2022 sold around 9700 tonnes of biomass fuels which increased to around 59400 tonnes in fiscal year 2023 representing as increase of over 500% and further increased to around 121800 tonnes during the fiscal year 2024. Further, during the same period our revenue from operations also grow from Rs. 791.82 lakhs in Fiscal year 2022, to Rs. 5861.60 lakhs in Fiscal year 2023 and Rs. 9414.60 Lakhs for the Fiscal year 2024.

Further, in order to increase the use of Biomass pellets in briquettes, the Ministry of Power has mandated that all coal based thermal power plants of power generation utilities with bowl mills, shall on annual basis mandatorily use minimum 5% blend of biomass pellets made, primarily, of agro residue along with coal with effect from FY 2024-25. The obligation shall increase to 7% with effect from FY 2025-26. All coal based thermal power plants of power generation utilities with ball & race mills, shall on annual basis mandatorily use 5% blend of biomass pellets(torrefied only) made, primarily, of agro residue along with coal with effect from FY 2024-25. The obligation shall increase to 7% with effect from FY 2025-26. All coal based thermal power plants of power generation utilities with ball & tube mills, shall on annual basis mandatorily use 5% blend of torrefied biomass pellets with volatile content below 22%, primarily made of agro residue along with coal with effect from FY 2024-25 vide a notification dated June 16, 2023.

We currently sell majority of our products in the Northern States of India among which especially Haryana, Uttar Pradesh, Rajasthan and NCR region being the highest contributor to our revenue from operations. Our top 5 customers contribute majority of our revenues from operations i.e. 57.34%, 62.86% and 66.94% of our revenue from operations for the Fiscal year 2024, 2023 and 2022 respectively. Further Company sold approx. 42.79%, 49.64% and 34.46% in period FY 2023-24, FY 2022-23 and FY 2021-22 respectively to our top one customer. Further, the company has recently received a purchase order for short term supply of biomass approximately 1600 tonnes to a company engaged in pharmaceutical industry and also received an order for supply of biomass pellets approximately 14600 tonnes for a period of 1 year from a power sector company.

The promoters of our company are Anurag Agarwal, Aastha Agarwal and Sagar Agrawal. Sagar Agrawal is a Promotor having an experience of over 10 years and Anurag Agarwal and Aastha Agarwal having an experience of over 3 years in the field of Biomass fuels. The knowledge and guidance of our promoters and directors have been instrumental for the growth and development of the Company. Under the guidance of our promoter and the support of our employees, we have evolved ourselves into a company engaged in the manufacturing of the biomass fuel, which can act as an alternative to fossil fuels and lead to safer and greener fuel option to our customers.

Financial Snapshot

Key Financial Performance	For the year
	31-Mar-24	31-Mar-23	31-Mar-22
Revenue from operations(1)	9414.60	5861.60	791.82
EBITDA(2)	415.82	225.46	34.21
EBITDA Margin(3)	4.42%	3.85%	4.32%
PAT	329.77	242.38	27.46
PAT Margin(4)	3.50%	4.14%	3.47%
RoE(%)(6)	68.15%	179.13%	7125.22%
RoCE (%) (7)	61.67%	94.32%	50.71%

Notes:

(1) Revenue from operation means revenue from sales and other operating revenues

(2) EBITDA is calculated as Profit before tax + Depreciation + Interest Expenses - Other Income ⁽³⁾ ‘EBITDA Margin is calculated as EBITDA divided by Revenue from Operations

(4 PAT is calculated as Profit before tax – Tax Expenses

(5) ‘PAT Margin is calculated as PAT for the year divided by revenue from operations. ⁽⁶⁾ Return on Equity is ratio of Profit after Tax and Average Shareholder Equity

(7) Return on Capital Employed is calculated as EBIT divided by capital employed, which is which is defined as shareholders equity plus total borrowings {current & non-current}

Product wise revenue for last 3 Financial years.

