Grill Splendour Services Ltd Management Discussions

OPERATIONS

You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in the Draft Prospectus. You should also read the section entitled "Risk Factors" on page

16, which discusses a number of factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and is based on our restated financial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources.

Our financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the ICDR Regulations and restated as described in the report of our auditor dated September 07, 2023 which is included in this Draft Prospectus under "Financial Statements". The Restated Financial Information has been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. Our financial year ends on March 31 of each year, and all references to a particular financial year are to the twelvemonth period ended March 31 of that year.

Significant Developments Subsequent to the Last Financial Period

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

Key factors affecting the results of operation:

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

Economic conditions in the markets in which we operate

Our results of operations are dependent on the overall economic conditions in the markets in which we operate, including India. Any change in macro-economic conditions in these markets, including changes in interest rates, government policies or taxation and political, economic or other developments could affect our business and results of operations. The iron and steel market in India may perform differently and be subject to market and regulatory developments that are dissimilar to the markets in other parts of the world. While stronger macro-economic conditions tend to result into higher demand for our products, weaker macro-economic conditions tend to result into lower demand. Change in demand in the market segments we currently supply or improvement/deterioration in the market or a change in regulations, customs, taxes or other trade barriers or restrictions could affect our operations and financial condition.

Regulatory developments

Our Company is regulated by the Companies Act and some of its activities are subject to supervision and regulation by statutory and regulatory authorities. It is therefore subject to changes in Indian law, as well as to changes in regulation and government policies and accounting principles.

Our investments in new products and distribution channels may not be profitable and may be loss-making

In order to maintain a competitive position, we continue to invest in new home healthcare products. Our investments in new products or distribution channels, such as e-commerce and delivery platforms, whether developed in-house or through third parties, may be less profitable than what we have experienced historically, may be loss-making, may consume substantial financial resources and/or may divert managements attention from existing operations, all of which could materially and adversely affect our business, results of operations and financial condition.

Description of the major components of revenue and expense items: -

Our total revenue consists of revenue from sale of products and sale of services and other income.

Revenue

Revenue from Operations

Our revenue from operations primarily accrues from sale of Bakery and other food products and sale of services related to the same.

Expenses

Cost of Material consumed comprised of purchases of our products is the major expense head for our Company.

Employee Benefit expense includes, salaries & wages, bonus, incentives, contribution to PF and other funds and staff welfare expenses.

Other expenses mainly include expenses towards Rent for stores, electricity, power & fuel, legal & professional fees, vehicle & petrol expenses, Advertisement & sales promotion, Commission and services charges, Freight, octroi and transportation, repairs and maintenance etc.

Depreciation and Amortization Expenses

Depreciation and Amortization Expenses comprised depreciation on fixed assets both tangible and intangible.

Tax Expense

Our tax expense or credit for the period represents the tax payable on the current periods taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

OUR SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies, "Annexure IV" beginning under "Auditors Report and Financial Information of our Company" on page 101.

DISCUSSION ON RESULTS OF OPERATIONS:

The following discussion on results of operations should be read in conjunction with the audited financial results of our Company for the period ended September 30, 2023 and financial years ended March 31, 2023, 2022 and 2021.

For the 6 months period ended September 30, 2023

( lakhs)

Particulars	For the period ended September 30, 2023	% of Total Income
Income
Revenue from Operations	670.62	99.97
Other Income	0.17	0.03
Total Revenue	670.79	100.00
Expenditure
Cost of Material consumed	204.06	30.42
Employee Benefit Expenses	123.06	18.35
Other Expenses	254.06	37.87
Total Operating Expenses	581.18	86.64
Profit Before Interest, Depreciation and Tax	89.61	13.36
Depreciation and Amortisation Expenses	9.64	1.44
Profit Before Interest and Tax	79.97	11.92
Financial Charges	12.78	1.91
Profit before Taxation	67.19	10.02
Taxes	16.52	2.46
Profit After Tax but Before Extra ordinary Items	50.67	7.55

Total Income : We recorded Operational Revenue of 670.62 Lakhs and Other Income earned by us was 0.17 Lakhs. Total Income for the period ended September 30, 2023 was 670.79 Lakhs.

Total Operating Expenses: The total operating expenditure amounted to 581.18 lakhs which was 86.64% of the Total Income.

Cost of Material consumed amounted to 204.06 lakhs which was 30.42% of the Total Income. Other Expenses stood at

254.06 lakhs which was 37.87% of the Total Income.

Employee Benefit Expenses stood at 123.06 lakhs which was 18.35% of the Total Income.

Depreciation and Amortization Expenses: Depreciation and Amortization cost worked out to 9.64 lakhs, which is 1.44% of our Total Income.

