Thaai Casting Ltd Management Discussions

You should read the following discussion and analysis of financial condition and results of operations together with our financial statements included in this Red Herring Prospectus. The following discussion relates to our Company and is based on our restated financial statements. Our financial statements have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be "Forward looking statement" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws and other Statutes and incidental factors.

BUSINESS OVERVIEW

Our Company was originally formed as a Partnership Firm under the Partnership Act, 1932 having Firm Registration Number FR/Chennai South/1102/2010 in the name and style of "Thaai Casting" pursuant to Deed of Partnership dated June 02, 2010. Subsequently our firm was converted from Partnership firm into a public limited company as per the provision of Part I Chapter XXI of the Companies Act, 2013 with the name and style of "Thaai Casting Limited" and received a Certificate of Incorporation from the Registrar of Companies, Tamil-Nadu and Andaman situated at Chennai dated June 12, 2023. The corporate identification number of our Company is U24105TN2023PLC161105.

We are a distinguished automotive ancillary company with IATF 16949:2016 certification, specializing in High- Pressure Die Casting, as well as the precision Machining of both Ferrous and Non-Ferrous materials and Induction heating and quenching. Founded by Mr. Sriramulu Anandan, a seasoned professional with extensive expertise in Pressure Die Casting and Machining Processes, our business model is firmly rooted in a B2B approach, catering to leading entities in the automotive components sector. Our product portfolio encompasses a diverse range of Automobile components, including Engine Mounting Support Brackets, Transmission Mounts, Fork Shift and Housing, Armature - Steering Wheel, Electrical Connectors, YFG Base Frame (Right-hand drive side/Left-hand drive side), Housing, Top Cover, and more.

We have consistently grown in terms of our revenues over the past years. In the past three (3) years our revenues from operation were Rs.2,042.87 lakhs in F.Y. 2020-21, Rs.3,833.80 lakhs in F.Y.2021-22 and Rs. 4,896.06 lakhs in the FY 2022-23. Our Net Profit after tax for the above-mentioned periods are Rs. 40.33 lakhs, Rs. 115.40 lakhs and Rs.503.71 lakhs respectively.

Factors contributing to the growth of our Revenue:

i. For FY 2020-21 the following were the factors that contributed to growth of our revenue:

a. The company being in the manufacturing sector, has increased its production capacity. This was achieved through increase in installed capacity over from 710MT in FY 2019-20 to 888MT in FY

2020-21, hence increase in installed capacity has lead to increase in revenue.

b. The company has increased its machine hours through investment in additional machinery to the tune of Rs.2.72 Crores in FY 2020-21. The company was able to increase its machine hours capacity about 30% from, 65,340 machine hours in FY 2019-20 to 84,727 hours in FY 2021-22, this increase in the production capacity was in order to cater the increased demand of its customer and in turn increased the production.

c. The company was also able to achieve increase in revenue through the addition of the following new products:

i. SHIFTER FORK 1&2

ii. SHIFTER FORK 5R

iii. JOINT FLANGE - BA

iv. JOINT FLANGE [1501] LWB

v. JOINT BLOCK

vi. PSA ARMATURE

vii. INNER - KT 502

viii. INNER - KT 506

ii. For FY 2021-22 the following were the factors that contributed to growth of our revenue:

a. The company being in the manufacturing sector, has increased its production capacity. This was achieved through increase in installed capacity over from 888MT in FY 2020-21 to 1,128 MT in FY

2021-22. So increase in installed capacity has lead to increase in additional production of 73MT which in turn increased in revenue.

b. The company has increased its production machine hours through investment in additional machinery to the tune of Rs.6.69 Crores in FY 2021-22. This increase in the production capacity was in order to cater the increased demand of its customer and in turn increased the production.

c. The company was able to utilize its labour force better in FY 2021-22 as compared to FY 2020-21, which can be observed that the revenue of the company increased 88% whereas its employee cost only increased 49% in FY 2021-22 as compared to previous financial year.