Product Name	FY 2023-24	% to Total Sales	FY 2022- 23	% to Total Sales	FY 2021- 22	% to Total Sales
Biomass Pellets	3272.07	34.76%	1801.34	30.73%	283.54	35.81%
Briquettes	5444.63	57.83%	3911.91	66.74%	508.27	64.19%
Wood Chips	2.23	0.02%	2.64	0.05%	-	-
Coal	46.46	0.49%	145.71	2.49%	-	-
Ground Nut Husk	98.77	1.05%	-	-	-	-
Paddy Husk	550.44	5.85%	-	-	-	-
Total	9414.60	100%	5861.60	100%	791.81	100%

Geographical Revenue Break up

	2021-22		2022-23		2023-24
Name of	Amount in Rs. LacsC	% to Total Sales	Amount in Rs. Lacs	% to Total Sales	Amount in Rs. Lacs	% to Total Sales
Delhi	-	-	120.69	2.06	65.79	0.70
Gujrat	108.36	13.69	41.04	0.70	0.74	0.01
Haryana	208.27	26.30	1,747.47	29.81	2016.15	21.42
Himachal Pradesh	3.82	0.48	1.99	0.03	44.93	0.48
Madhya Pradesh	-	-	4.20	0.07	37.63	0.40
Maharashtra	-	-	4.79	0.08	67.25	0.71
Punjab	11.75	1.49	42.13	0.72	47.16	0.50
Rajasthan	3.36	0.42	491.82	8.39	729.87	7.75
Uttar Pradesh	456.26	57.62	3,405.12	58.10	6216.70	66.03
Uttarakhand	-	-	2.35	0.04	185.29	1.97
Odisha	-	-	-	-	3.10	0.03
Gross Total	791.82	100.00	5,861.60	100.00	9414.60	100.00

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

For details in respect of "Statement of Significant Accounting Policies", please refer to Annexure IV of Restated Financial Statements beginning on page 140 of this Red Herring Prospectus.

Factors Affecting our Results of Operations

1. General economic and business conditions in the markets in which we operate and in the local, regional, national and international economies;

2. Changes in focus toward the Biomass fuels i.e. Biomass Pellets and Briquettes demand;

3. Any change in government policies resulting in increases in taxes payable by us;

4. Our ability to retain our key managements persons and other employees;

5. Changes in laws and regulations that apply to the Biomass fuels industry in which we operate.

6. Our failure to keep pace with rapid changes in technology;

7. Our ability to grow our business;

8. Our ability to make interest and principal payments and satisfy the covenants in our existing/future debt;

9. General economic, political and other risks that are out of our control;

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

11. Company s ability to successfully implement its growth strategy and expansion plans ;

12. Failure to comply with regulations prescribed by authorities of the jurisdictions in which we operate;

13. Inability to successfully obtain registrations in a timely manner or at all;

14. Occurrence of Environmental Problems & Uninsured Losses;

15. Conflicts of interest with affiliated companies, the promoter group and other related parties; 16. Any adverse legal proceedings initiated against our company or its promoters, directors and KMP s;

