M.V.K. Agro Food Product Ltd Management Discussions

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF

OPERATIONS

The following discussion is intended to convey managements perspective on our financial condition and results of operations forthe six month period ended September 30, 2023 and for the financial years ended March 31, 2023, 2022 and 2021. One should read the following discussion and analysis of our financialcondition and results of operations in conjunction with our section titled "Financial Statements" and the chapter titled "FinancialStatement" on page 173 of the Draft Prospectus. This discussion contains forward-looking statements and reflects our current views with respect to future events and our financial performance and involves numerous risks and uncertainties, including, but not limited to, those described in the section entitled "Risk Factors" on page 23 of this Draft Prospectus. Actual results could differ materially from those contained in any forward-looking statements and for furtherdetails regarding forward-looking statements, kindly refer the chapter titled "Forward-Looking Statements" on page 15 of this Draft Prospectus. Unless otherwise stated, the financial information of our Company used in this section has been derived from the Restated Financial Information. Our financial year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular financial year are to the 12-month period ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers to M.V.K. Agro

Food Product Limited, our Company and our Subsidiary, Sai Krupa Dairy & Food Products Private Limited. Unless otherwise indicated, financial information included herein are based on our Restated Financial Statements for six months ended September 30, 2023 and the financial years ended March 31, 2023, 2022 and 2021 included in this Draft Prospectus beginningon page 173 of this Draft Prospectus

BUSINESS OVERVIEW

We are an integrated sugar and other allied products manufacturing company operating from Nanded District in the State of Maharashtra. We operate a single location sugar unit having licensed crushing capacity of 2,500 TCD. In addition to sugar we also commercialise and sell our by-products and waste products, namely, Molasses, Bagasse and Pressmud. We are also engaged in the generation of Power for captive consumption. Our business can hence be broken up into two segments, namely Sugar and its by-products/waste products. In the year 2020, we commenced operations of manufacturing of Sugar. In the year 2020, our Company implemented backward integration and began commercial operations of the by-products and waste products of Sugar along with Co-Generation capabilities. Our Company has in the Fiscal 2023, completed three crushing seasons, i.e., 2020-21, 2021-22 and 2022-23. Over the years, we have expanded the production / manufacturing capacities of all our products. Our present licensed manufacturing capacity for our various products is given below:

S. No.	Product	Current Approved Capacity
1.	Sugar	2,500 Tones Cane per day (TCD)
2.	Molasses	120 Tones per day
3.	Bagasse	750 Tones per day
4.	Pressmud	90 Tones per day

Our Company proposes to further diversify its product portfolio by setting up a greenfield unit for manufacturing Ethanol and Bio-CNG and Fertilizer. Ethanol is produced after fermentation and distillation of Molasses and can be further purified into Fuel Ethanol, by removing the water content. We intend to create an additional revenue stream using backward integration of our waste material, i.e., Molasses for manufacturing Ethanol and marketing and selling the same for industrial usage. Further, in the said greenfield unit, we propose to set up a separate bio CNG bottling and fertiliser plant for bio-gas generation and bottling. The by-product generated from the manufacturing of bio-gas is mainly used as a fertiliser, therefore our Company proposes to market and sell such by-product as a fertilizer to third parties. We propose to generate bio-gas by processing Bagasse and Pressmud further marketing and selling the same for industrial usage. Accordingly, our Company proposes to utilise an amount of 3,488.17 lakhs and 1,750.00 lakhs from the Net Proceeds of this Issue towards setting up the aforementioned manufacturing unit for Ethanol and Bio-CNG and Fertilizer, respectively, and expanding our product portfolio.

Our Company follows a diversified marketing approach for marketing and selling its products. We market and sell our products through domestic brokers and export-oriented commodity traders.

Domestic Brokers: We market and sell our Sugar through brokers, with whom we share long term relationship. Our brokers further market and sell Sugar to institutional confectionary manufactures, such as PepsiCo Holdings India Private Limited, Parle Biscuits Private Limited and Britannia Industries Limited, etc. Our products are used as a raw materials by the institutional manufacturers for manufacturing finished products such as biscuits, rusk and other bakery products. Our brokers also market and sell our products directly to wholesalers and large retailers, all over India. We believe that the marketing initiatives of our brokers have enabled us in creating a brand presence in the domestic market.

Export-oriented commodity traders: In addition to our association with brokers, we also sell our products to export oriented commodity traders, such as, Sakuma Exports Limited, Indian Sugar Exim Corporation, Garden Court and HRMM Agro Overseas Private Limited. Our commodity traders have built long-standing relationships with international buyers of various grades of raw sugar, and therefore we sell Sugar in bulk quantities to our commodity traders, who further market and sell it in both bulk and containerised forms in global markets.

