Shree OSFM E-Mobility Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in the Prospectus. You should also read the section entitled "Risk Factors" on page 18, which discusses a number of factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and is based on our restated financial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources.

Our financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the ICDR Regulations and restated as described in the report of our auditor dated November 27, 2023 which is included in this Prospectus under "Financial Statements". The Restated Financial Information has been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. Our financial year ends on March 31 of each year, and all references to a particular financial year are to the twelvemonth period ended March 31 of that year.

Significant 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 Prospectus, there have not arisen any circumstance that materially or adversely affect or are likely to affect the business or profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months.

Key factors affecting the results of operation:

Our Companys future results of operations could be affected potentially by the following factors:

Economic conditions in the markets in which we operate

Our results of operations are dependent on the overall economic conditions in the markets in which we operate in India. Any change in macro-economic conditions in these markets, including changes in interest rates, government policies or taxation and political, economic or other developments could affect our business and results of operations. The passenger transportation market in India may perform differently and be subject to market and regulatory developments that are dissimilar to the markets in other parts of the world. While stronger macro-economic conditions tend to result into higher demand for our products, weaker macro-economic conditions tend to result into lower demand. Change in demand in the market segments we currently supply or improvement/deterioration in the market or a change in regulations, customs, taxes or other trade barriers or restrictions could affect our operations and financial condition.

The following important factors could cause actual results to differ materially from the expectations include among others:

General economic and business conditions; Volatility in financial market

Increasing competition in the industry;

Changes in laws and regulations that apply to the industry; Changes in fiscal, economic or political conditions in India;

Other Key factors affecting our financial condition and our results of operations:

Important factors that could cause actual results to differ materially from our expectations include but are not limited to:

? Increased competition in this industry;

? Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch and implement various projects and business plans including those for which funds are being raised through this Issue;

? Fluctuations in operating costs;

? Any adverse incident, including natural disaster, outbreak of any pandemic;

? Our ability to maintain and expand our existing business;

? Our ability to enter into new verticals and setup new stores;

? Our ability to attract and retain qualified personnel;

? The performance of the financial markets in India and globally; and

? Any adverse outcome in the legal proceedings in which we are involved.

Regulatory developments

Our Company is regulated by the Companies Act and some of its activities are subject to supervision and regulation by statutory and regulatory authorities. It is therefore subject to changes in Indian law, as well as to changes in regulation and government policies and accounting principles.

Dependence on third party manufacturers/ vendors/suppliers of Vehicles

Our Company is engaged in the passenger transportation services. Our Company needs vehicles on regular basis and it has no formal supply agreement or contract with the manufacturers/ vendors/suppliers for the uninterrupted supply of vehicles and its accessories. There can be no assurance that such parties shall continuously provide their products to us and as per our requirements of quantity as well as quality. In the event of any disruption in the supply of vehicles or the non-availability of vehicles / accessories, our vehicle deployment schedule may be adversely affected impacting the sales and profitability of the Company.

Changes in Technology

Modernization and technology upgradation is essential for the vehicles that we offer to our customers. New technology in the vehicles may lead to heavy investments by us which may lead to liquidity crunch. Further, if we are unable to respond to changes in technology and evolving industry trends, our businesses may not be able to compete effectively.

RESULTS OF OPERATIONS

Description of the major components of revenue and expense items: -

Our total revenue consists of revenue from Vehicle Hire Charges and other income.

Revenue

Revenue from Operations

Our revenue from operations primarily accrues from Vehicle Hire services.

Expenses

Vehicle Hire charges paid including diesel cost is the major expense head for our Company.

Employee Benefit expense includes, salaries and wages, bonus, statutory contributions like PF, ESIC, Gratuity, director remuneration and staff welfare expenses.

Other expenses include expenses towards repairs and maintenance of vehicles, RTO Charges, legal and professional charges, rent expense, Police verification, Office expenses etc.

Depreciation and Amortization Expenses

Depreciation and Amortisation Expenses comprised depreciation on fixed assets both tangible and intangible.

