Womancart Ltd Management Discussions

MANAGEMENTs DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the financial year ended March 31, 2023 and financial year ended March 31, 2022, and for the financial year ended March 31, 2021. One should read the following discussion and analysis of our financial condition and results of operations in conjunction with our section titled "Financial Statements" and the chapter titled "Financial Information" on page 195 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 29 of this Draft Prospectus. Actual results could differ materially from those contained in any forward-looking statements and for further details regarding forward-looking statements, kindly refer the chapter titled "Forward-Looking Statements" on page 18 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 Womancart Limited, our Company. Unless otherwise indicated, financial information included herein are based on our Restated Financial Statements for Financial Years 2023, 2022 & 2021 included in this Draft Prospectus beginning on page 195 of this Draft Prospectus.

BUSINESS OVERVIEW

Our company was incorporated as a private limited company under the Companies Act, 2013 in the name and style of "Womancart Private Limited", on July 04, 2018, bearing a CIN U74999DL2018PTC336138, having registered office at New Delhi. The company was converted into a public limited company and the name was changed into "Womancart Limited", pursuant to a shareholders resolution passed at an Extra-Ordinary General Meeting held on May 19, 2023 and a fresh Certificate of Incorporation dated May 31, 2023 was issued by Registrar of Companies, Delhi.

We are primarily a digitally native consumer centric web portal, providing wide range of branded beauty and wellness products for make-up, body care, hair care for both men and women at the comfort of home. Our portfolio consists of approximately 10,000 products from our own brand along with national brands. It includes products related to skin care, make-up, hair, appliances, personal-care, baby care, fragrance, artificial jewellery, lingerie, bags etc. It is a one stop solution addressing various customers concerns at a single digital platform.

We have both online and offline presence, providing omnichannel experience to our customers. Our online website i.e., www.womancart.in offers a wide range of products approximately 10,000 SKUs (Products) from various brands and Our offline channel comprises of 2 stores and 1 kiosks in Delhi. Our physical channels offers a limited range of products.

Our portfolio consists of four brands that we own along with our subsidiaries. These brands are essential in expanding the range of products we offer to our customers.

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SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR AND STUB PERIOD

As per mutual discussion between the Board of the Company and LM, in the opinion of the Board of the Company there have not arisen any circumstances since the date of the last financial statements as disclosed in the Draft Prospectus and which materially and adversely affect or is likely to affect within the next twelve months except as follows:

• The Board of Directors of our Company has approved and passed resolution on June 26, 2023 to authorize the Board of Directors to raise the funds by way of Initial Public Offering.
• The Shareholders of our company appointed Mr. Madhu Sudan Pahwa as Managing Director w.e.f. June 26, 2023, in the Annual General Meeting held on June 28, 2023.
• The Board of Our Company has appointed Ms. Palakh Jain, Ms. Ankita Bhatnagar and Mr. Megh Vinayak as Independent Director (Additional Director) in the Board Meeting held on June 26, 2023 and Shareholder in the Annual General Meeting dated June 28, 2023 regularized them as Independent Directors.
• The board of directors in its meeting held on April 28, 2023 appointed Ms. Nimisha Jain as Company Secretary & Compliance officer of the Company and on June 26, 2023 appointed Mr. Madhu Sudan Pahwa as Chief Financial Officer of the Company.

SIGNIFICANT 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 29 of this Draft Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

• Changes, if any, in the regulations / regulatory framework / economic policies in India and / or in foreign countries, which affect national & international finance.
• Companys results of operations and financial performance;
• Performance of Companys competitors;
• Significant developments in India‘s economic and fiscal policies;
• Failure to adapt to the changing needs of industry and in particular government policies and regulations may adversely affect our business and financial condition;
• Volatility in the Indian and global capital market;

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DISCUSSION ON RESULT OF OPERATION

