Srinibas Pradhan Constructions Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our

"Restated Consolidated Financial Statements" which have been included in this Draft Red Herring Prospectus.

The following discussion and analysis of our financial condition and results of operations is based on our Restated Consolidated Financial Statements for the Fiscal Years ended on March 31, 2024, 2023, and 2022 including the related notes and reports, included in this Draft Red Herring Prospectus prepared in accordance with requirements of the Companies Act and restated in accordance with the SEBI Regulations, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Our Restated Consolidated Financial Statements have been derived from our audited financial statements for the respective years. Accordingly, the degree to which our Restated Consolidated Financial Statements will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity withIndian GAAP, Companies Act, SEBI Regulations and other relevant accounting practices in India.

Some of the information contained in this section, including information with respect to our strategies, contain forward-looking statements that involve risks and uncertainties. You should read the section titled "Forward-

Looking Statements" beginning on page 25 of this Draft Red Herring Prospectus for a discussion of the risks and uncertainties related to those statements and also the section titled "Risk Factors" and "Our Business" beginning on page 34 and 134, respectively, of this Draft Red Herring Prospectus for a discussion of certain factors that may affect our business, results of operations and financial condition. The actual results of the Company may differ materially from those expressed in or implied by these forward-looking statements.

Unless otherwise stated, references to "the Company", "our Company", "we", "us", and "our" are to Srinibas Pradhan Constructions Limited.

Our Fiscal Year ends on March 31 of each year. Accordingly, all references to a particular Fiscal Year are to the 12 months ended March 31 of that year.

BUSINESS OVERVIEW

Our Company was incorporated as Srinibas Pradhan Constructions Private Limited under the provisions of the Companies Act, 2013, pursuant to certificate of incorporation dated September 25, 2020 issued by the Central Registration Centre. Subsequently, our Company was converted into public limited company under the provisions of Companies Act, 2013, pursuant to the approval accorded by our Shareholders at the Extra-ordinary General

Meeting held on December 27, 2023. Consequently, the name of our Company was changed to "Srinibas Pradhan Constructions Limited" and a fresh Certificate of Incorporation consequent upon conversion from a private limited company to a public limited company was issued to our Company by the Registrar of Companies, Cuttack on February 09, 2024. The registered office of our company is situated at C/O- Srinibas Pradhan, Near Chuakani, PO- Lamtibahal, Jharsuguda, Orissa - 768216, India.

We are in infrastructure development across various domains, with a primary focus on Roads and Highways, including Rural, Major District, and Urban roads. We utilizing a range of materials such as Aggregate, Sand, Tar, and Cement to ensure durable and reliable construction. In addition to roads, we focus on construction of High-Level Bridges and Steel Structures, both for bridges and sheds. We actively engage in competitive bidding processes for diverse projects in Odisha, spanning Roads, Bridges, Irrigation & Canals, Civil, and Industrial construction.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR

In the opinion of the Board of Directors of our Company, since the date of the last financial statements disclosed in this Draft Red Herring Prospectus, there have not arisen any circumstance that materially and adversely affect or are likely to affect the business activities or profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months, except as mentioned below:

1. The current Public Issue was authorized by a resolution of the Board of Directors in their meeting held on April 30, 2024. It was subsequently approved by the Shareholders through a Special Resolution at the Extraordinary General Meeting on May 18, 2024, in accordance with Section 62(1)(c) of the Companies Act, 2013.

2. The Board of Directors, in their meeting held on April 05, 2024, issued and allotted 2,17,200 equity shares with a face value of Rs. 10/- (Rupees Ten Only) each at a premium of Rs. 60/- (Rupees Sixty Only) each. This was done through Private Placement which was approved in the Meeting of the Board of Directors on March 27, 2024, and the Extraordinary General Meeting on March 28, 2024.

3. On March 31, 2024, our Company acquired 48.90% shareholding in Srinibas Pradhan Infra Private Limited, thereby making it a Wholly Owned Subsidiary

4. On May 8, 2024, our Company acquired 99.99% shareholding in Srinibas Pradhan Infra Private Limited, thereby making it a Wholly Owned Subsidiary.

5. Appointment of Ms. Ayushi Sharma as Independent Director w.e.f April 30, 2024.

6. Appointment of Mr. Biranchi Narayan Hota as Independent Director w.e.f April 30, 2024.

7. Appointment of Mr. Prithwiraj Singdeo as Independent Director w.e.f April 30, 2024.

8. Resignation of Mr. Yashwant Agrawal as Company Secretary & Compliance Officer w.e.f. June 15, 2024.

9. Appointment of Ms. Nishi Agarwal as Company Secretary & Compliance Officer w.e.f June 21, 2024.

KEY FACTORS AFFECTING THE RESULTS OF OPERATION

We believe that the following factors have significantly affected our results of operations and financial condition during the periods under review, and may continue to affect our results of operations and financial condition in the future:

1. Government Policies and Macroeconomic Environment on the Civil Infrastructure Sector

Our business relies heavily on infrastructural development projects such as roads, flyovers, bridges, and irrigation systems in Odisha, primarily awarded or funded by central and state governments or corporate entities. We anticipate that a significant portion of our revenue will continue to come from these sectors. This revenue depends largely on government budget allocations, public bodies participation, and comprehensive infrastructure policies that encourage private sector involvement. Sustained increases in budget allocations and public-private collaboration are expected to drive the launch of numerous infrastructure projects across India. Additionally, macroeconomic factors affecting the road and highway sectors will significantly impact our business prospects and operational results. Economic growth in manufacturing, services, and logistics will increase the demand for better transportation infrastructure, necessitating the construction, upgrading, and maintenance of highways. However, changes in government policies or administration could affect our business.

