Srigee DLM 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 incorporated as ‘Srigee Enteprises Private Limited, a private limited company under the Companies Act, 1956, pursuant to a certificate of incorporation dated December 20, 2005 issued by the Registrar of Companies, U.P. & Uttaranchal, Kanpur. Pursuant to a resolution passed by the shareholders at their meeting held on September 12, 2023, the name of our Company was changed to ‘Srigee DLM Private Limited and a Fresh Certificate of Incorporation dated September 22, 2023 was issued by Registrar of Companies, Kanpur. Subsequently, our Company was converted into a public limited company pursuant to a resolution passed by our Shareholders at an Extraordinary General Meeting held on September 22, 2023 and consequently the name of our Company was changed to ‘Srigee DLM Limited and a fresh certificate of incorporation dated October 10, 2023 was issued by the Registrar of Companies, Kanpur. The Corporate Identification Number of our Company is U32109UP2005PLC031105. For further details please refer to chapter titled "History and Certain Corporate Matters" beginning on Page No.121 of this Draft Red Herring Prospectus.

We have consistently grown in terms of our revenues over the past years. In the past three (3) years our revenues from operation were Rs. 3,301.26 lakhs in F.Y.2021-22, Rs. 4,714.48 lakhs in the FY 2022-23 and Rs. 5,442.73 lakhs in the FY 2023-24. Our Net Profit after tax for the above-mentioned periods are Rs. 113.45 lakhs, Rs. 281.17 lakhs and Rs. 296.95 lakhs respectively.

Factors contributing to the growth of our Revenue:

Significant Surge in Revenue from Operations: -

Our revenue from operations surged from 5304.52 lakhs in FY 2022-23 to 14,813.46 in FY 2023-24, reflecting an impressive growth of almost 179.26%, revenue from operations surged from 3414.33 lakhs in FY 2021-22 to 5304.52 lakhs in FY 2022-23, reflecting an impressive growth of almost 55.36%. And revenue from operations surged from 2147.54 lakhs in FY 2020-21 to 3414.33 lakhs in FY 2021-22, reflecting an impressive growth of almost 58.99%. This substantial increase was primarily attributed to the heightened growth traction observed in our existing business under EPC and Integrated Operation and Maintenance services.

Expansion of Service Portfolio: Introduced innovative service offerings, including renewable energy projects and digital transformation solutions, contributing to a diversified portfolio, and attracting new business sectors.

Enhanced Operational Efficiency: Implemented innovative project management tools and lean management practices, resulting in faster project turnaround times and lower operational costs, directly impacting the bottom line positively.

Increased Market Penetration: Expanded our presence in emerging Indian market, by securing high-value contracts and establishing local site offices, leading to a significant boost in sales figures.

Customer Acquisition and Retention: Strengthened customer relationships through enhanced service delivery, resulting in higher customer satisfaction scores and repeat business, which contributed to the sales increase.

Government Contracts and Compliance: Successfully secured multiple government and public sector projects due to our compliance with regulatory standards and our competitive bidding strategies.

Human Resource Development: Invested in training and development programs to enhance employee skills and technical expertise, ensuring that our workforce could tackle complex projects and innovate solutions, contributing to business growth.

Financial Management Improvements: Optimized financial strategies by improving cash flow management and securing favourable financing terms for large projects, which increased operational capacity and enabled the company to take on additional projects.

FINANCIAL KPIs OF THE COMPANY:

(Rs. In Lakhs)

	For the year ended March 31
Particulars	2024	2023	2022
Revenue from Operations (Rs In Lakhs)	5,442.73	4,714.48	3,301.26
Growth in Revenue from Operations (%)	15.45%	42.81%	NA
Other Income (Rs In Lakhs)	22.43	10.10	2.65
Total Income (Rs In Lakhs)	5,465.16	4,724.58	3,303.91
EBITDA (Rs In Lakhs)	482.34	465.48	224.35
EBITDA Margin (%)*	8.83%	9.85%	6.79%
Profit After Tax (Rs In Lakhs)	296.95	281.17	113.45
PAT Margin (%)*	5.46%	5.96%	3.44%
ROE (%)	23.61%	30.59%	15.71%
ROCE (%)	27.85%	33.88%	17.65%

*EBITDA margin is calculated as EBITDA as a percentage of total income and PAT Margin (%) is calculated as Profit for the year/period as a percentage of Revenue from Operations.

