Interiors & More 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, 2023, 2022 and 2021 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 will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the reader?s level of familiarity with Indian GAAP, Companies Act, SEBI Regulations and other relevant accounting practices 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 Error! Bookmark not defined. and 21, 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.

Our Company was originally incorporated on July 30, 2012 as a Private Limited Company as "Interiors & More Private Limited" under the provisions of the Companies Act, 1956 with the Registrar of Companies, Mumbai, Maharashtra. Later in the year 2022, pursuant to a Special Resolution of our Shareholders passed in the Extra-Ordinary General Meeting held on October 31, 2022, our Company was converted from a Private Limited Company to Public Limited Company and consequently, the name of our Company was changed to ‘Interiors & More Limited? and a Fresh Certificate of Incorporation consequent to Conversion was issued on January 06, 2023 by the Registrar of Companies, Mumbai. The Corporate Identification Number of our Company is U74120MH2012PLC233915.

We are Manufacturers and Importers of high-quality Artificial Flowers and other decorative Products for decorating Homes, Corporates Premises and Events. Our products include Artificial Flowers, Vases, Plants & Planters, Wedding Props, Lights, Furniture, Fabric, Chandeliers, Candles, Fragrance & more. We are trusted manufacturer and trader of high-quality Artificial Flowers and other decorative Products for decorating Homes, Corporates Premises and Events, has been catering to businesses of all sizes for over a decade. Our products include Artificial Flowers, Vases, Plants & Planters, Wedding Props, Lights, Furniture, Fabric, Chandeliers, Candles, Fragrance & more. We also specialise in providing high-quality artificial flowers, props and other decorative materials for Weddings.

Our Company buys from other well established and renowned companies and sell to businesses engaged in event planning as well as individual customers seeking products to decorate their homes. We are Privately Owned Indian Company having dynamic team carrying a rich experience in the field of Fresh & Artificial Flowers, Gift Items, Decoration for Home, Offices and other establishments like Malls, Airports, Party Halls etc. From Import to Retail we offer each client a combination of imaginative design, expertise, and intense involvement. Our reputation is based on providing the highest quality of products to every client.

We are a well-known provider with over a decade of corporate and B2B as well as B2C experience. Our Company?s proficiency lies in understanding the specific requirement of our customers and based on which we take the orders and we design according to the client?s requirements and deliver the final product. Our professionals are devoted to develop an exclusive product range capable to gain a nationwide appreciation for its remarkable finish, unique designs, trendy colour combinations, flawless detailing, unbreakable quality and higher durability.

We are committed to gain a distinguished repute and as an emerging company, our objectives towards differentiation are further strengthened by our rigorous research and analysis activities. We have implemented advanced technology that equips us to design and develop products with various processes. Our products are cherished by the corporate sector and widely utilized in almost all the industry. We owe our rapid growth to the allied support of leading vendors who underpin our vigilant approach to source premium quality products.

Our promoters have a combined experience of over 10 years in the industry. Our Promoters have been the pillars of our Companys growth and have built a strong value system for our Company. With their enriching experience and progressive thinking, we aim to continue to grow in the Industry India and abroad.

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:

> Our Company was converted from a private limited company to public limited company vide resolution passed in its Extra ordinary General meeting dated October 31, 2022 and a fresh certificate of incorporation consequent to conversion was issued on January 06, 2023 by the Registrar of Companies, Maharashtra bearing Corporate Identification Number U74120MH2012PLC233915.

> The members of our Company approved proposal of Capitalization of reserves and issue of 34,30,000 Bonus equity shares in the extra ordinary general meeting held on June 16, 2023.

> The Board of our Company has approved to raise funds through initial public offering in the Board meeting held on June 13, 2023.

> 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 June 18, 2023.

> The members of our company has approved to Increase the authorised capital from Rs.2,00,00,000/- to Rs.6,00,00,000/- in the Extra ordinary general meeting held on January 09, 2023.