d. The company was also able to achieve increase in revenue through the addition of the following new products:

i. FRONT COVER T190 /T210

ii. FORK SHIFT 3&4 - PE

iii. FORK SHIFT 5R - PE

iv. INNER CORE - Ai3

v. INNER CORE - D070030

vi. Ai3 SUPPORT BKT

vii. BALUSTRADE

viii. JOINT FLANGE [5901]

ix. COMB

x. ENCLOSURE - FIXED

xi. ENCLOSURE - ADJ

xii. "HOUSING CONTROL -SP2i"

xiii. "CONTROL VALVE BODY DIA 90"

xiv. FORK SHIFT 1&2 - GSPE

xv. FORK SHIFT 3&4 - CF23

xvi. "CONTROL VALVE BODY DIA 102"

iii. For FY 2022-23 the following were the factors that contributed to growth of our revenue:

a. The company has increased its production capacity. This was achieved through increase in installed capacity over from 1,128 MT in FY 2021-22 to 2,172MT in FY 2022-23. This increase in installed capacity has lead to increase in additional production from 499MT in previous year to 1,386MT in FY 2021-22 which in turn increased in revenue.

b. The company availed adequate working capital from bank to support for its operation, which leads to increase in the scale operations by thereby aiding in the working capital cycle of the company contributing to profitability in a consistent manner.

c. The companys employee cost increased only 28% and was able to utilize its labour force in FY

2022-23 as compared to FY 2021-22, and was able to increase the revenues by 28% as compared to previous year.

d. The company has increased its production machine hours through investment in additional machinery, it was able to increase 18.5% of its overall machine hours of production as compared to previous year which was also contributing to increase in revenue.

e. The company was also able to achieve increase in revenue through the addition of the following new products:

i. FORK SHIFT 1&2 - MB6

ii. FORK SHIFT 3&4 - MB6

iii. FORK SHIFT 5&6 - MB6

iv. CORP SUERVIOR LDA - 70722

v. CORPO INFER LDA - 707210

vi. FLANGIA SISTEMA BLOW - 5291

vii. INTAKE MANIFOLD -1824

viii. OIL FILLER CAP - 0942

ix. YFG BASE RHD - LH/RH

x. YFG BASE LHD - LH/RH

xi. DOUBLE BALL STAY

xii. CAP CAM SHAFT BRG -BIG - 04301

xiii. CAP CAM SHAFT BRG -SMALL - 043050

xiv. PROTEZIONE PER ALBERO PTO

FACTORS AFFECTING OUR RESULT OF OPERATIONS

Except as otherwise stated in this Red Herring Prospectus and the Risk Factors given in the Red Herring Prospectus, the following important factors could cause actual results to differ materially from the expectations include, among others:

Regulatory Framework

We have obtained all regulatory permissions which are necessary to run our business, Further, some of the approvals are granted for fixed periods of time and need renewals, which are obtained in the course of business, however, there may be change in statutory regulations at any time which cannot be predicted by us. There can be no assurance that the change in regulations will not impact our operations in the future.

Ability of Management

Our success depends on the continued services and performance of the members of our management team and other key employees. Competition for senior management in the industry is intense, and we may not be able to retain our existing senior management or attract and retain new senior management in the future. The loss of any member of our senior management or other key personnel may adversely affect our business, results of operations and financial condition.

Ability to manage logistics and transportation needs

Apart from in-house transportation facility we rely on third party transportation and other logistic facilities at every stage of our business activity including for procurement of products from our suppliers and for transportation from our godown to our customers and other markets. Since the cost of our goods also carried by third party transporters is typically much higher than the consideration paid for transportation, it may be difficult for us to recover damages for damaged, delayed or lost goods. Our operations and profitability are dependent upon the availability of transportation and other logistic facilities in a time and cost-efficient manner. Accordingly, our business is vulnerable to increased transportation costs, transportation strikes and lock-outs, shortage of labour, delays and disruption of transportation services for events such as weather-related problems and accidents.

Further, global supply chains can be impacted with the increase in the fees of shipping routes putting cost pressures. Further, movement of goods encounters additional risks such as accidents, pilferage, spoilage or shrinkage may adversely affect our operations, results of operations and financial condition. Although we have not experienced any material logistics and transport related disruptions in the past, any prolonged disruption or unavailability of such facilities in a timely manner could result in delays or non-supply or may require us to look for alternative sources which may not be cost-effective, thereby adversely affecting our operations, results of operations, cash flows and financial condition.