(? Thousands)
PARTICULARS		For the period ended on
		31-03-2023	% of total income	31-03-2022	% of total income	31-03-2021	% of total income
I.	Revenue From Operations	87,409.12	99.90%	42,337.07	99.46%	13,510.87	99.97%
II.	Other Income	85.66	0.10%	229.53	0.54%	4.25	0.03%
III.	Total Income (1+2)	87,494.78	100.00%	42,566.60	100.00%	13,515.12	100.00%
IV.	Expenses:
(a)	Cost of Goods sold	66,342.19	75.82%	33,351.90	78.35%	12,024.41	88.97%
(b)	Employee benefits expenses	4,027.77	4.60%	2,445.38	5.74%	802.15	5.94%
(c)	Finance costs	656.29	0.75%	953.19	2.23%	661.03	4.89%
(d)	Depreciation and amortisation expenses	838.51	0.96%	140.09	0.33%	57.71	0.43%
(e)	Other expenses	9,397.33	10.74%	3,533.80	8.30%	1,753.16	12.97%
	Total Expense	81,262.09	92.88%	40,424.36	94.97%	15,298.46	113.20%
V.	Profit/(Loss) Before Exceptional & extraordinary items and tax (III-IV)	6,232.69	7.12%	2,142.24	5.03%	-1,783.34	-13.20%
VI.	Exceptional Items	-	-	-	-	-	-
VII.	Profit before extraordinary items and tax	6,232.69	7.12%	2,142.24	5.03%	-1,783.34	-13.20%
VIII.	Extraordinary Items	-	-	-	-	-	-
IX.	Profit before tax (VII- VIII)	6,232.69	7.12%	2,142.24	5.03%	-1,783.34	-13.20%
X.	Tax Expense:
(a)	Current tax	1,556.49	1.78%	38.02	0.08%	-	0.00%
(b)	Deferred tax	-24.83	-0.03%	30.10	0.07%	10.82	0.08%
(c)	Last year excess provision Written Back	-	-	-	-	-	-
XI.	Profit/(Loss) from the period from continuing operations	4,701.03	5.37%	2,074.13	4.87%	-1,794.16	-13.28%
XII.	Profit/ (Loss) from discontinuing operations	-	-	-	-	-	-
XIII.	Profit/ (Loss) for the period (XI + XIV)	4,701.03	5.37%	2,074.13	4.87%	-1,794.16	-13.28%
XIV.	Earning per equity share: (in Rs.)
	(I) Basic	1.70	-	1.00	-	-2.69	-
	(II) Diluted	1.70	-	1.00	-	-2.69	-

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DISCUSSION ON CONSOLIDATED RESULT OF OPERATIONS

(? Thousands)
PARTICULARS		For the period ended on
		31-03-2023	% of total income
I.	Revenue From Operations	96,430.84	99.91%
II.	Other Income	85.66	0.09%
III.	Total Income (1+ II)	96,516.50	100.00%
	Expenses:
	Cost of materials consumed	71,515.43	74.10%
	Purchase of Stock-in-Trade	-	-
	Employee benefits expenses	4,449.01	4.61%
	Finance costs	664.79	0.69%
	Depreciation and amortisation expenses	1,020.86	1.06%
	Administrative (wrong spelling in audit restated), Selling & Distribution Expenses	12,097.68	12.53%
IV.	Total Expense	89,747.78	92.99%
V.	Profit/(Loss) Before Exceptional & extraordinary items and tax (III-IV)	6,768.72	7.01%
VI.	Exceptional Items	-	-
VII.	Profit before extraordinary items and tax	6,768.72	7.01%
VIII.	Extraordinary Items	-	-
IX.	Profit before tax (VII-VIII)	6,768.72	7.01%
X.	Tax Expense:
(1)	Current tax	1691.02	1.75%
(2)	Deferred tax (highlighted in restated)	-16.77	-0.02
(3)	MAT Credit	-	-
XI.	Profit/(Loss) from the period from continuing operations	5060.94	5.24%
XII.	Profit/ (Loss) from discontinuing operations	-	-
XIII.	Tax expense of discounting operations	-	-
XIV.	Profit/(Loss) from Discontinuing operations	-	-
XV.	Profit/ (Loss) for the period (XI + XIV)	5060.94	5.24%
XVI.	Profit/(Loss) Attributable to minorities	-01.12	0.00%
XVII.	Profit/(Loss) Attributable to the owners of the company (XV - XVI)	5062.06	5.24%
XVIII.	Earning per equity share: (in Rs.)
	(I) Basic	1.83	-
	(II) Diluted	1.83	-

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Items for Standalone and Consolidated Restated Financial Statements

Our Significant Accounting Policies

For Significant accounting policies please refer " Significant Accounting Policies", under Chapter titled Restated Standalone Financial Statements and Restated Consolidated Financial Statements beginning on page 195 and 219 respectively of the Draft Prospectus.