Tax Expense

Our tax expense or credit for the period represents the tax payable on the current periods taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

DISCUSSION ON RESULTS OF OPERATIONS:

For the 6 months period ended September 30, 2023

( lakhs)

Particulars	For the period ended September 30, 2023	% of Total Income
Income
Revenue from Operations	5,572.39	99.56
Other Income	24.70	0.44
Total Revenue	5,597.09	100.00
Expenditure
Operating Expenses	4,563.85	81.54
Employee Benefit Expenses	231.69	4.14
Other Expenses	62.81	1.12
Total Operating Expenses	4,858.35	86.80
Profit Before Interest, Depreciation and Tax	738.74	13.20
Depreciation and Amortisation Expenses	350.72	6.27
Profit Before Interest and Tax	388.02	6.93
Financial Charges	30.52	0.55
Profit before Taxation	357.50	6.39
Taxes	134.91	2.41
Profit After Tax but Before Extra ordinary Items	222.59	3.98

Total Income : We recorded Operational Revenue of 5572.39 Lakhs and Other Income earned by us was 24.70 Lakhs. Total Income for the period ended September 30, 2023 was 5597.09 Lakhs.

Total Operating Expenses: The total operating expenditure amounted to 4858.35 lakhs which was 86.80% of the Total Income.

Operating Expenses amounted to 4563.85 lakhs which was 81.54% of the Total Income. Other Expenses stood at 62.81 lakhs which was 1.12% of the Total Income.

Employee Benefit Expenses stood at 231.69 lakhs which was 4.14% of the Total Income.

Depreciation and Amortization Expenses: Depreciation and Amortization cost worked out to 350.72 lakhs, which is 6.27% of our Total Income.

Financial Charges: Financial Charges amounted to 30.52 lakhs, which is 0.55% of our Total Income.

Tax Expenses: Tax Expenses for the period were 134.91 Lakhs.

Profits: Our PBIDT stood at 738.74 lakhs for the period ended September 30, 2023 with the PBIDT margin of 13.20%. We recorded Net Profit after tax of 222.59 lakhs. Our Net Profit Margin stood at 3.98%.

The following discussion on results of operations should be read in conjunction with the restated financial statements of our Company for the financial years ended March 31, 2023, 2022 and 2021.

OUR SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies, "Annexure IV" beginning under "Auditors Report and Financial Information of our Company" on page 101.

Comparison of Financial Years ended March 31, 2023, 2022 and 2021

( lakhs)

Particulars	31.03.23	31.03.22	31.03.21
Income
Revenue from Operations	8,211.30	3,030.19	2,918.66
Increase/Decrease (%)	170.98%	3.82%
Other Income	49.71	49.39	59.85
Total Income	8,261.01	3,079.58	2,978.51
Increase/Decrease (%)	168.25%	3.39%
Expenditure
Material Consumed	6,851.77	2,364.74	2,380.60
Increase/Decrease (%)	189.75%	-0.67%
% to Total Income	82.94%	76.79%	79.93%
Employee Benefit Expenses	427.34	232.55	195.72
Increase/Decrease (%)	83.76%	18.82%
% to Total Income	5.17%	7.55%	6.57%
Other Expenses	157.94	121.35	96.79
Increase/Decrease (%)	30.15%	25.37%
% to Total Income	1.91%	3.94%	3.25%
Total Operating Expenditure	7,437.05	2,718.64	2,673.11
Increase/Decrease (%)	173.56%	1.70%
% to Total Income	90.03%	88.28%	89.75%
PBIDT	823.96	360.94	305.40
Increase/Decrease (%)	128.28%	18.19%
% to Total Income	9.97%	11.72%	10.25%
Depreciation	338.97	167.98	236.57
Increase/Decrease (%)	101.79%	-28.99%
% to Total Income	4.10%	5.45%	7.94%
Profit Before Interest and Tax	484.99	192.96	68.83
Increase/Decrease (%)	151.34%	180.34%
% to Total Income	5.87%	6.27%	2.31%
Financial Charges	71.22	5.06	13.40
Increase/Decrease (%)	1307.51%	-62.24%
% to Total Income	0.86%	0.16%	0.45%
Profit before Taxation	413.77	187.90	55.43
Increase/Decrease (%)	120.21%	238.99%
% to Total Income	5.01%	6.10%	1.86%
Tax Effect	104.68	25.12	-18.33
Increase/Decrease (%)	316.72%	-237.04%
% to Total Income	1.27%	0.82%	-0.62%
Profit After Tax but Before Extra ordinary Items	309.09	162.78	73.76
Increase/Decrease (%)	89.88%	120.69%
% to Total Income	3.74%	5.29%	2.48%
Extraordinary Item Baddebts written off	0.00	0.00	0.00
Increase/Decrease (%)	NA	NA
% to Total Income	0.00%	0.00%	0.00%
Profit After Tax after Extra ordinary Items	309.09	162.78	73.76
Increase/Decrease (%)	89.88%	120.69%
% to Total Income	3.74%	5.29%	2.48%

