Motisons Jewellers Ltd Management Discussions

The following discussion of our financial condition and results of operations should be read in conjunction with our "Restated Financial Statements" on page 224.

This Draft Red Herring Prospectus may include forward-looking statements that involve risks and uncertainties, and our actual financial performance may materially vary from the conditions contemplated in such forward-looking statements as a result of various factors, including those described below and elsewhere in this Draft Red Herring Prospectus. For further information, see "Forward Looking Statements" on page 23. Also read "Risk Factors" and "Key Factors that may affect our Results of Operation" on pages 35 and 291, respectively, for a discussion of certain factors that may affect our business, financial condition or results of operations.

Unless otherwise indicated or the context otherwise requires, the financial information for Fiscals 2020, 2021 and 2022 included herein is derived from the Restated Financial Information, included in this Draft Red Herring Prospectus, have been prepared in accordance with requirements of the Companies Act and Ind AS and restated in accordance with the SEBI Regulations, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. For further information, see "Restated Financial Statements" on page 224.

Unless the context otherwise requires, in this section, references to "we", "us", "our", "the Company" or "our Company" refers to Motisons Jewellers Limited.

OVERVIEW

We are a Jewellery retail player with a history of more than 2 decades in the jewellery industry having experienced entrepreneurs as our Promoters with more than 20 years of experience. Our jewellery business includes the sale of jewellery made of gold, diamond, kundan and sale of other jewellery products that include pearl, silver, platinum, precious, semi-precious stones and other metals. Our other offerings include gold and silver coins, utensils and other artifacts. We commenced our business through a partnership firm M/s Motisons Jewellers in 1997 which was subsequently converted into public limited company in 2011 and currently have presence across multiple prominent locations in Jaipur, Rajasthan.

We started our jewellery business in 1997 with a single showroom in Jaipur, Rajasthan. Our first outlet, famously known as the ‘Traditional Store was set up amidst the famous lanes of the busiest Johri Bazaar, renowned jewellery hub in the heart of the city. This Johri Bazaar showroom displaying gold and diamond jewellery was approx. 304 sq. ft. in area which was expanded to 1355 sq. ft. by 2002 with growth in the business. We have, since then, expanded our network of showrooms and the product portfolio and currently operate 4 showrooms under the "Motisons" brand, located across the city of Jaipur. The flagship store ‘Motisons Tower is located at the high street of Tonk Road, Jaipur. The showroom at Tonk Road spans in an area of approx. 11,700 Sq Ft and has 3 floors with a dedicated floor space for silver, gold, and diamond jewellery respectively. The most recent outlet, opened in the year 2021, is situated in the affluent neighborhood in the southwestern part of Jaipur at Vaishali Nagar.

In addition to selling products at our showrooms, we also sell our products through our online platform at https://www.motisonsjewellers.com/. We launched our website in the year 2011 and online sales commenced from 2018 for younger and more digitally savvy customers who can browse our catalogue based on preferences, collections and designs, and purchase the jewellery directly and have it delivered to their homes. We also arrange virtual appointments to assist our customers. Products generally offered through online marketplaces are diverse and not available in the showrooms.

We primarily source finished jewellery from third party manufacturing vendors located across India. This includes all types of jewellery made of gold, diamond and other precious and semi precious stones. Additionally, to cater to the increasing demand in the market, we also engage artisans on job work basis and have our own manufacturing facilities located in Jaipur, Rajasthan for diamond and gem stone studded jewellery. We outsource the work of making ornaments to various artisans with whom we have developed strong relationships. We offer a large variety of handcrafted jewellery, which are designed and manufactured by our in-house designers in close collaboration along with skilled local craftsman located across the country. To ensure optimum prices and mitigate the risk of suppliers concentration, we procure raw materials from various suppliers across the country. This procurement process enables us to offer a wide range of products.

Our product profile includes traditional, contemporary and combination designs across jewellery lines, for special occasions such as weddings and festivals to daily wear jewellery for all ages, genders and across various price points. Our offerings include gold jewellery, diamond jewellery and other silverware from handmade Indian ethnic to the cutting-edge styles of the urban world. Our gold, diamond and other jewellery inventory in each showroom reflects customer preferences and designs. Our focus on design and innovation, our ability to recognize consumer preferences and market trends, the intricacy of our designs and the quality of our products are our key strengths. We have a dedicated design team, focused on developing new products and designs that meet customers requirements. In addition, our access to a range of contract manufacturers that are generally smaller, localized jewellery manufacturers from various parts of India allows us to offer a diverse product range. We also customize jewellery for individual needs.

Our experience of close to two decades has enabled us to build an effective business model that gives us control over our processes from raw material procurement, design, manufacturing and marketing to sales through our network. Our business model allows us to monitor and control the quality of our products on the supply side, and provides us the ability to respond quickly to our customers needs and preferences on the demand side. Our diamond jewellery is certified by various agencies including IGI, GIA and IDT. As per the demand of customers, we also provide our internal certifications. All our gold and silver jewellery products in line are hallmarked by BIS, except gold jewellery weighing less than two grams, which does not require to be hallmarked.

Our Company is managed by our promoters, Mr. Sandeep Chhabra, the Chairman & Whole Time Director, son of Late Mr. Moti Lal Chhabra and Mr. Sanjay Chhabra, the Managing Director, son of Late Mr. Moti Lal Chhabra, who have experience of more than two decades each in the jewellery industry. The Promoters hail from a business family and started with a strong vision to take the jewellery division to an all-new level in the retail sector. Their relationships with our suppliers, customers and other industry participants have been instrumental in implementing our growth strategies. Our Promoters continues to remain actively involved in our operations and brings to our Company their vision and leadership which we believe has been instrumental in sustaining our business operations and as a result, today the brand successfully operates from 4 prominent locations in Jaipur. Over the years, our management team has helped scale our operations and includes professionals with extensive experience in the retail and jewellery industry as well as finance and marketing.

SIGNIFICANT MATERIAL 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 Red Herring Prospectus, there have not arisen any circumstance that materially and adversely affect or are likely to affect the business activities or profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months except as mentioned below:

1) The Board of Directors have decided to get their equity shares listed pursuant to Section 23 of the Companies Act 2013, by a resolution passed at its meeting held on September 14, 2022 proposed the Issue, subject to the approval of the shareholders and such other authorities as may be necessary.

2) The shareholders of the Company have, pursuant to Section 23 of the Companies Act 2013, by a special resolution passed in the Extra Ordinary General Meeting held on September 15, 2022 authorized the Initial Public Offer.

3) Mr. Kaustubh Chhabra has been appointed as the Chief Financial Officer of the Company w.e.f. 01.07.2022.