> The Board of our company has approved to shift the registered office of the company from its current address at 241, Mhada SVP Nagar , Near RTO office, Andheri west to Office No.7, Ground Floor, Kumtha Street, Off. Shahid Bhagat Singh Road, Ballard Estate, Fort Mumbai G.P.O., India within same state in the Board meeting held on June 17, 2023.

> The members of our company has approved to Increase the authorised capital from Rs. 6,00,00,000/- to Rs. 8,00,00,000/- in the Annual general meeting held on August 08, 2023.

Factors affecting our results of operations

Our company?s future results of operations could be affected potentially by the following factors:

1. Market Demand

2. Competitive Landscape

3. Innovation and Design Capabilities

4. Manufacturing and Supply Chain

5. Distribution and Sales Channels

6. Growth Opportunities

7. Experienced Management Team

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

Key Performance Indicators of our Company

Key Financial Performance	FY 2022-23	FY 2021-22	FY 2020-21
Revenue from operations (1)	2,485.66	989.16	642.73
EBITDA(2)	946.48	260.24	105.76
EBITDA Margin(3)	38.08%	26.31%	16.46%
PAT	592.85	104.44	43.33
PAT Margin(4)	23.85%	10.56%	6.74%
Networth(5)	995.22	405.07	300.63
RoE %(6)	84.68%	29.60%	18.02%
RoCE% (7)	38.06%	15.29%	8.78%

Notes:

(1) Revenue from Operations means the Revenue from Operations as appearing in the Restated 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 Average 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.

Explanations for KPI Metrics

KPI	Explanation
Revenue from Operation	Revenue from Operations is used by our management to track the revenue profile of the business and in turn helps to assess the overall financial performance of our Company and volume of our business in key verticals
EBITDA	EBITDA provides information regarding the operational efficiency of the business
EBITDA Margin (%)	EBITDA Margin (%) is an indicator of the operational profitability and financial performance of our business
PAT	Profit after tax provides information regarding the overall profitability of the business
PAT Margin (%)	PAT Margin (%) is an indicator of the overall profitability and financial performance of our business.
Net Worth	Net worth is used by the management to ascertain the total value created by the entity and provides a snapshot of current financial position of the entity.
RoE%	RoE provides how efficiently our Company generates profits from Shareholders? Funds
RoCE%	ROCE provides how efficiently our Company generates earnings from the capital employed in the business.

STATEMENT OF SIGNIFICANT POLICIES Corporate Information:

INTERIORS & MORE LIMITED is a Public Company domiciled in India originally incorporated as INTERIORS & MORE PRIVATE LIMITED on 30th July, 2012 and subsequently got converted to Public Limited Company vide certificate of incorporation dated 06th January,2023 issued by Registrar of Companies, Mumbai, being Corporate Identification Number U74120MH2012PTC233915 and subsequently convert into public limited company vide fresh certificate of incorporation dated 06th January, 2023, being Corporate Identification Number U74120MH2012PLC233915. The company is in the business of marketing, exporting, importing, processing, packing/repacking, arranging or otherwise dealing in any other manner in flowers, dried flowers, potpourri, handicrafts, dry arrangements, artificial flowers, all types of home & interior decorative items and related materials thereof.

Note 1- Significant Accounting Policies:

1.1 Basis of preparation of financial statements

(a) The financial statements are prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP) under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are consistently applied by the Company.

(b) The financial statements are prepared to comply in all material respects with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and provisions of Companies Act, 2013.

(c) The preparation of the financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialize.

1.2 Revenue Recognition

(a) The company generally follows the mercantile system of accounting and recognizes Income & Expenditure on accrual basis.

(b) Revenue is recognised to the extent that it is possible that, the economic benefits will flow to the company and the revenue can be reliably estimated and collectability is reasonably assured.

(c) Revenue from sale of goods and services are recognised when control of the products being sold is transferred to our customer and even there are no longer any unfulfilled obligations. The performance obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.

