Subam Papers Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our Financial Statements as Restated which is included in this Draft Red Herring Prospectus. The following discussion and analysis of our financial condition and results of operations is based on our Financial Statements as Restated, for the years ended March 31, 2024, 2023 and 2022 including the related notes and reports, included in this Draft Red Herring Prospectus is prepared in accordance with requirements of the Companies Act, 2013 and restated in accordance with the SEBI (ICDR) Regulations, 2018, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Our Financial Statements, as restated have been derived from our audited statutory financial statements. Accordingly, the degree to which our Financial Statements as Restated willprovide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity with Indian GAAP, Companies Act, SEBI Regulations and other relevant accountingpractices in India.

This discussion contains forward looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these Forward-Looking Statements as a result of certain factors such as those described under chapters titled "Risk Factors" and "Forward Looking Statements" beginning on pages 32 and 5, respectively of this Draft Red Herring Prospectus.

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

We are a company engaged in the manufacturing of Kraft Paper, D?plex paper and other Paper Products. We proudly call ourselves as a packaging solution providing company. Subam started its journey in the year 2004 with manufacturing of paper cones and later expanded the product base by adding Duplex board and Kraft paper in its portfolio. Our company is not like the traditional paper manufactures, we do not manufacture our products from wood pulp but instead we use wastepaper as our raw material. We aim to preserve mother nature and tend to drive our company on the principle of recycling. Our company leverages wastepaper as the primary raw material in the production of Kraft Paper and Duplex Board.

We are dedicated to sustainability, using recycled paper and cardboard in the production of Kraft Paper and Duplex Board. This not only reduces waste but also underscores our commitment to environmental responsibility. To further minimize our environmental impact, we harness renewable energy through our own wind and solar power installations. Our wind energy infrastructure includes two windmills: with a capacity of 850 KW each totalling approximately 1.7 MW. Additionally, we operate a solar plant with a capacity of 14 MW. These renewable energy sources enable our manufacturing facilities to significantly reduce their carbon footprint, aligning with our goal of sustainable and eco-friendly operations.

For more details kindly refer our chapter titled "Our Business" on page 113 of this Draft Red Herring Prospectus.

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 or adversely affect or are likely to affect the profitability of our Company or the value of its assets or its ability to pay its material liabilities within the previous twelve months except:

> The company increased itss Authorised equity share capital from Rs.2,05,00,000/- to Rs.25,05,00,000/- vide resolution passed in its members meeting dated May 06, 2024.

> The Company issued 1,46,49,048 bonus Equity Shares in the proportion of 9:1 (Nine) fully paid equity share of Rs.10/ - each allotted against 1(One) Equity Shares of Rs.10/- each vide resolution passed in its members meeting dated May 18, 2024 effect of this bonus issue has been considered to calculate EPS.

> The Board of our Company has approved to raise funds through initial public offering in the Board meeting held on May 17, 2024.

> The members of our Company approved proposal of Board of Directors to raise funds through initial public offering in the extra ordinary general meeting held on May 18, 2024.

> The company issued Preferential Shares 8,03,350 Equity Shares at a face value of Rs. 10/- each at a premium of Rs. 95/- per share to the allotees vide Board Resolution dated June 15, 2024.

Factors Affecting Our Results of Operations

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

1. Paper waste recycle and Sustainable packaging solutions

2. Significant Advantage Due to Proximity of Subams Factory Location

3. Efficient Inventory Management

4. Fully Integrated Manufacturing Facility

5. Consistent Financial Performance

6. Advantage of producing all grades of Paper

Our business is subjected to various risks and uncertainties, including those discussed in the section titled ‘Risk Factors beginning on page 27 of this Draft Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

Key Performance Indicators of our Company

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

(Rs. in Lakhs)

Key Financial Performance	Financial Year ended March 31, 2024	Financial Year ended March 31, 2023	Financial Year ended March 31, 2022
Revenue from operations(1)	49,386.46	50,829.89	32,927.45
EBITDA(2)	7,272.10	3,148.87	4,071.90
EBITDA Margin(3)	14.72%	6.19%	12.37%
PAT	3,341.80	(26.79)	2,600.23
PAT Margin(4)	6.77%	(0.05)%	7.90%
Networth(5)	19,904.12	16,562.32	16,589.11
RoE %(6)	16.79%	(0.16)%	15.67%
RoCE% (7)	20.84 %	5.88%	12.82%

Notes:

Revenue from Operations means the Revenue from Operations as appearing in the Restated Consolidated Financial Statements

<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 Margin is calculated as PAT for the period/year divided by revenue from operations.

<⁵ Net worth means the aggregate value of the paid-up share capital and reserves and surplus of the company less deferred tax assets.