Market & Economic conditions

India is one of the largest economies and is growing at a rapid pace. But in this globalised economy, all the businesses face an uncertain level of volatility from unexpected global events which ranges from global pandemics to wars, to weather changes to supply chain disruption, which may change the economic dynamics and the purchasing capability of the end customers. At the time of market slowdown, the demand falls which has adverse impact on our business.

Competition

We operate in a competitive atmosphere. Our competition varies by market, geographic areas and type of products. Our Company may face stiff competition from domestic as well as global market as the dynamic changes. Some of our competitors may have greater resources than those available to us. While service quality, technical ability, performance records, etc are key factors in client decisions among competitors, however, price& quality are the deciding factor in most cases. Further, this industry is fragmented with many small and medium sized companies and entities, which manufactures some of these products at various levels, which may adversely affect our business operation and financial condition. Further, there are no entry barriers in this industry and any expansion in capacity of existing manufacturers would further intensify competition. Moreover, as we seek to diversify into new geographical areas, new territories, new emerging markets, we face competition from competitors that have a pan- India presence and also from competitors that have a strong presence in regional markets. The markets in which we compete and intend to compete are undergoing, and are expected to continue to undergo, rapid and significant change. We expect competition to intensify as technological advances and consolidations continue. These competitive factors may force us to reduce rates, and to pursue new market opportunities. Increased competition could result in reduced demand for our products, increased expenses, reduced margins and loss of market share. Failure to compete successfully against current or future competitors could harm our business, operating cash flows and financial condition.

COVID-19 Pandemic

Since the onset of the COVID-19 pandemic in March 2020, our Companys operations have been affected as our employees faced the threat of getting infected. In 2020, cases of the novel corona virus started rapidly increasing in India, which led the government of India to impose a nationwide lockdown. The spread of Covid-19 and its recent developments have had and might continue to have repercussions across local, national and global economies. To prevent the spread of Covid-19 and to comply with the restrictions, we had to temporarily suspend our operations in order to follow the Governments norms. We continuously monitored the economic conditions and have outlined sufficient measures to combat the pandemic situation at our business premises. Once the lockdown was lifted, our operations restarted in full swing. Initially we did find a little hiccup in finding workers but because of our enterprising organization, we were able to source quality workforce and we were able to train them and we restarted our operations. After lifting the lockdown and resuming our operations the demand in our industry abruptly increased from the different sectors and we attained the highest production during the partial year 2020-21 and FY 2021-22. The demand after pandemic ultimately nullified the impact of shutdown during COVID 19 pandemic. The future impact of COVID-19 or any other severe communicable disease on our business and results of operations depends on several factors including those discussed in the chapter "Risk Factors" beginning on Page No.32. We are continuing to closely monitor the economic conditions and the effect of COVID- 19 and have outlined certain measures to combat the pandemic situation and to minimize the impact on our business.

Cost and availability of raw material

We are susceptible to raw material price fluctuations which could result in changes in operating margins. Since our primary raw material is aluminium ingots, volatility in the price of the same would have an impact on our cost of production.

Any reduction or interruption in the supply of raw material or an inability on our part to find alternative sources for the procurement of such raw material may have an adverse effect on our ability to manufacture our products in a timely or cost-effective manner and may lead to a breach of our contractual obligations with our customers.

change in technology and backward integration by its customers

in the casting industry is significantly influenced by technological advancements and the degree of backward integration by its customers. The evolution of technology plays a pivotal role in shaping the efficiency and competitiveness of casting processes. Innovations in casting techniques, Moreover, the integration of automation and smart manufacturing technologies enhances precision and reduces lead times, the non-adoption of such technology may have an adverse effect on our ability to manufacture our products as per requirement of customer preference.

Significant Developments after October 31, 2023 that may affect our Future Results of Operations

The Directors confirm that there have been no other events or circumstances since the date of the last financial statements as disclosed in the Red Herring Prospectus which materially or adversely affect or is likely to affect the business or profitability of our Company or the value of our assets, or our ability to pay liabilities within next twelve months.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation of Financial Statements:

The summary statement of restated assets and liabilities of the Company as at 31st October 2023, 31st July 2023, 31st March 2023, 31st March, 2022 and 31st March, 2021 and the related summary statement of restated profit and loss and cash flows for the year ended 31st October 2023, 31st July 2023, 31st March 2023, 31st March, 2022 and 31st March, 2021(collectively referred to as the "Restated summary financial information) have been prepared specifically for the purpose of inclusion in the offer document to be filed by the Company in connection with the proposed Initial Public Offering (hereinafter referred to as ‘IPO).