(d) Revenue is measured on the basis of sale price, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government such as goods and service tax etc. Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.

(e) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.3 Property, Plant & Equipment and Intangible Assets & Depreciation

(a) Property, Plant and Equipment 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 price 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.

(b) 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 maintance cost are charged to the statement of profit and loss during the period in which they are incurred.

(c) 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 recognised in the statement of profit and loss when the same is derecognised.

(d) Depreciation is calculated on pro rata basis on straight line method (SLM) based on estimated useful Life as prescribed under Part C of Schedule - II of the Companies Act, 2013. Freehold land is not depreciated.

(e) Intangible asset purchased are initially measured at cost. The cost of an intangible assets comprises its purchase price including duties and taxes and any costs directly attributable to making the assets ready for their intended use. The useful lives of intangible assets are assessed as either finite or indefinite. Finite-life intangible assets are amortised on a straightline basis over the period of their estimated useful lives.

1.4 Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of the assets net selling price and value in use, which is determined by the present value of the estimated future cash flows.

1.5 Investments

Investments classified as long-term investments are stated at cost. Provision is made to recognize any diminution other than temporary in the value of such investments. Current investments are carried at lower of cost and fair value.

1.6 Inventories

Inventories consisting of Raw Materials, W-I-P and Finished Goods are valued at lower of cost and net realizable value unless otherwise stated. Cost of inventories comprises of material cost on FIFO basis and expenses incurred in bringing the inventories to their present location and condition. .

1.7 Employee Benefits

-Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the provident fund is charged to the statement of profit and loss for the year when an employee renders the related services.

Provision for Gratuity expenses have been considered as per actuarial valuation report for respective years.

Leave encashment to the employees are accounted for as & when the same is claimed by eligible employees.

1.8 Borrowing Costs

(a) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use.

(b) Other Borrowing costs are recognized as expense in the period in which they are incurred.

1.9 Taxes on Income

Tax expense comprises of current tax and deferred tax.

Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the applicable tax rates and tax laws.

Deferred Tax arising on account of "timing differences" and which are capable of reversal in one or more subsequent periods is recognized, using the tax rates and tax laws that are enacted or substantively enacted. Deferred tax asset is recognized only to the extent there is reasonable certainty with respect to reversal of the same in future years as a matter of prudence

1.10 Earnings per Share (EPS)

(a) Basic earnings per 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.

(b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.11 Prior Period Items

Prior Period and Extraordinary items and Changes in Accounting Policies having material impact on the financial affairs of the Company are disclosed in financial statements.

1.12 Provisions / Contingencies

(a) Provision involving substantial degree of estimation in measurements is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

(b) Contingent Liabilities are shown by way of notes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable.

(c) A Contingent Asset is not recognized in the Accounts.

1.13 Segment Reporting

A) Business Segments: Based on the guiding principles given in Accounting Standard 17 (AS - 17) on Segment Reporting issued by ICAI, the Company has only one reportable Business Segment which is engaged in business of manufacturing of artificial flower and interior decor items in India. Accordingly, the figures appearing in these financial statements relate to the Companys single Business Segment.

B) Geographical Segments: The Company activities / operations are confined to India and as such there is only one geographical segment. Accordingly, the figures appearing in these financial statements relate to the Companys single geographical segment.

1.14 Foreign Currency Transactions

Foreign exchange transactions are recorded at the rate prevailing on the date of respective transaction. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rates on that date. 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 transaction. Exchange differences arising on foreign exchange transactions settled during the year and on restatement as at the balance sheet date are recognized in the statement of profit and loss for the year.

1.15 Balance Confirmations

Balance of Debtors & Creditors & Loans & advances Taken & giving are subject to confirmation and subject to consequential adjustments, if any. Debtors & creditors balance has been shown separately and the advances received and paid from/to the parties is shown as advance from customer and advance to suppliers.

1.16 Regrouping

1Previous year?s figures have been regrouped and reclassified wherever necessary to match with current year grouping and classification.