17. Concentration of ownership among our Promoters;

18. The performance of the financial markets in India and globally; and

19. Impact of covid-19 on our business and operations.

Discussion on Result of Operations

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

Particulars	March 31, 2024	% of Total Income	March 31, 2023	% of Total Income	March 31, 2022	% of Total Income
Revenue from Operation	9,414.60	99.22%	5861.60	98.16%	791.82	100.00%
Other Income	73.71	0.78%	109.63	1.84%	0.01	0.00
Total Income	9,488.32	100.00%	5971.24	100.00%	791.83	100.00%
Expenditure
Cost of material Consumed	224.73	2.37%	0.00	0.00	0.00	0.00
Purchase of Stock in Trade	7,480.95	78.84%	4811.73	80.58%	668.84	84.47%
Change in inventories of finished goods, work in progress and stock in trade	(61.60)	(0.65%)	0.00	0.00	4.70	0.59%
Employee Benefit Expenses	46.76	0.49%	46.39	0.78%	11.46	1.45%
Finance Cost	21.86	0.23%	4.60	0.08%	0.01	0.00
Depreciation and Amortization Expenses	13.45	0.14%	7.27	0.12%	2.30	0.29%
Other Expenses	1,300.35	13.70%	777.20	13.02%	72.61	9.17%
Total Expenditure	9,026.51	95.13%	5647.19	94.57%	759.91	95.97%
Profit/(Loss) Before Tax	461.81	4.87%	324.05	5.43%	31.92	4.03%
Tax Expense
Tax Expense for Current Year	132.83	1.40%	80.99	1.36%	4.46	0.56%
Short/(Excess) Provision of Earlier Year	0.00	0.00%	0.00	0.00	0.00	0.00
Deferred Tax	(0.78)	(0.01%)	0.68	0.01%	(0.01)	(0.00)
Profit/(loss) after tax	329.77	3.48%	242.38	4.06%	27.46	3.47%

Revenue from operations:

Revenue from operations mainly consists of revenue from sale of biomass pellets and briquettes. The company was earlier engaged in the business of manufacturing of fly ash bricks, but later during the year 2021 foray into the supplying of biomass pellets and briquettes. Further, during the year 2023, the company further started the manufacturing of biomass pellets and briquettes.

Other Income:

Other income primarily comprises of incentives received, interest from fixed deposits, discounts received and balances written off.

Total Expenses:

Total expenses consist of operating cost like purchase of material, Employee benefits expense, Finance costs, Depreciation and amortization expenses and other expenses.

Purchase of Material

The company was till September 2023 majorly involved in the supplying of the biomass pellets and briquettes but now the company has started the manufacturing of these biomass pellets and briquettes.

Employee benefits expense:

Employee benefits expense primarily comprises of Salaries, wages & bonus expenses, Staff welfare expenses and Employers Contribution to ESI and PF and Gratuity.

Finance Costs:

Our finance cost includes Interest expenses and Bank charges.

Depreciation and Amortization Expenses:

Depreciation includes depreciation on plant & machinery, furniture and fixtures, office equipment, computer, vehicle and computer software.

Other Expenses:

Other Expenses consists of audit fees, rates & taxes, power and fuel, rent, repair and maintenance, transport charges, testing charges, insurance, business promotion expenses and other expenses like legal & professional fee, commission charges, travelling & conveyance expenses, telephone & postage expenses, building written off, printing and stationery, etc.

FINANCIAL PERFORMANCE HIGHLIGHTS FOR THE PERIOD ENDED MARCH 31, 2024

Total Income:

Total income for the period ended March 31, 2024 stood at Rs. 9,488.32 Lakhs. The total income consists of revenue from operations and other income.

Revenue from Operations

During the period ended March 31, 2024 the net revenue from operation of our Company was Rs. 9414.60 Lakhs from sale of biomass pellets and briquettes.

Other Income:

During the period ended March 31, 2024 the other income of our Company stood at Rs 73.71 Lakhs. The main components of the other income primarily comprises of incentives received, balances written off, interest from fixed deposits and discounts received, dividend , Profit on sale of asset and capital gain from sale of share.

Total Expenses

Total expenses consist of cost like purchase of material, employee benefits expense, finance costs, depreciation and amortization expenses and other expenses. During the period ended March 31, 2024 the total expenses of our Company stood at Rs 9,026.51 Lakhs.

Cost of Material Consumed

During the period ended March 31, 2024 the Cost of material Consumed of our Company stood at Rs. 224.73 Lakhs. Cost of material consumed amount to approximately 2.37% of our total Income.