We have achieved complete integration by marketing and selling by-products and waste products produced while manufacturing sugar. Our sugar manufacturing unit is an integrated production facility, which first crushes sugarcane to extract juice and processes the juice to produce Sugar. The Sugar manufactured is then graded and packed based on the size of crystals and quality of the sugarcane. After extracting the juice from sugarcane, the residual fibre leftover called Bagasse is used by our Company as raw material for in-house power generation, for captive consumption. During the manufacture of Sugar, bagasse, molasses and pressmud are accumulated as by-products and waste material. We commercialise the said products to third party bio-coal and ethanol manufacturers, thereby achieving complete integration.

We have a successful track record which has enabled us to develop an effective business model with stringent control over processes, including raw material procurement, manufacturing operations, inventory management and management of distribution logistics. We adhere to stringent product quality standards and closely track consumer preferences across segments from cross-section of markets. Our Company runs a zero wastage manufacturing unit, wherein waste material generated from our divisions is either sold or processed in power generation. We further market and sell our by-product, bagasse, molasses and pressmud, and therefore commercialise our by-product as well as waste material. The commercialisation of our waste material makes our manufacturing unit a zero wastage unit or a zero discharge unit. The revenue earned from the sale of our products, including by-products during the six months period ended September 30, 2023 and Fiscals 2023, 2022 and 2021 have been provided below:

Particulars	Six month period ended September 30, 2023		2023		Fiscal 2022		2021
	Revenue earned in ( in lakhs)	% of total revenue*	Revenue earned in ( in lakhs)	% of total revenue*	Revenue earned in ( in lakhs)	% of total revenue*	Revenue earned in ( in lakhs)	% of total revenue*
Sugar
Brokers	4186.09	69.62%	2750.46	29.28%	4984.45	37.58%	1281.65	49.62%
Export-oriented	-	-	2663.99	28.36%	5176.63	39.03%	-	-
commodity traders
			By-Products
Bagasse	-	0.00%	87.1	0.93%	96.74	0.73%	21.59	0.84%
Cane Seed &	1008.53	16.77%	2009.8	21.40%	1216.3	9.17%	0.59	0.02%
others
Molasses	37.03	0.62%	1812.43	19.29%	1588.38	11.98%	974.47	37.72%
Pressmud	1.00	0.02%	3.96	0.04%	4.61	0.03%	5.1	0.20%
			Milk products
Milk Products	779.87	12.97%	-	-	-	-	-	-

* As a percentage of consolidated turnover.

We believe our complete integration of operations and in-house generation of Power for captive consumption has helped us in achieving sustainability in our business operations. Our manufacturing unit is completely operated through the power generated through waste material collected during the sugar manufacturing process. We do not rely on any third party power sources to run our manufacturing process. Furthermore, our manufacturing operations our seasonal in nature, owing to our dependence on harvesting and cultivation of sugarcane. Therefore we run our manufacturing unit on a 24 hour basis from November until March and manufacture and stock the sugar in adequate quantities to sustain the demands of our customers from April to October. Our cyclical operations are in line with the harvesting season and therefore supplements the natural cycle of production of sugarcane. Our cyclical operations also ensure adequate demand of sugarcane for the famers and therefore also sustains their livelihood during the harvest period. In addition to the above, our Company has adopted a circular manufacturing process, wherein by-products and waste material are either used in power generation or are commercialised to third parties for manufacturing sustainable products such as, bio-coal and bio-gas. Our integrated operations make us a sustainable ‘zero-discharge unit.

Production of sugar and power requires our Company to adopt stringent Quality Assurance and Quality Control standards (QA/QC). We have formed a quality control and quality assurance division ("Quality Division") set-up an in-house laboratory in our manufacturing unit which ensures that quality of raw material used in the production process and also the finished goods delivered to our customers is subject to various tests. To access and facilitate compliance with applicable requirements, our Quality Division regularly reviews the quality systems to determine their effectiveness and identify areas for improvement. This helps in improving our procurement process thus reducing wastages, returns and other related costs.

Our business model and our products are completely sustainable in nature. We source our raw materials directly from farmers to ensure that we use absolutely natural ingredients in our products. Our business model ensures that the farmers receive complete benefit of their produce without having to share their revenue with market intermediaries. Since, we source our raw materials directly from the farmers, we are able to offer our products at a lower range than our competitors, thereby having a unique pricing model. We source our raw materials from local farmers to ensure that we do not increase the carbon footprint in transporting products from different states in our manufacturing unit. In addition to this, we have also set up a ‘Farmer Development Division, wherein agricultural experts from our team train local farmers farming techniques and methods to ensure that their produce is healthy and matches with our quality standards. We also sponsor the education of our Farmers by sending them to farming institutes and colleges, to enable them to obtain technical farming knowledge and expertise.