The restated summary financial information has been prepared by applying necessary adjustments to the financial statements (‘financial statements) of the Company. The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the accounting standards specified under section 133 of the Companies Act, 2013, of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable and Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) regulations 2018, as amended (the "Regulations"). The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistently applied.

b) Use of Estimates:

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

c) Property, Plant & Equipment and Intangible Assets

Property Plant and Equipments are stated at cost, less accumulated depreciation. Cost includes cost of acquisition including material cost, freight, installation cost, duties and taxes, and other incidental expenses, incurred up to the installation stage, related to such acquisition. Property Plant and Equipments purchased in India in foreign currency are recorded in Rupees, converted at the exchange rate prevailed on the date of purchase. Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less any accumulated amortisation and any accumulated impairment loss.

d) Depreciation / Amortization:

The Company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and calculated the depreciation as per the Writen Down Value (WDV) method. Depreciation on new assets acquired during the year is provided at the rates applicable from the date of acquisition to the end of the financial year. In respect of the assets sold during the year, depreciation is provided from the beginning of the year till the date of its disposal.

Intangible assets are amortised on a straight-line basis over the estimated useful life as specified in Schedule II of the Companies Act 2013. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss. In respect of the assets sold during the year, amortisation is provided from the beginning of the year till the date of its disposal.

The Entity has depreciated its fixed assets using WDV Method at the income tax rates. Depreciation Expenses has been restated using SLM Method at the useful life as specified in Schedule-II of Companies Act, 2013. As in the reporting period of restated financials, the company was a partnership firm and accordingly, was not following the provisions of companies act, 2013, as the case may be, in respect of rates of depreciation charged on fixed assets. However, in restated financials, the company has adopted the method and rates of depreciation in terms of Schedule II to The Companies act, 2013, as applicable in respective financial year. The company has recalculated the depreciation since financial year 2012-13 and accordingly, retrospective impact has been given in the restated financials.

The estimated useful lives of assets are as follows:

Useful life of Property, Plant and Equipments

Category	Useful life
Computer & Accessories	3 years
Furniture & Fittings	8 years
Buildings	60 years
Plant & Machinery	8 years
Software	3 years

e) Impairment of Assets:

The Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the assets net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. Reversal of impairment loss is recognised immediately as income in the profit and loss account.

f) Investments:

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

g) Cash and Cash Equivalents:

Cash and cash equivalents comprise cash and cash deposits with banks. The Company considers all highly liquid investments with a original maturity at a date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

h) Cash Flow Statement:

Cash flows are reported using indirect method, whereby net profit/loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

i) Foreign Currency Translations:

Domestic Operation:

I . Initial Recognition :

A foreign currency transactions are recorded, on initial recognition 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 the transaction.

II . Measurement :

Foreign currency monetary items are reported using the closing rate.

Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

III . Treatment of Foreign Exchange:

Exchange differences arising on settlement/restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expenses in the Statement of Profit and Loss.

j) Details of Share capital

The Company was incorporated by conversion of erstwhile Partnership Firm, hence the partners of firm become subscriber of the Company. The partners of the firm were issued shares in the company against the outstanding credit balance of the partners capital account with is nothing but the capital contribution in partnership firm before conversion of such firm into the Company.

k) Provisions and Contingent Liabilities:

A provision is recognised if, as a result of past event, the Company has a present legal obligation that can be estimated reliably and it is probable that an outflow of economic benefit will be required to settle the obligation. Provisions are determined by the best estimate of outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

l) Revenue Recognition:

Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and other sales-related taxes. Revenue from the sale of goods relates to the sale of castings. Revenue is recognised once the performance obligation has been met. This is deemed to be when the goods and services have been collected by, or delivered to, the customer in accordance with the agreed delivery terms.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Firm and the revenue can be reliably measured in accordance with AS-9, Revenue Recognition. Sales are recognized on accrual basis, and only after transfer of services to the customer.