Overview of Revenue & Expenditure

The following discussion on results of operations should be read in conjunction with the Restated Standalone Financial Statements for the Financial Year ended March 2023, 2022 & 2021 and the Restated Consolidated Financial Statements for the Financial Year ended March 2023 & 2022.

Our revenue and expenses are reported in the following manner:

Revenues

• Revenue of operations

Our Companys revenue is generated from the sale of goods in which company deals.

• Other Income

Other Income includes discount received, Interest on fixed deposit and other income.

• Expenditure

Our total expenditure primarily consists of Costs of goods sold, Employee benefit expenses, Financial costs, Depreciation and amortization expense and other expenses.

• Cost of Goods Sold

Cost of goods sold includes purchases and other direct expenses.

• Employment Benefit Expenses

Our employee benefits expense primarily comprises of salaries and wages, and staff welfare expenses.

• Finance Cost

Finance Cost Includes loan processing charges, bank charges and interest on borrowings.

• Depreciation and Amortization Expenses

Depreciation and Amortization Expenses majorly includes depreciation on Plant & Equipment which majorly includes computer systems and Softwares, furniture & fixtures and other tangible assets.

• Other Expenses

Other Expenses includes Business Promotion expenses, accounting charges, electricity expense, interest on loan, interest on TDS, directors remuneration, website hosting charges, website maintenance charges, rents, packaging expenses and various other expenses.

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PERIOD ENDED MARCH 31, 2023 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2022 (BASED ON RESTATED STANDALONE FINANCIAL STATEMENTS)

Revenues

• Total Income

Total Income for the period ended March 31, 2023, stood at ? 87,494.78 Thousand whereas in Financial Year 2021-22 it stood at ? 42,566.60 Thousand representing an increase of 105.55%.

Reason: The main reason of increase was growing business operations of the company.

• Revenue of operations

Net revenue from operations for the period ended March 31, 2023, stood at ? 87,409.12 Thousand whereas in Financial Year 2021-22 it stood at ? 42,337.07 Thousand representing an increase of 106.46%

Reason: There has been increase in "Revenue from operations" due to "increase in trading of goods" dealt by the company.

• Other Income

Other Income for the Period ended March 31, 2023, stood at ? 85.66 Thousand whereas in Financial Year 2021-22 it stood at ? 229.53 Thousand representing a decrease of 62.68%.

Reason: There has been decrease in "Other Income" due to "less discount received" by the company.

Expenditure

• Total Expenses

Total Expenses for the Period ended March 31, 2023, stood at ? 81,262.09 Thousand whereas in FY ended March 31, 2022 it stood at ? 40,424.36 thousand representing an increase of 101.02%.

Reason: The increase is on account of increase in overall expenses due to growth of the company.

• Cost of Goods sold

Cost of Goods sold for the Period ended March 31, 2023, stood at ? 66,342.19 Thousand whereas in FY ended March 31, 2022 it stood at ? 33,351.90 thousand representing an increase of 98.92%.

Reason: There has been increase in "Cost of Goods sold" due to "Increase in purchases" by the company.

• Employment Benefit Expenses

Employee benefit expenses for the Period ended March 31, 2023, stood at ? 4,027.77 Thousand whereas in FY ended March 31, 2022 it stood at ? 2,445.38 representing an increase of 64.71%

Reason: There has been an increase in ‘Employee benefit expenses because of a major increase in Staff Salaries, and Staff Welfare & Bonus.

• Finance Cost

Finance Cost for the Period ended March 31, 2023, stood at ? 656.29 Thousand whereas in FY ended March 31, 2022 it stood at ? 953.19 Thousand representing a decrease of 31.15%.

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Reason: This was primarily due to a decrease in the working capital facilities availed by our Company as a result of which, there was a decrease in the Interest of Borrowings.

• Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Period ended March 31, 2023, stood at ? 838.51 thousand whereas in Financial Year 2021-22 it stood at ? 140.09 thousand representing an increase of 498.55%.

Reason: This increase was due to increased capital expenditure undertaken by our Company, primarily towards purchase of Furniture and fixtures and other tangible Assets.

• Other Expenses

The Other Expenses for the Period ended March 31, 2023, stood at ? 9,397.33 thousand whereas for FY ended March 31, 2022 it stood at ? 3,533.80 thousand representing an increase of 165.93%.