2. Bidding and Execution Capabilities

Infrastructure projects in India are awarded through competitive bidding. This involves pre-qualification based on technical and financial strengths and an evaluation of past contract performance. Our ability to form strategic partnerships also influences pre-qualification and project awards. Our project management capabilities, including efficient resource sourcing, communication between site and head offices, and project planning and monitoring, are critical to our success.

3. Funding Availability and Cost Management

Our projects are largely funded by our internal accruals, and any increase in cost of materials could adversely affect our financial condition. Significant working capital is often required to finance materials, equipment hire, and project work before receiving client payments. Maintaining stable operational and finance costs are crucial for our profitability and financial health.

4. Order Book Execution and Expansion

Our Order Book, calculated based on ongoing project values minus completed work, indicates our future revenue potential but does not account for work scope changes or escalation. This calculation method may differ from that of our competitors and does not guarantee future earnings. Our Order Book reflects medium to large contracts, and project schedules can vary due to factors beyond our control, such as land availability and work commencement delays. These factors can impact our revenue and financial performance. Order cancellations or payment delays can affect our cash flow, working capital, and impact operations.

5. Capability to Handle Larger Projects

To bid for high-value projects, we must meet pre-qualification criteria, including technical capability, quality reputation, safety record, financial strength, and relevant experience. Pre-qualification is critical, although price competitiveness is also crucial. Strategic partnerships enhance our chances of securing large projects.

6. Operational Uncertainties

Various operational uncertainties, such as skilled manpower availability, project completion, and timely delivery, can impact our operations. Delays can lead to increased costs, delayed payments, penalties, or contract termination. Fixed-price contracts pose financial risks if actual expenditures exceed bid assumptions due to project changes. Cost escalation provisions and price escalation clauses in contracts aim to mitigate these risks.

7. Geographic, Seasonal, and Weather Factors

Project location, weather conditions, and seasonal factors like heavy rains, landslides, and floods can affect our construction activities and resource utilization. Adverse weather can delay operations, increase costs, and impact productivity. Transporting manpower and machinery to project sites is also crucial for timely project completion.

8. Competition in the Industry

The Indian road construction industry is highly competitive, with project type, contract value, margins, complexity, location, and revenue risks influencing competition. Key competitive factors include service quality, technical ability, performance record, experience, safety records, and skilled personnel availability. However, price often determines tender awards.

OUR SIGNIFICANT ACCOUNTING POLICIES

The Restated Consolidated Financial Statements for Financial Year 2023-24 has been prepared considering the financial statements of associate company Srinibas Pradhan Infra Private Limited (associate since March 31, 2024) and the figures pertaining to Financial Years 2022-23 and 2022-23 have been prepared on standalone basis as there were no subsidiaries or associated enterprises during respective financial years.

For Significant accounting policies please refer Significant Accounting Policies and Notes to accounts, Annexure-IV and V beginning under Chapter titled "Restated Consolidated Financial Statements" beginning on page 214 of this Draft Red Herring Prospectus.

KEY PERFORMANCE INDICATORS AND CERTAIN NON-GAAP MEASURES

In evaluating our business, we consider and use certain non-GAAP financial measures and key performance indicators that are presented below as supplemental measures to review and assess our operating performance. The presentation of these non-GAAP financial measures and key performance indicators are not intended to be considered in isolation or as a substitute for the Restated Financial Information. We present these non-GAAP financial measures and key performance indicators because they are used by our management to evaluate our operating performance. These non-GAAP financial measures are not defined under Ind AS and are not presented in accordance with Ind AS. The non-GAAP financial measures and key performance indicators have limitations as analytical tools. Further, these non- GAAP financial measures and key performance indicators may differ from the similar information used by other companies, including peer companies, and hence their comparability may be limited. Therefore, these matrices should not be considered in isolation or construed as an alternative to Ind AS measures of performance or as an indicator of our operating performance, liquidity, profitability or results of operation.

EBITDA and EBITDA Margin

EBITDA is defined as our profit/loss before tax, finance cost, depreciation and amortization. Profit/loss before tax margin is defined as profit/loss before tax divided by revenue from operations. EBITDA margin is defined as our EBITDA as a percentage of revenue from operations.