Interest Income: Revenue is recognized on the time proportion basis after taking into account the amount outstanding and the rate applicable.

Dividend Income: Dividend Income is recognised when the owners right to receive payment is established.

Other Income: Other items of income and expenditure are recognized on accrual basis and as a going concern basis, and the accounting policies are consistent with the generally accepted accounting policies.

m) Employee Benefits:

Defined Contribution Plan:

Provident Fund: Eligible employees receive benefit from provident fund covered under the Provident Fund Act. Both the employee and the company make monthly contributions. The employer contribution is charged off to Profit & Loss Account as an expense.

Defined Benefit Plan:

Gratuity liability is a defined benefit obligation and is unfunded. The Company accounts for liability for future gratuity benefits based on the actuarial valuation using Projected Unit Credit Method carried out as at the end of each financial year.

n) Earnings per Share:

As the Company was formed through conversion of the Partnership Firm therefore, Profit for calculation of Basic & Diluted EPS for the year ended March 31, 2023, 2022 and 2021 and weighted average EPS on restated basis the profits after tax available as per the financials of Partnership Firm.

Basic earnings per share are 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.

Hence EPS and NAV per share for all the years of reporting period have been calculated by considering the number of shares outstanding post conversion of Partnership Firm into Company (i.e., 1,70,00,000 Equity Shares of ? 10 each).

o) Taxation & Deferred Tax:

Income Tax expense is accounted for in accordance with AS-22 "Accounting for Taxes on Income" for both Current Tax and Deferred Tax stated below:

A. Current Tax:

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

B. Deferred Tax:

Deferred tax is recognised, subject to the consideration of prudence, as the tax effect of timing difference between the taxable income and accounting income computed for the current accounting year using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carried forward losses, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

RESULTS OF OUR OPERATIONS

(Amount ? in lacs)

Particulars	For the period ended 31st October, 2023 (? in lakhs)	% of Total**	For the period ended 31st July, 2023 (? in lakhs)	% of Total**	For the year ended 31st March, 2023 (? in lakhs)	% of Total**	For the year ended 31st March, 2022 (? in lakhs)	% of Total**	For the year ended 31st March, 2021 (? in lakhs)	% of Total**
INCOME
Revenue from Operations (Gross)	2,888.93	100.00%	1,958.52	99.93%	4,896.06	99.68%	3,833.80	99.79%	2,042.87	99.72%
Other Income	-	0.00%	1.47	0.07%	15.58	0.32%	8.15	0.21%	5.84	0.28%
Total Revenue (A)	2,888.93	100.00%	1,959.98	100.00%	4,911.64	100.00%	3,841.94	100.00%	2,048.70	100.00%
EXPENDITURE
Cost of material consumed	1,844.45	63.85%	1,343.91	68.57%	2,079.21	42.33%	1,851.43	48.19%	902.33	44.04%
Other Manufacturing Expenses	136.13	4.71%	220.36	11.24%	894.90	18.22%	855.32	22.26%	424.95	20.74%
Changes in inventories	(347.01)	-12.01%	(511.19)	-26.08%	21.39	0.44%	(58.46)	-1.52%	15.87	0.77%
Employee benefits expense	317.14	10.98%	189.89	9.69%	546.20	11.12%	428.25	11.15%	287.77	14.05%
Finance costs	86.62	3.00%	98.95	5.05%	232.40	4.73%	133.02	3.46%	66.65	3.25%
Depreciation and amortization expense	82.09	2.84%	115.23	5.88%	283.90	5.78%	196.47	5.11%	142.33	6.95%
Other expenses	16.39	0.57%	40.78	2.08%	133.50	2.72%	259.78	6.76%	150.18	7.33%
Total Expenses (B)	2,135.81	73.93%	1,497.93	76.43%	4,191.49	85.34%	3,665.80	95.42%	1,990.06	97.14%
Profit/(Loss) before Tax	753.12	26.07%	462.05	23.57%	720.15	14.66%	176.14	4.58%	58.64	2.86%
Tax Expense/ (benefit)
(a) Current Tax Expense	197.57	6.84%	150.35	7.67%	187.96	3.83%	48.55	1.26%	20.47	1.00%
(b) Deferred Tax	(1.57)	-0.05%	7.89	0.40%	28.48	0.58%	12.19	0.32%	(2.17)	-0.11%
Net tax expense / (benefit)	196.00	6.78%	158.24	8.07%	216.44	4.41%	60.74	1.58%	18.31	0.89%
Profit/(Loss) for the year	557.12	19.28%	303.81	15.50%	503.71	10.26%	115.40	3.00%	40.33	1.97%

**Total refers to Total Revenue

Components of our Profit and Loss Account Income

Our total income comprises of revenue from operations and other income.