Purchase of Material

During the period ended March 31, 2024 the purchase of material cost of our Company stood at Rs. 7,480.95 Lakhs. Our Purchase cost primarily comprises of Purchase of material like biomass pellets, briquettes and the Agri waste required to manufacture these biomass components. The purchase cost accounts to approximately 78.84% of the sales value of the material.

Employee benefits expense:

During the period ended March 31, 2024 the employee benefit expenses of our Company stood at Rs. 46.76 Lakhs. The main components of the employee benefit expenses are Salaries & wages.

Finance Costs:

During the period ended March 31, 2024 the finance cost expenses of our Company stood at Rs. 21.86 Lakhs. Our finance cost includes Interest expenses and Bank charges

Depreciation and Amortization Expenses:

During the period ended March 31, 2024 the Depreciation and amortization charges of our Company stood at Rs. 13.45 Lakhs, during the period the company has capitalized the fixed assets amounting to Rs. 76.69 lakhs including vehicles, machine etc.

Other Expenses:

During the period ended March 31, 2024 the Other Expenses of our Company stood at Rs. 1300.35 Lakhs Other Expenses consists of audit fees, rates & taxes, power and fuel, rent, repair and maintenance, transport charges, testing charges, insurance, business promotion expenses and other expenses like legal & professional fee, commission charges, travelling & conveyance expenses, telephone & postage expenses, building written off, printing and stationery, etc.

Restated Profit before tax:

The Company reported Restated profit before tax for period ending March 31, 2024 of Rs. 461.81 Lakhs.

Restated profit after tax:

The Company reported Restated profit after tax for period ending March 31, 2024 of Rs. 329.77 Lakhs.

FINANCIAL YEAR 2024 COMPARED TO FINANCIAL YEAR 2023

Total Income:

Total income for the financial year 2023-24 stood at Rs.9,488.32 Lakhs whereas in Financial Year 2022-23 the same stood at Rs.5971.24 Lakhs representing an increase of 58.90 %. The main reason of increase was increase in the volume of business operations of the company. During the financial year 2023-24 the revenue from operation of our Company increased to Rs. 9414.60 Lakhs as against Rs. 5861.60 Lakhs in the Financial Year 2022-23 representing an increase of 60.61 %, which was due to increase the sale of biomass pellets and briquettes which increased from around 59400 tonnes in FY2022-23 to around 121800 tonnes during the FY 2023-24.

Revenue from Operations

During the financial year 2023-24 the net revenue from operation of our Company increased to Rs. 9414.60 Lakhs as against Rs. 5861.60 Lakhs in the Financial Year 2022-23 representing an increase of 60.61 %. The main reason of increase was increase in the volume of business i.e. sale of biomass pellets and briquettes which increased from around 59400 tonnes in FY2022-23 to around 121800 tonnes during the FY 2023-24.

Other Income:

During the financial year 2023-24 the other income of our Company increased to Rs. 73.71 Lakhs as against Rs. 109.63 lakhs in the Financial Year 2022-23 which was majorly due to the decrease in the incentive targets which decreased from 108.87 lakhs to Rs. 50.97 lakhs in the FY 2023-24 and increased due to balances written off from 0.11 lakhs in FY 2022-23 to 13.95 Lakhs in FY 2023-24.

Total Expenses

The total expense for the financial year 2023-24 increased to Rs. 9026.51 Lakhs from Rs. 5647.19 lakhs in the Financial Year 2022-23 representing an increase of 59.84 %. Such increase was due to increase in business operations of the Company where the purchase of material increased by 55.47% which represent over 75 % of the total revenue of the company. Apart from the material cost the other expenses also increased to Rs. 1300.35 Lakhs during the Financial Year 2023-24 as against Rs. 777.20 Lakhs during the financial year 2022-23. There was an increase of 67.31 % mainly due increase in Transport charges from Rs. 648.33 lakhs to Rs. 1045.62 lakhs which are directly related to the goods sold by the company.