Comparison of FY 2023 with FY 2022:

Revenue from operations

Our revenues for the past 3 years were affected as compared to FY 2020 as most of our clients (being in IT sector) had not used our services on a full-fledged basis. The reasons our clients did not use our services on a full-fledged basis as they provided work from home facilities to their employees due to COVID-19 restrictions. As and when the COVID-19 restrictions were relaxed, our services had also picked up and accordingly, there was growth in last 3 years. Please note prior to Covid-19, during FY 2020 our sales were Rs. 11,364.59 lakhs and from there it dipped to Rs. 2,918.66 lakhs during FY 2021 due to the covid restrictions. After relaxations from the government from Covid related restrictions and opening up of offices, our revenue also started normalizing and has grown to Rs. 3,030.19 Lakhs in FY 2022 and Rs. 8,211.30 Lakhs in FY 2023. However, FY 2023 figure is still lower than our FY 2020 figures and we expect to cross that during current financial year.

The Revenue from operations for the FY 2023 was 8,211.30 lakhs as compared to 3,030.19 lakhs during the FY 2022 showing an increase of 170.98%. This increase is mainly due to increase in volume of business and addition of new customers.

Other Income for the FY 2023 and FY 2022 was 49.71 Lakhs and 49.39 Lakhs respectively includes Interest from Bank and Insurance claims received.

The Total Income for the FY 2023 and FY 2022 was 8,261.01 Lakhs and 3,079.58 Lakhs respectively.

Expenditure: Total Operating Expenses

Total Operating Expenses increased in an absolute term to 7,437.05 lakhs for FY 2023 from 2,718.64 lakhs for FY 2022. This increase was mainly in line with increase in operations due to increase in volume of business with some increase in vehicles hire charges paid by us.

Vehicle Hire Charges paid

Vehicle Hire Charges paid at the end of year was 6,851.77 lakhs for FY 2023 and 2,364.74 lakhs for FY 2022. This increase was mainly due to increase in overall business as well as higher charges paid for vehicle hire during FY 2023.

Employee Benefit Expenses

Employee Benefit Expenses increased in absolute term from 232.55 lakhs for the year ended March 31, 2022 to 427.34 lakhs for FY 2023 showing an increase of 83.76%. This increase was mainly due to increase in Salary & Wages of employees of the Company and Directors remuneration during FY 2023. However, in % term there was decrease in Employee Benefit Expenses and the same stood at 7.55% and 5.17% of Total income for FY 2022 and FY 2023, respectively.

Other Expenses

Other Expenses increased to 157.94 lakhs for FY 2023 from 121.35 lakhs for FY 2022 showing an increase of 30.15% mainly due to increase in Legal & Professional fees, RTO charges, Police verification expenses and ROC expenses. Other Expenses was 1.91% of Total income during FY 2023 as against 3.94% during FY 2022.