The following table reconciles our profit/loss before tax (an AS financial measure) to EBITDA for the years indicated:

(Amount in Rs. Lakhs)

	For the year ended on March 31,
Particulars
	2024	2023	2022
Net Profit, as Restated	354.59	148.90	12.87
Add: Depreciation	56.80	12.98	2.40
Add: Interest on Loan	17.95	-	-
Add: Income Tax/ Deferred Tax	122.10	50.52	4.16
Add: Exceptional Item	-	-	-
EBIDTA	551.41	212.40	19.43
Revenue from Operations	3,526.94	2634.88	430.51
EBIDTA Margin	15.63%	8.06%	4.51%

The following table sets forth certain key performance indicators for the years indicated:

(Amount in Rs. Lakhs)

	For the year ended on March 31,
Particulars	2024	2023	2022
Revenue from Operations	3,526.94	2634.88	430.51
Total Income	3527.05	2635.01	430.51
Gross Profit (1)	1,049.25	449.02	42.40
Gross Profit Margin	29.75%	17.04%	9.85%
EBIDTA (2)	551.44	212.40	19.43
EBIDTA Margin (3)	15.63%	8.06%	4.51%
Profit After Tax	354.59	148.90	12.87
PAT Margin (4)	10.05%	5.65%	2.99%
Debt Equity Ratio (5)	0.24	-	2.10
ROCE (6)	84.13%	126.57%	67.81%
ROE (7)	68.38%	105.72%	143.85%

1) Gross profit is calculated as Revenue from Operations, minus Cost of Material Consumed and Change in Inventories in the year.

2) EBITDA is calculated as Profit for the year, plus total tax expenses (consisting of current tax and deferred tax), finance costs and depreciation and amortization expenses.

3) EBITDA Margin is calculated as EBITDA as a percentage of revenue from services.

4) PAT Margin is calculated as restated PAT for the year as a percentage of revenue from services.

5) Debt Equity Ratio is calculated as Total Debt divided by Total Equity.

6) ROCE is calculated as Earnings before Interest and Taxation (EBIT) for the year divided by shareholders equity plus loans

7) ROE is calculated as restated PAT for the year divided by average Shareholders fund.

PRESENTATION OF FINANCIAL INFORMATION

These Restated Consolidated Financial Information have been compiled by the management from the Restated Consolidated Audited financial statements of the Company as at and for the years ended, March 31, 2024, March 31, 2023 and March 31, 2022 are prepared in accordance with the accounting standards notified under the Section 133 of the Act ("Indian GAAP") and other accounting principles generally accepted in India which have been restated in accordance with the SEBI (ICDR) Regulations by M/s Kapish Jain & Associates, Chartered Accountants, Delhi and Peer Review Auditor of the Company.

The policies have been consistently applied by our Company in preparation of the Restated Consolidated Financial Statements and are consistent with those adopted in the preparation of financial statements for the year ended March 31, 2024.

The Restated Consolidated Financial Statements have been prepared so as to contain information / disclosures and incorporating adjustments set out below in accordance with the SEBI ICDR Regulations:

Adjustments to the profits or losses of the earlier years for the changes in accounting policies if any to reflect what the profits or losses of those periods would have been if a uniform accounting policy was followed in each of these years and of material errors, if any;

Adjustments for reclassification of the corresponding items of income, expenses, assets and liabilities, retrospectively for the years ended March 31, 2024, March 31, 2023 and March 31, 2022, in order to bring them in line with the groupings as per the Restated Consolidated Financial Statements of for the year ended March 31, 2024 and the requirements of the SEBI ICDR Regulations, if any; and

The resultant impact of tax due to the aforesaid adjustments, if any.

PRINCIPAL COMPONENTS OF STATEMENT OF PROFIT AND LOSS

Set forth below are the principal components of statement of profit and loss from our continuing operations:

Total Income

Our total income comprises of (i) revenue from operations and (ii) other income.

Revenue from Operations

Revenue from operations comprise the following: (i) revenue from sale of services and (ii) revenue from contracts with customers.

Other Income

Other income includes (i) interest income, (ii) other income.

Cost of Materials consumed

Cost of materials consumed includes consumption of raw materials such as aggregate, cement, steel, pipes, valves, sand, ready-mix, consumables and other hardware items.

Change in work in progress and Stock in Trade

Change in work in progress and stock in trade includes (i) Opening and Closing Balances of Raw Materials (ii) Opening and Closing Balances of Work in Progress.

Employee benefits expense

Employee benefits expenses primarily include (i) salary and wages, (ii) contribution to employee benefits (gratuity, provident fund, and other funds) and (iii) staff welfare expenses (iv) Bonus etc.

Finance cost

Finance costs include interest expense incurred in relation to short term and long-term borrowings of our company and other borrowing costs and bank charges.

Depreciation and Amortization expense

Depreciation includes depreciation on our building, vehicles, Computers, Plant & Machinery, Furniture and Fixtures, and Office equipment.

Direct Expense

Direct Expense includes Machine Hire Charges Repair, Maintenance expense, Fuel charges, Freight, Deductions from work, Loading & Unloading Charges and Construction Work.

Other Expenses

Other expense mainly includes Tender expenses, Insurance Charges, Travelling Expenses, Rent Expense, Rates and Taxes, Business Promotion, License Fees, Website expenses, Legal & Professional fees and other expenses.