4) Mr. Laksh Chhabra has been appointed as the Joint Managing Director of the Company w.e.f. 08.08.2022

KEY FACTORS THAT MAY AFFECT OUR RESULTS OF OPERATION

Our results of operations have been, and will be, affected by many factors, some of which are beyond our control. Our results of operations and financial conditions are affected by numerous factors including the following:

A. Ability to expand the customer base and develop new products capabilities to meet evolving preferences in the Jewellery industry and generate new sales.

Our results of operations are dependent on the number, size and location of, and sales from, our showrooms. Customer relationships are the core of our business. Our ability to grow our customer base and drive market adoption of our products is affected by the pace at which the jewellery industry grows. We expect that our revenue growth will be primarily driven by the pace of adoption of our offerings. This will drive our ability to acquire new customers and increase sales to existing customers, which in turn, will affect our future financial performance.

Our ability to profitably expand our network and product offerings is dependent on our ability to efficiently manage our corresponding increase in expenditures. We have grown our operations by introducing variety of products to meet potential requirements of our customers and create market for our products. To service and grow our relationships with our existing customers and to win new customers, we are required to provide them with products that address their requirements, to anticipate and understand trends in their relevant markets and to continually address their needs as those change and evolve.

Our future growth shall depend on our ability to identify emerging market trends, offer new products and new designs to customers and inculcate strong culture of innovation which will enable us to expand the range of our offerings to customers and improve the delivery of our products along with growing our portfolio of various sized products to increasingly represent our revenue from operations, widened the customer base that we cater to, and typically have a higher margin profile.

B. Maintaining our brand image and catering to changing consumer preferences

We derive substantially all of our revenue from sales of jewellery products, which depends significantly on the strength and reputation of our brand. We attribute the strength and reputation of our brand to our historical ability to provide customers with transparency in the purchase process and pricing of jewellery and create a positioning of trust and transparency in the minds of our customers. We strive to appeal to a broad base of customers with a multifaceted optimizing strategy, which we implement by endeavoring to understand the market preferences and trends in the geographies in which we operate and offering a range of jewellery products in our showrooms that are tailored to such tastes. We undertake numerous marketing initiatives to promote our brand image. For Fiscals 2022, 2021 and 2020 our expenses for advertising and other marketing costs were 88.71 Lakhs, 65.68 Lakhs and 115.14 Lakhs respectively. We believe that we have built a trusted brand with a high recall value and strive to maintain it through impactful communication via our longstanding associations with marquee national, regional and local brand ambassadors, who communicate the salient aspects of our brand. For further details on our marketing and promotion efforts, see "Our Business Marketing and Promotion" on page 164.

The jewellery industry is subject to shifting consumer preferences and more specifically, jewellery preferences often vary significantly by region. In order to compete effectively in our industry, we must be able to identify and respond to shifting consumer demands and preferences. Being able to adapt to the changes in our customers preferences is an important factor in our operational and financial performance.

Recognizing early the powerful potential of engaging customers online, we invested and launched our online platform, www.motisonsjewellers.com where we cater to younger and more digitally savvy customers. Through this online platform our customers can purchase a wide variety of jewellery. Our online platform offers us another distribution channel to reach customers and potentially drive further traffic to our showrooms. See "Our Business Online Sales" on page 164.

C. Product mix and pricing

Changes in the relative mix of gold jewellery, studded jewellery and other jewellery products have had and will continue to have an impact on our financial condition and results of operations.

The products in our showrooms generally have a predetermined making charge or value-added charge. Our jewellery prices are programmed directly into our central ERP system and are primarily based on our costs of production, including the costs of raw materials and production costs. Our jewellery prices also reflect applicable taxes as well as general market demands and price trends. The price of the underlying gold component of our jewellery is based on prevailing market rates, accounting for the global market gold price (which is generally quoted in U.S. Dollars) and the relative value of the Indian Rupee (or local currencies in our Middle East operations). Our production charges and margins are determined by our senior management team in consultation with regional management.

D. Seasonality

Our sales have historically exhibited certain seasonal fluctuations, reflecting higher sales volumes and profit margins during festivals and other occasions. Historically, sales in the third quarter and fourth quarter have typically been higher than the first quarter and second quarter of the fiscal year. We stock certain inventory to account for this seasonality, while our fixed costs such as lease rentals, employee salaries, showroom operating costs and logistics-related expenses, which form a significant portion of operating costs, are relatively constant throughout the year.

Consequently, lower than expected net sales during any third or fourth quarters or more pronounced seasonal variations in sales in the future could have a disproportionate impact on our operating results for the year, or could strain our resources and impair cash flows. Any slowdown in demand for our jewellery during peak season or failure by us to accurately foresee and prepare for such seasonal fluctuations could have a material adverse effect on our business, financial condition and results of operations. The effect of seasonality is expected to further decrease with greater geographical diversification.

E. Increasing competition in the industry;

We face competition from multiple competitors in the markets in which we operate. Success of our operations depends on our ability to effectively compete, including by continuing to differentiate our brand and products from competition by maintaining our brand perception centered around the values of trust and transparency and by continuing to optimize our product assortment and marketing campaigns to cater to preferences in the markets in which we operate. For further details, see "Business Competition" on page 165.

F. Changes in fiscal, economic or political conditions in India

Our results of operations are dependent on the overall economic conditions in the markets in which we operate. Any slowdown in these economies, including due to a global economic slowdown or changes in interest rates, government policies or taxation, social and civil unrest, pandemics and political, economic or other developments could adversely affect our business and results of operations. Even though there are many factors that affect levels of consumer confidence and spending, demand for jewellery can be relatively inelastic in our markets as it is often purchased for wedding-related, religious, cultural and sentimental reasons.

KEY PERFORMANCE INDICATORS AND CERTAIN NON-GAAP MEASURES

In evaluating our business, we consider and use certain non-GAAP financial measures and key performance indicators that are presented below as supplemental measures to review and assess our operating performance. The presentation of these non-GAAP financial measures and key performance indicators are not intended to be considered in isolation or as a substitute for the Restated Financial Information. We present these non-GAAP financial measures and key performance indicators because they are used by our management to evaluate our operating performance. These non-GAAP financial measures are not defined under Ind AS and are not presented in accordance with Ind AS. The non-GAAP financial measures and key performance indicators have limitations as analytical tools. Further, these non-GAAP financial measures and key performance indicators may differ from the similar information used by other companies, including peer companies, and hence their comparability may be limited. Therefore, these matrices should not be considered in isolation or construed as an alternative to Ind AS measures of performance or as an indicator of our operating performance, liquidity, profitability or results of operation.

EBITDA and EBITDA Margin

EBITDA is defined as our profit/loss before tax less other income before finance cost and depreciation and amortisation. Profit/loss before tax margin is defined as profit/loss before tax divided by revenue from operations. EBITDA margin is defined as our EBITDA as a percentage of revenue from operations.