Our Company is promoted by Marotrao Vyankatrao Kawale, who is also the Managing Director of our Company. He started his career as a school teacher and was previously associated with Nutan Vidyalaya Education Society in the capacity of an assistant teacher. He has vast knowledge and experience in the field on management and manufacturing of sugar, jaggery, ethanol, milk product and dairy for over 20 years. He has played a key role in growth and development of our Company. Our Company and our Promoter are aided by a team of experienced personnel. The team comprises of personnel having technical, operational and business development experience. We believe that our management teams experience and their understanding of the sugar production & derived product manufacturing business will enable us to continue to take advantage of both current and future market opportunities. It is also expected that our management personnels experience will to help us in addressing and mitigating various risks inherent in our business, including significant competition, reliance on independent agents, and fluctuations in sugar and sugarcane prices. Our team includes senior executives and managers, many of whom are having vast experience in the engineering and sugar industry. We believe our management and executive team has the long-term vision to provide stability and continuity to our businesses.

Our revenues from operations for the six months period ended September 30, 2023 and the Fiscals 2023, 2022 and 2021 were 6,012.52 lakhs, 9,327.65 lakhs, 1,3067.11 lakhs and 2,283.40 lakhs, respectively. Our EBITDA for the six months period ended September 30, 2023 and the Fiscals 2023, 2022 and 2021 were 1,325.39 lakhs,

1,661.13 lakhs, 1,201.82 lakhs and 533.66 lakhs, respectively. Our profit after tax for the six months period ended September 30, 2023 and the Fiscals 2023, 2022 and 2021 were 430.07 lakhs, 377.45 lakhs, 320.87 lakhs and 139.43 lakhs, respectively. For further details, please refer to the section titled "Financial Information" on page 173 of this Draft Prospectus.

For detailed information on the business of our Company please refer to "Our Business" beginning on page numbers

112 of this Draft Prospectus.

Products Offered by our Company

Our products can be broadly classified as under:

SUGAR

Our Company is involved in the process of production of sugar, with a total capacity crushing capacity of 2,500 tonnes per day. Sugarcane being a seasonal crop, the sugar manufacturing majorly takes place during the sugarcane period of November to March known as Crushing Season. We use modern technology which enables us to optimally utilize the available resources to ensure maximum crushing capacity and thereby maximize the production of sugar. We have a total licensed sugarcane crushing capacity of 2,500 TCD and installed sugarcane crushing capacity of 2,500 TCD. The sugar produced by us is differentiated on the basis of the size of the sugar crystals. These types are termed as M30, SS30 and S30 which are in descending order of the size of the crystals. Since the de-regularization of Sugar, our Company has developed a robust and long term relationship with brokers and export oriented commodity traders who have liaisons with various major brands. Through our brokers, we have sold our sugar produce to major brands such as PepsiCo Holdings India Private Limited, Parle Biscuits Private Limited and Britannia Industries Limited; among others, who use sugar for manufacture of various biscuits, confectionery and beverages.

BY-PRODUCTS

Bagasse: Bagasse is the fibrous residual material that is left after juice has been extracted from sugarcane. The bio-fuel is used for the boilers which generates steam. This high pressure steam is blown through the turbines which and is responsible for rotation of turbines. The rotation of turbines generates electricity. Out of the total bagasse produced as a result of the cane crushing process, we use ~85% in the electricity generation process and the balance is sold to local traders.

Press Mud: Pressmud is used as manure in sugarcane fields to increase the fertility of the soil and ensure improved yields. Press mud is produced from the residue which comes out from the factory after the filtration of sugarcane juice. The clarification process separates the juice into a clear juice that rises to the top and goes for manufacture, and a mud that collects at the bottom. However Press Mud is also sold to farmers who use it as organic fertilizers, etc.

Molasses: Molasses is used in the manufacturing of ethanol and sprit. Molasses is produced from the residue which comes out from the factory after the centrifugation of massecuite. We sell this to domestic ethanol manufacturers.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST AUDITED FINANCIALS

After the date of last Audited accounts i.e. September 30, 2023, the Directors of our Company confirm that, there have not been any significant material developments.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factor" beginning on page 23 of this Draft Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

1. We cannot assure you that the manufacturing unit proposed to be set up by us will become operational as scheduled, or at all, or operate as efficiently as planned. If we are unable to commission our new manufacturing unit in a timely manner or without cost overruns, it may adversely affect our business, results of operations and financial condition.

2. As on date we have not obtained any of the approvals, clearances and permissions as may be required from the relevant authorities for the proposed manufacturing unit. In the event we are unable to obtain such approvals and permits, our business, results of operations, cash flows and financial condition could be adversely affected.