Purchase of material

The Purchase of material for the financial year 2023-24 increased to Rs. 7480.95 lakhs from Rs. 4811.73 lakhs in the Financial Year 2022-23 representing an increase of 55.47%. Such increase was due to increase in business operations of the Company. The purchase material represent almost 78.84% of the total income in the FY 2023-24 and 80.58% of the total income during the FY 2022-23. Further, as the company started the manufacturing during the Fiscal year 2023-24, the cost of material consumed increased to Rs. 224.73 lakhs against Nil during the Fiscal year 2022-23.

Employee benefits expense:

Our Company has incurred Rs. 46.76 Lakhs as Employee benefits expense during the financial year 2023-24 as compared to Rs. 46.39 Lakhs in the financial year 2022-23. The increase of 0.81% was due to increase in number Employees and Contribution to gratuity and the staff welfare expenses.

Finance Cost

Our Company has incurred Rs. 21.86 Lakhs as finance cost during the financial year 2023-24 as compared to Rs. 4.60 Lakhs in the financial year 2022-23. The increase was due to increase in borrowings during the FY 2024 which were repaid in the later part of the Fiscal year 2024.

Depreciation and Amortization Expenses:

Depreciation for the financial year 2023-24 stood at Rs. 13.45 Lakhs as against Rs. 7.27 Lakhs during the financial year 2022-23. The increase in depreciation was around 85 % which was due to purchase of vehicles, machine etc.

Other Expenses:

Our Company has incurred Rs. 1300.35 Lakhs during the Financial Year 2023-24 on other expenses as against Rs. 777.20 Lakhs during the financial year 2022-23. There was an increase of 67.31 % mainly due (i) increase in Transport charges from Rs. 648.33 lakhs to Rs. 1045.62 lakhs, (ii) decrease in Commission charges from Rs. 75.63 lakhs to Rs. 48.04 lakhs, (iii) increase in Travelling expense from Rs. 17.04 lakhs to Rs. 39.71 lakhs as compared with previous year.

Restated profit before tax:

Net profit before tax for the financial year 2023-24 increased to Rs. 461.81 Lakhs as compared to Rs. 324.05 Lakhs in the financial year 2022-23. The increase of 64.01 % was majorly due to factors as mentioned above.

Restated profit for the year:

As a result of the foregoing factors, our profit after tax for the year increase by 36.05 % from net profit of Rs. 242.38 Lakhs in financial year 2022-23 to net profit Rs. 329.77 lakhs in financial year 2023-24. Consequently, our PAT margin remained at around 3.48% of total income in financial year 2023-24 from 4.06% of total income in financial year 2022-23 due to higher increase in the finance cost and other expenses against increase in the total revenue of the company.

FINANCIAL YEAR 2023 COMPARED TO FINANCIAL YEAR 2022

Total Income:

Total income for the financial year 2022-23 stood at Rs. 5971.24 Lakhs whereas in Financial Year 2021-22 the same stood at Rs. 791.83 Lakhs representing an increase of 654.11%. The main reason of increase was increase in the volume of business operations of the company.

Revenue from Operations

During the financial year 2022-23 the net revenue from operation of our Company increased to Rs. 5861.60 Lakhs as against Rs. 791.82 Lakhs in the Financial Year 2021-22 representing an increase of 640.27%. The main reason of increase was increase in the volume of business i.e. sale of biomass pellets and briquettes which increased from around 9700 tonnes in FY2021-22 to around 59400 tonnes during the FY 2022-23.

Other Income:

During the financial year 2022-23 the other income of our Company increased to Rs. 109.63 Lakhs as against Rs. 0.01 lakhs in the Financial Year 2021-22 which was majorly due to the increase in the incentive targets which increased from Nil to Rs. 108.87 lakhs in the FY 2022-23.