Revenue from Operations

Our revenue from operation as a percentage of our total income was 100%,99.93%,99.68%,99.79% and 99.72% for the period ended October 30, 2023, July 31, 2023 and Financial Years ended March 31, 2023, March 31, 2022 and March 31, 2021 respectively.

Other Income

It is the income earned from Interest received on deposits with banks and others, Foreign Exchange Fluctuation, Discount received and Miscellaneous Income etc.

Expenditure

Our total expenditure primarily consists of Cost of consumption, Other Manufacturing expense, Changes in inventories, employee benefit expenses, finance costs, Depreciation & Other Expenses.

Employee Benefit Expenses

Our employee benefits expense comprises of Salaries and wages, Gratuity Expense & Staff Welfare Expenses. Finance costs

Our Finance cost expenses comprises of Interest Expenses.

Other Expenses

Other expenses primarily include Advertisement expense, Audit Fees, Insurance expense, Printing & Stationery expense, Professional & Consultancy Charges, Repairs & Maintenance, Transport expense & Other miscellaneous Expenses etc.

Provision for Tax

The provision for current taxation is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.

For the Period ended October 31^st, 2023

Income

The total income of our company for the period ended October 31, 2023 was ? 2888.93 lacs.

Expenditure Cost of Consumption

For the period ended October 31st, 2023, Cost of consumption was ? 1844.45 lacs.

Other Manufacturing expenses

For the period ended October 31st, 2023, our Company incurred Manufacturing cost of ? 136.13 lacs.

Employee Benefit Expenses

For the period ended October 31st, 2023, our Company incurred for employee benefit expenses ? 317.14 lacs. Finance Costs

The finance costs for the period ended October 31st, 2023 was ? 86.62 lacs.

Other Expenses

For the period ended October 31st, 2023, our other expenses were ? 16.39 lacs.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the period ended October 31st, 2023 of ? 753.12 lacs Profit/ (Loss) after Tax

Profit after tax for the period ended October 31st, 2023 was at ? 557.12 lacs.

For the Period ended July 31^st, 2023 Income

The total income of our company for the period ended July 30th, 2023 was ? 1959.98 lacs.

Expenditure Cost of consumption

For the period ended July 31st, 2023, Cost of consumption was ? 1343.91 lacs.

Other Manufacturing expenses

For the period ended July 31st, 2023, our Company incurred other manufacturing cost of ? 220.36 lacs. Employee Benefit Expenses

For the period ended July 31st, 2023, our Company incurred for employee benefit expenses ? 189.89 lacs. Finance Costs

The finance costs for the period ended July 31st, 2023 was ? 98.95 lacs.

Other Expenses

For the period ended July 31st, 2023, our other expenses were ? 40.78 lacs.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the period ended July 31st, 2023 of ? 462.05 lacs Profit/ (Loss) after Tax

Profit after tax for the period ended July 31st, 2023 was at ? 303.81 lacs.

Fiscal 2023 compared with fiscal 2022

Income

The total income of our company for fiscal period 2023 was t 4911.64 lacs against t 3841.94 lacs total income for Fiscal period 2022. An increase of 27.84% in total income. This increase was due to increase in production and sales.

Expenditure

Cost of consumption

In Fiscal 2023, Cost of consumption was t 2079.21 lacs against t 1851.43 lacs expenses in fiscal 2022. An increase of 12.30%. This increase was due to increase in production and sales.

Other Manufacturing Expenses

In Fiscal 2023, our Company incurred Manufacturing cost of t 894.90 lacs against t 855.32 lacs expenses in fiscal 2022. An Increase of 4.63%. This Increase was due to increase in cost prices & increase in volume of consumption.