3. Our Company has limited experience of manufacturing Ethanol and Bio-CNG and Fertilizer. Hence, we have limited exposure in manufacturing products outside of our existing product portfolio, which may make it difficult to evaluate our past performance and prospects with respect to the same.

4. We cannot assure that we shall be able to utilize our proposed manufacturing unit to its full capacity or up to an optimum capacity, and non-utilisation of the same may lead to loss of profits or can result in losses, and may adversely affect our business, results of operations and financial condition.

5. There can be no assurance that the objects of the Issue will be achieved within the time frame anticipated or at all, or that the deployment of the Net Proceeds in the manner intended by us will result in any increase in the value of your investment. Further, the plan for deployment of the Net Proceeds has not been appraised by any bank or financial institution.

6. Our Company is yet to place orders for 100% of the plant and machinery. Any delay in placing orders or procurement of such plant and machinery, may further delay the schedule of implementation and increase the cost of commissioning the manufacturing unit.

7. We depend on our domestic brokers and export-oriented commodity traders for a significant portion of our revenue, and any decrease in revenues or sales from any one of our key intermediaries may adversely affect our business and results of operations.

8. Our business is subject to seasonal variations that could result in fluctuations in our results of operations.

9. Sugarcane is the principal raw material used for the production of sugar. Our business depends on the availability of sugarcane and any shortage of sugarcane may adversely affect our business and results of operations. 10. The improper handling, processing or storage of raw materials or products, or spoilage of and damage to such raw materials and products, or any real or perceived contamination in our products, could subject us to regulatory and legal action, damage our reputation and have an adverse effect on our business, results of operations and financial condition.

DISCUSSION ON RESULT OF OPERATION

Our Significant Accounting Policies

For Significant accounting policies please refer Significant Accounting Policies, under Chapter titled "Restated

Financial Statements" beginning on page 173 of the Draft Prospectus.

Overview of Revenue & Expenditure

Our revenue and expenses are reported in the following manner:

Revenues

Revenue of operations

Our Companys revenue is primarily engaged in the manufacturing of Sugar. In addition to sugar we also commercialise and sell our by-products and waste products, namely, Molasses, Bagasse and Pressmud.

Other Income

Our other income mainly consists of profit on sale of Interest and other miscellaneous income.

( In Lakhs)

		For the period ended
Particulars	September 30, 2023	March 31, 2023	March 31, 2022	March 31, 2021
Income
Revenue from Operations	6,012.52	9,327.65	13,067.11	2,283.40
% of total revenue	99.47%	99.30%	98.52%	88.40%
Other income	31.84	65.98	196.45	299.70
% of total revenue	0.53%	0.70%	1.48%	11.60%
Total Revenue	6,044.36	9,393.63	13,263.56	2,583.10

Expenditure

Our total expenditure primarily consists of Cost of material consumed, Manufacturing Expense, Changes in inventories of finished goods and stock-in-trade, Employee Benefit Expenses, Depreciation and amortization Expenses, Finance Costs and Other Expenses.

Employment Benefit Expenses

It includes salaries, wages, bonus and allowances, contributions to welfare funds, provision for gratuity and other expenses.

Cost of materials Consumed

This relates to the cost of material consumed in manufacturing, packing material and consumables, change in inventory of raw material and cost of consumable consumed.

Manufacturing Expense

This relates to the cost of Power Fuel & Water, Repairs & Maintenance and Freight & Transportation of raw material.

Changes in Inventories of finished goods

This relates to the change in inventory of finish good.

Other Expenses

It includes Profession Fees, Vehicle Repair & Maintenance, Nursery Expenses, Advertisement Expenses, Mobile Bill, Printing & Stationery, Audit Fees and Other Audit Expenses, Insurance, Rent, Rates & Taxes, Licenses & Inspection Fees, Plant expenses, Power & Fuel Expenses, General Expense, Agri Staff Travelling Expenses and other expenses.

Finance Costs

Our finance costs mainly include processing charges and interest.

Depreciation

Depreciation includes depreciation and amortization.

RESULTS OF OUR OPERATION

( In Lakhs)

