You should read the following discussion of our financial position and results of operations together with our Restated Standalone Financial Information, which have been included in this Prospectus. You should also read the section entitled "RISK FACTORS" beginning on page no. 16 and "FORWARD LOOKING STATEMENTS" beginning on page no. 11, which discusses a number of factors, risks and contingencies that could affect our financial condition and results of operations.
The following discussion and analysis of our financial position and results of operations is based on our Restated Standalone Financial Information for the period ended 29th February, 2024 and for the financial years ended March 31st, 2023, 2022 and 2021 including the related notes and reports, included in this Prospectus prepared in accordance with requirements of the Companies Act and restated in accordance with the SEBI Regulations, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Our Financial Statements, as restated have been derived from our audited financial statements for the respective period and years. Accordingly, the degree to which our Restated Standalone Financial Information will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity with Indian GAAP, Companies Act, SEBI
Regulations and other relevant accounting practices in India.
This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward looking statements as a result of certain factors such as those described under "RISK FACTORS" and "FORWARD LOOKING
STATEMENTS" on page nos. 16 and 11, respectively, and elsewhere in this Prospectus. Our Financial Year ends on March 31 of each year. Accordingly, all references to a particular Financial Year are to the 12 months ended March 31 of that year.
BUSINESS OVERVIEW
Our Company was originally incorporated as a Private limited company under the Companies Act, 2013, with the name "Resourceful Automobile Private Limited" on February 21st, 2018 under the provisions of the Companies Act, 2013 vide Certificate of Incorporation issued by the Registrar of Companies, Delhi and Haryana. Later on, company was converted into public limited company, the name of the Company has changed to "Resourceful Automobile Limited" and for the same fresh Certificate of Incorporation dated October 25th, 2023 due to change in Name was issued by the Registrar of Companies, Delhi and Haryana.
Our Company is actively involved in the dealership of two-wheeler bike of Yamaha, operating under the showroom name "Sawhney Automobile". Specializing in the sales and servicing of motorcycles and scooters, with quality products and exceptional customer service, making it a trusted destination for motorcycle enthusiasts.
Sawhney Automobile caters to a diverse range of customer preferences and needs by offering a comprehensive selection of two-wheelers. The inventory encompasses commuter bikes, sport bikes, cruisers, and scooters sourced from reputable manufacturers. As an authorized Yamaha dealership, we guarantee customers access to the latest models and authentic spare parts. Our dealership goes beyond sales, providing expert guidance to assist customers in selecting the right bike, arranging test rides, and offering financing options for enhanced accessibility. We take pride in our advanced service center, where skilled technicians handle routine maintenance, repairs, and ensure the availability of genuine spare parts to uphold the longevity and performance of the bikes we sell.
The foundation of our company is laid by three esteemed promoters, Mr. Rahul Sawhney, Mrs. Bindu Sawhney, and Mrs. Megha Chawla. They collectively boast over a decade of invaluable experience in the motorbike industry, possessing a profound understanding of the products and the operational landscape of our business. We firmly believe that the extensive expertise of our management team positions us to not only capitalize on existing opportunities but also navigate future prospects successfully. This wealth of experience is instrumental in addressing and mitigating various inherent risks in our industry, particularly in the face of significant competition.
For more details kindly refer our chapter titled "BUSINESS OVERVIEW" begins from page no. 86 of this Prospectus.
Key Performance Indicators of our Company:
(Rs. In Lakhs)
| Key Financial Performance | For the period | For the financial year ended 31st |
March, | |
| ending February 29th, 2024 | 2023 | 2022 | 2021 | |
| Revenue from Operations(1) | 1,653.86 | 1,883.92 | 1,231.71 | 1,103.79 |
| Growth in Revenue from Operations(2) | -12.21% | 52.95% | 11.59% | 15.42% |
| EBITDA(3) | 301.56 | 147.78 | 90.64 | 36.17 |
| EBITDA Margin(4) | 18.24% | 7.84% | 7.36% | 3.28% |
| PAT(5) | 152.24 | 41.50 | 28.73 | 0.16 |
| PAT Margin(6) | 9.21% | 2.20% | 2.33% | 0.01% |
Note:
(1) Revenue from operation means revenue from sales;
(2) Growth in Revenue from Operations (%) is calculated as Revenue from Operations of the relevant period minus Revenue from Operations of the preceding period, divided by Revenue from Operations of the preceding period; (3) EBITDA is calculated as Profit before tax + Depreciation + Interest Expenses;
(4) EBITDA Margin is calculated as EBITDA divided by Revenue from Operations; (5) PAT is calculated as Profit before tax Taxes;
(6) PAT Margin is calculated as PAT for the period/year divided by revenue from operations.