The following table reconciles our profit/loss before tax (an IndAS financial measure) to EBITDA for the periods indicated.

			(Rs in lakhs)
Category	FY 2021-22	FY 2020-2021	FY 2019-2020
Restated (loss) / profit after tax	1,474.72	967.17	316.36
Add: Total Tax Expense	524.20	339.44	106.60
Add: Finance Costs	1593.13	1539.03	1647.34
Add: Depreciation and Amortisation expense	282.72	266.67	294.17
Earnings before interest, taxes, depreciation	3,874.77	3112.31	2364.47
and amortization expenses (EBITDA)
Revenue from operations	31,433.01	21,304.01	21,894.31
EBITDA Margin	12.33%	14.61%	10.80%

The following table sets forth certain key performance indicators for the periods indicated:

				(Rs in lakhs)
Category	FY 2021-22	FY 2020-2021	FY 2019-2020	CAGR
Revenue from Operations	31,433.01	21,304.01	21,894.31	12.81%
EBIDTA (1)	3,874.77	3,112.31	2,364.47	17.90%
EBIDTA Margin (%) (2)	12.33%	14.61%	10.80%	4.51%
PAT	1,474.72	967.17	316.36	67.05%
PAT Margin (%) (3)	4.69%	4.54%	1.44%	48.08%
ROE (4)	13.63%	10.05%	3.50%	57.33%
ROCE (5)	13.09%	11.30%	8.63%	14.90%

1. EBITDA is calculated as restated PAT for the year, plus total tax expenses, exceptional items, finance costs and depreciation and amortization expenses, less interest on income tax.

2. EBITDA Margin is calculated as EBITDA as a percentage of revenue from operations.

3. PAT Margin is calculated as restated PAT for the year as a percentage of revenue from operations.

4. ROE is calculated as restated PAT for the year divided by average shareholders equity.

5. ROCE is calculated as EBIT divided by capital employed.

PRESENTATION OF FINANCIAL INFORMATION

These Restated Financial Information have been compiled by the management from:

a) Audited financial statements of the Company audited and reported by us for the year ended March 31, 2022 prepared in accordance with Ind AS notified under Companies Act, 2013 specified under section 133 of the Act and other accounting principles generally accepted in India which have been approved by the Board of Directors at their meeting held on August 22, 2022.

b) Audited financial statements of the Company as at and for the years ended, March 31, 2021 and March 31, 2020 prepared in accordance with the accounting standards notified under the section 133 of the Act ("Indian GAAP") and other accounting principles generally accepted in India, at the relevant time, which have been Audited and reported by erstwhile Statutory Auditor VKG & Co., Chartered Accountants.

c) The financial information for the years ended March 31, 2022, March 31, 2021 and March 31, 2020 included in such restated financial information have been prepared by the management by preparing Ind-AS financial statements wherein Ind-AS transition / restatement adjustments have been made to the audited financial statements of the Company and prepared in accordance with the Indian accounting standards as notified under Companies Act, 2013.

The optimizing policies have been consistently applied by our Company in preparation of the Restated Financial Statements and are consistent with those adopted in the preparation of financial statements for the year ended March 31, 2022.

The Restated Financial Statements have been prepared so as to contain information / disclosures and incorporating adjustments set out below in accordance with the SEBI ICDR Regulations:

Adjustments to the profits or losses of the earlier years for the changes in accounting policies if any to reflect what the profits or losses of those periods would have been if a uniform accounting policy was followed in each of these years and of material errors, if any;

Adjustments for reclassification of the corresponding items of income, expenses, assets and liabilities, retrospectively in the years ended March 31, 2022, March 21, 2021 and March 31, 2020, in order to bring them in line with the groupings as per the Restated Financial Statements of for the year ended March 31, 2022 and the requirements of the SEBI ICDR Regulations, if any; and

The resultant impact of tax due to the aforesaid adjustments, if any.

SIGNIFICANT ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations is based on the Restated Financial Statements. For details of significant accounting policies followed by us while preparing our financial statements, see "Restated Financial Statements" on page 224.

OVERVIEW OF REVENUE & EXPENDITURE

Revenue and Expenses

Our revenue and expenses are reported in the following manner:

Total Revenue

Our Total Revenue comprises of revenue from operations and other income.

Revenue from operations Our revenue from operations majorly comprises of sale of jewellery made of gold, diamond, kundan and sale of other jewellery products that include silver, precious, semi-precious stones and other metals. We also sale other offerings such as gold and silver coins, utensils and other artifacts made of gold, silver and other precious metals.

Other Income Our other income primarily includes income from interest on loans and advances and other non operating income.

Expenses

Our expenses comprise of cost of materials consumed, purchase of Stock-in-Trade, Changes in inventories of Finished Goods, WIP and Traded Goods, employee benefit expenses, finance costs, depreciation & amortization expenses and other expenses.

Cost of material consumed Cost of material consumed primarily consists of cost of procuring raw materials i.e., primarily gold and precious / semi-precious stones and packaging material expense.

Purchase of Stock-in-Trade Purchases of stock-in-trade comprises gold, diamond and others that includes silver ornaments, etc.

Change in inventories of Finished Goods, WIP and Traded Goods Changes in inventories of finished goods is calculated based on the opening stock and closing stock of gold, diamonds and others.

Employee benefit expenses Our employee benefit expenses mainly include Salaries and allowances, sales incentives, directors remuneration, bonuses, contribution to provident fund and other funds, gratuity and other staff welfare expenses.

Finance costs Our finance costs include interest on secured and unsecured borrowings, lease liabilities, preference share capital and other borrowing costs.

Depreciation and amortization expenses Depreciation and amortisation expenses majorly comprise (i) depreciation of property, plant and equipment; and (ii) depreciation on right-of-use assets.

Other expenses Other expenses comprise of manufacturing and service cost, administration, selling and other expenses.