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:

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

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

3. Increased competition in the industry in which we operate;

4. Ability to grow the business;

5. Changes in laws and regulations that apply to the industries in which we operate;

6. Companys ability to successfully implement its growth strategy and expansion plans;

7. Ability to keep pace with rapid changes in technology;

8. Ability to maintain relationships with domestic as well as foreign vendors.

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

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

11. Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; 12. Any adverse outcome in the legal proceedings in which we are involved;

13. The performance of the financial markets in India and globally

SIGNIFICANT ACCOUNTING POLICY

a) Basis of preparation:

The restated summary statement of assets and liabilities of the Company as at, March 31, 2024, March 31, 2023 and March 31, 2022 and the related restated summary statement of profits and loss and cash flows for the financial year ended March 31, 2024, March 31, 2023 and March 31, 2022 (herein collectively referred to as ("Restated Summary Statements") have been compiled by the management from the audited Financial Statements of the Company for the the financial year ended March 31, 2024, March 31, 2023 and March 31, 2022 approved by the Board of Directors of the Company. Restated Summary Statements have been prepared to comply in all material respects with the provisions of Part I of Chapter III of the Companies Act, 2013 (the "Act") read with Companies (Prospectus and Allotment of Securities) Rules, 2014, Securities and Exchange

Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("ICDR Regulations") issued by SEBI and Guidance note on Reports in Companies Prospectuses (Revised 2019) ("Guidance Note"). Restated Summary Statements have been prepared specifically for inclusion in the offer document to be filed by the Company with the NSE in connection with its proposed SME IPO. The Companys management has recast the Financial Statements in the form required by Schedule III of the Companies Act, 2013 for the purpose of restated Summary Statements.

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 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable. 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.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles in India.

All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current non-current classification of assets and liabilities.

b) Use of estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

c) Property Plant and Equipment including Intangible assets:

All Fixed Assets are recorded at cost including taxes, duties, freight and other incidental expenses incurred in relation to their acquisition and bringing the asset to its intended use. d) Depreciation & Amortization:

Depreciation on fixed assets is calculated on a Straight Line mehtod using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule II to the Companies Act, 2013. Individual assets cost of which doesnt exceed Rs. 5,000/- each are depreciated in full in the year of purchase. Intangible assets including internally developed intangible assets are amortised over the year for which the company expects the benefits to accrue. Intangible Asset - Software is amortised with a useful life of decided by the management.

e) Impairment of assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount is the higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arms length transaction between knowledgeable, willing parties, less the costs of disposal. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting years is reversed if there has been a change in the estimate of the recoverable value.

f) Inventories:

Inventories comprises of Raw Material, Finished Goods and Stock- In- trade.

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in, first-out principle.

g) Cash And Bank Balances:

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.

h) Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial year of time to get ready for intended use. All other borrowing costs are charged to revenue.

i) Provisions, Contingent Liabilities and Contingent Assets:

Provision involving substantial degree of estimation in measurement is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

j) Revenue Recognition

Revenue is Recognised only when significant risk and rewards of ownership has been transferred to the buyer and it can be reliably measured and its reasonable to expect ultimate collection of it. Gross sales are of net trade discount and sales returns.

The Company adopts accrual concepts in preparation of accounts. Claims /Refunds not ascertainable with reasonable certainty are accounted for, on final settlement.

k) Other Income:

Interest Income on fixed deposit is recognized on time proportion basis. Other Income is accounted for when right to receive such income is established.

l) Taxes On Income:

Income taxes are accounted for in accordance with Accounting Standard (AS-22) "Accounting for taxes on income", notified under Companies (Accounting Standard) Rules, 2014. Income tax comprises of both current and deferred tax.

Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent years are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization.

m) Earnings Per Share

Basic earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity share outstanding during the year. Diluted earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. n) Employee Benefits: Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service without any monetary limit. Vesting occurs upon completion of five years of service. Provision for gratuity has been made in the books as per actuarial valuation done as at the end of the year.

Provident fund, ESIC and others

Company Make Contribution towards provident fund & ESIC for employees to the regulatory authorities.

o) Segment Reporting:

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities.