After the date of last Audited accounts i.e., February 29th, 2024, the Directors of our Company confirm that, there have not been any significant material developments except as stated below;
1. The Board of Directors of the Company approved the Initial Public Offering of our Company in their meeting held on 27th December, 2023.
2. The Shareholders of the Company approved the Initial Public Offering of our Company in their meeting held on 28st December, 2023.
3. The company has transferred its outstanding loan liabilities from Hero Fincorp to Deutsche Bank on 05th February, 2024.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
For details in respect of Statement of Significant Accounting Policies, please refer Restated Financial Statements under chapter titled "RESTATED FINANCIAL STATEMENTS" beginning on page no. 123 of this Prospectus.
Significant Developments after February 29th, 2024 that may affect our Future Results of Operations
The Directors confirm that there have been no events or circumstances since the date of the last financial statements as disclosed in the Prospectus which materially or adversely affect or is likely to affect the profitability of our Company, or the value of our assets, or our ability to pay liabilities within next twelve months.
FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business is subjected to various risks and uncertainties, including those discussed in the section titled "RISK
FACTORS" beginning on page no. 16 of this Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:
1. Our dependence on limited number of customers/suppliers/brands for a significant portion of our revenues;
2. Any failure to comply with the financial and restrictive covenants under our financing arrangements;
3. Our ability to retain and hire key employees or maintain good relations with our workforce;
4. Impact of any reduction in sales of our services/products;
5. Rapid Technological advancement and inability to keep pace with the change;
6. Increased competition in industries/sector in which we operate;
7. General economic and business conditions in India and in the markets in which we operate and in the local, regional and national economies;
8. Changes in laws and regulations relating to the Sectors in which we operate;
9. Political instability or changes in the Government in India or in the government of the states where we operate could cause us significant adverse effects; 10. Failure to obtain any applicable approvals, licenses, registrations and permits in a timely manner;
11. Occurrence of natural or man-made disasters could adversely affect our results of operations and financial condition; and 12. Our inability to successfully diversify our product offerings may adversely affect our growth and negatively impact our profitability.
BRIEF FINANCIALS OF OUR COMPANY
( In Lakhs)
| Particulars | For the period ended February 29th , 2024 |
2023 |
For the year endedMarch 31, 2022 |
2021 |
||||
| Amount | % of Total Income | Amount | % of Total Income | Amount | % of Total Income | Amount | % of Total Income | |
| Revenue from Operations | 1,653.86 | 95.95 | 1,883.92 | 97.20 | 1,231.71 | 98.53 | 1,103.79 | 97.92 |
| Other Income | 69.78 | 4.05 | 54.34 | 2.80 | 18.39 | 1.47 | 23.47 | 2.08 |
| Total Revenue | 1,723.64 | 100.00 | 1,938.26 | 100.00 | 1,250.10 | 100.00 | 1,127.26 | 100.00 |
| EXPENDITURE | ||||||||
| Purchases of Stock in Trade | 1,392.28 | 80.78 | 1,696.04 | 87.50 | 1,275.19 | 102.01 | 1,041.58 | 92.40 |