1.17 Pandemic (Covid-19) impact

The World Health Organization announced a global health emergency because of a new strain of coronavirus ("COVID-19") and classified its outbreak as a pandemic on 11 March 2020. On 24 March 2020, the Indian government announced a strict 21-day lockdown across the country to contain the spread of the virus. The management has made an assessment of the impact of COVID-19 on the Companys operations, financial performance and position for the year ended 31 March 2023 and has concluded that no there is no significant impact which is required to be recognized in the financial statements. Accordingly, no adjustments are required to be made to the financial statements.

DISCUSSION ON RESULTS OF OPERATION

The following discussion on results of operations should be read in conjunction with the Audited Restated Financial Results of our Company for the year ended on March, 31 2023, 2022 and 2021.

Results of Our Standalone Operations

The following table sets forth select financial data from our financial statements as restated of profit and loss for the financial years ended on March 31, 2023, 2022 and 2021 the components of which are also expressed as a percentage of total revenue for such periods:

Particulars	31-03- 2023	% of total income	31-03- 2022	% of total income	31-03- 2021	% of total income
Revenue from Operations	2,485.66	98.36%	989.16	99.06%	642.73	96.93%
Other income	41.52	1.64%	9.38	0.94%	20.37	3.07%
Total Revenue (A)	2,527.17	100.00%	998.53	100.00%	663.10	100.00%
Expenses:
Cost of Material Consumed	2,815.31	111.40%	458.21	45.89%	338.11	50.99%
Changes in Inventories	1,715.52	-67.88%	-	0.00%	-	0.00%
Employee benefits expense	237.30	9.39%	111.70	11.19%	97.39	14.69%
Other expenses	200.22	7.92%	159.01	15.92%	122.46	18.47%
Total Expenses (B)	1,537.31	60.83%	728.92	73.00%	557.96	84.14%
Earnings Before Interest, Taxes, Depreciation & Amortization(C=A-B)	989.86	39.17%	269.61	27.00%	105.14	15.86%
Finance costs (D)	143.47	5.68%	90.92	9.10%	42.44	6.40%
Depreciation and amortization expenses (E)	50.38	1.99%	35.36	3.54%	23.52	3.55%
Profit before exceptional items, extraordinary items and tax (F=C-D-E)	796.02	31.50%	143.34	14.35%	39.18	5.91%
Exceptional Items	1.87	0.07%	-	0.00%	-	0.00%
CSR	1.87	0.07%	-	0.00%	-	0.00%
Prior period items	-	0.00%	-	0.00%	-20.99	-3.17%
Profit before tax (F=C-D-E)	794.14	31.42%	143.34	14.35%	60.17	9.07%
Tax Expenses		0.00%		0.00%		0.00%
- Current Tax	201.03	7.95%	37.86	3.79%	16.48	2.49%
- Deferred Tax	0.26	0.01%	1.04	0.10%	0.36	0.05%
Tax Expense For The Year (G)	201.30	7.97%	38.90	3.90%	16.84	2.54%
Profit after tax (H=F-G)	592.84	23.46%	104.44	10.46%	43.33	6.53%

Overview of Revenue and expenditure Revenue and Expenditure

Total Revenue: Our Total Revenue comprises of Revenue from Operations and Other Income.

Revenue from operations: Our revenue from operations comprises of Sale of Finished Goods and Other Operating Revenue.

Other Income: Our other income comprises of Interest Income, Discount & Rebate, Forex Gain and Creditors Written Off.

Expenses: Our expenses comprise of Cost of Material Consumed, Changes in Inventories, Employee Benefit Expenses, Finance Cost, Depreciation and Amortisation Expenses and Other Expenses.

Cost of Material consumed: Our Cost of Material Consumed comprises of Purchases of Materials, Power & Fuel Expenses, Factory Rent and change in inventory of Raw-materials.

Change in Inventories: Our Change in comprises of difference between opening and closing stock of Finished Goods and Work-in-progress.