Reason: Other expenses comprises of various expenses that are directly or indirectly related to business. It comprises of Business Promotion, Camera Installation charges, consultancy, domain charges, packaging expenses, rent and various other expenses which is related to the business in which we work. Increase in revenue from operation will results increase in these expenses.

• Restated Profit before Tax

In line with above discussions, the restated profit before tax increased significantly by ? 4,090.45 Thousand from ? 2,142.24 Thousand in FY ended March 31, 2022 to ? 6,232.69 Thousand for the FY ended March 31, 2023, representing an increase of 190.94%.

Reason: The entire profit is attributable to Companys product sales.

• Tax Expense

Our total tax expense also accordingly increased by ? 1,463.54 Thousand from ? 68.11 Thousand in FY ended March 31, 2022 to ? 1,531.66 Thousand in FY ended March 31, 2023, due to higher profits.

• Restated Profit after Tax

For the various reasons stated above and adjustments of tax expense, Our Restated profit after tax increased significantly by ? 2,626.91 Thousand from ? 2,074.13 Thousand in FY ended March 31, 2022 to ? 4,701.03 Thousand for the FY ended March 31, 2023, representing an increase of 126.65%.

Reason: The profit after tax was increase primarily due to increase in revenue and effective cost control.

FISCAL YEAR ENDED MARCH 31, 2022 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2021 (BASED ON RESTATED STANDALONE FINANCIAL STATEMENTS)

Revenues

• Total Income

Total Income for the FY ended March 31, 2022, it stood at ? 42,566.60 thousand whereas in FY ended March 31, 2021 it stood at ? 13,515.12 thousand representing an increase of 214.96%.

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Reason: There has been increase in "Total Income" due to increase in "Revenue from operations" and "Other income".

• Revenue from operations

Net revenue from operations for the FY ended March 31, 2022 stood at ? 42,337.07 thousand. Whereas For the Financial Year 2020-21, it stood at ? 13,510.87 thousand representing an increase of 213.36%

Reason: The increase in "Revenue from operations" due to "Increase in sale of Goods in which company deals".

• Other Income

Other Income for the FY ended March 31, 2022 stood at ? 229.53 Thousand whereas for the FY ended March 31, 2021 it stood at ? 4.25 thousand representing an increase of 5300.31%.

Reason: There has been increase in "Other Income" due to interest on fixed deposits and discount received by the company.

Expenditure

• Total Expenses

Total Expenses for the FY ended March 31, 2022 stood at ? 40,424.36 thousand whereas for the FY ended March 31, 2021, it stood at ? 15,298.46 thousand representing an increase of 164.24%.

Reason: The increase is on account of increase in overall expenses due to growth of the company.

• Cost of Goods Sold

Cost of Goods sold for the FY ended March 31, 2022 stood at ? 33,351.90 thousand. Whereas For the FY ended March 31, 2021, it stood at ? 12,024.41 Thousand representing an increase of 177.37%.

Reason: There has been increase in "Cost of Goods sold" due to "Increase in purchases" by the company.

• Employment Benefit Expenses

Employee benefit expenses For the FY ended March 31, 2022 stood at ? 2445.38 thousand. Whereas For the FY ended March 31, 2021, it stood at ? 802.15 representing an increase of 204.85%.

Reason: There was an increase in ‘Employee benefit expenses because of an increase in salaries, and staff welfare and bonus.

• Finance Cost

Finance Cost for the FY ended March 31, 2022 stood at ? 953.19 Thousand whereas for the FY ended March 31, 2021, it stood at ? 661.03 Thousand representing an increase of 44.20%.

Reason: There is an increase in "Finance cost" due increase in bank charges and interest on borrowings.

• Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the FY ended March 31, 2022 stood at ? 140.09 thousand whereas For the FY ended March 31, 2021, it stood at ? 57.71 thousand representing an increase of 142.75%.

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Reason: This increase was due to increased capital expenditure undertaken by our Company, primarily towards purchase of Furniture and fixtures and other tangible Assets.

• Other Expenses

The Other Expenses for the FY ended March 31, 2022 stood at ? 3533.80 thousand. Whereas For the FY ended March 31, 2021, it stood at ? 1753.16 thousand representing an increase of 101.57%.

Reason: Other expenses comprises of various expenses that are directly or indirectly related to business. It comprises of Business Promotion, Camera Installation charges, consultancy, domain charges, packaging expenses, rent and various other expenses which is related to the business in which we work. Increase in revenue from operation will results increase in these expenses.