<⁶ Return on Equity is ratio of Profit after Tax and Shareholder Equity

<⁷⁾ Return on Capital Employed is calculated as EBIT divided by capital employed, which is defined as shareholders equity plus long-term borrowings. Here, EBIT is calculated as Profit before tax + Interest Expenses - Other Income.

For further detail on Key Performance Indicators of our company, please refer Chapter Titled "Basis of Offer Price" on page 103 of this Draft Red Herring Prospectus.

STATEMENT OF SIGNIFICANT POLICIES Corporate Information:

1. Company Background

Subam Papers Limited (UIN: U21012TN2004PLC054403), Subam Paper And Boards Private Limited its a subsidiary (UIN: U21000TN2020PTC136504) and Subam Agro Ventures Private Limited its a subsidiary (UIN: U01111TN2004PTC054666) are collectively referred to as "The Company" or SP Ltd or "The Group"

Subam Papers Limited is a Company incorporated in India under The Companies Act, 1956; an existing Company under the Companies Act, 2013 and is domiciled in India. Its Registered Office is located at S.F. No. 143-146 Vaduganpatti Village Nadukallur to Tirunelveli, Tirunelveli, Tirunelveli Taluk, Tamil Nadu, India, 627010

The Company is in the business of manufacture, sale and dealing in Kraft Paper Boards, Duplex Boards, and other allied goods and primarily caters to the Indian Market and also doing exports directly and through merchant exporters.

2. Significant Accounting Policies Basis of Preparation

These financial statements 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, read with rule 7 of the Companies (Accounts) Rules, 2014 as applicable. The financial statements have been prepared under the historical cost convention on accrual basis, except for certain financial instruments which are measured at fair value.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.

Change in Depreciation Method

During the year ended 31st March 2024, the company revised the estimated useful life of its machinery from the rates specified in Schedule II of the Companies Act, 2013, to managements estimated useful life. This change was based on a detailed review of the machinerys usage and technological advancements.

The impact of this change on the financial statements for the year is as follows:

- Increase in profit before tax by Rs.553.74 Lakhs due to lower depreciation expense.

- Decrease in depreciation expense by Rs.553.74 Lakhs.

The effect of the change on future periods is impracticable to determine at this time.

2.1 Fixed Assets

Tangible Fixed Assets is stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. Cost of acquisition or construction of property, plant and equipment comprises its purchase pnce including import duties and non-refundable purchase taxes after deducting trade discounts, rebates and any directly attributable cost of bringing the item to its working condition for its intended use.

Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of

the item can be measured reliably. All other repairs and maintenance cost are charged to the standalone statement of profit and loss during the period in which they are incurred.

Gains or losses that arise on disposal or retirement of an asset are measured as the difference between net disposal proceeds and the carrying value of property, plant and equipment and are recognized in the statement of profit and loss when the same is derecognized.

2.2 Capital Work-in-Progress

All project / capital related expenditure viz., civil works, machinery under erection, construction and erection materials, pre-operating expenditure including interest net of revenue included / attributable to the contracts of the project / as of incurred up to the date when the asset is ready for its intended use are shown as Capital work-in- progress.

2.3 Borrowing Costs

Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

2.4 Depreciation

Depreciation is calculated on cost of items of the Fixed Assets less their estimated useful values over their estimated useful lives using the straight-line method and is generally recognized in the statement of profit and loss account. Freehold land is not depreciated.

The estimated useful lives of the Fixed Assets are as follows:

Assets	Management estimate of useful life
Building	30 Years
Office Equipment and Furniture	3 to 10 Years
Plant & Machinery	15 to 25 Years
Vehicles	10 Years

Depreciation method and useful lives and residual values are reviewed at each financial year end adjusted if appropriate. The management believes that its estimates of useful lives as given above best represent the period over which the management expects to use the assets.

2.5 Current / Non-current classification

For the purpose of Current / Non-Current classification, the Company has reckoned its normal operating cycle as twelve months based on the nature of products and the time between the acquisition of assets or inventories for processing and their realisation in cash and cash equivalents.

2.6 Impairment

At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment. Recoverable amount is the higher of an assets net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre- tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Reversal of impairment loss is recognised as income in the statement of profit and loss.

2.7 Investments

Long-term investments and current maturities of long-term investments are stated at cost, less provisi?n for other than temporary diminution in value. Current investments, except for current maturities of long-term investments, comprising investments in mutual funds, government secundes and bonds are stated at the lower of cost and fair value.

2.8 Revenue recognition

Revenue is measured based on the transaction pnce, which is the fair value of the consideration received or receivable after netting trade discounts, volume discounts, sales returns and Goods and Services Tax. Revenue from sale of goods is recognized upon transfer of control of promised goods or services to customers.