OUR RESULTS OF OPERATIONS

The following table sets forth selected financial data from our Restated Statement of profit and loss for the Financial Year ended on March 31, 2022, 2021 and 2020, the components of which are also expressed as a percentage of total revenue for such periods:

					(Rs in lakhs)
Particulars	For the Year ended March 31, 2022		For the Year ended March 31, 2021		For the Year ended March 31, 2020
	Amt in Lakhs	(%)*	Amt in Lakhs	(%)*	Amt in Lakhs	(%)*
Revenue:
Revenue from operations	31,433.01	99.96%	21,304.01	99.99%	21,894.31	99.98%
Other income	14.12	0.04%	2.21	0.01%	4.63	0.02%
Total Revenue	31,447.13	100.00%	21,306.22	100.00%	21,898.94	100.00%
Expenses:
Cost of materials consumed	3,148.09	10.01%	1,321.98	6.20%	2,153.45	9.83%
Purchase of stock-in-trade	28,321.10	90.06%	16,558.81	77.72%	16,727.97	76.39%
Changes in inventories of Finished Goods, WIP and Traded Goods	(5,064.31)	-16.10%	(502.00)	-2.36%	(286.56)	-1.31%
Employee benefits expense	702.72	2.23%	563.45	2.64%	595.86	2.72%
Finance costs	1,593.13	5.07%	1,539.03	7.22%	1,647.34	7.52%
Depreciation and amortisation expense	282.72	0.90%	266.67	1.25%	294.17	1.34%
Other expenses	464.72	1.48%	251.69	1.18%	343.73	1.57%
Total Expenses	29,448.17	93.64%	19,999.63	93.87%	21,475.96	98.07%
Profit / (loss) before tax	1,998.96	6.36%	1,306.59	6.13%	422.98	1.93%
Tax Expense
Current Tax	526.45	1.67%	345.13	1.62%	130.93	0.60%
Deferred tax (credit)/charge	(2.21)	-0.01%	(5.71)	-0.03%	(24.31)	-0.11%
Total Tax Expense	524.24	1.67%	339.42	1.59%	106.62	0.49%
Profit for the year/period	1,474.71	4.69%	967.17	4.54%	316.36	1.44%

* (%) column represents percentage of total revenue.

SUMMARY ON RESULT OF OPERATIONS FROM OUR RESTATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2022, 2021 AND 2020

Total Revenue

Total revenue comprises of revenue from operations and other income which are as described below:

Revenue from operations Revenue from operations primarily include revenue from sale of jewellery made of gold, diamond, kundan and sale of other jewellery products that include silver, precious, semi-precious stones and other metals. Revenue also includes sale of other offerings such as gold and silver coins, utensils and other artifacts made of gold, silver and other precious metals:

						(Rs in lakhs)
	FY 2021-22		FY 2020-21		FY 2019-20
Category	Amount	(%)	Amount	(%)	Amount	(%)
(A) Manufacturing Sales*
- Diamond and Gem Stone Studded Jewellery	241.46	0.77%	29.30	0.14%	143.17	0.65%
- Gold Jewellery	1,758.12	5.59%	708.39	3.33%	330.30	1.51%
- Silver jewellery and articles	1,017.56	3.24%	725.38	3.40%	697.45	3.19%
Total (A)	3,017.14	9.60%	1,463.06	6.87%	1,170.92	5.35%
(B) Trading Sales
- Gold Jewellery	23,561.54	74.96%	16,303.14	76.53%	17,437.48	79.64%
- Diamond and Gem Stone Studded Jewellery	3,315.59	10.55%	2,318.41	10.88%	2,230.96	10.19%
- Silver jewellery and articles	1,444.89	4.60%	1,138.76	5.35%	1,029.77	4.70%
- Diamond and other stones	93.50	0.30%	76.65	0.36%	25.18	0.12%
Total (B)	28,415.52	90.40%	19,837.27	93.12%	20,723.39	94.65%
(C) Others (Job Work Income)	0.34	0.00%	3.68	0.02%	-	0.00%
TOTAL	31,433.00	100%	21,304.01	100.00%	21,894.31	100.00%

*Includes products manufactured in the Companys units as well as on job-work basis.

Note: Percentage of total Revenue from Operations

Other income Breakup of other income is set forth for the period indicated:

			(Rs in lakhs)
	For the year ended 31 March
Particulars	2022	2021	2020
Interest Income
Interest on Loans and Advances	10.25	0.44	-
Interest from Banks on Deposit	0.19	0.09	0.05
Interest on Income tax Refund	-	-	3.29
Interest Income on Lease Deposit	1.21	1.10	1.00
Other Non-Operating Income
Gain on Foreign Exchange Fluctuation (net)	1.02	0.58	0.30
Other Non-Operating Income
Reward Points Credit	0.25	-	-
Sales Prompt Incentive	1.20	-	-
Total	14.12	2.21	4.63

Total Expenses

Our total expenses comprise of (i) Cost of materials consumed (ii) Purchase of stock-in-trade (iii) Changes in inventories of Finished Goods, WIP and Traded Goods (iv) employee benefits expense, (v) finance cost, (vi) depreciation and amortization expense and (vii) other expenses.

Cost of material consumed The following table sets forth a breakdown of our cost of materials consumed for the periods indicated:

			(Rs in lakhs)
	For the year ended 31 March
Particulars	2022	2021	2020
Raw Material
Opening Stock at the beginning of the year	1,317.96	976.64	1,092.68
Add: Purchases and Incidental Expenses	2,350.44	1,576.78	1,924.70
(Net of returns, claims/ discount, if any)
Less: Closing Stock at the end of the year	652.95	1,317.96	976.64
Packing Material
Opening Stock at the beginning of the year	20.10	30.99	44.01
Add: Purchases and Incidental Expenses (Net of returns, claims/ discount, if any)	124.95	75.63	99.69
Less: Closing Stock at the end of the year	12.41	20.10	30.99
Total	3,148.09	1,321.98	2,153.45

Purchase of stock-in-trade The following table sets forth a breakdown of purchases of stock-in-trade expense for the periods indicated:

			(Rs in lakhs)
	For the year ended 31 March
Particulars	2022	2021	2020
Purchases and Incidental Expenses (Net of returns, claims/ discount, if any)	28,321.10	16,558.81	16,727.97
Total	28,321.10	16,558.81	16,727.97

Changes in inventories of Finished Goods, WIP and Traded Goods The following table sets forth a breakdown of changes in inventories of Finished Goods, WIP and Traded Goods for the periods indicated:

			(Rs in lakhs)
	For the year ended 31 March
Particulars	2022	2021	2020
Opening Stock
Work-in-Progress	-	-	-
Finished Goods / Stock-in Trade	22,646.15	22,144.15	21,857.59
	22,646.15	22,144.15	21,857.59
Closing Stock
Work-in-Progress	-	-	-
Finished Goods / Stock-in Trade	27,710.46	22,646.15	22,144.15
	27,710.46	22,646.15	22,144.15
Total	(5,064.31)	(502.00)	(286.56)

Employee Benefit Expenses The following table sets forth a breakdown of our employee benefits expense for the periods indicated:

			(Rs in lakhs)
	For the year ended 31 March
Salary and Allowances	408.89	323.21	365.30
Directors Remuneration	84.00	69.00	24.00
Contribution to ESI and PF	11.13	8.82	12.24
Staff Welfare Expenses	22.11	8.64	22.18
Bonus	27.61	22.90	27.22
Rent Free Accommodation	-	4.50	18.00
Gratuity Expenses	7.48	6.38	6.92
Sales Incentives	141.50	120.00	120.00
Total	702.72	563.45	595.86