EBIDTA

EBIDTA increased from 360.94 lakhs for FY 2022 to 823.96 lakhs for FY 2023 due to the reasons listed above. During FY 2023, our Company recorded EBIDTA margin of 9.97% of the Total income as against 11.72% during FY 2022.

Depreciation

Depreciation on fixed assets was 4.10% of Total income during FY 2023 as compared to 5.45% during FY 2022. The total depreciation during FY 2022 was 167.98 lakhs and during FY 2023 it was 338.97 lakhs.

Financial Charges

Financial Charges was 0.86% of Total income during FY 2023 as compared to 0.16% during FY 2022. The Financial Charges included Interest expenses on Overdraft and vehicle loans and bank charges. The total Financial Charges during FY 2022 was 5.06 lakhs and during FY 2023 it was 71.22 lakhs, this increase is mainly due to increase in interest expenses and other expenses for higher borrowings.

Profit after Tax and restatement adjustment but before Extra-ordinary item (PAT before Extra-ordinary item)

PAT before Extra-ordinary item increased from 162.78 lakhs for the FY 2022 to 309.09 lakhs in FY 2023. This absolute increase in profits was mainly on account of increase in business volume and other reasons as detailed above. During FY 2023, our Company recorded PAT before Extra-ordinary item margin of 3.74% for FY 2023 as against margin of 5.29% for FY 2022.

Profit after Tax and restatement adjustment and Extra-ordinary item (PAT after Extra-ordinary item)

Since there are no extra ordinary items, PAT after Extra-ordinary remained same as before extra-ordinary item.

Comparison of FY 2022 with FY 2021:

Revenue from operations

The Revenue from operations for the FY 2021 was 2,918.66 lakhs as compared to 3,030.19 lakhs during the FY 2022 showing an increase of 3.82%. This small increase is due to better realisation of our services in FY 2022. During FY 2021 due to COVID-19 pandemic our sales was exceptionally down from 11,364.59 lakhs during FY 2020 due to the covid restrictions by the local authorities in the Country including geographies we operate.

Other Income for the FY 2021 and FY 2022 was 59.85 Lakhs and 49.39 Lakhs respectively mainly includes Bank Interest and Interest on IT refunds.

The Total Income for the FY 2021 and FY 2022 was 2,978.51 Lakhs and 3,079.58 Lakhs respectively.

Expenditure: Total Operating Expenses

Total Operating Expenses increased in an absolute term from 2,673.11 lakhs for FY 2021 to 2,718.64 lakhs for FY 2022. This increase was mainly in line with increase in value of sales, however in % term there is fall in operating expenses due to lower vehicle hire charges paid by us.

Vehicle Hire Charges paid

Vehicle Hire Charges paid at the end of year was 2,380.60 lakhs for FY 2021 and 2,364.74 lakhs for FY 2022. This decrease was mainly due to lower vehicle hire charges paid during FY 2022 as compared to FY 2021.

Employee Benefit Expenses

Employee Benefit Expenses increased in absolute term to 232.55 lakhs for the year ended March 31, 2022 from 195.72 lakhs for FY 2021 showing an increase of 18.82%. This increase was mainly due to increase in Salary & Wages of employees of the Company and Directors remuneration. Employee Benefit Expenses stood at 7.55% and 6.57% of Total income for FY 2022 and FY 2021, respectively.

Other Expenses

Other Expenses increased from 96.79 lakhs for FY 2021 to 121.35 lakhs for FY 2022 showing a increase of 25.37% due to increase in repairs and maintenance of vehicles, RTO Charges, Commission and brokerage payment, rent expense, provision of doubtful debts etc. Other Expenses were 3.25% of Total income during FY 2021 as against 3.94% during FY 2022.

EBIDTA

EBIDTA increased to 360.94 lakhs for FY 2022 from 305.40 lakhs for FY 2021 due to the reasons listed above. During FY 2021, our Company recorded EBIDTA margin of 10.25% of the Total income as against 11.72% during FY 2022 due to better control on the expenses.