| Changes In Inventories of F.G., WIP | -123.20 | -7.15 | -96.71 | -4.99 | -249.25 | -19.94 | -71.47 | -6.34 |
| Employee Benefits Expenses | 18.45 | 1.07 | 33.37 | 1.72 | 45.87 | 3.67 | 50.77 | 4.50 |
| Finance Costs | 90.24 | 5.24 | 73.83 | 3.81 | 39.51 | 3.16 | 14.69 | 1.30 |
| Depreciation and amortization Expenses | 6.33 | 0.37 | 14.05 | 0.72 | 12.52 | 1.00 | 20.66 | 1.83 |
| Other Expenses | 134.55 | 7.81 | 157.79 | 8.14 | 87.65 | 7.01 | 70.23 | 6.23 |
| TOTAL EXPENSES | 1,518.65 | 88.11 | 1,878.37 | 96.91 | 1,211.49 | 96.91 | 1,126.44 | 99.93 |
| Profit Before Tax | 204.99 | 11.89 | 59.89 | 3.09 | 38.61 | 3.09 | 0.82 | 0.07 |
| Tax Expenses | ||||||||
| Current Tax | 53.52 | 3.11 | 18.61 | 0.96 | 11.30 | 0.90 | 3.67 | 0.33 |
| Deferred Tax (Liabilities) / Assets | -0.77 | -0.04 | -0.22 | -0.01 | -1.42 | -0.11 | -3.01 | -0.27 |
| Profit After Tax | 152.24 | 8.83 | 41.50 | 2.14 | 28.73 | 2.30 | 0.16 | 0.01 |
Financial Performance Highlights for the period ended 29th February, 2024:
The following descriptions set forth information with respect to the key components of our profit and loss statement.
1. INCOME:
Revenue from Operation: Our Companys total revenue during the period (April 01, 2023 to 29th February, 2024) was
1,723.64 Lakhs. The revenue from operation was 1,653.86 Lakhs which is almost 95.95% of Total Revenue which consist of sales and servicing of motorcycles and scooters.
Other Income: Other Income during the period (April 01, 2023 to 29th February, 2024) was 69.78 Lakhs which is 4.05 % of the Total Revenue which consist of Sale of Spare Parts & Servicing.
2. EXPENSES:
Total Expenses: Our Companys total expenses during the said period (April 01, 2023 to 29th February, 2024) were 1,518.65 Lakhs. The Total Expenditure is almost 88.11% of Total Revenue. The main constituent of Total Expenditure is Purchase of stock in trade and change in Inventories which was 1,269.08 Lakhs, almost 73.63% of Total Revenue.
Cost of Materials Consumed: This comprises of Purchase of Stock in trade and change in Inventories which was
1,269.08 Lakhs, almost 73.63% of the Total Revenue.
Employee Benefits Expense: The Employee Benefit Expenses for the said period (April 01, 2023 to 29th February, 2024) was 18.45 Lakhs, almost 1.07% of Total Revenue.
Finance Cost: The Finance Cost for the said period (April 01, 2023 to 29th February, 2024) was 90.24 Lakhs, almost 5.24% of Total Revenue.
Depreciation and Amortization Expense: We recognize Depreciation and Amortization expense on a Written down value method on pro rata basis and at the rates prescribed under schedule II of the Companies Act, 2013. The cost for the said period (April 01, 2023 to 29th February, 2024) was 6.33 Lakhs, almost 0.37% of Total Revenue.
Other Expenses: Other expenses includes Consumables items, Electricity expenses, Rent expenses, Showroom Expenses and other miscellaneous expenses. Total other expenses for the said period (April 01, 2023 to 29th February, 2024) was 134.55 Lakhs, almost 7.81% of Total Revenue.
3. PROFIT:
Profit/ (Loss) Before Tax: The Restated Profit Before Tax for the said period (April 01, 2023 to 29th February, 2024) was 204.99 Lakhs, almost 11.89% of Total Revenue.
Profit/ (Loss) after Tax: The Restated Profit After Tax for the said period (April 01, 2023 to 29th February, 2024) was 152.24 Lakhs, almost 8.83% of Total Revenue.
Comparison of Financial Performance of Fiscal 2023 with Fiscal 2022
The following descriptions set forth information with respect to the key components of our profit and loss statement.