RESULTS OF OUR OPERATION

The following table sets forth detailed total income data from our Restated Statement of profit and loss for the period ended on March 31, of the Financial Years 2024, 2023 and 2022, the components of which are also expressed as a percentage of total Income for such period.

					(Amount in Rs. Lakhs)
	For the year ended on March 31,
	2024		2023		2022
Particulars	Amount	% of total revenue	Amount	% of total revenue	Amount	% of total revenue
Revenue from Operations	3,526.94	100.00	2634.88	100.00	430.51	100.00
Other Income	0.11	-	0.13	-	-	-
Total Revenue	3527.05	100.00	2635.01	100.00	430.51	100.00
Expenses:
Cost of Material Consumed	2477.69	70.25	2185.86	82.95	388.10	90.22
Employee Benefit Expenses	413.54	11.73	210.07	7.97	18.49	4.22
Other Expenses	86.29	2.45	26.68	1.01	4.49	1.04
Finance Cost	17.95	0.51	-	-	-	-
Depreciation & Amortization Exp	56.80	1.61	12.98	0.49%	2.40	0.56
Total Expenses	3052.26	86.55	2435.57	92.43	413.49	96.04
EBIDTA	551.44	15.63	212.40	8.06	19.43	4.51
Share in Profit/(loss) of associates	1.91	0.05
Profit before Tax	476.69	13.52	199.43	7.57	17.03	3.96
Tax Expenses
Total Tax Expenses	122.10		50.52	1.92	4.16	0.97
Total Tax Expenses	122.10	3.46	50.52	1.92	4.16	0.97
Profit after Tax as Restated	354.59	10.05	148.90	5.65	12.87	2.99

REVIEW OF RESULTS OF OPERATIONS FOR THE PERIOD ENDED 31st MARCH 2024, 2023, AND 2022

TOTAL INCOME:

Revenue from operations

Our company is engaged in the business of infrastructure development and civil construction for projects like construction of roads, bridges, buildings etc. The Total Revenue from operations for the period ended on March 31, 2024, was Rs. 3.526.94 Lakhs. Which has increasing trend, as compared to previous years. The increase was attributed to new contracts every year because the company started its operations in the last quarter of 2021-22 only. The growth in the Revenue from Operations is as per restated consolidated financial statements:

			(Amount in Rs. Lakhs)
Particulars	2023-24	2022-23	2021-22
Revenue from Operations	3,526.94	2634.88	430.51
Growth (%)	33.86%	512.04%	-

Other Income:

Other income of the company was Rs. 0.11 lakhs constituting negligible portion of Total Income for the period ended March 31, 2024. Other Income includes Interest on Fixed Deposit and interest on Income Tax Refund.

EXPENDITURE

Cost of Materials consumed.

Our Cost of Materials consumed were Rs. 2,477.70 lakhs representing 70.25% of Total Income for the period ended March 31, 2024. Cost of materials consumed includes consumption of raw materials such as aggregate, cement, steel, pipes, valves, sand, ready-mix, other hardware items, Machine Hire Charges Repair, Maintenance expense, Fuel charges, Freight, Deductions from work, Loading & Unloading Charges, Construction Work and Change in inventories. In which Machine Hire Expense and construction cost being major component amounts to Rs. 410.68 lakhs and 508.05 lakhs respectively.

Employee Benefit Expenses

Employee Benefit expenses were Rs. 413.53 lakhs representing 11.72 % of Total Income for the period ended March 31, 2024. Employee Benefit Expenses includes Salaries and Wages, staff welfare expenses, gratuity expenses, bonus, contribution to provident fund and other funds.

Finance Cost

Finance expense was Rs. 17.95 lakhs representing 0.51% of Total Income for the period ended March 31, 2024. Finance costs include interest expense on long term and short-term borrowings and other borrowing costs.

Depreciation and Amortization

The Depreciation and amortization expense were Rs. 56.80 lakh representing 1.61 % of Total Income for the period ended March 31, 2024. Depreciation mainly includes depreciation on our vehicles, Computers, Plant & Machinery, Furniture and Fixtures, and Office equipment.

Other Expenses

Other Expenses were Rs. 86.29 lakhs representing 2.45% of Total Income for the period ended March 31, 2024. Other expense mainly includes Tender expenses, Insurance Charges, Travelling Expenses, Rent Expense, Rates and Taxes, Business Promotion, License Fees, Website expenses, Legal & Professional fees, and other expenses.

Profit before Tax

The Profit before Tax for the period ended March 31, 2024, was 13.52% of the total income. The Profit before Tax was Rs. 476.69 lakhs for the period ended September 30, 2023.

Profit after Tax (PAT)

As a result of the foregoing, our company recorded profit after tax was Rs. 354.59 lakhs for the period ended March 31, 2024. Profit after tax was 10.05% of Total Income of our company for the period ended on March 31, 2024. The increase in profit after tax was primarily due to increase in revenue from operations and substantial decrease in other expenses as compared to previous financial year.