RESULTS OF OUR OPERATIONS

(Amount in lakhs)

Particulars	For the year ended 31st March 2024	% of Total**	For the year ended 31st March, 2023	% of Total**	For the year ended 31st March, 2022	% of Total**
INCOME
Revenue from Operations (Gross)	5,442.73	99.59%	4,714.48	99.79%	3,301.26	99.92%
Other Income	22.43	0.41%	10.10	0.21%	2.65	0.08%
Total Revenue (A)	5,465.16	100.00%	4,724.58	100.00%	3,303.91	100.00%
EXPENDITURE
Cost of Material Consumed	3,506.86	64.17%	1,990.27	42.13%	1,347.57	40.79%
Direct Expenses	257.24	4.71%	432.42	9.15%	383.33	11.60%
Purchases of Stock-in-Trade	1,027.01	18.79%	1,653.03	34.99%	1,107.63	33.52%
Changes in inventories of finished goods, work-in-progress and stock-in-trade	(109.14)	-2.00%	(169.39)	-3.59%	(95.05)	-2.88%
Employee Benefit Expenses	141.16	2.58%	167.40	3.54%	222.04	6.72%
Finance Costs	30.40	0.56%	43.19	0.91%	34.30	1.04%
Depreciation and Amortization expense	43.76	0.80%	38.37	0.81%	37.58	1.14%
Other expenses	155.31	2.84%	177.40	3.75%	108.05	3.27%
Total Expenses (B)	5,052.60	92.45%	4,332.69	91.71%	3,145.45	95.20%
Profit/(Loss) before Tax	412.56	7.55%	391.89	8.29%	158.46	4.80%
Tax Expense/ (benefit)
(a) Current Tax Expense	111.98	2.05%	108.91	2.31%	41.45	1.25%

 

Particulars	For the year ended 31st March 2024	% of Total**	For the year ended 31st March, 2023	% of Total**	For the year ended 31st March, 2022	% of Total**
(b) Deferred Tax	3.63	0.07%	1.81	0.04%	3.56	0.11%
Net tax expense / (benefit)	115.61	2.12%	110.72	2.34%	45.01	1.36%
Profit/(Loss) for the Period	296.95	5.43%	281.17	5.95%	113.45	3.43%

**Total refers to Total Revenue

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 operation as a percentage of our total income was 99.59%, 99.79% and 99.92% for the financial year ended March 31, 2024, March 31, 2023 and March 31, 2022 respectively.

(Rs 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 of Goods
- Manufactured Goods	3,955.67	2,514.19	1,465.29
-Traded Goods	1,188.35	1,563.70	1,245.27
Sale of Services	298.71	636.59	590.70
Total	5,442.73	4,714.48	3,301.26

Other Income

Our Other Income primarily consists of Interest Income, Rental Income, Discount received, Sundry balances written back and Profit on Sale of Assets etc.

(Rs In Lakhs)

Particulars	For the year ended March 31, 2024	For the Year ended March 31, 2023	For the year ended March 31, 2022
Interest Income	1.73	1.02	1.15
Rental Income	12.00	9.00	1.50
Miscellaneous Income	-	0.08	-
Sundry balance Written back	6.29	-	-
Discount received	2.20	-	-
Profit on Sale of Assets	0.21	-	-
TOTAL	22.43	10.10	2.65

Expenditure

Our total expenditure primarily consists of Cost of Materials Consumed, Changes in inventories of finished goods , work-in-progress and stock-in-trade, Purchases of Stock-in-Trade and Direct Expenses, Employee benefit expenses, Finance costs, Depreciation & Amortization Expenses and Other Expenses.

Direct Expenses

Our direct expenses primarily include Electricity Expenses, Import charges, Labour charges, Job Work expense, Freight Inward charges, Printing Charges, Manufacturing Damages.

(Rs In Lakhs)

Particulars	For the year ended March 31, 2024	For the Year ended March 31, 2023	For the year ended March 31, 2022
Electricity Expenses	73.87	60.50	84.43
Import charges	2.74	3.08	1.76
Labour charges	157.42	353.85	265.97
Job Work expense	10.88	3.58	11.63
Freight Inward charges	6.53	9.00	9.34
Printing Charges	5.80	-	-
Manufacturing Damages	-	2.41	10.20
TOTAL	257.24	432.42	383.33

Employee Benefit Expenses

Our employee benefits expense comprises of Salaries & Wages, Employers Contribution to Provident fund and ESI, Provision for Gratuity, Staff Welfare and Directors Remuneration.

Finance costs

Our Finance cost expenses comprises of Bank Charges and Interest on Borrowings and Interest on delayed payment of taxes.

Other Expenses

Other expenses primarily include Conveyance expenses, Festival expenses, legal and consultancy charges, Office expenses, Power & Fuel expenses, Repair & maintenance, Rent expense, Security Expense, and Statutory Late Fees & Demand.