Particulars	30-Sep-23	31-Mar-23	31-Mar-22	31-Mar-21
Incomes:
Revenue from Operations	6,012.52	9,327.65	13,067.11	2,283.40
% of total revenue	99.47%	99.30%	98.52%	88.40%
% Increase/(Decrease)	-	-28.62%	472.27%	-
Other income	31.84	65.98	196.45	299.70
% of total revenue	0.53%	0.70%	1.48%	11.60%
% Increase/(Decrease)	-	-66.41%	-34.45%	-
Total Revenue	6,044.36	9,393.63	13,263.56	2,583.10
% Increase/(Decrease)	-	(29.18%)	(413.48%)	-
Expenses:
Cost of raw material consumed	771.75	8,919.68	8,983.42	6,708.52
% of total revenue	12.77%	94.95%	67.73%	259.71%
% Increase/(Decrease)	-	-0.71%	33.91%	-
Manufacturing Expense	156.98	475.38	513.02	258.69
% of total revenue	2.60%	5.06%	3.87%	10.01%
% Increase/(Decrease)	-	-7.34%	98.31%	-
Changes in inventories of finished
goods, and stock-in-trade	3,387.58	-2,667.23	1,852.15	-5,305.84
% of total revenue	56.05%	-28.39%	13.96%	-205.41%
% Increase/(Decrease)	-	(244.01%)	(134.91%)	-
Employee Benefit expenses	303.15	648.85	504.99	238.53
% of total revenue	5.02%	6.91%	3.81%	9.23%
% Increase/(Decrease)	-	28.49%	111.70%	-
Other expenses	99.51	355.82	208.17	149.52
% of total revenue	1.65%	3.79%	1.57%	5.79%
% Increase/(Decrease)	-	70.93%	39.23%	-
Total Expense	4,718.97	7,732.50	12,061.74	2,049.43
% of total revenue	78.07%	82.32%	90.94%	79.34%
% Increase/(Decrease)	-	(35.89%)	488.54%	-
Profit before Interest,
	1,325.39	1,661.13	1,201.82	533.67
Depreciation and Tax
% of total revenue	21.93%	17.68%	9.06%	20.66%
Depreciation and amortization
	164.03	227.24	179.09	45.07
Expenses
% of total revenue	2.71%	2.42%	1.35%	1.74%
% Increase/(Decrease)	-	26.89%	297.40%	-
Profit before Interest and Tax	1,161.36	1,433.88	1,022.73	488.60

 

% of total revenue	19.21%	15.26%	7.71%	18.92%
Financial Charges	593.81	942.59	605.01	303.24
% of total revenue	9.82%	10.03%	4.56%	11.74%
% Increase/(Decrease)	-	55.80%	99.52%	-
Profit before Tax and
	567.55	491.30	417.72	185.36
Extraordinary Expenses
% of total revenue	9.39%	5.23%	3.15%	7.18%
Extraordinary Expenses	-	-	-	-
% of total revenue	-	-	-	-
% Increase/(Decrease)	-	-	-	-
Restated Profit/(Loss) before tax	567.55	491.30	417.72	185.36
% of total revenue	9.39%	5.23%	3.15%	7.18%
% Increase/(Decrease)	-	17.61%	125.35%	-
Tax expenses/(income)
Current and prior years Tax (net)	116.89	46.89	35.61	15.41
Provisions for Deferred Tax	20.59	66.95	62.30	29.53
Total tax expenses	137.48	113.84	97.91	44.94
% of total revenue	2.27%	1.21%	0.74%	1.74%
Restated profit/(loss) after Tax	430.07	377.46	319.81	140.42
% of total revenue	7.12%	4.02%	2.41%	5.44%
% Increase/(Decrease)	-	17.67%	127.75%	-

Our income is dependent upon few major intermediaries, details of the same is as following:

( in lacs)

Particulars	September 30, 2023		Fiscal 2023		Fiscal 2022		Fiscal 2021
	Amount	Percentage%	Amount	Percentage%	Amount	Percentage%	Amount	Percentage%
Top five customers	2,144.27	35.48%	4,767.37	50.75%	6,010.88	45.32%	1,111.34	43.02%
Top ten customers	2,578.23	42.66%	5,416.67	57.66%	7,205.06	54.32%	1,262.1	48.86%

REVIEW OF OPERATIONS FOR THE PERIOD ENDED SEPTEMBER 30, 2023

Income from Operations

Our revenue from operations for the period ended September 30, 2023 was 6,012.52 Lakhs which was about 99.47% of the total revenue and which comprises of revenue from sale of Sugar and its by-products Bagase Sale, Pressmud Sale, and Molasses Sales, and sale of dairy products by subsidiary Cane Seed Sales, Scrap Sale, Dairy Sales.

Other Income

Our other income for the period ended September 30, 2023 was 31.84 Lakhs which was about 0.53% of the total revenue andwhich includes income and other miscellaneous income.

Expenditure

Cost of Material Consumed

The cost of material consumed for the period ended September 30, 2023 were 771.75 Lakhs which has about 12.77% of the total revenue.

Manufacturing Expense

The Manufacturing Expense for the period ended September 30, 2023 were 156.98 Lakhs which has about 2.60% of the total revenue.

Changes in inventories of finished goods, and stock-in-trade

The changes in inventories of finished goods, and stock-in-trade for the period ended September 30, 2023 were 3,387.58

Lakhs.

