Assam Entrade Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Non-Banking Financial Company (NBFC) sector continues to play a critical role in the Indian financial ecosystem by augmenting credit delivery and complementing the traditional banking sector. The Reserve Bank of India (RBI) has continually refined the regulatory framework under the Scale-Based Regulation (SBR) framework to ensure structural stability, transparency, and financial discipline across all layers.

As an NBFC Non-Deposit Taking Non-Systemically Important Company (Base Layer), your Company operates predominantly in corporate investments, treasury operations, and inter-corporate deployment of surplus funds. Unlike retail-focused financial institutions, the Company does not engage in direct retail lending or public customer interface.

In addition to its core financial activities, the Company is engaged along with six other Corporates in the development of an integrated township project as part of its long-term asset value-creation strategy. The project is passing through regulatory milestones, layout approvals, and pre-development planning in alignment with applicable local urban development and real estate regulatory frameworks.

2. OPPORTUNITIES AND THREATS

Opportunities:

o Corporate Financing Needs: Growing requirements for structured corporate loans, promoter financing, and strategic equity investments in mid-market entities.

o Regulatory Clarity: Clear regulatory guidelines under RBIs Scale-Based Regulation foster greater investor confidence and governance standardization.

o Rising Demand for Integrated Living: Rapid urban expansion and infrastructural growth in Tier-II cities are driving consumer demand toward organized, self-contained integrated townships that offer modern amenities, open spaces, and integrated commercial facilities.

Threats & Challenges:

- Interest Rate Volatility: Fluctuations in benchmark interest rates directly impact

- Regulatory & Compliance Shifts: Evolving compliance standards under SEBI

(LODR) Regulations and RBI directives require constant monitoring and operational alignment.

- Long Gestation and Execution Cycles: Large-scale township developments involve multi-phase execution schedules, exposing the project to standard execution delays, material price escalations, and extended cash-flow conversion periods.

3. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company operates in a primary business segment, which is Financial Services/ Investment and Financing Activities (comprising inter-corporate loans, investments in securities, and treasury deployments)

Real Estate Development & Infrastructure Segment

Integrated Township Project at village Singhpur Kachaar, Hindupur & Sambhalpur, Kanpur Nagar- Uttar Pradesh:

Company has been awarded license for development of Integrated Township project and Detailed Project Report (DPR) of the same has been approved by the local authority i.e. Kanpur Development Authority (hereinafter referred to as "KDA").

The final layout plan has been approved by KDA in February, 2026

Since the project is currently in the pre-launch and regulatory approval stage, no commercial revenue from real estate sales was recognized during the financial year under review. All outlays are accounted for under project work-in-progress/inventories in accordance with applicable Indian Accounting Standards (Ind AS).

4. OUTLOOK

The Company aims to maintain a prudent, risk-averse strategy focused on preserving capital and maximizing risk-adjusted returns. The Company will continue to evaluate market conditions carefully to deploy its capital efficiently while keeping credit and liquidity risks minimal.

5. RISKS AND CONCERNS

As a wholesale/investment-focused NBFC, the Companys risk profile differs from retail lenders:

Liquidity Risk: Ensuring adequate liquidity to meet financial commitments. Since the Company does not accept public deposits, liquidity risk is managed by maintaining adequate liquid investments and cash equivalents.

Operational & Regulatory Risk: Managed through strong internal financial controls, secretarial checks, and strict adherence to RBI and SEBI norms.

Real estate projects require multi-tier clearances, from layout sanctions to environmental norms, RERA approvals, and local authority compliances.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an adequate and robust system of internal financial controls commensurate with the size, scale, and complexity of its business operations.

Since the Company does not handle direct customer interfaces, retail cash transactions, or consumer data processing, internal controls are primarily focused on treasury operations, corporate loan approvals, documentation, compliance tracking, and accounting accuracy.

The Internal Auditors directly evaluate operational procedures, governance checks, and legal compliances.

The Audit Committee of the Board regularly reviews audit observations, financial statements, and the adequacy of internal financial control systems to ensure complete integrity in financial reporting.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year under review, the Company maintained steady operational performance. Key highlights include:

Revenue Generation: Revenue was primarily driven by interest income from corporate loans/deployments and dividend.

Statutory Reserves: The Company has fully complied with Section 45-IC of the Reserve Bank of India Act, 1934, by transferring 20% of its net profit for the year to the Statutory Reserve Account.

8. HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company maintains a lean and highly specialized organizational structure. Since there is no retail branch network or customer-facing operations, human resource requirements are focused entirely on corporate finance, secretarial compliance, risk management, and accounts. Industrial relations remained cordial and harmonious throughout the year.

9. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

As required under Regulation 34(2)(e) of SEBI (LODR) Regulations, 2015, significant changes

[i.e., change of 25% or more as compared to the immediately preceding financial year] in key financial ratios along with detailed explanations:

Sr. No. Key Financial Ratio	Financial Year 2025-26	Financial Year 2024 25	Change (%)	Explanation for Significant Variation ( 25%)
1 Debtors Turnover Ratio	N.A.	N.A.		Not Applicable (NBFC operations)
2 Inventory Turnover Ratio	N.A.	N.A.		Not Applicable (NBFC operations)
3 Interest Coverage Ratio	13.06	20.03	34.77%	Due to decrease in profit
4 Current Ratio	160.74	105.69	55%	Due to decrease in current liability
5 Debt-Equity Ratio	0.04	0.04	No change	N.A.
6 Operating Profit Margin (%) 77.94%	92.68%	15.90%	N.A.
7 Net Profit Margin (%) 54.08%	72.32%	18.24%	N.A.

7. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH

			Explanation for
Financial	RETURN ON NET	Change	Significant Variation (
Year	WORTH		25%)
FY 2025-26	3.08	36.75%	Due to decrease in profit
FY 2024 25	4.87

11. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations, or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and domestic economic conditions, interest rate movements, regulatory shifts by RBI/SEBI, taxation laws, and other statutory developments.