Financial Charges: Financial Charges amounted to 12.78 lakhs, which is 1.91% of our Total Income.

Tax Expenses: Tax Expenses for the period were 16.52 Lakhs.

Profits: Our PBIDT stood at 89.61 lakhs for the period ended September 30, 2023 with the PBIDT margin of 13.36%. We recorded Net Profit after tax of 50.67 lakhs. Our Net Profit Margin stood at 7.55%.

Comparison of Financial Years ended March 31, 2023, 2022 and 2021

( lakhs)

Particulars	31.03.23	31.03.22	31.03.21
Income
Revenue from Operations	1,529.35	1,150.49	824.54
Increase/Decrease (%)	32.93%	39.53%
Other Income	2.27	1.78	0.68
Total Income	1,531.62	1,152.27	825.22
Increase/Decrease (%)	32.92%	39.63%
Expenditure
Cost of Material consumed	411.43	355.35	251.92
Increase/Decrease (%)	15.78%	41.06%
% to Total Income	26.86%	30.84%	30.53%
Employee Benefit Expenses	293.76	253.74	199.44
Increase/Decrease (%)	15.77%	27.23%
% to Total Income	19.18%	22.02%	24.17%
Other Expenses	535.88	516.74	361.17
Increase/Decrease (%)	3.70%	43.07%
% to Total Income	34.99%	44.85%	43.77%
Total Operating Expenditure	1,241.07	1,125.83	812.53
Increase/Decrease (%)	10.24%	38.56%
% to Total Income	81.03%	97.71%	98.46%
PBIDT	290.55	26.44	12.69
Increase/Decrease (%)	998.90%	108.35%
% to Total Income	18.97%	2.29%	1.54%
Depreciation	16.30	12.12	6.44
Increase/Decrease (%)	34.49%	88.20%
% to Total Income	1.06%	1.05%	0.78%
Profit Before Interest and Tax	274.25	14.32	6.25
Increase/Decrease (%)	1815.15%	129.12%
% to Total Income	17.91%	1.24%	0.76%
Financial Charges	23.04	10.86	9.88
Increase/Decrease (%)	112.15%	9.92%
% to Total Income	1.50%	0.94%	1.20%
Profit before Taxation	251.21	3.46	-3.63
Increase/Decrease (%)	7160.40%	-195.32%
% to Total Income	16.40%	0.30%	-0.44%
Tax Effect	52.11	0.00	0.00
Increase/Decrease (%)	100.00%	0.00%
% to Total Income	3.40%	0.00%	0.00%
Profit After Tax but Before Extra ordinary Items	199.10	3.46	-3.63
Increase/Decrease (%)	5654.34%	-195.32%
% to Total Income	13.00%	0.30%	-0.44%
Extraordinary Item - Debenture Write back	0.00	0.00	0.00
Increase/Decrease (%)	100.00%	100.00%
% to Total Income	0.00%	0.00%	0.00%
Profit After Tax after Extra ordinary Items	199.10	3.46	-3.63
Increase/Decrease (%)	5654.34%	-195.32%
% to Total Income	13.00%	0.30%	-0.44%

Comparison of FY 2023 with FY 2022:

Revenue from operations

The Revenue from operations for the FY 2023 is 1,529.35 lakhs as compared to 1,150.49 lakhs during the FY 2022 showing an increase of 32.93%. The sale of products was 1,356.20 lakhs and the sale of services was 126.73 lakhs for the Fiscal 2023. The sale of products was 1,150.32 lakhs and the sale of services was Nil for the Fiscal 2022. This increase was primarily due to increase in number of stores and volume of sales as well as sale of services during FY 2023.

Other Income for the FY 2023 and FY 2022 was 2.27 lakhs and 1.78 lakhs respectively. Hence the Total Income was for the FY 2023 and FY 2022 was 1,531.62 lakhs and 1,152.27 lakhs respectively.

Expenditure:

Cost of Material consumed

Cost of Material consumed was 411.43 lakhs for FY 2023 and 355.35 lakhs for FY 2022. This increase was mainly due to increase in purchases in line with increase in sales.

Employee Benefit Expenses

Employee Benefit Expenses increased from 253.74 lakhs for the year ended March 31, 2022 to 293.76 lakhs for FY 2023 showing a increase of 15.77%. This increase was mainly due to decrease in staff salary, incentives, bonus and number of employees. Employee Benefit Expenses stood at 19.18% and 22.02% of Total income for FY 2023 and FY 2022, respectively.