Employee Benefits expenses

The employee benefits expenses for the period ended September 30, 2023 were 303.15 Lakhs which was about

5.02% of the total revenue and which includes salaries, wages, bonus and allowances, contributions to welfare funds, provision for gratuity and other expenses.

Other Expenses

Other Expenses for the period ended September 30, 2023 were 99.51 Lakhs which was about 1.65% of the total revenue and which includes Profession Fees, Vehicle Repair & Maintenance, Nursery Expenses, Advertisement Expenses, Mobile Bill, Printing & Stationery, Audit Fees and Other Audit Expenses, Insurance, Rent, Rates & Taxes, Licenses & Inspection Fees, Plant expenses, Power & Fuel Expenses, General Expense, Agri Staff Travelling Expenses and other expenses.

EBIDTA

Our EBITDA for the period ended September 30, 2023 were 1,325.39 Lakhs.

Financial Costs

Financial costs for the period ended September 30, 2023 were 593.81 Lakhs which was about 9.82% of the total revenue and which consists of interest and other finance charges.

Depreciation

Depreciation for the period ended September 30, 2023 were 164.03 Lakhs which was about 2.71% of the total revenue and which consists of depreciation and amortization expenses.

Profit /(Loss) after Tax

PAT for the period ended September 30, 2023 was 430.07 Lakhs.

REVIEW OF OPERATIONS FOR THE PERIOD ENDED MARCH 31, 2023

Income from Operations

Our revenue from operations for the fiscal year ended March 31, 2023 was 9,327.65 Lakhs which was about 99.30% of the total revenue and which comprises of revenue from sale of finish product i.e. sugar and its by-products Bagase Sale, Pressmud Sale, and Molasses Sales, and sale of dairy products by subsidiary Cane Seed Sales, Scrap Sale, Dairy Sales.

Other Income

Our other income for the fiscal year ended March 31, 2023 was 65.98 Lakhs which was about 0.70% of the total revenue and which includes interest income and other miscellaneous income.

Expenditure

Cost of Materials Consumed

The cost of materials consumed for the year ended March 31, 2023 were 8,919.68 Lakhs which has about 94.95% of the total revenue.

Cost of Materials Consumed

The Manufacturing Expense for the year ended March 31, 2023 were 475.38 Lakhs which has about 5.06% of the total revenue.

Changes in inventories of finished goods, and stock-in-trade

The changes in inventories of finished goods, and stock-in-tradefor the year ended March 31, 2023 were (2,667.23) Lakhs.

Employee Benefits expenses

The employee benefits expenses for the fiscal year ended March 31, 2023 were 648.85 Lakhs which was about 6.91% of the total revenue and which includes salaries, wages, bonus and allowances, contributions to welfare funds, provision for gratuity and other expenses.

Other Expenses

Other Expenses for the fiscal year ended March 31, 2023 were 355.82 Lakhs which was about 3.79% of the total revenue and which includes Profession Fees, Vehicle Repair & Maintenance, Nursery Expenses, Advertisement Expenses, Mobile Bill, Printing & Stationery, Audit Fees and Other Audit Expenses, Insurance, Rent, Rates & Taxes, Licenses & Inspection Fees, Plant expenses, Power & Fuel Expenses, General Expense, Agri Staff Travelling Expenses and other expenses.

EBIDTA

Our EBITDA for the fiscal year ended March 31, 2023 were 1,661.13 Lakhs.

Financial Costs

Financial costs for the year ended March 31, 2023 were 942.59 Lakhs which was about 10.03% of the total revenue and which consists of interest and other finance charges.

Depreciation

Depreciation for the fiscal year ended March 31, 2023 were 227.24 Lakhs which was about 2.42% of the total revenue and which consists of depreciation and amortization expenses.

Profit /(Loss) after Tax

FISCAL YEAR ENDED MARCH 31, 2023 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2022

Income

Total revenue has decreased by 3,739.46 Lakhs and 28.62%, from 13,067.11 Lakhs in the fiscal year ended March 31, 2022 to 9,327.65 Lakhs in the fiscal year ended March 31, 2023. The decrease in revenue was on account of decrease in manufacturing of finished products due lack of availability of sugar canes on account of lack of rainfall in the western part of India.

Expenditure

Total Expenditure decreased by 3,943.51 Lakhs and 30.70%, from 12,845.84 Lakhs in the fiscal year ended March 31, 2022 to 8,902.33 Lakhs in the fiscal year ended March 31, 2023. Overall expenditure was decreased mainly due to decrease in manufacturing of finished products i.e. sugar.

Cost of materials Consumed

Cost of materials consumed decreased by 63.74 Lakhs and 0.71%, from 8,983.42 Lakhs in the fiscal year ended

March 31, 2022 to 8,919.68 Lakhs in the fiscal year ended March 31, 2023. Cost of Materials Consumed was decreased mainly due to decrease volume of production.