Depreciation

Depreciation on fixed assets was 7.94% of Total income during FY 2021 as compared to 5.45% during FY 2022. The total depreciation during FY 2022 was 167.98 lakhs and during FY 2021 it was 236.57 lakhs.

Financial Charges

Financial Charges was 0.45% of Total income during FY 2021 as compared to 0.16% during FY 2022. The Financial Charges included Interest expenses and others. The total Financial Charges during FY 2022 was 5.06 lakhs and during FY 2021 it was 13.40 lakhs, this decrease is mainly due to lower interest and other expenses for borrowings due to lower utilisation of credit facilities.

Profit after Tax and restatement adjustment but before Extra-ordinary item (PAT before Extra-ordinary item)

PAT before Extra-ordinary item increased to 162.78 lakhs for the FY 2022 from 73.76 lakhs in FY 2021. This increase was mainly on account of reduction in expenditure and other reasons as detailed above. During FY 2021, our Company recorded PAT before Extra-ordinary item margin of 2.48% for FY 2021 as against margin of 5.29% for FY 2022.

Profit after Tax and restatement adjustment and Extra-ordinary item (PAT after Extra-ordinary item)

Since there is no extra ordinary items, PAT after Extra-ordinary remained same as before extra-ordinary item.

Cash Flows

The following table sets forth certain information concerning our cash flows for the periods indicated:

(Rs in Lakhs)

Particulars	30.09.2023	Fiscal 2023	Fiscal 2022	Fiscal 2021
Net cash flow from operating activities	665.65	-67.13	35.02	953.01
Net cash flow from investing activities	-513.42	-501.71	211.01	-979.23
Net cash flow from financing activities	75.91	572.02	-292.21	-742.25
Net increase in cash and cash equivalents	228.14	3.18	-46.18	-768.47
Add: Balance at the beginning of the year	115.72	112.54	158.72	927.19
Cash and cash equivalents at the end of the year	343.87	115.72	112.54	158.72

FACTORS THAT MAY AFFECT THE RESULTS OF THE OPERATIONS:

1. Unusual or infrequent events or transactions

An outbreak of COVID-19 was recognised as a pandemic by the WHO on March 11, 2020. In response to the COVID-19 outbreak, the governments of many countries, including India, have taken preventive or protective actions such as imposing country-wide lockdowns, as well as restrictions on travel and business operations. Due to a government mandated lockdown in India, we had to temporarily shut down of our operations. We saw a downtrend in our business during the period of lock down in Fiscal 2021 and subsequently slowly business has recovered.

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

Our business has been subject, and we expect it to continue to be subject, to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described in the section entitled ‘Risk Factors beginning on page 18 of the Prospectus. To our knowledge, except as we have described in the Prospectus, there are no known factors which we expect to bring about significant economic changes.

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 titled "Risk Factors" on page 18 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, 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 will be determined by demand/supply situation, government policies and prices quoted by service providers.

5. 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.

Changes in revenues during the last three fiscal years are explained in "Managements Discussion and Analysis of Financial Condition & Results of Operations" under the subsection "Comparison of Financial Years ended March 31, 2023, 2022 and 2021" under the respective paragraphs titled "Operating Revenue".

6. Total turnover of each major industry segment in which the issuer company operated.

For details on the industry please refer to "Industry Overview" on page 70.

7. Status of any publicly announced new products or business segment.

Our Company has not announced any new product or business segment.

8. The extent to which business is seasonal.

Our business is not seasonal in nature.

9. Any significant dependence on a single or few suppliers or customers.

Particulars	For the period ended 30.09.2023	Financial Year ended March 31, 2023	Financial Year ended March 31, 2022	Financial Year ended March 31, 2021
Customers contribution Top 5 (%)	65.87%	64.04%	77.40%	71.07%
Suppliers contribution Top 5 (%)	20.00%	16.71%	17.10%	13.39%

10. Competitive conditions.

Competitive conditions are as described under "Industry Overview" and "Our Business" on pages 70 and 75, respectively.