Other Expenses

Other Expenses increased to 535.88 lakhs for FY 2023 from 516.74 lakhs for FY 2022 showing an increase of 3.70%. Other Expenses was 34.99% of Total income during FY 2023 as against 44.85% during FY 2022.

EBIDTA

EBIDTA increased from 26.44 lakhs for FY 2022 to 290.55 lakhs for FY 2023. During FY 2023, our Company recorded EBIDTA margin of 18.97% of the Total income as against 2.29% during FY 2022.

Depreciation

Depreciation on fixed assets was 1.06% of Total income during FY 2023 as compared to 1.05% during FY 2022. The total depreciation during FY 2023 was 16.30 lakhs and during FY 2022 it was 12.12 lakhs.

Interest and Financial Charges

Interest and Financial Charges increased from 10.86 lakhs for the year ended March 31, 2022 to 23.04 lakhs for FY 2023 showing a increase of 112.15%. This increase was mainly due to increase in interest on loans and processing charges. Interest and Financial Charges stood at 0.94% and 1.50% of Total income for FY 2022 and FY 2023, respectively.

Profit after Tax and restatement adjustment (PAT)

PAT increased from 3.46 lakhs for the FY 2022 to 199.10 lakhs in FY 2023. This increase was mainly on account of increase in revenue from operations and other reasons as detailed above. During FY 2023, our Company recorded PAT margin of 13.00% as against 0.30% for FY 2022.

Comparison of FY 2022 with FY 2021:

Revenue from operations

The Revenue from operations for the FY 2022 is 1,150.49 lakhs as compared to 824.54 lakhs during the FY 2021 showing an increase of 39.53%. This increase was primarily due to increase in number of stores and volume of sales during FY 2022.

Other Income for the FY 2021 and FY 2022 was 0.68 lakhs and 1.78 lakhs respectively. Hence the Total Income was for the FY 2021 and FY 2022 was 825.22 lakhs and 1,152.27 lakhs respectively.

Expenditure:

Cost of Material consumed

Cost of Material consumed was 251.92 lakhs for FY 2021 and 355.35 lakhs for FY 2022. This increase was mainly due to increase in purchases in line with increase in sales during FY 2022.

Employee Benefit Expenses

Employee Benefit Expenses increased from 199.44 lakhs for the year ended March 31, 2021 to 253.74 lakhs for FY 2022 showing a increase of 27.23%. This increase was mainly due to decrease in staff salary & wages, bonus and staff welfare expenses. Employee Benefit Expenses stood at 24.17% and 22.02% of Total income for FY 2021 and FY 2022, respectively.

Other Expenses

Other Expenses increased from 361.17 lakhs for FY 2021 to 516.74 lakhs for FY 2022 showing an increase of 43.07%. Other Expenses was 43.77% of Total income during FY 2021 as against 44.85% during FY 2022.

EBIDTA

EBIDTA increased to 26.44 lakhs for FY 2022 from 12.69 lakhs for FY 2021. During FY 2021, our Company recorded EBIDTA margin of 1.54% of the Total income as against 2.29% during FY 2022.

Depreciation

Depreciation on fixed assets was 0.78% of Total income during FY 2021 as compared to 1.05% during FY 2022. The total depreciation during FY 2021 was 6.44 lakhs and during FY 2022 it was 12.12 lakhs.

Interest and Financial Charges

Interest and Financial Charges increased to 10.86 lakhs for the year ended March 31, 2022 from 9.88 lakhs for FY 2021 showing a increase of 9.92%. This increase was mainly due to increase in interest on loans. Interest and Financial Charges stood at 0.94% and 1.20% of Total income for FY 2022 and FY 2021, respectively.

Profit after Tax and restatement adjustment (PAT)

PAT increased to 3.46 lakhs for the FY 2022 from loss of 3.63 lakhs in FY 2021. This increase was mainly on account of increase in revenue from operations and other reasons as detailed above. During FY 2021, our Company recorded negative PAT margin of 0.44% as against positive PAT margin of 0.30% for FY 2022.

Cash Flows

The following table sets forth certain information concerning our cash flows for the periods indicated:

( in lakhs)

PARTICULARS	30.09.23	31.03.23	31.03.22	31.03.21
Net cash generated from operation	-88.43	226.90	2.70	31.57
Net cash (used) in investing activities	-574.43	-278.37	-28.87	-74.19
Net cash generated/(used) in financing activities	908.70	142.67	26.34	40.22
Net Increase / ( Decrease ) in cash and cash equivalents	245.84	91.20	0.17	-2.40
Cash and cash equivalents at the beginning of the year	98.81	7.61	7.44	9.84
Cash and cash equivalents at the end of the year	344.65	98.81	7.61	7.44

FACTORS THAT MAY AFFECT THE RESULTS OF THE OPERATIONS:

1. Unusual or infrequent events or transactions

An outbreak of COVID-19 was recognised as a pandemic by the WHO on March 11, 2020. In response to the COVID-19 outbreak, the governments of many countries, including India, have taken preventive or protective actions such as imposing country-wide lockdowns, as well as restrictions on travel and business operations. Due to a government mandated lockdown in India, we had to temporarily shut down our stores operations but Online sales and delivery was allowed to our industry since we are dealing in essential items. We saw a increase in our business during the period of lock down in Fiscal 2021.