Total Expenses

The total expense for the financial year 2022-23 increased to Rs. 5647.19 Lakhs from Rs. 759.91 lakhs in the Financial Year 2021-22 representing an increase of 643.07%. Such increase was due to increase in business operations of the Company where the purchase of material increased by 619.24% which represent over 80% of the total revenue of the company.

Purchase of material

The Purchase of material for the financial year 2022-23 increased to Rs. 4811.73 lakhs from Rs. 668.84 lakhs in the Financial Year 2021-22 representing an increase of 619.42%. Such increase was due to increase in business operations of the Company. The purchase material represent almost 80.58% of the total income in the FY 2022-23 and 84.47% of the total income during the FY 2021-22.

Employee benefits expense:

Our Company has incurred Rs. 46.39 Lakhs as Employee benefits expense during the financial year 2022-23 as compared to Rs. 11.46 Lakhs in the financial year 2021-22. The increase of 304.83% was due to increase in (i) Employees Salary Expenses from Rs. 11.46 lakhs to Rs. 44.26 lakhs which amount to 286.42% (ii) Contribution to gratuity and the staff welfare expenses.

Finance Cost

Our Company has incurred Rs. 4.60 Lakhs as finance cost during the financial year 2022-23 as compared to Rs. 0.01 Lakhs in the financial year 2021-22. The increase was due to increase in borrowings during the FY 2022.

Depreciation and Amortization Expenses:

Depreciation for the financial year 2022-23 stood at Rs. 7.27 Lakhs as against Rs. 2.30 Lakhs during the financial year 2021-22. The increase in depreciation was around 193.80% which was due to purchase of vehicles.

Other Expenses:

Our Company has incurred Rs. 777.20 Lakhs during the Financial Year 2022-23 on other expenses as against Rs. 72.61 Lakhs during the financial year 2021-22. There was an increase of 970.33% mainly due (i) increase in repair and maintenance charges from Rs. 0.66 lakhs to Rs. 3.35 lakhs, (ii) increase in transportation charges from Rs. 67.25 to Rs. 648.33 lakhs, (iii) increase in commission charges from Rs. 0.68 lakhs to Rs. 75.63 lakhs as compared with previous year.

Restated profit before tax:

Net profit before tax for the financial year 2022-23 increased to Rs. 324.05 Lakhs as compared to Rs. 31.92 Lakhs in the financial year 2021-22. The increase of 916.93% was majorly due to factors as mentioned above.

Restated profit for the year:

As a result of the foregoing factors, our profit after tax for the year increase by 783.92% from net profit of Rs. 27.46 Lakhs in financial year 2021-22 to net profit Rs. 242.38 lakhs in financial year 2022-23. Consequently, our PAT Margin expanded to 4.07% of total income in financial year 2022-23 from 3.47% of total income in financial year 2021-22 due to revenue increasing more in comparison with the other fixed expenses.

FINANCIAL YEAR 2022 COMPARED TO FINANCIAL YEAR 2021

Total Income:

Total income for the financial year 2021-22 stood at Rs. 791.83 Lakhs whereas in Financial Year 2020-21 the same stood at Rs. 18.50 Lakhs representing an increase of 4179.34%. The increase in revenue was due to change in the business operations of the company from construction material to biomass pellets and briquettes.

Revenue from Operations

During the financial year 2021-22 the net revenue from operation of our Company increased to Rs. 791.82 Lakhs as against Rs. 18.49 Lakhs in the Financial Year 2020-21 representing an increase of 4181.37%. The main reason of increase was due to change in the business operations of the company, the company changed the business operations to biomass fuels. Further, the company sold around 9700 tonnes of biomass fuels during the FY 2021-22, previously the company was engaged in the business of fly ash bricks and miscellaneous items.

Other Income:

During the financial year 2021-22 the other income of our Company remained stable at Rs. 0.01 Lakhs as against Rs. 0.01 lakhs in the Financial Year 2020-21.