COMPARISION OF FINANCIAL YEAR ENDED MARCH 31, 2024 WITH FINANCIAL YEAR ENDED MARCH 31, 2023 BASED ON RESTATED CONSOLIDATED FINANCIAL STATEMENTS

TOTAL INCOME

Our Total Income increased to 3,527.05 lacs in Financial Year 2023-24 from 2,635.01 lacs in Financial Year 2022-23, primarily due to an increase in our Revenue from Operations as discussed below:

Revenue from operations

(Amount in Rs. Lakhs)

			(Amount in Rs. Lakhs)
Particulars	2023-24	2022-23	2021-22
Revenue from Operations	3,526.94	2634.88	430.51
Growth (%)	33.86%	512.04%	-

Our company is engaged in the business of infrastructure development and civil construction for projects like construction of roads, bridges, buildings etc. The Total Revenue from operations for the year ended on FY 2023-24 was Rs. 3,526.94 Lakhs as compared to Rs. 2,634.88 Lakhs during the FY 2022-23 i.e., an increase by 33.86 % in FY 2023-24 as compared to FY 2022-23. There was increase in revenue due to increase in number of clients of the company in 2023-24 which can be seen from the list of top 10 customers mentioned. Therefore, the increase in revenue from operation is largely attributable to increase in the business operational activity in FY 2023-24 as compared to the previous Financial Years.

Other Income

Other income of the company is decreased by 15.38% to 0.11 lacs in Financial Year 2023-24 from 0.13 lacs in Financial Year 2022-23. Interest on Fixed Deposit and Interest on refund of income tax is the main constituents of the Other Income for the year Financial Year 2023-24. There was a marginal decrease in interest income during the Financial Year 2023-24 as compared to previous financial year.

(Amount in Rs. Lakhs)

Particulars	2023-24	2022-23	2021-22
Other Income	0.11	0.13	-
Growth (%)	-15.38%	-	-

EXPENDITURE

Our total expenses increased to Rs. 3,052.26 Lakhs for the FY 2023-24 from Rs. 2,435.57 Lakhs for the FY 2022-23. Our total expense was 86.55% of total income in FY 2023-24 and 92.43% of total income in FY 2022-23, which is a decrease of 5.88% of total income. The reasons for change are discussed below:

Cost of Materials consumed.

Our Cost of Materials consumed increased by Rs. 291.83 lakhs amounting to Rs. 2,477.69 Lakhs in FY 2023-24 from Rs. 2,185.86 Lakhs in FY 2022-23. Increase in Cost of materials consumed is attributable to increase in revenue from operation during the year.

Cost of materials and services consumed decreased as a percentage of total income to 70.25 % in FY 2023-24 from 82.95% in FY 2022-23 i.e., decrease of 12.70% of total income. Cost of materials consumed includes consumption of raw materials such aggregate, cement, steel, pipes, valves, sand, ready-mix, other hardware items, Machine Hire Charges Repair, Maintenance expense, Fuel charges, Freight, Deductions from work, Loading & Unloading Charges, Construction Work and Change in inventories. There is major decrease in the cost of Construction work, Deduction from work and Transportation charges of 12.8%, 1.17% and 0.30% respectively as a result of better negotiations with vendors and better efficiency in operations resulting in decrease of Cost of Material and services as a % of Total Income.

Employee Benefit Expenses

Employee Benefit expenses increased to Rs. 413.53 Lakhs for FY 2023-24 from Rs. 210.07 Lakhs for FY 2022-23 showing an increase Rs. 203.46 lakhs as compared to FY 2022-23. The increase in employee benefit expenses is primarily due to hiring of new employees and workers on-site because of increase in operations. Salaries and wages component increased to Rs. 339.61 Lakhs in FY 2023-24 from Rs. 170.37 Lakhs in FY 2022-23 respectively.

Finance Cost

Finance expenses were Rs.17.95 Lakhs in FY 2023-24 but there was no interest cost in 2022-23 because of absence of loans in the company. Borrowing facility was availed for the first time in 2023-24 since incorporation.

Depreciation

The Depreciation and amortization expense for FY 2023-24 was Rs. 56.80 Lakhs as against Rs.12.98 Lakhs for FY 2022-23 showing an increase mainly on account of huge acquisition and deployment in plant and equipment amounting to Rs. 275.46 Lakhs to support the operational activities of the business during the FY 2023-24

Other Expenses

Other Expenses increased to Rs. 86.29 Lakhs for FY 2023-24 from Rs. 26.68 Lakhs for FY 2022- 23 showing an increase of Rs. 59.61. Other expense includes Bank Charges & Bank Processing Fees, Tender expenses, Insurance Charges, Travelling Expenses, Rent Expense, Rates and Taxes, Business Promotion, License Fees, Website expenses, Professional & Consultancy fees, Electricity and other expenses.

Other expenses increased due to increased activities of Business Promotion, Rates & Taxes, Professional and consultancy Fees, and License Fees & Taxes. Professional and consultancy Fees was increased due to the various consultancy received for advice for share capital increase and services of Restated Consolidated Financial Statements. Other expenses increased due to increase in Operations.