Finance Costs Bifurcation of finance costs is described below:

			(Rs in lakhs)
	For the year ended 31 March
Particulars	2022	2021	2020
Interest expense:
Bank & Financial Charges	39.00	42.37	56.39
On Other Borrowing (Unsecured Loan)	914.52	879.59	944.73
On Lease Liabilities	85.35	104.36	121.57
On Preference Share-Financial Liability	35.91	32.64	29.68
On Borrowing	517.95	479.69	494.59
On EIR	0.40	0.38	0.38
Total	1,593.13	1,539.03	1,647.34

Depreciation and Amortization Expenses Following is the bifurcation of the depreciation expense:

			(Rs in lakhs)
	For the year ended 31 March
Particulars	2022	2021	2020
Depreciation on Property, Plant and	75.30	60.12	87.52
Equipments
Depreciation on Right of Use Assets	205.52	205.52	205.52
Amortisation of Intangible Assets	1.90	1.03	1.13
Total	282.72	266.67	294.17

Other expenses The following table sets forth a breakdown of our other expenses for the periods indicated:

			(Rs in lakhs)
	For the year ended 31 March
Particulars	2022	2021	2020
Manufacturing & Service Cost
Job Charges	78.21	8.06	23.45
Freight and Cartage	-	0.38	3.22
Consumables and Tools	12.42	8.34	11.14
Wages	47.84	35.02	61.06
Rent on Manufacturing Unit	-	-	-

 

	For the year ended 31 March
Particulars	2022	2021	2020
Total Manufacturing & Service Cost	138.47	51.80	98.87
Administration, Selling & Other Expenses
Advertisement Expenses	43.66	9.26	21.24
Annual Maintenance Charges	4.70	3.26	2.22
Auditors Remuneration	1.50	1.50	1.53
Donation Expenses	1.00	-	0.51
Independent Director Sitting Fees	0.60	0.60	0.60
Commission and Brokerage	48.99	42.01	19.10
Power and Fuel	71.75	65.47	67.39
Hallmarking Expenses	14.84	14.56	17.33
Insurance	18.25	18.04	18.15
Legal & Professional Fees	25.94	8.95	7.37
General Expenses	12.83	8.95	9.12
Internet & Telephone Expenses	4.17	3.22	3.36
Printing & Stationery	11.92	2.79	4.20
Repair Others	5.50	4.30	7.58
Repair of Building	0.67	-	0.91
Membership Fees	0.71	1.07	0.12
Software Upgradation Charges	2.47	1.21	1.58
Sales Promotion Expenses	22.49	14.41	48.37
Discount	3.02	0.07	1.42
Testing & Polishing Expenses	0.77	0.68	1.49
Travelling & Conveyance Expenses	2.60	0.69	4.96
Rate & Taxes	11.72	0.88	3.12
CSR Expenditure	16.00	-	-
Expected Credit Loss	(0.09)	(2.07)	3.19
Misc Exp	0.24	0.04	-
Prior Period Expenses	-	-	-
Total Administration, Selling & Other Expenses	326.25	199.89	244.86
Grand Total	464.72	251.69	343.73

Tax Expenses

Our tax expenses comprise of current tax and deferred tax.

COMPARISION OF RESTATED FINANCIALS FOR THE YEAR ENDED MARCH 31, 2022 WITH FINANCIAL YEAR ENDED MARCH 31, 2021

Total Revenue:

		(Rs in lakhs)
2021-22	2020-21	Variance in %
31,447.13	21,306.22	47.60%

Our total revenue has increased by 47.60% to 31,447.13 Lakhs for financial year 2021-22 from

21,306.22 Lakhs for financial year 2020-21 bifurcated into revenue from operations and other income.

Revenue from Operations

		(Rs in lakhs)
2021-22	2020-21	Variance in %
31,433.01	21,304.01	47.55%

Revenue from Operations has increased by 47.55% to 31,433.01 Lakhs in financial year 2021-22 from 21,304.01 Lakhs in financial year 2020-21. This increase is driven due to an increase retail activity i.e., increase in gold and studded jewellery sold by us. This was driven primarily by an increase in jewellery sold at our showrooms. A further breakup of item-wise sales in FY 2021-22 and 2020-21 is given below. Further the rates of gold have also increased which has led to increased revenue.

				(Rs in lakhs)
	FY 2021-22		FY 2020-2021
Category	Amount	(%)	Amount	(%)
(A) Manufacturing Sales*
- Diamond and Gem Stone Studded Jewellery	241.46	0.77%	29.30	0.14%
- Gold Jewellery	1,758.12	5.59%	708.39	3.33%
- Silver jewellery and articles	1,017.56	3.24%	725.38	3.40%
Total (A)	3,017.14	9.60%	1,463.06	6.87%
(B) Trading Sales
- Gold Jewellery	23,561.54	74.96%	16,303.14	76.53%
- Diamond and Gem Stone Studded Jewellery	3,315.59	10.55%	2,318.41	10.88%
- Silver jewellery and articles	1,444.89	4.60%	1,138.76	5.35%
- Diamond and other stones	93.50	0.30%	76.65	0.36%
Total (B)	28,415.52	90.40%	19,837.27	93.12%
(C) Others (Job Work Income)	0.34	0.00%	3.68	0.02%
TOTAL	31,433.00	100.00%	21,304.01	100.00%

Other Income

		(Rs in lakhs)
2021-22	2020-21	Variance in %
14.12	2.21	538.91%

During the year 2021-22, the other income of our company increased to 14.12 Lakhs from 2.21 Lakhs in 2020-21, representing an increase of 538.91%. This was majorly due to interest income earned on loans and advances of 10.25 Lakhs in FY 2021-22 as against 0.44 Lakhs in FY 2020-21. This interest was on account of loans and advances given by our Company to related party in March 2021 which was repaid back to the Company in August 2021. Therefore, the interest income was earned in FY 2021-22.

Total Expense

		(Rs in lakhs)
2021-22	2020-21	Variance in %
29,448.17	19,999.63	47.24%

The total expenditure for the financial year 2021-22 was increased to 29,448.17 Lakhs from 19,999.63 Lakhs in 2020-21, representing a 47.24% increase, primarily owing to increase in our cost of sales and purchase of stock-in-trade. A further description is given as under.

Cost of material consumed

		(Rs in lakhs)
2021-22	2020-21	Variance in %
3,148.09	1,321.98	138.13%

Cost of material consumed for the financial year 2021-22 increased to 3,148.09 Lakhs from 1,321.98 Lakhs in 2020-21, representing an increase of 138.13%. This was primarily attributable to increase in purchases and increase in manufacturing activity on account of high demand of products in the market and maintenance of large amount of stock in the showrooms.