Total Expenses

The total expense for the financial year 2021-22 increased to Rs. 759.91 Lakhs from Rs. 20.17 lakhs in the Financial Year 2020-21 representing an increase of 3667.20%

Purchase of Material

The Cost of Purchase of material for the financial year 2021-22 increased to Rs. 668.84 lakhs from Rs. 11.87 lakhs in the Financial Year 2020-21 representing increase of 5534.66%. Such increase was due to increase in business operations of the Company pursuant to the change in the business undertaken by the Company.

Employee benefits expense:

Our Company has incurred Rs. 11.46 Lakhs as Employee benefits expense during the financial year 2021-22 as compared to Rs. 4.56 Lakhs in the financial year 2020-21. The reason for increase in expenses was due to an increase in Salaries and wages by Rs. 6.90 lakhs as compared to the previous year.

Finance Cost

Our Company has incurred Rs. 0.01 Lakhs as finance cost during the financial year 2021-22 as compared to Rs. 0.01 lakhs in the financial year 2020-21. The Company has not taken any major loans or financial arrangement during the Fiscal year.

Depreciation and Amortization Expenses:

Depreciation for the financial year 2021-22 stood at Rs. 2.30 Lakhs as against Rs. 2.75 Lakhs during the financial year 2020-21. The decrease in depreciation was around 16.51% in comparison to the previous year.

Other Expenses:

Our Company has incurred Rs. 72.61 Lakhs during the Financial Year 2021-22 on other expenses as against Rs. 0.98 Lakhs during the financial year 2020-21. There was an increase of 7310.54% mainly due to change in the business operations of the company which leads to increase in transportation charges, repair and maintenance, travelling & conveyance charges and commission charges etc.

Restated profit before tax:

Net profit before tax for the financial year 2021-22 increased to Rs. 31.92 Lakhs as compared to Rs. (1.67) Lakhs in the financial year 2020-21. The increase was majorly due to factors as mentioned above.

Restated profit for the year:

As a result of the foregoing factors, our profit after tax for the year increased to net profit of Rs. 27.46 Lakhs in financial year 2021-22 to net loss Rs. (1.97) lakhs in financial year 2020-21.

Information required as per Item (II)(C)(iv) of Part A of Schedule VI to the SEBI Regulations:

An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:

1. Unusual or infrequent events or transactions

There has not been any unusual trend on account of our business activity. Except as disclosed in this Red Herring Prospectus, there are no unusual or infrequent events or transactions in our Company.

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

There are no significant economic changes that may materially affect or likely to affect income from continuing operations.

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.

Apart from the risks as disclosed under Section Risk Factors beginning on page 25 of the 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

Other than as described in the sections Risk Factors , Our Business and Management s Discussion and Analysis of Financial Condition and Results of Operations on pages 25, 96 and 178 respectively, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

5. Segment Reporting

As we deal in manufacturing and supplying of biomass fuels mainly pellets and briquettes our business activities fall under a single segment.

6. Status of any publicly announced New Products or Business Segment

Except as disclosed in the Chapter Our Business , our Company has not announced any new product or service.

7. Seasonality of business

Our business is not subject to seasonality, however, the raw material used in the manufacturing of the biomass fuels i.e. agricultural waste is a seasonal product. For further information, see Industry Overview and Our Business on pages 87 and 96 respectively.

8. Dependence on single or few customers

For the FY 23-24, FY 22-23 and FY 21-22 our top 5 customers contributed to 57.34%, 62.86% and 66.94% of our revenue from operations. For further information, see Risk Factors on page 25 of this Red Herring Prospectus

9. Competitive conditions

Competitive conditions are as described under the Chapters Industry Overview and Our Business beginning on pages 87 and 96 respectively of this Red Herring Prospectus.

10. Details of material developments after the date of last balance sheet i.e., March 31, 2024

No major material development have occurred after the date of last Balance sheet i.e., March 31, 2024, i.e. after the last audited period