Esaar (India) Ltd Management Discussions

Your Directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2024. The Management Discussion and Analysis have been included in consonance with the Code of Corporate Governance as approved by The Securities and Exchange Board of India (SEBI). Investors are cautioned that these discussions contain certain forward looking statements that involve risk and uncertainties including those risks which are inherent in the Companys growth and strategy. The company undertakes no obligation to publicly update or revise any of the opinions or forward-looking statements expressed in this report consequent to new information or developments, events or otherwise.

The Management of the Company is presenting herein the overview, opportunities and threats, initiatives by the Company and overall strategy of the Company and its outlook for the future. This outlook is based on Managements own assessment and it may vary due to future economic and other future developments in the country.

NBFC INDUSTRY - PERFORMANCE AND OUTLOOK

The Outlook for the NBFC sector appears optimistic. Consumer optimism, double-digit credit growth and technology will form the baseline in building innovation and adaptability for the finance sector. With the anticipated decline in interest rates in the latter half of the year, demand in credit will also help NBFCs grow in tandem.

Non-banking financial companies (NBFCs) are expected to temper expansion to Rs. 19.0- 20.5 trillion in FY25 from Rs. 22 trillion in FY24.

There will be an increasing demand for financial products in rural markets fuelled by the penetration of the internet and an entrepreneurial mindset. Government schemes like Pradhan Mantri Jan Dhan Yojana (PMJDY), Mudra Yojana and Stand-Up India have created a backbone for NBFCs in this market. Using technology and existing initiatives, NBFCs can educate and collaborate to reach the grassroots level. There is immense potential here as microfinance loans can boost local businesses, agri loans can spur farm productivity, thus putting NBFCs in a position where they are playing a key role in hyperlocal economic development.

In this digital-first world, technology has played a key role in driving the growth of NBFCs. A few financial services companies have already implemented advanced technology to stay ahead of the curve. Like the FMCG model, NBFCs have also shifted towards a customer- centric approach by investing in social listening tools, market research and technology to enhance customer experience and build trust. From customer support, AI bots, content creation tools and productivity measurement has been the backbone for NBFCs in offering tailor-made solutions to meet their growing customer needs.

The implementation of Generative AI will bring a paradigm shift for businesses. It can be used in strategy where main problems can be addressed with defined goals and policies.

All this can be done in alignment with the governments regulations and compliance for sustainable growth. NBFCs need to stay abreast with the evolving RBI regulations and adapt swiftly to the changing ecosystem. With compliance-driven frameworks in place, NBFCs can mitigate risks and build credibility and trust among the stakeholders and customers.

OPPOURTUNITIES & THREATS

The growth of the Company is subject to opportunities and threats as are applicable to the industry from time to time. The Company has risk management policy in place for risk assessment and treatment of the same. The company does not foresee any major threats to its growth and market share in the coming years. The existing capacity should take care of the companys requirement at least for the next four to five years.

RISK & CONCERN

The Company is mainly exposed to market risk (including liquidity risk), interest risk and credit risk. While risk is an inherent aspect of any business, the Company is conscious of the need to have an effective monitoring mechanism and has put in place appropriate measures for its mitigation including business portfolio risk, financial risk, legal risk and internal process risk.

INTERNAL CONTROL SYSTEM

The Company has a sound internal control system. All transactions are subject to proper scrutiny. The Management takes immediate corrective action wherever it is being pointed out to help streamline the internal control process.

HUMAN RESOURCES

The Company enjoys cordial relations with its work force across all categories.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE.

The Total Other Income for the year ended March 31, 2024 is Rs. 947.41 Lakhs as compared to Rs. 288.52 Lakhs for the previous year. The Net Loss is Rs. (48.28) Lakhs for the year ended March 31, 2024 as against net profit of Rs. 447.70 Lakhs for the previous year.

DISCLOSURES

During the year the Company has not entered into any transaction of material nature with its promoters, the directors or the management, their subsidiaries or relatives etc., if an, that may have potential conflict with the interest of the Company at large. All details of transaction covered under related party transaction are given in the notes to account.

DETAILS OF SIGNIFICANT CHANGES

DETAILS OF CHANGE IN RETURN ON NET WORTH AS COMPARED TO IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH THE DETAILED EXPLANATION THEREOF

CAUTIONARY STATEMENT

Statement made herein describing the Companys expectations is "forward looking statement." The actual results may differ from those expected or predicted since the Companys operations are influenced by many external factors which are beyond the control of the Company. Prime factors that may make difference to the Companys performance include market conditions, economic conditions, Government regulations and Tax Laws, Political situation etc over which the Company does not have any direct control.