Employee Benefit Expenses: Our employee benefit expense consists of Salaries, Wages & Bonus, Directors Remuneration, Contribution to ESI & EPF, Gratuity and Staff Welfare Expenses.

Finance Cost: Our finance costs comprise of Bank & Other Finance Charges and Interest on Loans.

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

Other expenses: Other expenses are the General and Administrative expenses of our Company. It includes Auditor Remuneration, Business promotion, Carriage Outward, Computer Maintenance Charges, Discount Allowed, Distribution /Packing Expenses, Electricity Charges, Exhibition Expenses, Forex Loss (Net), Insurance expenses, Late fees on payment of taxes, Legal & Professional Fees, Making Expenses, Miscellaneous Expenses, Office Expenses, Postage & Telecommunication, Printing & Stationery, Rates & Taxes, Rent & Maintenance charges, Repairs & Maintenance, Telephone & Internet Charges, Transportation charges, Travelling and conveyance, Trademark Expenses, Vehicle Maintenance & Website Expenses.

Exceptional Items: Our Exceptional Items comprises of CSR Expenses and Prior period adjustments-Provision for Expenses.

Provision for Tax: 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 I. T. Act.

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 2022-23 WITH FY 2021-22

Income

Total Revenue: Our total revenue increased by ? 1,528.64 lakhs or 153.09% to ?2,527.17 Lakh for the financial year 202223 from ?998.53 Lakh for the financial year 2021-22 due to increase in Revenue from Operations and Other income.

Revenue from operations

Our revenue from operations is ?2,485.66 Lakhs for the financial year 2022-23 as compared to ? 989.16 Lakhs for the financial year 2021-22 representing an increase of 151.29% on account of increase in sales due to expansion.

Other Income

Our Other Income was ?41.52 Lakhs for the financial year 2022-23 as compared to ?9.83 Lakhs for the financial year 202122 mainly due to increase in Interest Income and Creditors Written Off.

Expenses

Our total expenses excluding finance cost, depreciation and tax expenses is ?1,537.31 Lakhs for the financial year 2022-23 as compared to ?728.92 Lakhs for the financial year 2021 -22 representing an increase of 110.90% due to the factors described below: -

Cost of Material Consumed

Our Cost of Material Consumed is ?2,815.31 Lakhs for the financial year 2022-23 as compared to ?458.21 Lakhs for the financial year 2021-22 representing an increase of 514.41% due to increase in purchases and manufacturing expenses.

Changes in Inventories of Stock-in-trade and Finished Goods

Our changes in inventories of stock-in-trade and finished goods is ?(1,715.52) Lakhs for the financial year 2022-23. There was no change in inventories of Finished Goods and Work-in-progress for financial year 2021 -22 as our company has started trading business from current financial year onwards.

Employee benefits expenses

Our employee benefit expenses is ?237.30 Lakhs for the financial year 2022-23 as compared to ?111.70 Lakhs for the financial year 2021-22 representing an increase of 112.45% due to increase in Salaries, Wages & Bonus, Directors Remuneration, Contribution to ESI & EPF, Staff Welfare Expenses.

Finance costs

Our finance cost is ?143.47 Lakhs for the financial year 2022-23 as compared to ?90.92 Lakhs for the financial year 202122 representing an increase of 57.81% on account of an increase in Interest on Loans.

Depreciation and amortization expense

Our depreciation increased by 42.47% to ?50.38 Lakhs for the financial year 2022-23 from ?35.36 Lakhs for the financial year 2021-22 due to wear and tear cost of additional assets purchased during the year.