Income from interest is being accounted for on time proportion basis taking into account the amount outstanding and the applicable rate of interest. In respect of other heads of income, the company follows the practice of accounting of such income on accrual basis.

Earnings from Non-Conventional Energy sources

The company has installed Off-site Solar Plant and Windmills for captive consumption of power. The value of power so generated from the Off-site Solar Plant and Windmills are shown separately under "Other Operating Revenues".

2.9 Taxation

Current income tax expense comprises taxes on income from operations in India Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction for relevant tax paying units and where the Company is able to and intends to settle the asset and liability on a net basis. The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

a) Foreign exchange transactions/translations:

i. Initial Recognition: Foreign currency transactions are reported in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

ii. Conversion: Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date.

iii. Exchange Differences: Exchange difference arising on long term currency monetary items related to acquisition of a fixed asset a recapitalized and depreciated over the remaining useful life of the asset. The exchange differences on other foreign currency monetary items are accumulated in.

"Foreign currency monetary item translation difference account" and amortized over the remaining life of the concerned monetary item. All other exchange differences are recognised as income or as expense in the period in which they arise according to the accounting standard 11 "The effects of change in Foreign exchange rates".

2.10 Inventories

Raw materials are carried at the lower of cost and net realisable value. Cost is determined on a FIFO basis Work-in- progress is carried at the cost. Stores and spare parts are carried at cost. Finished goods produced or purchased by the

Company are carried at lower of cost and net realisable value. Cost includes direct material and labor cost and a proportion of manufacturing overheads.

2.11 Provisions, Contingent liabilities and Contingent assets

A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.

2.12 Cash and Cash equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.

2.13 Events after reporting period

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, nature and consequent impact of the events of material size, occurring after the Balance Sheet date, are only disclosed.

2.14 Employee benefits

All employee benefits payable wholly within twelve months after the end of the annual reporting period of rendering the service are classified as Short-Term Employee Benefits and they are recognised in the period in which the employee renders the related service.

The Company recognizes the undiscounted amount of Short-Term Employee Benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.

Retirement Benefits

1. Gratuity is provided for the eligible employees as per the Payment of Gratuity Act 1972 with actuarial valuation. The company does not have any approved super annulation fund to its employees.

2. The company contributes Provident Fund to the employees under the Employees Provident Fund Scheme run by the Government.

3. As per the rules and regulations of the company the leave encashment is drawn within the year itself and no amount need to be provided.

2.15 Earnings per share

Basic earnings per equity share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

Diluted earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the Company and weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. In computing dilutive earnings per share, only potential equity shares that are dilutive and that decrease profit per share are included.

Discussion on Results of Operation

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

Results of Our Operations

The following table sets forth select financial data from our Financial Statements as Restated Profit and Loss for the financial years ended on March 31, 2024, 2023 and 2022 the components of which are also expressed as a percentage of total revenue for such periods:

(Rs. in Lakhs)

Particulars	For the year ended March 31, 2024	% of Total income	For the year ended March 31, 2023	% of Total income	For the year ended March 31, 2022	% of Total income
Revenue from operations	49,386.46	99.37%	50,829.89	99.54%	32,927.45	99.00%
Other income	310.85	0.63%	232.47	0.46%	332.42	1.00%
Total Income (A)	49,697.31	100.00%	51,062.36	100.00%	33,259.87	100.00%
Expenses:
Cost of Materials Consumed	37,281.99	75.02%	43,151.69	84.51%	26,802.86	80.59%
Change in Inventory of Stock in Trade and Finished Goods	183.91	0.37%	(298.62)	-0.58%	(1,217.43)	(3.66)%
Employee Benefit Expenses	2,120.60	4.27%	2,142.09	4.20%	1,397.13	4.20%
Other Expenses	2,466.64	4.96%	2,559.75	5.01%	1,835.39	5.52%
Total Expenses (B)	42,053.13	84.62%	47,554.91	93.13%	28,817.95	86.64%
Earnings Before Interest, Taxes, Depreciation & Amortization(C=A-B)	7,644.17	15.38%	3,507.45	6.87%	4,441.92	13.36%
Finance Cost (D)	1,767.51	3.56%	1,414.53	2.77%	307.31	0.92%
Depreciation and Amortization Expenses (E )	1,296.71	2.61%	1,596.56	3.13%	666.72	2.00%
Profit before Exceptional Items	4,579.95	9.22%	496.35	0.97%	3,467.89	10.43%
Exceptional Items	61.23	0.12%	126.11	0.25%	37.60	0.11%
Profit/(Loss) before Tax	4,518.73	9.09%	370.24	0.73%	3,430.28	10.31%
Tax Expenses:
Current Tax	772.88	1.56%	-	0.00%	716.95	2.16%
Deferred Tax	443.16	0.89%	438.59	0.86%	216.49	0.65%
Profit/(Loss) for the year	3,302.69	6.65%	(68.35)	-0.13%	2,496.84	7.51%
Add/(Less): Share of profit/(loss) of Associate Companies	39.10	0.08%	41.74	0.08%	103.24	0.31%
Add/(Less): Minority Interests share in profit/(loss)	0.01	0.00%	(0.18)	0.00%	0.15	0.00%
X . Profit (Loss) for the period	3,341.80	6.72%	(26.79)	-0.05%	2,600.23	7.82%

Overview of Revenue and expenditure Revenue and Expenditure

Total Income: Our total income comprises of revenue from operations and other income.