(Rs In Lakhs)

Particulars	For the year ended March 31 , 2024	For the Year ended March 31 , 2023	For the year ended March 31, 2022
Auditors Remuneration	0.25	0.25	0.25
Business Promotion	-	-	0.83
Conveyance expenses	11.65	11.78	7.18
Courier Charges	0.08	-	0.04
Electricity charges	-	0.09	-
Festival expenses	2.36	-	-
Fees & subscription	0.25	-	1.74
Loss on Foreign Exchange Fluctuation	0.30	2.37	0.98
Insurance expenses	2.25	1.30	2.36
legal and consultancy charges	8.32	19.38	5.69
Office expenses	20.53	20.10	9.22
Discount Charges	2.67	-	-
Miscellaneous Expenses	0.26	0.14	0.41
Power & Fuel expenses	15.12	23.91	16.26
Printing & Statiionery	0.68	2.86	2.01
Repair & maintenance	21.87	28.15	16.02
Rent expense	39.60	53.11	32.48
Software Annual maintenance expenses	0.32	-	-
Security Expense	10.35	10.67	9.47

 

Particulars	For the year ended March 31 , 2024	For the Year ended March 31 , 2023	For the year ended March 31, 2022
Telephone and Internet expenses	2.62	2.43	2.10
Rates & Fees	1.67	-	-
Statutory Late Fees & Demand	13.24	-	-
Tour & Travels	0.66	0.86	0.86
Vehicle running and maintenance expenses	0.26	-	-
Water Charges	-	-	0.15
TOTAL	155.31	177.40	108.05

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.

Fiscal 2024 compared with fiscal 2023

Revenue from Operations

The Revenue from Operations of our company for fiscal year 2024 was 5,442.73 lacs against 4,714.48 lacs for Fiscal year 2023. An increase of 15.45% in revenue from operations. This increase was due increase volume of sale of goods from our home appliance manufacturing activities.

Other Income

The other income of our company for fiscal year 2024 was 22.43 lacs against 10.10 lacs for Fiscal year 2023. An increase of 122.08% in other income. This increase was due to sundry written off and increase Rental Income.

Total Income

The total income of our company for fiscal year 2024 was 5,465.16 lacs against 4,724.58 lacs total income for Fiscal year 2023. An increase of 15.68% in total income. This increase was due to increase in revenue from customer in home appliances sale particularly air cooler industry due to prolonged summer season.

Expenditure

Cost of material consumed

In Fiscal year 2024, our Cost of material consumed were 3,506.86 lacs against 1,990.27 lacs in fiscal year 2023. An increase of 76.20%. This increase due to increased volume of production of manufacturing goods.

Direct Expenses

In Fiscal year 2024, our direct expenses were 257.24 lacs against 432.42 lacs direct expenses in fiscal year 2023. A decrease of 40.51%. This decrease was due to restructuring (automation) in electronic assembly services which was man-power intensive there was significant reduction in labour expenses.

Purchase of stock-in-trade

In Fiscal year 2024, Purchase of stock-in-trade were 1,027.01 lacs against 1,653.03 lacs purchase of stock-in- trade in fiscal year 2023. A decrease of 37.87%. This decrease was due to reduction in sales in the corresponding period the related purchase was also reduced.

Changes in inventories of finished goods, work-in-progress and stock-in-trade

In Fiscal 2024, our Changes in inventories of finished goods, work-in-progress and stock-in-trade were (109.14) lacs against (169.39) lacs in fiscal 2023.

Employee Benefit Expenses

In Fiscal year 2024, our Company incurred for employee benefit expenses 141.16 lacs against 167.40 lacs expenses in fiscal year 2023. A decrease of 15.68%. This decrease was due to cut in staff welfare expenses of canteen was reduced due to a reduction in man-power in relation to restructuring of assembly services.

Finance Costs

The finance costs for the Fiscal year 2024 was 30.40 lacs while it was 43.19 lacs for Fiscal year 2023. A decrease of 29.61%. was primary due to decrease in borrowings consequently reducing the interest cost.

Other Expenses

In fiscal year 2024, our other expenses were 155.31 lacs and 177.40 lacs in fiscal year 2023. This decrease of 12.45% was due to consolidation of our operations, expenses pertaining to power and fuel, rent, repair and maintenance and other logistics were reduced.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal year 2024 of 412.56 lacs against profit before tax of 391.89 lacs in Fiscal year 2023. An increase of 5.27%. This increase was impacted primarily due to decrease in Other expenses, Finance Cost and Employee Benefit Expenses.