Other expenses

Our other expenses increased by 25.92% to ?200.22 Lakhs for the financial year 2022-23 from ?159.01 Lakhs for the financial year 2021-22, which is 7.92% and 15.92% of the total revenue of respective years. The increase was mainly due to increase in Auditor Remuneration, Carriage Outward, Discount Allowed, Distribution /Packing Expenses, Electricity Charges, Exhibition Expenses, Forex Loss (Net), Insurance expenses, Legal & Professional Fees, Making Expenses, Miscellaneous Expenses, Office Expenses, Postage & Telecommunication, Rates & Taxes, Repairs & Maintenance, Telephone & Internet Charges, Transportation charges, Travelling and conveyance, Trademark Expenses & Website Expenses which was partially set off against decrease in Business promotion, Computer Maintenance Charges, Late fees on payment of taxes, Printing & Stationery, Rent & Maintenance charges and Vehicle Maintenance.

Exceptional Items

As per the provisions of Companies Act, 2013, our company attracts the provision for CSR, and for that purpose we have created a CSR provision of ?1.87 Lakhs for F.Y.22-23.

Profit before tax

Our profit before tax increased by 454.04% to ?794.14 Lakhs for the financial year 2022-23 from ?143.34 Lakhs for the financial year 2021-22. The increase was mainly due to increase in income and production of finished goods.

Tax expenses

Our tax expenses for the financial year 2022-23 amounted to ?201.30 Lakhs as against tax expenses of ?38.90 Lakhs for the financial year 2021-22. The net increase of ?162.40 Lakhs is on account of increase in Current tax which partially set off with Deferred Tax Assets.

Profit After Tax

Our profit after tax increased by 467.64% to ?592.84 Lakhs for the financial year 2022-23 from ?104.44 Lakhs for the financial year 2021-22, reflecting a net increase of ?488.40 Lakhs due increase in revenue and scale of operations.

COMPARISON OF FY 2021-22 WITH FY 2020-21

Income

Total Revenue: Our total revenue increased by ? 335.43 lakhs or 50.59% to ? 998.53 Lakh for the financial year 2021-22 from ?663.10 Lakh for the financial year 2020-21 due to the factors described below:

Revenue from operations

Our revenue from operations is ? 989.16 Lakhs for the financial year 2021-22 as compared to ? 642.73 Lakhs for the financial year 2020-21 representing a growth of 53.90% on account of increase in sales due to expansion.

Other Income

Our Other Income was ?9.38 Lakhs for the financial year 2021-22 as compared to ?20.37 Lakhs for the financial year 202021 mainly due to decrease in Foreign Loss and Creditors Written Off.

Expenses

Our total expenses excluding finance cost, depreciation and tax expenses is ? 728.92 Lakhs for the financial year 2021-22 as compared to ? 557.96 Lakhs for the financial year 2020-21 representing an increase of 30.64% due to the factors described below: -

Cost of Material Consumed

Our Cost of Material consumed is ? 458.21 Lakhs for the financial year 2021-22 as compared to ? 338.11 Lakhs for the financial year 2020-21 representing an increase of 35.52% due to increase in purchases and manufacturing expenses.

Employee benefits expenses

Our employee benefit expenses is ? 111.70 Lakhs for the financial year 2021-22 as compared to ? 97.39 Lakhs for the financial year 2020-21 representing an increase of 14.69% due to increase in Salaries, Wages & Bonus, Directors Remuneration, Gratuity and Staff Welfare Expenses.

Finance costs

Our finance cost is ? 90.92 Lakhs for the financial year 2021-22 as compared to ? 42.44 Lakhs for the financial year 202021 representing an increase of 114.21% on account of increase in Interest on Loans.

Depreciation and amortization expense

Our depreciation increased by ^11.84 Lakhs to ? 35.36 Lakhs for the financial year 2021-22 from ? 23.52 Lakhs for the financial year 2020-21 due to wear and tear of additional assets purchased during the year.