Purchase of stock-in-trade

		(Rs in lakhs)
2021-22	2020-21	Variance in %
28,321.10	16,558.81	71.03%

Purchase of stock in trade for the financial year 2021-22 increased to 28,321.10 Lakhs from 16,558.81 lakhs in 2020-21, representing 71.03% increase variance. This was primarily attributable to optimizing of inventory to cater to the demand and stock displayed in showrooms.

Changes in inventories of Finished Goods, WIP and Traded Goods

		(Rs in lakhs)
2021-22	2020-21	Variance in %
(5,064.31)	(502.00)	908.83%

Changes in inventories of Finished Goods, WIP and Traded Goods for the financial year 2021-22 increased to (5,064.31) Lakhs from (502.00) Lakhs in 2020-21, majorly due to due to optimizing of the inventory.

Employee benefits expenses

		(Rs in lakhs)
2021-22	2020-21	Variance in %
702.72	563.45	24.72%

Our Company has incurred 702.72 Lakhs as employee benefit expenses in 2021-22, as compared to 563.45 Lakhs in 2020-21, reflecting an increase of 24.72%. This was mainly due to increase in Salary and Allowances by 85.68 Lakhs, Sales Incentives by 21.50 Lakhs, Director Remuneration by 15.00 Lakhs and staff welfare expenses of 13.47 Lakhs.

Finance Cost

		(Rs in lakhs)
2021-22	2020-21	Variance in %
1,593.13	1,539.03	3.52%

Finance costs increased by 54.10 lakhs in 2021-22 over 2020-21, representing a change of 3.52%. This slight increase was due to increase in bank interest on account of increase in working capital limits and unsecured loans.

Depreciation and Amortization expense

		(Rs in lakhs)
2021-22	2020-21	Variance in %
282.72	266.67	6.02%

Depreciation for the financial year 2021-22 stood at 282.72 Lakhs as compared to 266.67 Lakhs in 2020-21, showing an increase of 6.02% because of additions in tangible fixed assets during the year.

Other Expense

		(Rs in lakhs)
2021-22	2020-21	Variance in %
464.72	251.69	84.64%

The companys other expenses saw an increase of 84.64%, amounting to 213.03 Lakhs, majorly due to increase in the following expenses.

			(Rs in lakhs)
Particulars	2021-22	2020-21	Variance
Job Charges	78.21	8.06	70.15
Advertisement Expenses	43.66	9.26	34.40
Legal & Professional Fees	25.94	8.95	16.99
CSR Expenditure	16.00	-	16.00
Wages	47.84	35.02	12.82
Rate & Taxes	11.72	0.88	10.84
Printing & Stationery	11.92	2.79	9.13
Sales Promotion Expenses	22.49	14.41	8.08
Commission and Brokerage	48.99	42.01	6.98
Power and Fuel	71.75	65.47	6.28

The expenses have increased on account of increase in cost of sales. The business operations of the company have increased thereby optimizing stock in the showrooms.

Provision for Tax and Net Profit

			(Rs in lakhs)
Particulars	2021-22	2020-21	Variance in %
Taxation Expenses	524.24	339.42	54.45%
Profit after Tax	1,474.71	967.17	52.48%

Our current tax expense increased by 54%% to 524.24 Lakkhs in FY 2021-22 from 339.42 Lakkhs in FY 2020-21, primarily due to an increase in our taxable income.

As a result of the foregoing factors, our profit for FY 2021-22 increased to 1,474.71 Lakhs from 967.17 Lakhs for FY 2020-21.

COMPARISION OF RESTATED FINANCIALS FOR THE YEAR ENDED MARCH 31, 2021 WITH FINANCIAL YEAR ENDED MARCH 31, 2020

Total Revenue:

		(Rs in lakhs)
2020-21	2019-20	Variance in %
21,306.22	21,898.94	(2.71) %

Our total revenue has decreased by 2.71% to 21,306.22 Lakhs for financial year 2020-21 from 21,898.94 Lakhs for financial year 2019-20 bifurcated into revenue from operations and other income.

Revenue from Operations

		(Rs in lakhs)
2020-21	2019-20	Variance in %
21,304.01	21,894.31	(2.70) %

Revenue from Operations has decreased marginally by 2.70% to 21,304.01 Lakhs for financial year 2020-21 from 21,894.31 Lakhs for financial year 2019-20. This decrease was primarily due to the nationwide lockdown being imposed towards the end of the FY 2020-21.

Other Income

		(Rs in lakhs)
2020-21	2019-20	Variance in %
2.21	4.63	(52.27) %

During the year 2020-21, the other income of our company decreased to 2.21 Lakhs from 4.63 Lakhs in 2019-20, representing a decrease of 52.27%. This slight decrease was due to decrease in interest received on Income tax refund by 3.29 Lakhs.

Total Expense

		(Rs in lakhs)
2020-21	2019-20	Variance in %
19,999.63	21,475.96	(6.87) %

The total expenditure for the financial year 2020-21 was decreased to 19,999.63 Lakhs from 21,475.96 Lakhs in 2019-20, representing a slight decrease of 6.87% mainly due to a reduction in our operations on account of the COVID-19 pandemic.

Cost of material consumed

		(Rs in lakhs)
2020-21	2019-20	Variance in %
1,321.98	2,153.45	(38.61) %

Cost of material consumed for the financial year 2020-21 decreased to 1,321.98 Lakhs from 2,153.45 Lakhs in 2019-20, representing a decrease of 38.61%. This was primarily attributable to an increase in gold sale rates, and decreasing in manufacturing activity.

Purchase of stock-in-trade

		(Rs in lakhs)
2020-21	2019-20	Variance in %
16,558.81	16,727.97	(1.01) %

Purchase of stock in trade for the financial year 2020-21 marginally decreased to 16,558.81 Lakhs from 16,727.97 Lakhs in 2019-20, representing a decline of 1.01%. This was primarily attributable to closure of showrooms due to lockdown imposed on account of COVID-19 pandemic.

Changes in inventories of Finished Goods, WIP and Traded Goods

		(Rs in lakhs)
2020-21	2019-20	Variance in %
(502.00)	(286.56)	75.18%

Changes in inventories of Finished Goods, WIP and Traded Goods for the financial year 202021 increased to (502.00) Lakhs from (286.56) Lakhs in 2019-20.