1. INCOME:
Total Revenue: During FY 2022-23, the companys revenue from operations and other income increased to 1938.26 Lakhs, from the amount of 1,250.10 Lakhs recorded in FY 2021-22. Due to the Increase in demand of two wheelers, the company was able to expand their client base and increase revenue.
2. EXPENSES:
Total Expenses: The total expenditure for FY 2022-23 has been increased to 1,878.37 Lakhs as against 1,211.49 Lakhs in FY 2021-22. This increase was mainly due to increase in purchase of stock in trade comprising of two wheelers during the years.
Employee Benefits Expense: The Employee Benefit Expenses for FY 2022-23 have decreased to 33.37 Lakhs, from the amount of 45.87 Lakhs in FY 2021-22. This was mainly due to change in ratio of expenses to be distributed between Yamaha and Resourceful.
Finance Cost: The Finance Cost for the FY 2022-2023 have increased to 73.83 Lakhs as against 39.51 Lakhs in the FY 2021-22. This was mainly due to increase in Borrowings.
Other Expenses: The Other Expenses for the FY 2022-2023 have increased to 157.79 Lakhs as against to 87.65 Lakhs in the FY 2021-22. This decrease was majorly due to increase in consumable items, Rent Expenses Etc.
3. PROFIT:
Profit/ (Loss) Before Tax: The Restated Profit Before Tax for FY 2022-23 has been significantly increased to 59.89 Lakhs as against 38.61 Lakhs in the FY 2021-22. This was mainly due to increase in the sales volume during the fiscal year.
Profit/ (Loss) After Tax: The restated Profit After Tax for FY 2022-23 has been significantly increased to 41.50 Lakhs as against 28.73 Lakhs in the FY 2021-22. This was mainly due to increase in the sales volume during the fiscal year.
Comparison of Financial Performance of Fiscal 2022 with Fiscal 2021
The following descriptions set forth information with respect to the key components of our profit and loss statement.
1. INCOME:
Total Revenue: During FY 2021-22 the revenue from operation and other income of the company increased slightly to
1250.10 Lakhs as against 1127.26 Lakhs in FY 2020-21. This increase was mainly due to our association with new dealers clients along with increased revenue from existing clients.
2. EXPENSES:
Total Expenses: The total expenditure for FY 2021-22 increased to 1211.49 Lakhs as against 1126.44 Lakhs in FY 2020-21. This increase was mainly due to increase in Purchase of stock in trade and operational expenses due to increase in revenue from operation as mentioned above.
Employee Benefits Expense: The Employee Benefit Expenses for FY 2021-22 have decreased to 45.87 Lakhs, against the amount of 50.77 Lakhs in FY 2020-21. This was mainly due to no new hiring and reimbursement of expenses by Yamaha.
Finance Cost: The Finance Cost for the FY 2021-2022 have increased to 39.51 Lakhs as against 14.69 Lakhs in the FY 2020-21. This increase was mainly due to increase in Long term borrowings.
Other Expenses: The Other Expenses for the FY 2021-2022 increased to 87.65 Lakhs as against 70.23 Lakhs in the FY 2020-21. This increase was mainly due to increase in operational and administrative expenses like rent, sales & promotion, office expenses and insurance expenses.
3. PROFIT:
Profit/ (Loss) Before Tax: The Restated Profit Before Tax for FY 2021-22 increased to 38.61 Lakhs as against 0.82 Lakhs in the FY 2020-21. This Significant increase was mainly due to increase in sales during the FY as mentioned in above leading to improvement in profit margins.
Profit/ (Loss) after Tax: The Restated Profit After Tax for FY 2021-22 increased to 28.73 Lakhs as against 0.16
Lakhs in the FY 2020-21. This Significant increase was mainly due to increase in sales during the FY as mentioned in above leading to improvement in profit margins.