Other expenses

Our other expenses increased by 29.85% to ?159.01 Lakhs for the financial year 2021-22 from ? 122.46 Lakhs for the financial year 2020-21, which is 15.92% and 18.47% of the total revenue of respective years. The increase was mainly due to increase in Business promotion, Computer Maintenance Charges, Exhibition Expenses, Forex Loss (Net), Insurance expenses, Office Expenses, Postage & Telecommunication, Rates & Taxes, Rent & Maintenance charges, Repairs & Maintenance, Telephone & Internet Charges, Transportation charges, Travelling and conveyance and Vehicle Maintenance which was partially set off against decrease in Auditor Remuneration, Carriage Outward, Electricity Charges, Late fees on payment of taxes, Legal & Professional Fees, Making Expenses, Miscellaneous Expenses, Printing & Stationery and Website Expenses.

Exceptional Items

There is an exceptional item of ?(20.99) Lakhs as prior period items in financial year 2020-21.

Profit before tax

Our profit before tax increased by 138.23% to 143.34 Lakhs for the financial year 2021-22 from ?60.17 Lakhs for the financial year 2020-21. The increase was mainly due to increase in revenue from operation.

Tax expenses

Our tax expenses for the financial year 2021-22 amounted to ?38.90 Lakhs as against tax expenses of ?16.84 Lakhs for the financial year 2020-21. The net increase of ?22.06 Lakhs is on account of increase in Current tax and Deferred Tax Assets.

Profit After Tax

Our profit after tax increased by 141.01% to ?104.44 Lakhs for the financial year 2021-22 from ?43.33 Lakhs for the financial year 2020-21, reflecting a net increase of ^61.11 Lakhs due increase in revenue and scale of operations.

Changes in Cash Flows

The table below summaries our cash flows from our Restated Financial Statements for the financial years 2023, 2022 and 2021:

	For the year ended March 31,
Particulars	2023	2022	2021
Net cash (used in)/ generated from operating Activities	95.79	(95.11)	(633.40)
Net cash (used in)/ generated from investing Activities	(93.55)	(169.46)	(67.63)
Net cash (used in)/ generated from financing Activities	(3.74)	302.40	696.34
Net increase/ (decrease) in cash and cash Equivalents	(1.49)	37.83	(4.68)
Cash and Cash Equivalents at the beginning of the period	50.26	12.43	17.11
Cash and Cash Equivalents at the end of the Period	48.77	50.26	12.43

Operating Activities Financial year 2022-23

Our net cash generated from operating activities was ? 95.80 Lakhs for the period ended March 31, 2023. Our operating profit before working capital changes was ? 980.32 Lakhs for the financial year 2022-23 which was primarily adjusted against increase in Inventories ?513.93 Lakhs, increase in trade receivables by ?630.40 Lakhs, increase in Short Term Loans & Advances ?63.07 Lakhs, decrease in Other Current Assets by ?116.09 Lakhs, increase in trade payables by ?77.41 Lakhs, increase in other current liabilities by ?198.13 Lakhs, increase in short term provision by ?132.29 Lakhs which was further decreased by payment of Income Tax of ?201.04 Lakhs.

Financial year 2021-22

Our net cash used in operating activities was ? (95.11) Lakhs for the period ended March 31, 2022. Our operating profit before working capital changes was ? 264.50 Lakhs for the financial year 2021-22 which was primarily adjusted against increase in inventories by ?334.98 Lakhs, decrease in trade receivables by ? 57.43 Lakhs, decrease in Short Term Loans & Advances by ? 11.72 Lakhs, increase in other current assets by ? 28.11 Lakhs, decrease in trade payables by ? 34.80 Lakhs, decrease in other current liabilities by ? 6.51 Lakhs, increase in short term provision by ? 13.49 Lakhs which was further decreased by payment of Income Tax of ?37.86 Lakhs.

Financial year 2020-21

Our net cash used in operating activities was ? (633.40) Lakhs for the period ended March 31, 2021. Our operating profit before working capital changes was ?124.13 Lakhs for the financial year 2020-21 which was primarily adjusted against increase in inventories by ?1.04 Lakhs, decrease in trade receivables by ? 17.04 Lakhs, decrease in Short Term Loans & Advances ? 83.42 Lakhs, increase in other current liabilities by ? 88.82 Lakhs, decrease in trade payable by ? 727.43 Lakhs, decrease in short term provision by ? 9.27 Lakhs, decrease in other current liability by ? 14.96 Lakhs which was further decreased by payment of Income Tax of ? 16.48 Lakhs.