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

Our business has been subject, and we expect it to continue to be subject, to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described in the section entitled ‘Risk Factors beginning on page 16 of the Draft Prospectus. To our knowledge, except as we have described in the Draft Prospectus, there are no known factors which we expect to bring about significant economic changes.

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

Apart from the risks as disclosed under Section titled "Risk Factors" on page 16 in the Draft Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

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

Our Companys future costs and revenues will be determined by demand/supply situation, government policies and prices quoted by service providers.

5. 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.

Changes in revenues during the last three fiscal years are explained in "Managements Discussion and Analysis of Financial Condition & Results of Operations" under the subsection "Comparison of Financial Years ended March 31, 2023, 2022 and 2021" under the respective paragraphs titled "Operating Revenue".

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

For details on the total turnover of the industry please refer to "Industry Overview" on page 65.

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

Our Company has not announced any new product or business segment.

8. The extent to which business is seasonal.

Our business is not seasonal in nature.

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

Particulars	For the period ended September 30, 2023	Financial Year ended March 31, 2023	Financial Year ended March 31, 2022
Customers contribution Top 10 (%)	27.07%	20.75%	2.90%
Suppliers contribution Top 10 (%)	62.74%	54.78%	59.69%

10. Competitive conditions.

Competitive conditions are as described under "Industry Overview" and "Our Business" on pages 65 and 74, respectively.

FINANCIAL INDEBTEDNESS

Following is a summary of our Companys outstanding borrowings as on October 31, 2023:

Nature of Borrowing	Amount ( in lakhs)
1. Secured Borrowings	292.47
2. Unsecured Borrowings	1,233.67
Total	1,526.14

The details of loans are as under:

There are following secured borrowings as on October 31, 2023:

( in Lakhs)

Particulars	Sanctioned Amount	Outstanding Amount	Rate of Interest (p.a.) (%)	Security	Repayment
IDFC Bank				Property situated at Flat No. 2204, 22nd
Limited				Floor, B Wing, Ajmera Zeon, Bhakti
Term Loan				Park, Sewri-Chembur Road, Wadala	180 monthly
				East, Mumbai 400074, Maharashtra	installments
				owned by Srinidhi V Rao, Vandana	ending on
	100.00	91.42	8.25	Srinidhi Rao and Vivek Vijaykumar Sood	10/04/2036
IDFC Bank				Property situated at Flat No. 2204, 22nd
Limited				Floor, B Wing, Ajmera Zeon, Bhakti
Term Loan				Park, Sewri-Chembur Road, Wadala	180 monthly
				East, Mumbai 400074, Maharashtra	installments
				owned by Srinidhi V Rao, Vandana	ending on
	55.00	52.30	7.90	Srinidhi Rao and Vivek Vijaykumar Sood	10/06/2037
IDFC Bank				Property situated at Flat No. 2204, 22nd
Limited				Floor, B Wing, Ajmera Zeon, Bhakti
Term Loan				Park, Sewri-Chembur Road, Wadala	180 monthly
				East, Mumbai 400074, Maharashtra	installments
				owned by Srinidhi V Rao, Vandana	ending on
	125.00	123.36	9.25	Srinidhi Rao and Vivek Vijaykumar Sood	10/05/2038
HDFC Bank
Limited				Hypothecation of Tata Harrier, Eicher	48 monthly
Vehicle Loan	51.59	25.39	12.35	and Maruti Eeco vehicles	installments
Total		292.47

Unsecured Loans:

( in Lakhs)

Particulars	Outstanding as on 31.10.2023	Rate of Interest (p.a.) (%)	Repayment
Blue River Finvest Private Limited	1,115.00	7.00	On Demand
Bajaj Finance Flexi Business Loan	25.47	16.00	36 monthly installments ending on 02/04/2026
HDFC Bank Ltd.	25.00	15.50	36 monthly installments ending on 03/11/2026
IDFC First Bank	35.70	15.50	36 monthly installments ending on 03/11/2026
Srinidhi V. Rao	11.00	Nil	On Demand
Vandana Srinidhi Rao	21.50	Nil	On Demand
Total	1,233.67