Revenue from operations: Our revenue from operations comprises of Domestic Sale of Products, Exports, Sale of Agricultural Produce and Other Operating Revenue.

Other Income: Our other income is reduced by Inter-company Other Income and comprises of Interest Income from Fixed Deposits, Bad Debts recovered, Other Income, Discount Received and Miscellaneous Write Back.

Expenses: Our expenses comprise of Cost of Material Consumed, Change in Inventories of work in progress and finished goods, Employee Benefit Expenses, Finance Cost, Depreciation and Amortisation Expenses and Other Expenses.

Raw Material Consumed: Our Raw Material consumed consists of change in stock of Raw Material, Purchase of Raw material adjusted by inter company purchases, Consumption of Stores and Spare parts and Direct Expenses which further includes Manufacturing expenses, Power & Fuel and Freight.

Changes in Inventories: Our Changes in Inventories comprises of change in Stock of Finished goods and Work-in- progress from the beginning of the year to the end of the year.

Employee Benefit Expenses: Our employee benefit expense consists of Salaries & Wages, Contribution to Provident & Other funds, Director Remuneration, Gratuity, Bonus and Staff Welfare Expenses.

Finance Cost: Our finance costs comprise of Interest on Loan, Bank Charges, Net loss on foreign currency transactions and translation & Other Finance Charges.

Depreciation and amortisation expenses: Tangible assets are depreciated over periods corresponding to their estimated useful lives. Depreciation includes depreciation charged on Property, Plant & Equipment & Intangible Assets.

Other expenses: Other expenses includes Payment to Auditors, Advertisement, Commission, Consultancy Fees, Freight, Insurance, Legal & Professional Charges, Interest Expenses on Income Tax, Rent, Repairs & Maintenance to Building, machinery & Others, Rates & Taxes, Selling & Distribution Expenses, Postage Expenses, Printing & Stationery, Travelling Expenses, CSR Expenses, Donations, Miscellaneous Expenses, Rebates & Discounts Given, Provision for Doubtful Debts and Miscellaneous Written Off.

Tax Expenses: Income taxes are accounted for in accordance with Accounting Standard - 22 on "Accounting for Taxes on Income" ("AS-22"), prescribed under the Companies (Accounting Standards) Rules, 2006. Our Company provides for current tax as well as deferred tax, as applicable.

Provision for current taxes is made at the current tax rates after taking into consideration the benefits available to our Company under the provisions of the Income Tax Act, 1961.

Deferred tax arises from the timing differences between book profits and taxable profits that originate in one period and are capable of reversal in one or more subsequent periods and is measured using the tax rates and laws applicable as of the date of the financial statements. Our Company provides for deferred tax asset / liability on such timing differences subject to prudent considerations in respect of deferred tax assets.

COMPARISON OF FY 2023-24 WITH FY 2022-23

Income

Total Income: Our total income decreased by Rs.1,365.05 lakhs or 2.67% to Rs.49,697.31 Lakh for the financial year 2023-24 from Rs.51,062.36 Lakh for the financial year 2022-23 due to the factors described below:

Revenue from operations

Our Revenue from operations decreased by Rs. -1443.43 lakhs, from Rs. 50,829.89 lakhs for the financial year ended March 31, 2023, to Rs. 49,386.46 lakhs for the financial year ended March 31, 2024, representing a decline of -2.84 % on account of decline in sale of products and absence of MEIS Sales incentive in FY 2023-24.

Other Income

Our Other income increased by Rs. 78.38 lakhs, from Rs. 232.47 lakhs for the financial year ended March 31, 2023, to Rs. 310.85 lakhs for the financial year ended March 31, 2024, representing a growth of 33.72% due to increase in Other Non- Operating Income.

Expenses

Our total expenses excluding finance cost, depreciation and tax expenses is Rs. 42,053.13 Lakhs for the financial year 2023-24 as compared to Rs. 47,554.91 Lakhs for the financial year 2022-23 representing a decrease of 11.57% due to the factors described below: -

Cost of Raw Material Consumed

Our Cost of Raw Material Consumed is Rs.37,281.99 for the financial year 2023-24 as compared to Rs.43,151.69 Lakhs for the financial year 2022-23 representing a decrease of 13.60% due to decrease in Purchases.