Employee benefits expenses

		(Rs in lakhs)
2020-21	2019-20	Variance in %
563.45	595.86	(5.44) %

Our Company incurred 563.45 Lakhs as employee benefit expenses in 2020-21, as compared to 595.86 Lakhs in 2019-20, reflecting a slight reduction of 5.44%. This was mainly due to decrease in Salaries and wages by 42.09 Lakhs, Staff welfare expenses by 13.54 Lakhs, Rent Free Accommodation by 13.50 Lakhs, Bonus by 4.32 Lakhs and Contributions to ESI and PF by 3.42 Lakhs. This decrease was partially offset by increase in Directors remuneration by 45.00 Lakhs.

Finance Cost

		(Rs in lakhs)
2020-21	2019-20	Variance in %
1,539.03	1,647.34	(6.57) %

Finance costs decreased by 108.31 Lakhs in 2020-21 over 2019-20, representing a change of 6.57%, due to decrease in interest on Other Borrowing (Unsecured Loan) by 65.14 Lakhs, on Lease Liabilities by 17.21 Lakhs due to the unwinding of discount on the Companys lease agreements, on borrowings by 14.90 Lakhs and on Bank & Financial Charges by 14.02 Lakhs on account of reduced loan utilization levels.

Depreciation and Amortization expense

		(Rs in lakhs)
2020-21	2019-20	Variance in %
266.67	294.17	(9.35) %

Depreciation for the financial year 2020-21 stood at 266.67 Lakhs as compared to 294.17 Lakhs in 2019-20, reflecting a reduction of 9.35% since there were no major additions in tangible fixed assets of the Company during the year.

Other Expense

		(Rs in lakhs)
2020-21	2019-20	Variance in %
251.69	343.73	(26.78) %

The companys other expenses saw a decrease of 26.78%, amounting to 92.04 Lakhs, majorly due to the following factors:

			(Rs in lakhs)
Particulars	2020-21	2019-20	Variance
Sales Promotion Expenses	14.41	48.37	(33.96)
Wages	35.02	61.06	(26.04)
Particulars	2020-21	2019-20	Variance
Job Charges	8.06	23.45	(15.39)
Advertisement Expenses	9.26	21.24	(11.98)
Expected Credit Loss	(2.07)	3.19	(5.26)
Travelling & Conveyance Expenses	0.69	4.96	(4.27)
Repair Others	4.30	7.58	(3.28)
Hallmarking Expenses	14.56	17.33	(2.77)
Rate & Taxes	0.88	3.12	(2.24)
Commission and Brokerage	42.01	19.10	22.91

Provision for Tax and Net Profit

			(Rs in lakhs)
Particulars	2020-21	2019-20	Variance in %
Taxation Expenses	339.42	106.62	218.35%
Profit after Tax	967.17	316.36	205.72%

Our current tax expense increased by 218.35% to 339.42 Lakhs in FY 2020-21 from 106.62 Lakhs in FY 2019-20, primarily due to an increase in our taxable income.

As a result of the foregoing factors, our profit for FY 2020-21 increased to 967.17 Lakhs from 316.36 Lakhs for FY 2019-20.

LIQUIDITY AND CAPITAL RESOURCES

We have historically financed the expansion of our business and operations primarily through debt financing and funds generated from our operations. From time to time, we may obtain loan facilities to finance our short-term working capital requirements.

CASH FLOW

The table below summaries our cash flows from our Restated Financial Information for the financial year ended March 31, 2022, 2021 and 2020:

			(Rs in lakhs)
	For the year ended March 31
Particulars	2021-22	2020-21	2019-20
Net cash generated from / (used in) operating activities	611.06	1,713.44	1,141.47
Net cash generated from / (used in) Investing Activities	69.53	(74.20)	(23.31)
Net cash generated from / (used in) from financing activities	(739.80)	(1,256.94)	(1,311.84)
Net Increase / (decrease) in Cash & Cash Equivalents	(59.21)	382.30	(193.68)
Cash and cash equivalents at the beginning of the year	608.58	226.28	419.96
Cash and cash equivalents at the end of the year	549.37	608.58	226.28

OPERATING ACTIVITIES

Financial year 2021-22

Our net cash generated from operating activities was 611.06 Lakhs for the financial year 2021-22.

Our operating profit before working capital changes was 3,861.14 Lakhs which was primarily adjusted for increase in inventories by 4,391.61 Lakhs. This was significantly offset by decrease in Other Current Asset by 565.88 Lakhs, increase in Trade Payables by 553.28 Lakhs, decrease in Short-term loans and advances by 300.41 Lakhs, increase in Current Tax Liabilities by 186.08 Lakhs, increase in Other Current Liabilities by 44.02 Lakhs and decrease in Trade receivables by 17.35 Lakhs. The cash generated from operations has also been adjusted for taxed paid of 526.45 Lakhs.

Financial year 2020-21

Our net cash generated from operating activities was 1,713.44 Lakhs for the financial year 2020-21. Our operating profit before working capital changes was 3,113.70 Lakhs which was primarily adjusted for increase in inventories by 832.44 Lakhs, decrease in trade payables by 493.01 Lakhs, increase short term loans & advances by 300.41 Lakhs and decrease in other current liabilities by 7.08 Lakhs. This was partially offset by decrease in trade receivables by 411.38 Lakhs, other current assets by 85.96 Lakhs, other non-current assets by 49.77 Lakhs and increase in Current Tax Liabilities by 30.65 Lakhs. The cash generated from operations has also been adjusted for taxed paid of 345.13 Lakhs.

Financial year 2019-20

Our net cash generated from operating activities was 1,141.47 Lakhs for the financial year 2019-20. Our operating profit before working capital changes was 2,361.75 Lakhs which was primarily adjusted for increase in other Current Assets by 836.61 Lakhs, trade receivables by 487.18 Lakhs, inventories by 157.49 Lakhs, decrease in other current liabilities by 55.91 Lakhs and decrease in Current Tax Liabilities by 15.91 Lakhs. This was offset by increase in payables by 350.48 Lakhs, decrease in other non-current assets by 109.27 Lakhs and increase in short-term provisions by 4.00 Lakhs.

INVESTING ACTIVITIES

Financial year 2021-22

Net cash generated in investing activities was 69.53 lakhs for the financial year 2021-22. This was primarily on account of decrease in Other Financial Asset (Security Deposits) and interest received which was slightly offset by purchase of fixed assets amounting to 79.30 Lakhs.

Financial year 2020-21

Net cash used in investing activities was 74.20 lakhs for the financial year 2020-21. This was primarily on account of purchase of fixed assets amounting to 71.34 Lakhs.

Financial year 2019-20

Net cash used in investing activities was 23.31 Lakhs for the financial year 2019-20. This was primarily on account of purchase of fixed assets amounting to 25.00 Lakhs.