Profit before Tax

As a result of the foregoing, we recorded an increase of Rs. 277.26 lakhs in our profit before tax, which was Rs. 476.69 Lakhs in FY 2023-24, as compared to Rs. 199.42 Lakhs in FY 2022-23. The Profit before Tax for the FY 2023-24 was 13.46% of the total income and it was 7.57% of total income for the FY 2022-23. The increase in profit before tax was primarily due to increase in revenue from operations and decrease in Cost of Material and Services consumed, as compared to previous financial year.

Profit after Tax

Our profit for the period, increased by 205.69 lakhs i.e. 138.14% to Rs. 354.59 lakhs in Fiscal 2024 from Rs. 148.90 lakhs in Fiscal 2023, as a result of the factors described above.

COMPARISION OF FINANCIAL YEAR ENDED MARCH 31,2023 WITH FINANCIAL YEAR ENDED MARCH 31, 2022 BASED ON RESTATED CONSOLIDATED FINANCIAL STATEMENTS

TOTAL INCOME

Our Total Income increased to 2,635.01 lacs in Financial Year 2022-23 from 430.51 lacs in Financial Year 2021-22, primarily due to an increase in our Revenue from Operations as discussed below:

Revenue from operations

The Total Revenue from operations for the year ended on FY 2022-23 was Rs. 2,634.88 Lakhs as compared to Rs. 430.51 Lakhs during FY 2021-22. The Company was incorporated on September 25, 2020, and began operations in the fiscal year 2021-22. The growth in revenue from operations was driven by increased operational activities, including the onboarding of new customers. For further details, please refer to the Restated Consolidated Financial Statements - Top 10 Customers on page 255 of the Draft Red Herring Prospectus.

Other Income

Other income of the company was 0.13 lacs in Financial Year 2022-23. Other income included Interest on income tax refund only for the year Financial Year 2022-23.

EXPENDITURE

Our total expenses increased to Rs. 2,435.58 Lakhs for the FY 2022-23 from Rs. 413.48 Lakhs for the FY 2021-22. Our total expenses were 92.43% of total income in FY 2022-23 and 96.04 % of total income in FY 2021-22, which is a decrease of 3.61 % of total income. The reasons for the change are discussed below:

Cost of Materials consumed.

Our Cost of Materials and Services increased by Rs. 1,847.33 lakhs in FY 2022-23 from Rs. 388.10 Lakhs in FY 2021-22 to Rs. 2,185.85 Lakhs in FY 2022-23. Increase in Cost of materials consumed is mainly attributable to increase in revenue from operation during the year.

Cost of materials consumed includes consumption of raw materials such aggregate, cement, steel, pipes, valves, sand, ready-mix, other hardware items, Machine Hire Charges Repair, Maintenance expense, Fuel charges, Freight, Deductions from work, Loading & Unloading Charges, Construction Work and Change in inventories.

Cost of materials consumed decreased as a percentage of total income to 82.95% in FY 2022-23 from 90.15 % in FY 2021-22. There is decrease in the cost of Construction work, Deduction from work and Transportation charges of 2.02%, 2.55% and 2.47% respectively as a result of better negotiations with vendors and better efficiency in operations.

Employee Benefit Expenses

Employee Benefit expenses increased to Rs. 210.07 Lakhs for FY 2022-23 from Rs. 18.49 Lakhs for FY 2022-22. The increase in employee benefit expenses is primarily due to hiring of new employees and worker on-site because of increase in operations.

Finance Cost

There was no Finance Cost in FY 2022-23 and FY 2021-22 as the company did not have any loans availed in both years.

Depreciation

The Depreciation and amortization expense for FY 202-23 was Rs.12.98 Lakhs as against Rs.2.40 Lakhs for FY 2021-22 showing an increase on account of huge addition of Rs. 40.35 Lakhs to support the operational activities of the business in FY 2022-23 and deployment of plant and machinery amounting to 48.46 Lakhs in FY 2021-22 was for less than 6 months.

Other Expenses

Other Expenses increased to Rs. 26.69 Lakhs for FY 2022-23 from Rs. 4.49 Lakhs for FY 2021- 22 showing an increase of 494.43%. Other expense includes Bank Charges & Bank Processing Fees, Tender expenses, Insurance Charges, Travelling Expenses, Rent Expense, Rates and Taxes, Business Promotion, License Fees, Website expenses, Professional & Consultancy fees, Electricity, and other expenses. Other expenses increased due to increase in Business Promotion, Rates & Taxes, Professional and consultancy Fees, and License Fees & Taxes. Professional and consultancy Fees was increased due to the various consultancy received for advice for share capital increase and services of Restated Consolidated Financial Statements. Other expenses increased due to increase in Operations.

Profit before Tax

As a result of the foregoing, we recorded an increase of Rs. 182.40 lakhs in our profit before tax, which amounted to Rs. 199.42 Lakhs in FY 2022-23, as compared to Rs. 17.03 Lakhs in FY 2021-22. The Profit before Tax for the FY 2022-23 was 7.57 % of the total income and it was 3.96 % of total income for the FY 2021-22. The increase in profit before tax was primarily due to increase in revenue from operations and decrease in Cost of Material and Services consumption as a % to total income, as compared to previous financial year.