Changes in Inventories

Our Net Change in Inventory of Work-n-Progress and Finished Goods increased by Rs. 482.53 lakhs, from Rs. -298.62 lakhs for the financial year ended March 31, 2023 to Rs. 183.91 lakhs for the financial year ended March 31, 2024 representing an increase of 161.59% due to increase in closing inventory.

Employee Benefits Expenses

Our employee benefit expenses are Rs.2,120.60 Lakhs for the financial year 2023-24 as compared to Rs.2,142.09 Lakhs for the financial year 2022-23 representing an decrease of 1% due to decrease in Salary and wages, Directors Remuneration and Staff Welfare Expenses which was partially set off against increase in Bonus and Gratuity Expenses.

Finance Costs

Our finance cost is Rs.1,761.51 Lakhs for the financial year 2023-24 as compared to Rs.1,414.53 Lakhs for the financial year 2022-23 representing an increase of 24.95 % on account of increase in Interest on Loans, Processing Charges which is partially set off by decrease in Bank Charges and Net loss on foreign currency transactions and translation.

Depreciation and Amortization Expense

Our depreciation decreased by 18.78% to Rs.1,296.71 Lakhs for the financial year 2023-24 from Rs.1,596.56 Lakhs for the financial year 2022-23 due to change in accounting estimate of useful life of Fixed assets.

Other expenses

Our other expenses decreased by 3.64% to Rs. 2,466.64 Lakhs for the financial year 2023-24 from Rs. 2,559.75 Lakhs for the financial year 2022-23, which is 4.96% and 5.01% of the total revenue of respective years. The increase was mainly due to increase in Commission, freight, Insurance, Printing & Stationary, Travelling Expenses which was partially set off against decrease in Advertisement, Repairs & maintenance, CSR Expenses etc.

Exceptional Items

Our Exceptional consists of CSR Provision and Prior period items, decreased by 51.45% to Rs.61.23 Lakhs for the financial year 2023-24 from Rs.126.11 Lakhs for the financial year 2022-23 due to change in CSR Provision and Prior period item in F.Y. 2022-23.

Profit Before Tax

Our profit before tax increased by 1,120.48% to Rs.4,518.73 Lakhs for the financial year 2023 -24 from Rs.370.24 Lakhs for the financial year 2022-23. The increase was mainly due to the factors described above.

Tax Expenses

Our tax expenses for the financial year 2023-24 amounted to Rs.1,216.05 Lakhs as against tax expenses of Rs.438.59 Lakhs for the financial year 2022-23. The net increase of Rs.777.46 Lakhs is on account of increase in deferred tax and Current tax due to increase in profits.

Profit After Tax

Our profit after tax but before Share of Profit of Associates and Share of Minority Interest, increased by 4932.44% to Rs.3,302.68 Lakhs for the financial year 2023-24 from Rs.(68.34) Lakhs for the financial year 2022-23, reflecting a net increase of Rs.3,371.02 Lakhs mainly due to expansion of business and increase in revenue.

Share of Profit of Associate Companies

Our share of profit of associate companies comprise of Rs.39.10 Lakhs for financial year 2023-24 as compared to Rs.41.74 Lakhs for financial year 2022-23.

Share of Minority Interest

Minority Interests share in profit stood at Rs. 0.01 lakhs for financial year 2023-24 as compared to share in loss of Rs. - 0.18 Lakhs for financial year 2022-23.

COMPARISON OF FY 2022-23 WITH FY 2021-22

Income

TotalIncome: Our total income increased by Rs.17,802.49 lakhs or 53.53% to Rs.51,062.36 Lakh for the financial year 2022-23 from Rs.33,259.87 Lakh for the financial year 2021-22 due to the factors described below:

Revenue from operations

Our revenue from operations is Rs.50,829.89 Lakhs for the financial year 2022-23 as compared to Rs.32,927.45 Lakhs for the financial year 2021-22 representing an incline of 54.37% on account of increase in expansion of business.

Other Income

Our Other Income decreased from Rs.332.42 Lakhs in financial year 2021-22 to Rs.232.47 Lakhs in financial year 202223 due to increase in Inter company Other income being reduced from Total Other Income.

Expenses

Our total expenses excluding finance cost, depreciation and tax expenses is Rs. 47,554.91 Lakhs for the financial year 2022-23 as compared to Rs. 28,817.95 Lakhs for the financial year 2021-22 representing an increase of 65.02% due to the factors described below: -

Cost of Materials Consumed

Our Cost od Materials Consumed is Rs.43,151.69 for the financial year 2022-23 as compared to Rs.26,802.86 Lakhs for the financial year 2021-22 representing an increase of 61.00 % due to increase in Purchases of Raw material.