FINANCING ACTIVITIES

Financial year 2021-22

Net cash utilized from financing activities for the financial year 2021-22 was 739.80 lakhs. This was primarily on account of Interest and Finance Charges of 1,593.13 Lakhs, repayment of long-term borrowings of 317.48 Lakhs and payments towards lease liabilities of 200.54 Lakhs. This was significantly offset by increase in Short Term Borrowings by 1,334.42 Lakhs and Long-Term Financial Liabilities of 35.91 Lakhs.

Financial year 2020-21

Net cash utilized from financing activities for the financial year 2020-21 was 1,256.94 Lakhs. This was on account of Interest and Finance Charges of 1,539.04 Lakhs, repayment of short-term borrowings of 569.95 Lakhs and payments towards long term lease liabilities of 200.55 Lakhs. This was offset by proceeds from long-term borrowings of 1,000.37 Lakhs, increase in Long-Term Financial Liabilities of 32.64 Lakhs and increase in short-term lease liabilities of 19.01 Lakhs.

Financial year 2019-20

Net cash utilized from financing activities for the financial year 2019-20 was 1,311.84 lakhs. This was on account of Interest and Finance Charges of 1,647.34 Lakhs, payments towards lease liabilities of 164.33 Lakhs and repayment of long-term borrowings of 38.97 Lakhs. This was offset by proceeds from short-term borrowings of 508.82 Lakhs and increase in Long-Term Financial Liabilities of 29.68 Lakhs.

FINANCIAL INDEBTEDNESS

As on August 31, 2022, our company has total outstanding of secured borrowings from banks aggregating to 6,003.33 Lakhs in the ordinary course of business.

CONTINGENT LIABILITIES

The following table sets forth our contingent liabilities and commitments as on March 31, 2022 as per restated financial statements:

	(Rs in lakhs)
Particulars	As on March 31, 2022
GST Demand	127.75
Income Tax Demand	1,490.56
Total	1,618.31

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.

CAPITAL EXPENDITURE

Our capital expenditures include expenditures on property, plant and equipment. Property, plant and equipment include land, computers, furniture and fixtures, office equipment, plant and machinery, factory Shed / building, electrical installation and vehicles.

The following table sets out the capital expenditure (addition to property, plant and equipment) for the periods indicated:

			(Rs in lakhs)
Particulars	For the year ended March 31
	2021-22	2020-21	2019-20
Electric Equipments	55.66	-	0.11
Lease Improvement	-	-	-
Building	-	-	-
Computers & Printers	10.02	0.32	3.71
Motor Cycle/Cycles	-	-	-
Furniture & Fixtures	79.80	-	1.27
Generators & Inverters	-	-	-
Motor Cars	6.90	43.22	-
Plant & Machinery	35.80	4.11	-
Telephones	1.09	1.45	0.10

 

Particulars	For the year ended March 31
	2021-22	2020-21	2019-20
Land	-	-	-
Lease Hold Land	16.24	-	5.49
Capital WIP	-	20.73	13.00

RELATED PARTY TRANSACTIONS

Related party transactions with certain of our promoters, directors and their entities and relatives primarily relate to remuneration, Short Term Borrowing, rent, Guarantee Fees, etc. For further details of such related parties under AS-18, refer chapter titled "Restated Financial Statements" beginning on page 224.

CHANGES IN ACCOUNTING POLICIES IN LAST THREE YEARS

There is no change in accounting policy in the last 3 years except for provision of gratuity on actuarial basis. For further details, please refer to chapter titled "Restated Financial Statements" beginning on page 224.

QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Credit Risk

Credit risk is the risk of financial loss to the Company, if a customer or the counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companys receivables from customers and from its investing activities, including deposits with banks. The carrying amounts of financial assets represent the maximum credit risk exposure.

Liquidity Risk

Liquidity risk is the risk that the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. Our Companys approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companys reputation. We believe that our working capital is sufficient to meet our current requirements.

Market Risks

We are exposed to various types of market risks during the normal course of business. Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: price risk, currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

Effect of Inflation

In recent years, India has experienced relatively high rates of inflation. While we believe inflation has not had any material impact on our business and results of operations, inflation generally impacts the overall economy and business environment and hence could affect us

Unusual or infrequent events or transactions

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

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 section titled "Risk Factors" beginning on page 35 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

Other than as described in chapter titled "Risk Factors" beginning on page 35 and in this section, to our knowledge there are no known factors that might affect the future relationship between cost and revenue. Our Companys future costs and revenues will be determined by demand/ supply situation, government policies, global market situation and prices of our material.

New Products or Business Segments

Other than as described elsewhere in this Red Herring Prospectus, there are no new products or business segments in which we operate.

The extent to which the business is seasonal

Our sales have historically exhibited certain seasonal fluctuations, reflecting higher sales volumes during the festival period, wedding season and other occasions as compared to other periods. As a result of such trends, we may experience some fluctuation in our revenues and profits during the course of our fiscal year. See "Risk Factor No. 21 Our income and sales are subject to seasonal fluctuations and lower income in a peak season may have a disproportionate effect on our results of operations" on page 51.

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

Indian rules and regulations as well as the overall growth of Indian economy have a significant bearing on our operations. Major changes in these factors can significantly impact income from continuing operations.

Other than as described in the section titled "Risk Factors" beginning on page 35, to our knowledge there are no significant economic changes that materially affects or are likely to affect income of our Company from continuing operations.

The extent to which material increases in net sales or revenue are due to better product quality and increase in number of customers

Increase in revenue is by and large linked to increases in volume of business activity by the Company.

Reservations, qualifications and adverse remarks

Except as disclosed in chapter titled "Restated Financial Statements" beginning on page 224, 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 "Restated Financial Statements" beginning on page 224, 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.

Material Frauds

There are no material frauds, as reported by our statutory auditor, committed against our Company, in the last three Fiscals.

Status of any publicly announced new products / projects or business segments

Our Company has not announced any new projects or business segments, other than disclosed in the Draft Red Herring Prospectus. For details of our new projects or business segments please refer to the chapter titled "Our Business" beginning on page 150.

Increase in income

Increases in our income are due to the factors described above in this chapter under "Key Factors that may affect our Results of Operation" and chapter titled "Risk Factors" beginning on page 291 and 35, respectively..

Any significant dependence on a single or few suppliers or customers

We majorly procure our raw materials and sell our products to various organisations / wholesalers. The following is the breakup of top five and top ten customers and suppliers of our Company as on March 31, 2022 are as below:

				(Rs in lakhs)
Particulars	Customers		Suppliers
	Amount	% of Total Sales	Amount	% of Total Purchases
Top 5	288.86	0.92%	13,084.35	42.48%
Top 10	373.36	1.19%	16,532.09	53.68%

Competitive Conditions

We face competition from existing and potential organized and unorganized competitors which is common for any business. We have, over a period of time, developed certain competitive strengths which have been discussed in section titled "Our Business" beginning on page 150.