Profit/ (Loss) after Tax

Profit after tax for the Fiscal year 2024 was at 296.95 lacs against profit after tax of 281.17 lacs in fiscal year 2023. An increase of 5.61%. This increase registered primarily due to decrease in Other expenses, Finance Cost and Employee Benefit Expenses.

Fiscal 2023 compared with fiscal 2022

Revenue from Operations

The Revenue from Operations of our company for fiscal year 2023 was 4,714.48 lacs against 3,301.26 lacs for Fiscal year 2022. An increase 42.81% in revenue from operations. This increase was due to increase in overall sale from manufacturing, trading and electronic assembly services.

Other Income

The other income of our company for fiscal year 2023 was 10.10 lacs against 2.65 lacs for Fiscal year 2022. An increase of 281.13% in other income. This increase was mainly due to increase in Rental Income.

Total Income

The total income of our company for fiscal period 2023 was 4,724.58 lacs against 3,303.91 lacs total income for Fiscal period 2022. An increase of 43.00% in total income. This increase was primarily due to increase in Revenue from Operations and Other income as stated above.

Expenditure

Cost of Materials Consumed

In Fiscal 2023, Cost of Materials Consumed was 1,990.27 lakhs against 1,347.57 in fiscal 2022. An increase of 47.69%. This increase in volume of production related to manufacturing activities were increased.

Direct Expenses

In Fiscal 2023, our Company incurred Direct Expenses of 432.42 lacs against 383.33 lacs expenses in fiscal 2022. The increase of 12.81%. This increase was due to increase in wages and salaries.

Purchases of Stock-in-Trade

In Fiscal 2023, Purchases of Stock-in-Trade was 1,653.03 lacs against 1,107.63 lacs expenses in fiscal 2022. The increase of 49.24%. This increase is due to increase in trading sale.

Changes in inventories of finished goods, work-in-progress and stock-in-trade

In Fiscal 2023, Our Changes in inventories of finished goods, work-in-progress and stock-in-trade were (169.39) lacs against (95.05) lacs in fiscal 2022.

Employee Benefit Expenses

In Fiscal 2023, our Company incurred for employee benefit expenses 167.40 lacs against 222.04 lacs expenses in fiscal 2022. The decrease of 24.61%. This decrease was due to effective use of labour and automation in assembly.

Finance Costs

The finance costs for the Fiscal 2023 was 43.19 lacs while it was 34.30 lacs for Fiscal 2022.This Increase of 25.92% was due to increase in borrowing.

Other Expenses

In fiscal 2023, our other expenses were 177.40 lacs and 108.05 lacs in fiscal 2022. An increase of 64.18% was due to expansion in manufacturing facility resulting in increase in rent, electricity, repair and maintenance and other related indirect expenses.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal 2023 of 391.89 lacs against profit before tax of

158.46 lacs in Fiscal 2022, This increase of 147.31% was due to increase in total income.

Profit/ (Loss) after Tax

Profit after tax for the Fiscal 2023 was at 281.17 lacs against profit after tax of 113.45 lacs in fiscal 2022, An 147.84% increase. This was due to increase in total income.

Cash Flows

(Amount in lakhs)

	For the year ended March 31,
Particulars	2024	2023	2022
Net Cash flow from/(used in) Operating Activities	143.88	175.71	(58.03)
Net Cash flow from/(used in) Investing Activities	(104.26)	(6.31)	(23.63)
Net Cash flow from/(used in) Financing Activities	44.75	(163.38)	83.33

Cash Flows from Operating Activities

1. In FY 2024 net cash flow from operating activities was 143.88 Lakhs. This comprised of the profit before tax of 412.56 Lakhs, which was primarily adjusted for depreciation and amortization expenses of 43.76 Lakhs, Interest income of 1.73 Lakhs, Finance Cost 30.40 Lakhs and Gratuity Provision of 0.30 Lakhs, Sundry balance Written back of 6.29 Lakhs, Loss on Foreign exchange fluctuation of

0.3 Lakhs and Profit on Sale of Assets of 0.21 Lakhs. The resultant operating profit before working capital changes was 479.09 Lakhs, which was primarily adjusted for an increase in inventory of 74.27 lakhs, increase in trade receivables during the year of 117.18 Lakhs, increase in long term loans and advances of 185.91 lakhs, increase in other assets of 0.77 lakhs, decrease in short term loans and advances of 15.00 lakhs, increase in trade & other payables during the year of 26.31 Lakhs and increase in other current liabilities during the year of 89.88 Lakhs. Cash flow from Operations was

232.15 Lakhs which was reduced by Direct Tax paid for 88.27 Lakhs resulting into Net cash flow used in operating activities of 143.88 Lakhs.