Investing Activities

Financial year 2022-23

Our net cash used in investing activities was ?93.55 Lakhs for the financial year 2022-23. These were on account of Purchase of Property, Plant & Equipment of ? 101.01 Lakhs, decrease in Non-Current Assets of ? 2.05 Lakhs and Interest income ? 9.51 Lakhs

Financial year 2021-22

Our net cash used in investing activities was ?169.46 Lakhs for the financial year 2021-22. These were on account of Purchase of Property, Plant & Equipment of ? 147.16 Lakhs, decrease in Non-current assets by ? 30.26 Lakhs and Interest Income of ? 7.97 Lakhs.

Financial year 2020-21

Our net cash used in investing activities was ?67.63 Lakhs for the financial year 2020-21. These were on account of Purchase of Property, Plant & Equipment of ? 24.35 Lakhs, decrease in non-current assets by ? 47.27 Lakhs and interest income of ? 3.99 Lakhs.

Financing Activities

Financial year 2022-23

Net cash used in financing activities for the financial year March 31, 2023 was ? 3.74 Lakhs which was primarily on account of increase in Short-Term Borrowings of ? 974.51 lakhs, decrease in Long-Term Borrowings of ? 832.07 Lakhs, Finance Cost of ? 143.47 Lakhs & IPO related expenses ? 2.70 lakhs.

Financial year 2021-22

Net cash generated from financing activities for the financial year March 31, 2022 was ? 302.40 Lakhs which was primarily on account of increase in Long-Term Borrowings by ? 204.07 Lakhs, increase in Short-Term Borrowings by ? 189.24 Lakhs & Finance cost of ? 90.92 Lakhs.

Financial year 2020-21

Net cash generated from financing activities for the financial year March 31, 2021 was ? 696.34 Lakhs which was primarily on account of increase in Share Capital of ? 77.00 Lakhs, increase in Long-Term Borrowings by ? 536.37 Lakhs, increase in Short-Term Borrowings by ? 125.41 Lakhs & Finance cost of ? 42.44 Lakhs.

Other Key Ratios

The table below summaries key ratios in our Restated Financial Statements for the financial years ended March 31, 2023, 2022 and 2021:

	For the year ended March 31,
Particulars	2023	2022	2021
Fixed Asset Turnover Ratio	7.46	3.50	3.77
Current Ratio	1.38	2.87	3.20
Debt Equity Ratio	1.45	3.20	3.01
Inventory Turnover Ratio	1.66	0.93	0.71

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 total turnover based on Financial Statements as restated.

Financial Indebtedness

As on March 31, 2023, the total outstanding borrowings of our Company is ? 1,439.77 Lakhs. For further details, refer to the chapter titled "Statement of Financial Indebtedness" beginning on page 151 of this Draft Red Herring Prospectus.

Particulars	As at March 31, 2023
Loans from Banks & Financial Institutions	1,086.17
Loan from Directors & Related Parties	347.58
Loans from Others	6.01
Total	1,439.77

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 151 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 151 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 Debentures 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 151 of this Draft Red Herring Prospectus, there have been no defaults in payment of statutory dues or repayment of debentures and interest thereon or repayment of deposits and interest thereon or repayment of loans from any bank or financial institution and interest thereon by the Company.

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 Company?s 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 price 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 23 of 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 in business of manufacturing of artificial flower and interior decor items in India. The Company primarily caters to the Indian market with overseas exports.

Relevant industry data, as available, has been included in the chapter titled "Our Industry? beginning on page 86 of this Draft Red Herring Prospectus.

Competitive Conditions

We have competition with Indian and international manufacturing companies and our results of operations could be affected by competition in the manufacturing industry in India and international market in the future. 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 23 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 23 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.