Employee Benefit Expenses

In Fiscal 2023, our Company incurred for employee benefit expenses t 546.20 lacs against t 428.25 lacs expenses in fiscal 2022. The increase of 27.54%. This increase was due to increase in employee cost.

Finance Costs

The finance costs for the Fiscal 2023 was t 232.40 lacs while it was t 133.02 lacs for Fiscal 2022.This increase of 74.71% was due to increase in borrowings.

Other Expenses

In fiscal 2023, our other expenses were t 133.50 lacs and t 259.78 lacs in fiscal 2022. This decrease of 48.61% was due to reduction in cost of repairs in the fiscal year 2023, as prior fiscal year 2022 there were frequent locked downs due to COVID restrictions hence considerable repairs was done in fiscal 2022.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal 2023 of t 720.15 lacs against profit before tax of t 176.14 lacs in Fiscal 2022, a 308.85% increase. This increase was due to increase in production and sales.

Profit/ (Loss) after Tax

Profit after tax for the Fiscal 2023 was at t 503.71 lacs against profit after tax of t 115.40 lacs in fiscal 2022, a 336.48% increase. This increase was due to increase in production and sales

Fiscal 2022 compared with fiscal 2021

Income

The total income of our company for fiscal year 2022 was t 3841.94 lacs against t 2048.70 lacs total income for Fiscal year 2021. An increase of 87.53% in total income. This increase was due to increase in production and sales as in the previous fiscal 2021 there was COVID lockdowns.

Expenditure

Cost of Consumption

In Fiscal 2022, Cost of consumption was t 1851.43 lacs against 902.33 in fiscal 2021. An increase of 105.18%. This increase was due to increase in production and sales.

Other Manufacturing expenses

In Fiscal 2022, our Company incurred manufacturing cost of ? 855.32 lacs against ? 424.95 lacs expenses in fiscal 2021. An increase of 101.28%. This increase was due to increase in production and sales.

Employee Benefit Expenses

In Fiscal 2022, our Company incurred for employee benefit expenses ? 428.25 lacs against ? 287.77 lacs expenses in fiscal 2021. A Increase of 48.82%. This Increase was due to increase in production

Finance Costs

The finance costs for the fiscal 2022 was ? 133.02 lacs while it was ? 66.65 lacs for fiscal 2021. This Increase of 99.59% was due to increase in borrowings.

Other Expenses

In fiscal 2022, our other expenses were ? 259.78 lacs and ? 150.18 lacs in fiscal 2021. An increase of 72.98% due to increase in production.

Profit/ (Loss) before Tax

Our Company had reported a profit before tax for the Fiscal 2022 of ? 176.14 lacs against profit before tax of ? 58.64 lacs in Fiscal 2021, An Increase of 200.38%. This Increase was due to increase in production and sales

Profit/ (Loss) after Tax

Profit after tax for the Fiscal 2022 was at ? 115.40 lacs against profit after tax of ? 40.33 lacs in fiscal 2021, An Increase of 186.12%. This was due to increase in production and sales.

Cash Flows

(Amount ? in lacs)

			For the year ended March 31, (Standalone)
Particulars	For the period ended 31st October, 2023	For the year ended 31st July, 2023	2023	2022	2021
Net Cash from Operating Activities	(260.75)	(529.56)	726.05	(237.74)	(164.60)
Net Cash from Investing Activities	(530.84)	(743.64)	(1340.31)	(966.57)	(711.78)
Net Cash used in Financing Activities	870.99	210.94	620.32	1210.60	876.64

Cash Flows from Operating Activities

Net cash from operating activities for the period ended 31^st October 2023, was ? (260.75) lacs as compared to the Profit Before Tax at ? 753.12 lacs. Net cash from operating activities for the period ended 31^st July 2023, was ?

(529.56) lacs as compared to the Profit Before Tax at ? 462.05 lacs. Net cash from operating activities for the year ended 31st March 2023, was ? 726.05lacs as compared to the Profit Before Tax at ? 720.15 lacs. Net cash from operating activities for fiscal 2022 was at ? (237.74) lacs as compared to the Profit Before Tax at ? 176.14 lacs while for fiscal 2021, net cash from operating activities was at ? (164.60) lacs as compared to the Profit Before Tax at t 58.64 lacs.