Profit after Tax

Our profit for the period, increased by 136.03 lakhs to Rs. 148.90 lakhs in Fiscal 2023 from Rs. 12.87 lakhs in Fiscal 2022, as a result of the increased operations and reasons stated above.

CASH FLOWS

The following table sets forth selected information from our statement of cash flows for the periods indicated:

Particulars	2023-24	2022-23	2021-22
Net Cash Flows from / (used in) operating activities (A)	276.43	(33.54)	26.16
Net Cash Flows from / (used in) investing activities (A)	(586.63)	(41.12)	(48.46)
Net Cash Flows from / (used in) financing activities (A)	313.87	69.70	32.30
Net increase / (decrease) in cash and cash equivalents A+B+C	3.66	(4.96)	10.01
Cash and Cash equivalent at the beginning of the year	8.03	12.99	2.99
Cash and Cash equivalent at the end of the year	11.69	8.03	13.00

Operating Activities

2023-24

Net cash generated in operating activities during the year 2023-24 was 276.43 lakhs. While our net profit before tax was 476.69 lakhs, we had an operating profit before working capital changes of 549.42 lakhs, primarily due to adjustments for depreciation and amortization expenses of 56.80 lakhs and finance costs of 17.95 lakhs, interest income of (0.11) lakhs. Our adjustments for working capital changes for the year 2023-24 primarily consists of increase in inventories of (351.70) lakhs, trade receivables of (296.52) lakhs and increase in short term loans of (239.72) lakhs and other assets of (8.38) lakhs, which were partially offset by decrease in trade and other payables of 694.59 lakhs. Our net cash generated from operations was 276.43 lakhs after adjusting tax paid of 71.26 lakhs.

2022-23

Net cash used in operating activities during the year 2022-23 was (33.54) lakhs. While our net profit before tax was 199.42 lakhs, we had an operating profit before working capital changes of 212.27 lakhs, primarily due to adjustments for depreciation and amortization expenses of 12.98 lakhs, interest income of (0.13) lakhs. Our adjustments for working capital changes for the year 2022-23 primarily consists of increase in inventories of (68.78) lakhs, decrease in trade receivables of 1.39 lakhs and increase in short term loans of (9.60) lakhs and other assets of (174.01) lakhs, which were partially offset by decrease in trade and other payables of 55.94 lakhs. Our net cash generated from operations was (33.54) lakhs after adjusting tax paid of 50.74 lakhs.

2021-22

Net generated used in operating activities during the year 2021-22 was 26.16 lakhs. While our net profit before tax was 17.03 lakhs, we had an operating profit before working capital changes of 19.43 lakhs, primarily due to adjustments for depreciation and amortization expenses of 2.40 lakhs. Our adjustments for working capital changes for the year 2021-22 primarily consists of increase in inventories of (34.51) lakhs, trade receivables of

(210.19) lakhs and increase in short term loans of (0.78) lakhs and other assets of (67.76) lakhs, which were partially offset by decrease in trade and other payables of 324.79 lakhs. Our net cash generated from operations was 26.16 lakhs after adjusting tax paid of 4.11 lakhs.

Investing Activities

2023-24

Net cash used in investing activities was (585.63) lakhs in 2023-24, primarily on account of (276.21) lakhs used for purchase of property, plant and equipment and capital work in progress, (174.33) lakhs used for the investments in shares and (136.20) used for advance against investment in shares, which were partially offset by proceeds from other income of 0.11 lakhs.

2022-23

Net cash used in investing activities was (41.12) lakhs in 2022-22, primarily on account of (41.25) lakhs used for purchase of property, plant and equipment and capital work in progress, which were partially offset by proceeds from other income of 0.13 lakhs.

2021-22

Net cash used in investing activities was (48.46) lakhs in 2021-22, primarily on account of (276.21) lakhs used for purchase of property, plant and equipment and capital work in progress.

Financing Activities

2023-24

Net cash generated in financing activities in 2023-24 amounted to 313.87 lakhs, which primarily consists of issue of equity share of 150.00 lakhs, proceeds from long-term borrowings of amount 128.86 lakhs, net proceeds from short-term borrowings amounting to 52.96 lakhs and interest paid of (17.95) lakhs.

2022-23

Net cash generated in financing activities in 2022-23 amounted to 69.70 lakhs, which primarily consists of net proceeds of long term borrowing of 69.70 lakhs.

2021-22

Net cash generated in financing activities in 2021-22 amounted to 32.30 lakhs, which primarily consists of net proceeds of long term borrowing of 32.30 lakhs

FINANCIAL INDEBTEDNESS

As on the date of this Draft Red Herring Prospectus, our Company has total outstanding of secured borrowings from banks aggregating to Rs. 181.82 lakhs in the ordinary course of business.

RELATED PARTY TRANSACTIONS

Related party transactions involving our promoters, directors, their entities, and relatives primarily pertain to share capital, remuneration, unsecured borrowings, and the purchase and sale of goods and services etc. For further details of such related parties under AS-18, refer chapter titled "Restated Consolidated Financial Statements" beginning on page 214.