Changes in Inventories

Our Net Change in Inventory of Work-in-Progress and Finished Goods increased by Rs. 918.81 lakhs, from Rs.-(1217.43) lakhs for the financial year ended March 31, 2022 to Rs. -(298.62) lakhs for the financial year ended March 31, 2023 representing an increase of 75.47% due to increase in closing inventory of Work-in-Progress and Finished Goods.

Employee Benefits Expenses

Our employee benefit expenses are Rs.2,142.09 Lakhs for the financial year 2022-23 as compared to Rs.1,397.13 Lakhs for the financial year 2021-22 representing an increase of 53.32% due to increase in Salary and wages, Contribution to provident and other funds , Bonus and Staff Welfare Expenses which was partially set off against decrease in Directors Remuneration and Gratuity Expenses.

Finance Costs

Our finance cost is Rs.1,414.53 Lakhs for the financial year 2022-23 as compared to Rs.307.31 Lakhs for the financial year 2021-22 representing an increase of 360.29% on account of increase in Interest on Loans, Bank charges and Net loss on foreign currency transactions and translation.

Depreciation and Amortization Expense

Our depreciation increased by 139.46% to Rs.1,596.56 Lakhs for the financial year 2022-23 from Rs.666.72 Lakhs for the financial year 2021-22 due to addition in assets during the year.

Other expenses

Our other expenses increased by 39.47% to Rs. 2,559.75 Lakhs for the financial year 2022-23 from Rs. 1,835.39 Lakhs for the financial year 2021-22, which is 5.01% and 5.52% of the total revenue of respective years. The increase was mainly due to increase in Advertisement, Insurance, Rent, Travelling expenses, CSR Expenses, Printing & Stationary, Repairs & maintenance, Selling and Distribution Expenses which was partially set off against decrease in Freight,etc.

Exceptional Items

Our Exceptional consists of CSR Provision and Prior period items, increased by 235.37% to Rs.126.11 Lakhs for the financial year 2022-23 from Rs.37.60 Lakhs for the financial year 2021-22 due to change in CSR Provision and Prior period item in F.Y. 2022-23.

Profit Before Tax

Our profit before tax decreased by 89.21% to Rs.370.24 Lakhs for the financial year 2022-23 from Rs.3,430.28 Lakhs for the financial year 2021-22. The increase was mainly due to the factors described above.

Tax Expenses

Our tax expenses for the financial year 2022-23 amounted to Rs.438.59 Lakhs as against tax expenses of Rs.933.44 Lakhs for the financial year 2021-22. The net increase of Rs.494.85 Lakhs is on account of increase in Deferred Tax and decrease in Current tax.

Profit After Tax

Our profit after tax but before Share of Profit of Associates and Share of Minority Interest decreased by 102.74% to Rs.(68.34) Lakhs for the financial year 2022-23 from Rs.2,496.84 Lakhs for the financial year 2021-22, reflecting a net decrease of Rs. 2,565.19 Lakhs mainly due to increase in Cost of material consumed.

Share of Profit of Associate Companies

Our share of profit of associate companies comprise of Rs.41.74 Lakhs for financial year 2022 -23 as compared to Rs.103.24 Lakhs for financial year 2021-22.

Share of Minority Interest

Minority Interests share in loss of Rs. -0.18 Lakhs for financial year 2022-23 as compared to share in profit of Rs.0.15 Lakhs for financial year 2021 -22.

Changes in Cash Flows

The table below summaries our cash flows from our Restated Financial Statements for the financial years ended 2024, 2023 and 2022:

(t in Lakh)

Particulars	For the year ended March 31,
	2024	2023	2022
Net cash (used in)/ generated from operating Activities	4,228.49	6,925.18	(308.43)
Net cash (used in)/ generated from investing Activities	(4,003.30)	(6,004.11)	(13,426.50)
Net cash (used in)/ generated from financing Activities	105.88	(945.90)	13,973.27
Movement in Minority Interest	(0.01)	0.18	(0.15)
Net increase/ (decrease) in cash and cash Equivalents	331.08	(25.01)	238.50
Cash and Cash Equivalents at the beginning of the period	761.98	786.98	548.27
Cash and Cash Equivalents at the end of the Period	1,093.06	761.98	786.98

Operating Activities Financial year 2023-24

Our net cash generated from operating activities was Rs. 4,228.49 Lakhs for the year ended March 31, 2024. Our operating profit before working capital changes was Rs.7,453.24 Lakhs for the financial year 2023-24 which was primarily adjusted against increase in Inventories of Rs.1,512.10 Lakhs, increase in trade receivables by Rs.1,594.47 Lakhs, decrease in Short Term & Advances of Rs.1,651.40 lakhs, increase in other non-current assets by Rs.99.15 Lakhs, increase in Other Current Assets by Rs.318.03 Lakhs, decrease in trade payables by Rs.1,765.35 Lakhs, increase in other current liabilities by Rs.404.02 Lakhs, decrease in Long Term Loans & Advances by Rs.652.19 Lakhs, increase in short term provision by Rs.96.58 Lakhs, increase in long term provision by Rs.33.06 Lakhs which was further decreased by payment of Income Tax of Rs.772.88 Lakhs.