CASH FLOWS:
( In Lakhs)
| Particulars | For the period ended | For the Year ended March 31st |
||
| February 29th, 2024 | 2023 | 2022 | 2021 | |
| Net Cash from Operating Activities | (89.17) | (25.21) | (417.33) | 54.35 |
| Net Cash from Investing Activities | (0.01) | 38.14 | (9.29) | (18.17) |
| Net Cash from Financing Activities | 154.33 | 0.19 | 364.42 | 17.56 |
Cash Flows from Operating Activities
Net cash used in operating activities for the period ended 29th February, 2024 was at 89.17Lakhs as compared to the Profit Before Tax at 204.99 Lakhs. This was primarily due to increase in Working Capital.
Net cash used in operating activities for year ended 31st March, 2023 was at 25.21 Lakhs as compared to the Profit Before Tax at 59.89 Lakhs. This was primarily due to increase in working capital and additional Income tax impact.
Net cash used in operating activities for year ended 31st March, 2022 was at 417.33 Lakhs as compared to the Profit Before Tax at 38.61 Lakhs. This was primarily due to increase in working capital and additional Income tax impact.
Net cash Flow from operating activities for year ended 31st March, 2021 was at 54.35 Lakhs as compared to the Profit Before Tax at 0.82 Lakhs. This was primarily due to decrease in working capital.
Cash Flows from Investment Activities
For the year period ended 29th February, 2024, net cash outflows from Investing Activities were 0.01 Lakhs. There was negligible movement due to no purchase of sale of fixed assets.
For the year ended 31st March, 2023, net cash Inflows from Investing Activities were 38.14 Lakhs. This was mainly on account of Interest Received and Purchase of Fixed Assets.
For the year ended 31st March, 2022, net cash outflows from Investing Activities were 9.29 Lakhs. This was mainly on account of Purchases of Fixed Assets.
For the year ended 31st March, 2021, net cash outflows from Investing Activities were 18.17 Lakhs. This was mainly on account of purchase of Fixed Assets.
Cash Flows from Financing Activities
For the period ended 29th February, 2024, net cash Inflow from financing activities was 154.33 Lakhs. This was primarily on account of movement in Long term and Short term Borrowings and Interest paid.
For the year ended 31st March, 2023, net cash Inflow from financing activities was 0.19 Lakhs. This was primarily on account of movement in Long term and Short term Borrowings and Interest paid.
For the year ended 31st March, 2022, net cash from Inflow form financing activities was 364.42Lakhs. This was primarily on account of Proceeds from Long term Borrowings and interest Paid.
For the year ended 31st March, 2021, net cash Inflow from financing activities was 17.56 Lakhs. This was primarily on account of Proceeds from Borrowings and interest Paid.
Information required as per Item (II) (C) (iv) of Part A of Schedule VI to the SEBI Regulations:
An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:
1. Unusual or infrequent events or transactions.
There has not been any unusual trend on account of our business activity. There are no Unusual or infrequent events or transactions in our Company. The transactions are as per usual business operations.
2. Significant economic changes that materially affected or are likely to affect income from continuing operations.
Except for any change in economic policy affecting service industry in India, there are no other significant economic changes that may materially affect or 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 sales, revenue or income from continuing operations.
Apart from the risks as disclosed under Section "RISK FACTORS" beginning on page no. 16 in the Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.
4. Future changes in relationship between costs and revenues.
Our Companys future costs and revenues will be determined by growth of industry in which we operate.
5. Increases in net sales or revenue and Introduction of new products or services or increased sales prices.
Increases in revenues are by and large linked to increases in volume of our business.
6. Status of any publicly announced New Products or Business Segment.
Our Company has not announced any new products.
7. Seasonality of business.
The nature of business is seasonal. For further detail, please refer to section titled "RISK FACTORS" beginning on page no. 16 of this Prospectus.
8. Competitive conditions.
Competitive conditions are as described under the Chapters "INDUSTRY OVERVIEW" and "BUSINESS OVERVIEW" beginning on page no. 80 and 86, respectively of the Prospectus.
9. Details of material developments after the date of last balance sheet i.e., February29th, 2024.
Except as mentioned in this Prospectus, no circumstances have arisen since the date of last financial statement until the date of filing the Prospectus, which materially and adversely affect or are likely to affect the operations or profitability of our Company, or value of its assets, or its ability to pay its liability within next twelve months.
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