CAPITAL EXPENDITURE IN LAST THREE YEARS

Our net capital expenditures include expenditures on tangible assets which primarily include Plant & Machinery, furniture and fixtures, office equipment, vehicle, and computers. The following table sets out our net capital expenditures for the period ended March 31, 2024, and for the financial year ended 2023 and 2022.

		(Amount	in Rs. Lakhs)
	For the year ended March 31,
Particulars	2024	2023	2022
Plant & Machinery	267.03	18.54	46.06
Furniture & Fixtures	1.38	5.28	0.32
Computers & Data Processing Units	7.06	4.03	2.08
Vehicles	-	12.50	-
Total	275.47	40.35	48.46

CONTINGENT LIABILITIES

As on the date of this Draft Red Herring Prospectus, our Company has no contingent liability in the name of claims against the company not acknowledged as debt bank guarantee etc.

QUALITATIVE DISCLOSURE 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 will fail to perform or fail to pay amounts due causing financial loss. 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, continuous follow-up, 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 another 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 other price like equity prices, which will affect our income or the value of our holdings of financial instruments.

Foreign currency risk is not material as our Companys primary business activities are within India and does not have significant exposure in foreign currency.

Currently, our companys interest rate exposure is mainly related to debt obligations outstanding.

Effect of Inflation

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

Details of default, if any, including therein the amount involved, duration of default and present status, in repayment of statutory dues or repayment of debentures or repayment of deposits or repayment of loans from any bank or financial institution

Except as disclosed in chapter titled "Restated Consolidated Financial Statements" beginning on page 214, there have been no defaults in payment of statutory dues or repayment of debentures and interest thereon or repayment of deposits and interest thereon or repayment of loans from any bank or financial institution and interest thereon by the Company.

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

Unusual or infrequent events or transactions

Except as described in this Draft Red Herring Prospectus, during the years under review there have been no transactions or events, which in our best judgment, would be considered unusual or infrequent.

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

Indian rules and regulations as well as the overall growth of Indian economy have a significant bearing on our operations. Major changes in these factors can significantly impact income from continuing operations.

Other than as described in the section titled "Risk Factors" beginning on page 34 to our knowledge there are no significant economic changes that materially affects or are likely to affect income of our Company from continuing operations.

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 titled "Risk Factors" beginning on page 34, 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.

Future changes in relationship between costs and revenues.

Apart from the risks as disclosed under Section titled "Risk Factors" beginning on page 34, there no known factors that might affect the future relationship between cost and revenue. Our Companys future costs and revenues will be determined by demand/ supply situation, government policies, global market situation and cost of our services.

The extent to which services increase in net sales or revenue are due to quality of our service and increase in number of customers.

Increase in revenue is by and large linked to increases in volume of business activity by the Company.

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

Our company is engaged in the of infrastructure development and civil construction for projects like construction of roads, bridges, buildings etc. Increase in revenues are by and large linked to increase in operations of company and dependent on the price realization of our services.

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

Our company is engaged in the business of infrastructure development and civil construction for projects like construction of roads, bridges, buildings etc. Relevant Industry data, as available, has been included in the section titled "Our Industry" beginning on page 114 of this Draft Red Herring Prospectus.

Status of any publicly announced new products or business segment.

Otherwise as stated in the Draft Red Herring Prospectus and in the section titled "Business Overview" appearing on page 134, our company has not publicly announced any new business segment till the date of this Draft Red Herring Prospectus.

The extent to which business is seasonal.

Our company is engaged in the business of infrastructure development and civil construction for projects like construction of roads, bridges, buildings etc. Business of our company to that extent is not seasonal in nature. Hence, our business is not subject to seasonality or cyclicality.

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

Our business is substantially dependent on projects awarded by our clients to us. For further details, please refer

"Risk factor - We depend on certain key customers for our revenues. A decrease in the revenues we derive from them could materially and adversely affect our business, results of operations, cash flows and financial condition" on page 36.

The percentage of revenue from operations derived from our top clients is given below:

Particulars	FY 2024	FY 2023	FY 2022
Top 1 Customer (%)	31.56	70.51	67.42
Top 3 Customers (%)	76.73	98.87	95.13
Top 5 Customers (%)	86.22	100.00	100.00
Top 10 Customers (%)	96.66	100.00	100.00

The percentage of purchase material and stock in trade derived from our top suppliers is given below:

Particulars	FY 2024	FY 2023	FY 2022
Top 1 Supplier (%)	20.54	8.86	19.67
Top 3 Suppliers (%)	34.66	23.42	33.56
Top 5 Suppliers (%)	43.19	32.55	43.47
Top 10 Suppliers (%)	54.49	48.74	62.03

Competitive Conditions

We face competition from existing and potential organized and unorganized competitors, which is common for any business. We have, over a period, developed certain competitive strengths which have been discussed in section titled "Our Business" beginning on page 134 of this Draft Red Herring Prospectus.

Material Frauds

There are no material frauds, as reported by our Statutory Auditor, committed against our Company, in the last three Fiscals.