Financial year 2022-23

Our net cash generated from operating activities was Rs. 6,925.18 Lakhs for the year ended March 31, 2023. Our operating profit before working capital changes was Rs.3,045.65 Lakhs for the financial year 2022 -23 which was primarily adjusted against decrease in Inventories of Rs.1,423.99 Lakhs, increase in trade receivables by Rs.601.30 Lakhs, decrease in Short Term & Advances of Rs.603.88 lakhs, decrease in other non-current assets by Rs.522.47 Lakhs, decrease in Other Current Assets by Rs.1.10 Lakhs, increase in trade payables by Rs.1,446.78 Lakhs, increase in other current liabilities by Rs.137.60 Lakhs, decrease in Long Term Loans & Advances by Rs.1,033.93 Lakhs, decrease in short term provision by Rs.699.28 Lakhs, increase in long term provision by Rs.10.36 Lakhs.

Financial year 2021-22

Our net cash used in operating activities was Rs. 308.43 Lakhs for the year ended March 31, 2022. Our operating profit before working capital changes was Rs.4,219.54 Lakhs for the financial year 2021-22 which was primarily adjusted against increase in Inventories of Rs.3,252.15 Lakhs, increase in trade receivables by Rs.2,713.45 Lakhs, increase in Short Term & Advances of Rs.279.32 lakhs, increase in other non-current assets by Rs.456.18 Lakhs, decrease in Other Current Assets by Rs.7.24 Lakhs, increase in trade payables by Rs.2,834.79 Lakhs, decrease in other current liabilities by Rs.67.41 Lakhs, decrease in Long Term Loans & Advances by Rs.118.32 Lakhs, decrease in short term provision by Rs.67.17

Lakhs, increase in long term provisi?n by Rs.64.28 Lakhs which was further decreased by payment of Income Tax of Rs.716.95 Lakhs.

Investing Activities

Financial year 2023-24

Our net cash used in investing activities was Rs. 4003.30 Lakhs for the financial year 2023-24. These were on account of net Purchase of Property, Plant & Equipment of Rs. 4,336.23 Lakhs and Interest income Rs.332.93 Lakhs.

Financial year 2022-23

Our net cash used in investing activities was Rs. 6,004.11 Lakhs for the financial year 2022-23. These were on account of Purchase of Property, Plant & Equipment of Rs. 6,583.75 Lakhs, Sale of Investments of Rs.3.53 Lakhs and Interest income Rs.576.11 Lakhs.

Financial year 2021-22

Our net cash used in investing activities was Rs. 13426.50 Lakhs for the financial year 2021-22. These were on account of Purchase of Property, Plant & Equipment of Rs. 13,349.88 Lakhs, Purchase of Investments of Rs.518.81 Lakhs and Interest income Rs.442.19 Lakhs.

Financing Activities

Financial year 2023-24

Net cash generated from financing activities for the financial year March 31, 2024 was Rs.105.8 7 Lakhs which was primarily on account of Finance Cost of Rs. 1,952.29 Lakhs, proceeds from short term borrowings of Rs. 3141.35 and repayment of long term borrowings of Rs.1,083.18 Lakhs.

Financial year 2022-23

Net cash used in financing activities for the financial year March 31, 2023 was Rs.945.91 Lakhs which was primarily on account of Finance Cost of Rs.1,654.96 Lakhs, proceeds from short term borrowings of Rs. 841.79 and repayment of long term borrowings of Rs.132.74 Lakhs.

Financial year 2021-22

Net cash used in financing activities for the financial year March 31, 2024 was Rs.13,973.27 Lakhs which was primarily on account of Finance Cost of Rs.447.93 Lakhs, proceeds from short term borrowings of Rs.4,677.51 and proceeds from long term borrowings of Rs.9,743.69 Lakhs.

Other Key Ratios

The table below summaries key ratios in our Restated Financial Statements for the financial years ended March 31, 2024, 2023 and 2022:

Particulars	For the year ended March 31,
	2024	2023	2022
Fixed Asset Turnover Ratio	2.01	2.36	1.98
Current Ratio	1.21	1.23	1.51
Debt Equity Ratio	0.92	0.98	0.94
Inventory Turnover Ratio	7.53	8.69	6.93

Fixed Asset Turnover Ratio: This is defined as revenue from operations divided by total fixed assets based on Financial Statements as Restated.