Manufacturing Expense

Manufacturing Expense decreased by 37.64 Lakhs and 7.34%, from 513.02 Lakhs in the fiscal year ended

March 31, 2022 to 475.38 Lakhs in the fiscal year ended March 31, 2023. Manufacturing Expense was decreased mainly due to decrease volume of production.

Changes in inventories of finished goods, and stock-in-trade

Changes in inventories of finished goods, and stock-in-trade decreased by 2,667.23 Lakhs in the fiscal year ended

March 31, 2023 as against increase of 1,852.15 Lakhs in the fiscal year ended March 31, 2022. Decrease in inventories of finished goods, and stock-in-trade was mainly due to lower volume of production of sugar.

Employee Benefit Expenses

Employee Benefit Expenses in terms of value and percentage increased by 143.86 Lakhs and 28.49% from 504.99 Lakhs in the fiscal year ended March 31, 2022 to 648.85 Lakhs in the fiscal year ended March 31, 2023. Overall employee cost was increased due to increase in increase staff strength and general increment in salary and incentives to employees.

Other Expenses

Other Expenses in terms of value and percentage increased by 147.65 Lakhs and 70.93% from 208.17 Lakhs in the fiscal year ended March 31, 2022 to 355.82 Lakhs in the fiscal year ended March 31, 2023. Other Expenses was increased mainly due to increase Nursery Expenses, Vehicle Hire Charges, Insurance, Donation Expenses, other manufacturing expenses, Process & Chemical Expenses and others.

EBIDTA

Profit before Interest, Depreciation and Tax has increased by 459.31 Lakhs and 38.22% from 1,201.82 Lakhs in the fiscal year ended March 31, 2022 to 1,661.13 Lakhs in the fiscal year ended March 31, 2023. Profit before Interest, Depreciation and Tax was increased due to lower production and reduction in inventories of finished goods, and stock-in-trade.

Finance Costs

Finance Costs in terms of value and percentage increased by 337.58 Lakhs and 55.80% from 605.01 Lakhs in the fiscal year ended March 31, 2022 to 942.59 Lakhs in the fiscal year ended March 31, 2023. Finance Costs was increased mainly due to higher interest outgo and increased borrowings.

Depreciation & Amortization Expenses

Depreciation in terms of value increased by 48.15 Lakhs and 26.89% from 179.09 Lakhs in the fiscal year ended March 31, 2022 to 227.24 Lakhs in the fiscal year ended March 31, 2023. Increase in depreciation is due to increase in assets and is general in nature.

Net Profit after Tax and Extraordinary items

Net Profit has increased by 57.65 Lakhs and 18.03% from profit of 319.81 Lakhs in the fiscal year ended March

31, 2022 to profit of 377.46 Lakhs in the fiscal year ended March 31, 2023. Net profit was increased due to lower production and reduction in inventories of finished goods, and stock-in-trade.

FISCAL YEAR ENDED MARCH 31, 2022 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2021

Income

Total revenue has increased by 10,783.71 Lakhs and 472.27%, from 2,283.40 Lakhs in the fiscal year ended March 31, 2021 to 13,067.11 Lakhs in the fiscal year ended March 31, 2022. The increase in revenue was on account of higher production of finish product and higher sale volume.

Expenditure

Total Expenditure increased by 10,448.11 Lakhs and 435.75%, from 2,397.73 Lakhs in the fiscal year ended March 31, 2021 to 12,845.84 Lakhs in the fiscal year ended March 31, 2022. Overall expenditure was increased mainly due to higher production of finished products.

Cost of Material Consumed

Cost of Material Consumed increased by 2,274.90 Lakhs and 33.91%, from 6,708.52 Lakhs in the fiscal year ended March 31, 2021 to 8,983.42 Lakhs in the fiscal year ended March 31, 2022. Cost of Material Consumed was increased mainly due to increase in material consumed on account of increased production of finish goods.

Manufacturing Expense

Manufacturing Expense increased by 254.33 Lakhs and 98.31%, from 258.69 Lakhs in the fiscal year ended

March 31, 2022 to 513.02 Lakhs in the fiscal year ended March 31, 2023. Manufacturing Expense was increased mainly due to increase volume of production.

Changes in inventories of finished goods, and stock-in-trade

Changes in inventories of finished goods, and stock-in-trade increased by 7,157.99 Lakhs in the fiscal year ended

March 31, 2022 as against decrease of 5,305.84 Lakhs in the fiscal year ended March 31, 2021. Increase in inventories of finished goods, and stock-in-trade was mainly due to higher volume of production.