• Restated Profit/(Loss) before Tax

In line with above discussions, the restated profit before tax increased significantly by ? 3,925.59 thousand from ? -1,783.34 Thousand in FY ended March 31, 2021 to ? 2,142.24 thousand for the FY ended March 31, 2022, representing an increase of 220.12%

• Tax Expense

Our total tax expense also accordingly increased by ? 57.30 Thousand from ? 10.82 Thousand in FY ended March 31, 2021 to ?68.11 Thousand in FY ended March 31, 2022, due to higher profits.

• Restated Profit/(Loss) after Tax

For the various reasons stated above and adjustments of tax expense, Our Restated profit after tax increased significantly by ? 3868.29 Thousand from ? -1794.16 Thousand in FY ended March 31, 2021 to ? 2074.13 thousand for the FY ended March 31, 2022, representing an increase of 215.60%.

Reason: This increase was primarily due to the company experienced a substantial growth in revenue during the period under consideration.

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

1. Unusual or infrequent events or transactions

Except as described in this Draft 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 Risk Factors beginning on page no. 29 of this Draft Prospectus, to our knowledge there are no known significant economic changes that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

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

Other than as described in this Draft Prospectus, particularly in the sections Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations on pages 29 and 249,

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respectively, to our knowledge, there are no known trends or uncertainties that are expected to have a material adverse impact on our revenues or income from continuing operations.

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

Income and sales of our Company on account of major activities derives from the business of beauty and wellness products for skin care, body care, hair care, fragrance. We also sell owned lifestyle brands imitation jewellery and clothes.

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

Our Companys future costs and revenues can be indirectly impacted by an increase in employees benefit costs as the company require employee for its store and other offices.

6. Future relationship between Costs and Income

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

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

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

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

The Company is operating in Beauty, Personal Care and Fashion Industry. Relevant industry data, as available, has been included in the chapter titled "Our Industry" beginning on page 99 of this Draft Prospectus.

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

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

10. The extent to which the business is seasonal

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

11. Competitive Conditions

We face competition from existing and potential competitors which is common for any business. Over a period of time, we have developed certain competitive strengths which have been discussed in section titled "Our Business" on page 117 of this Draft Prospectus.

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FINANCIAL INDEBTEDNESS

In terms of the Articles of Association of the Company, the Board is authorized to accept deposits from members either in advance of calls or otherwise, and generally accept deposits, raise loans or borrow or secure the payment of any sum of moneys to be borrowed together with the moneys already borrowed including acceptance of deposits apart from temporary loans obtained from the Company‘s Bankers in the ordinary course of business, exceeding the aggregate of the paid-up capital of the Company and its free reserves (not being reserves set apart for any specific purpose) or upto such amount as may be approved by the shareholders from time to time.

Our Company has obtained the necessary consents required under the relevant loan documentation with banks and financial institutions for undertaking activities, such as change in its capital structure, change in its shareholding pattern and change in promoters shareholding which has a possible change in the management control of our Company.

As on March 31, 2023, our Company have following outstanding secured borrowings from banks and financial institutions and unsecured Loan, as per the certificate issued by M/s KRA & Co., Chartered Accountants, dated July 28, 2023.

Secured

(Rs. in Thousands)

Name of Bank	Loan Amounts	Rate of Interest	Tenure	Security	Outstanding as on March 31, 2023
HDFC Bank Limited (Cash Credit)2	1,00,00,000	9.55%	Repayable on demand	Secured against Debtors & Stock and Directors personal guarantee	38,76,470

Unsecured

(Rs. in Thousands)

Name of persons/companies	Loan Amounts	Rate of Interest	Tenure	Outstanding as on March 31, 2023
IDFC BANK	25,50,000	16%	36 Months	25,50,000
HDFC BANK	20,00,000	16.25%	36 Months	16,35,237.47
HARI KISHAN BABBAR	15,00,000	12%	Repayable on demand	10,00,000
POLYTECH INDUSTRIES3	40,00,000	12%	Repayable on demand	40,00,000

Note 1: HDFC has issued a sanction letter dated July 31, 2023 for increase in credit limit upto 2 crores, which is yet to be accepted by the Company.

Note 2: We are in the process of applying to issue NOC from HDFC Bank Limited (Cash Credit) for approaching capital market for mobilising funds.

Note 3: Sandeep Pawah, Proprietor of Polytech Industries is the Director of our company.