Cash Flows from Investment Activities

Net cash from operating activities for the period ended 31^st October 2023, was ? (260.75) lacs as compared to the Profit Before Tax at ? 753.12 lacs. Net cash from operating activities for the period ended 31^st July 2023, was ?

(529.56) lacs as compared to the Profit Before Tax at ? 462.05 lacs. Net cash from operating activities for the year ended 31st March 2023, was ? 726.05lacs as compared to the Profit Bxefore Tax at ? 720.15 lacs. Net cash from operating activities for fiscal 2022 was at ? (234.74) lacs as compared to the Profit Before Tax at ? 176.14 lacs while for fiscal 2021, net cash from operating activities was at ? (164.60) lacs as compared to the Profit Before Tax at ? 58.64 lacs.

Cash Flows from Investment Activities

Net cash from investing activities for the period ended 31st October, 2023 was ? (530.84) lacs due to purchase of plant & machinery and construction of building. Net cash from investing activities for the period ended 31st July, 2023 was ? (743.64) lacs due to due to purchase of plant & machinery and construction of building. Net cash from investing activities for the year ended 31st March 2023 was ? (1340.31) lacs due to due to purchase of plant & machinery and construction of building. Net cash flow from investing activities for fiscal 2022 was at ? (966.57) lacs due to due to purchase of plant & machinery and construction of building. While for fiscal 2021, net cash flow from investing activities was at ? (711.78) lacs due to due to purchase of plant & machinery, purch ase of land and construction of building.

Cash Flows from Financing Activities

Net cash from financing activities for the period ended 31^st October 2023 was ? 870.99 lacs. Net cash from financing activities for the period ended 31^st July 2023 was ? 210.94 lacs due to increase in repayment of borrowings and related interest cost. Net cashflow from financing activities for the year ended 31st March 2023 was ? 341.65 lacs. Net cash from financing activities for fiscal 2022 was at ? 1210.60 lacs. while for fiscal 2021, net cash from financing activities was at ? 876.64 lacs.

OTHER MATTERS

INFORMATION REQUIRED AS PER ITEM (II) (C) (IV) OF PART A OF SCHEDULE VI TO THE SEBI REGULATIONS:

1. Unusual or infrequent events or transactions

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

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

Other than as described in the Section titled "Financial Information" and chapter titled "Managements Discussion and Analysis of Financial Conditions and Results of Operations", beginning on Page 168 and 172 respectively of this Draft Red Herring Prospectus, to our knowledge there are no significant economic changes that materially affected or are likely to affect income from continuing Operations.

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

Other than as described in the chapter titled "Risk Factors" and "Managements Discussion and Analysis of Financial Conditions and Result of Operations", beginning on Page 32 and 172 respectively of this Draft Red Herring Prospectus, best 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.

4. Income and Sales on account of major product/main activities

The major income and sales of our Company on account of major activities derives from the business of manufacturing of automotive i.e. Engine mounting support brackets, Transmission mounts, Armature starring wheel, and non-automotive i.e electrical connector, guide shoe and comb, wind power sector.

5. Future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known.

Our Companys future costs and revenues can be indirectly impacted by an increase in employees benefit costs as the company require more employee in future.

6. Future relationship between Costs and Income

Our Companys future costs and revenues will be determined by competition, demand/supply situation, Indian Government Policies, foreign exchange rates and interest rates quoted by banks & others.

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

Increases in our revenues are by and largely linked to increases in the volume of business.

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

The Company is operating in sector i.e. automotive, non-automotive, wind power, construction & instrumentation. Relevant industry data, as available, has been included in the chapter titled "Our Industry" beginning on page 90 of this Draft Red Herring Prospectus.

9. Status of any publicly announced new products or business segments.

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

10. The extent to which the business is seasonal

Our business does not depend to a certain extent on the seasonal, environmental and climate changes. Hence, our business is not seasonal in nature.

11. Competitive Conditions

We face competition from existing and potential competitors which is common for any business. Over a period of time, we have developed certain competitive strengths which have been discussed in the chapter titled Managements Discussion and Analysis of Financial Position and Results of Operations under heading Factors Affecting our Result of Operations on page 172 of this Draft Red Herring Prospectus.