Current Ratio: This is defined as current assets divided by current liabilities, based on Financial Statements as Restated.

Debt Equity Ratio: This is defined as total debt divided by total shareholder funds. Total debt is the sum of long- term borrowings, short-term borrowings and current maturities of long-term debt, based on Financial Statements as Restated.

Inventory Turnover Ratio: This is defined as average inventory divided by cost of goods sold based on Financial Statements as restated.

Financial Indebtedness

As on March 31, 2024, the total outstanding borrowings of our Company is as below. For further details, refer to the chapter titled "Statement of Financial Indebtedness" beginning on page of this Draft Red Herring Prospectus.

(tin Lakh)

Particulars	As at March 31, 2024	As at June 30, 2024
Loans from Banks & Financial Institutions	16,175.23	16,042.17
Loans from Related parties	147.53	147.53
Loans from Other Parties	2,018.00	2,005.26
Total	18,340.76	18,194.96

Related Party Transactions

Related party transactions with our promoters, directors and their entities and relatives primarily relate to purchase and sale of products and services. For further information, please refer to the chapter titled "Financial Statements as Restated on page 224 of this Draft Red Herring Prospectus.

Off-Balance Sheet Items

We do not have any other off-balance sheet arrangements, derivative instruments or other relationships with any entity that have been established for the purposes of facilitating off-balance sheet arrangements.

Qualitative Disclosure about Market Risk

Financial Market Risks

Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk. We are exposed to interest rate risk, inflation and credit risk in the normal course of our business.

Interest Rate Risk

Our financial results are subject to changes in interest rates, which may affect our debt service obligations and our access to funds.

Effect of Inflation

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

Credit Risk

We are exposed to credit risk on monies owed to us by our customers. If our customers do not pay us promptly, or at all, we may have to make provisions for or write-off such amounts.

Reservations, Qualifications and Adverse Remarks

Except as disclosed in chapter titled "Financial Statements as Restated" beginning on page 224 of this Draft Red Herring Prospectus, there have been no reservations, qualifications and adverse remarks.

Details of Default, if any, including therein the Amount Involved, Duration of Default and Present Status, in Repayment of Statutory Dues or Repayment of Deposits or Repayment of Loans from any Bank or Financial Institution.

Except as disclosed in chapter titled "Financial Statements as Restated beginning on page 224 of this Draft Red Herring Prospectus, there have been no defaults in payment of statutory dues 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.

FACTORS THAT MAY AFFECT THE RESULTS OF THE OPERATIONS Unusual or infrequent events or transactions

There are no transactions or events, which in our best judgment, would be considered unusual or infrequent that have significantly affected operations of the Company.

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

There are no significant economic changes that materially affected Companys operations or are likely to affect income from continuing operations. Any slowdown in the growth of Indian economy or future volatility in global commodity prices, could affect the business including the future financial performance, shareholders funds and ability to implement strategy and the pnce of the Equity Shares.

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

Other than as disclosed in the chapter titled "Risk Factors" beginning on page 32of this Draft Red Herring Prospectus to our knowledge, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

Future changes in relationship between costs and revenues in case of events such as future increase in labour or material cost or prices that will cause material change

According to our knowledge, there are no future relationship between cost and income that would be expected to have a material adverse impact on our operations and revenues. However, increase in the cost of the goods in which the Company deals, will affect the profitability of the Company. Further, the Company may not be able to pass on the increase in prices of the services to the customers in full and this can be offset through cost reduction.

The extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased prices

The increase in revenue is by and large linked to increase in volume of all the activities carried out by the Company.

Total turnover of each major industry segment in which the Issuer Company operates

Our Company is primarily engaged as manufacturers of Kraft Paper and Paper Products. The company caters to Indian as well as International market.

Relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page 113 of this Draft Red Herring Prospectus.

Competitive Conditions

We have competition with domestic and intemational paper manufacturers who may vertically int?grate their supply chains by acquiring or establishing their own distribution operation which reduces the need for independent distributors and create additional competition in the market. We expect competition to intensify due to possible new entrants in the market, existing competitors further expanding their operations and our entry into new markets where we may compete with well-established unorganized companies/ entities. This we believe may impact our financial condition and operations. For details, please refer to the chapter titled "Risk Factors" beginning on page 32 of this Draft Red Herring Prospectus.

Increase in income

Increases in our income are due to the factors described above in in this chapter under "Factors Affecting Our Results of Operations" and chapter titled "Risk Factors" beginning on page 32 of this Draft Red Herring Prospectus.

Status of any Publicly Announced New Business Segments

Except as disclosed elsewhere in the Draft Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new business segments.