Employee Benefit Expenses

Employee Benefit Expenses in terms of value and percentage increase by 266.45 Lakhs and 111.70% from 238.53 Lakhs in the fiscal year ended March 31, 2021 to 504.99 Lakhs in the fiscal year ended March 31, 2022. Overall employee cost was increase in number of man-hours in manufacturing process, increase staff strength and general increment in salary and incentives to employees.

Other Expenses

Other Expenses in terms of value and percentage increase by 58.65 Lakhs and 39.23% from 149.52 Lakhs in the fiscal year ended March 31, 2021 to 208.17 Lakhs in the fiscal year ended March 31, 2022. Other Expenses was increased mainly due to increase in Nursery Expenses, Vehicle Hire Charges, Insurance, Donation Expenses, other manufacturing expenses, Process & Chemical Expenses and others.

EBIDTA

Profit Before Interest, Depreciation and Tax has increased by 668.15 Lakhs and 125.20% from 533.67 Lakhs in the fiscal year ended March 31, 2021 to 1,201.82 Lakhs in the fiscal year ended March 31, 2022. Profit Before Interest, Depreciation and Tax was decreased due to increase in production of finished products.

Finance Costs

Finance Costs in terms of value and percentage increased by 301.77 Lakhs and 99.52% from 303.24 Lakhs in the fiscal year ended March 31, 2021 to 605.01 Lakhs in the fiscal year ended March 31, 2021. Finance Costs was increased mainly due to higher interest outgo and increased borrowings.

Depreciation & Amortization Expenses

Depreciation in terms of value increased by 134.03 Lakhs and 297.40% from 45.07 Lakhs in the fiscal year ended March 31, 2021 to 179.09 Lakhs in the fiscal year ended March 31, 2022. Increase in depreciation is due to increase in assets and is general in nature.

Net Profit after Tax and Extraordinary items

Net Profit has increased by 179.38 Lakhs and 127.75% from profit of 140.42 Lakhs in the fiscal year ended March 31, 2021 to profit of 319.81 Lakhs in the fiscal year ended March 31, 2022. Net profit was increased due to increase in revenue from operations and sales volume.

Cash Flows

(Amount in lacs)

Particulars	For the six months period ended September 30, 2023	2023	For the year ended March 31, 2022	2021
Net Cash from Operating Activities	3,909.58	(1,395.89)	2,873.84	(1,926.79)
Net Cash from Investing Activities	(370.38)	(720.95)	(846.89)	(5,477.62)
Net Cash used in Financing Activities	(3,468.68)	2,212.20	(2,100.02)	7,542.09

Cash Flows from Operating Activities

Net cash from operating activities for the six months ended September 30, 2023 was 3,909.58 lacs as compared to the Profit Before Tax at 567.55 lacs. Net cash from operating activities for fiscal 2023 was at (1,395.89) lacs as compared to the Profit Before Tax at 491.30 lacs, while for fiscal 2022, net cash from operating activities was at 2,873.84 lacs as compared to the Profit Before Tax at 417.72 lacs. For fiscal 2021, the net cash from operating activities was (1,926.79) lacs compared to Profit before Tax of 185.36 lacs.

Cash Flows from Investment Activities

Net cash from investing activities for the Six months ended September 30, 2023 was (370.38) lacs. This high cash outflow is attributed to increase in Fixed Assets in Manufacturing Facility. Net cash from investing activities for fiscal

2023 was at (720.95) lacs while for fiscal 2022, net cash from investing activities was at (846.89) lacs due to additions in increase in Fixed Assets. For fiscal 2021, the net cash from investing activities was (5,477.62) lacs due to investment in fixed Assets.

Cash Flows from Financing Activities

Net cash from financing activities for the six months ended September 30, 2023 was (3,468.68) lacs. Net cash from financing activities for fiscal 2023 was at 2,212.20 lacs due to increase in borrowings, while for fiscal 2022, net cash from financing activities was at (2,100.02) lacs also due to repayment of short term borrowings. For fiscal 2021, the net cash from financing activities was 7,542.09 lacs due to increase in borrowings.

OTHER MATTERS

1. Unusual or infrequent events or transactions

Except as described in this Draft 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 173 and 220 respectively of this Draft 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 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 23 and 220 respectively of this Draft 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. Future relationship between Costs and Income

Other than as described in the chapter titled "Risk Factors" beginning on Page 23 of this Draft Prospectus, best to our knowledge there are no factors, which will affect the future relationship between costs and income or which are expected to have a material adverse impact on our operations and finances.

5. Competition Conditions

Our Industry is fragmented consisting of large established players and small niche players. We compete with organized as well as unorganized sector on the basis of availability of product, product quality and product range. Further, there are no entry barriers in this industry and any expansion in capacity of existing manufacturers would further intensify competition. Industry is very competitive and we expect competition to continue and likely to increase in the future.