2. In FY 2023, net cash flow from operating activities was 175.71 Lakhs. This comprised of the profit before tax of 391.89 Lakhs, which was primarily adjusted for depreciation and amortization expenses of 38.37 Lakhs, Interest income of 1.02 Lakhs, Finance Cost 43.19 Lakhs and Gratuity Provision of 1.84 Lakhs and Loss on Foreign exchange fluctuation of 2.37 Lakhs. The resultant operating profit before working capital changes was 476.64 Lakhs, which was primarily adjusted for an increase in inventory of 316.02 lakhs, increase in trade receivables during the year of 43.46 Lakhs, increase in long term loans and advances of 34.48 lakhs, decrease in other assets of 2.54 lakhs, increase in short term loans & advances of 2.62 lakhs, increase in trade & other payables during the year of 210.05

Lakhs, decrease in Other current liabilities during the year of 56.47 Lakhs.

Cash flow from operations was 236.18 Lakhs which was reduced by Direct Tax paid for 60.47 Lakhs resulting into Net cash flow from operating activities of 175.71 Lakhs.

3. In FY 2022, net cash used in operating activities was 58.03 Lakhs. This comprised of the profit before tax of 158.46 Lakhs, which was primarily adjusted for depreciation and amortization expenses of 37.58 Lakhs, Interest income of 1.15 Lakhs, Finance Cost 34.30 Lakhs and Gratuity Provision of

1.66 Lakhs and Loss on Foreign exchange fluctuation of 0.98 Lakhs. The resultant operating profit before working capital changes was 231.83 Lakhs, which was primarily adjusted for an increase in inventory of 218.62 lakhs, decrease in trade receivables during the year of 140.28 Lakhs, increase in long term loans and advances of 17.89 lakhs, increase in other assets of 11.04 lakhs, increase in short term loans & advances of 5.70 lakhs, decrease in trade & other payables during the year of 190.32

Lakhs, increase in Other current liabilities during the year of 49.30 Lakhs.

Cash used in Operations was 22.16 Lakhs which was reduced by Direct Tax paid for 35.87 Lakhs resulting into Net cash used in operating activities of 58.03 Lakhs.

Cash Flows from Investment Activities

1. In FY 2024, net cash used in investing activities was 104.26 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances of 111.54 Lakhs, Proceeds from Sale of property, plant & equipment of 5.55 Lakhs and Interest received of 1.73 Lakhs.

2. In FY 2023, net cash used in investing activities was 6.31 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances of 7.33 Lakhs and Interest received of 1.02

Lakhs.

3. In FY 2022, net cash used in investing activities was 23.63 Lakhs, which primarily comprised of Capital expenditure on fixed assets, including capital advances of 24.78 Lakhs, and Interest received of 1.15

Lakhs.

Cash Flows from Financing Activities

1. In FY 2024, net cash generated from financing activities was 44.75 Lakhs, which predominantly comprised of Proceeds from equity Share issued of 99.00 lakhs, repayment of borrowings of 23.85 Lakhs and payment of finance cost of 30.40 Lakhs.

2. In FY 2023, net cash used in financing activities was 163.38 Lakhs, which predominantly comprised of repayment of borrowings of 120.19 Lakhs and payment of finance cost of 43.19 Lakhs.

3. In FY 2022, net cash generated from financing activities was 83.33 Lakhs, which predominantly comprised of Increase in borrowings of 117.63 Lakhs and payment of finance cost of 34.30 Lakhs.

OTHER MATTERS

1. Unusual or infrequent events or transactions

Except COVID-19 or any such kind of pandemic and as described in this Draft Red Herring Prospectus, there have been no other 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. 28 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. 31 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.

Increases 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.

Relevant Industry data and, as available, has been included in the chapter titled "Industry Overview" beginning on page no. 98 of this Draft Red Herring Prospectus.

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

Our Company has not announced any new services and product and segment / scheme, other than disclosure in this Draft Red Herring Prospectus.

8. The extent to which business is seasonal.

Our business does not depend to a certain extent on the seasonal, environmental and climate changes. Hence, our 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 customer vis-?-vis the total revenue from operations respectively as on FY 2023-24, FY 2022-23 and FY 2021-22 is as follows:

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 chapter titles "Business Overview" beginning on page no. 108 of this Draft Red Herring Prospectus.