Kumbhat Financial Services Ltd Management Discussions

The 2024 edition of the United Nations World Economic Situation and Prospects report comes amid stark global economic inequalities and high geopolitical tensions. While rich economies have largely bounced back from theCoVID-19 pandemic, developing economies have lost ground. Many are drowning in debt, with more than a third at risk of crisis. Investment in climate action and sustainable development is falling woefully short. Hunger and poverty are on the rise. And growing divisions between countries and economies are preventing an effective response. As the report makes clear, 2024 is projected to be another tough year. Sluggish global growth is projected to slow global growth further. Investment will remain weak. The debt crisis will continue to spiral, as debt service obligations reach new heights. Devastating conflicts and escalating extreme weather are bringing uncertainty and risk to the global economy.

The World Economic Situation and Prospects as of mid-2024 said "Indias economy is forecast to expand by 6.9% in 2024 and 6.6% in 2025, mainly driven by strong public investment and resilient private consumption".

According to Deloittes survey - Registering over 8% growth for three consecutive quarters, could India be progressing by leaps without bounds? However the emerging consumer spending pattern and rising household debt are things to watch out for.

Indias GDP took a big leap on Leap Day in 2024: The countrys remarkable growth rate of 8.4% in the third quarter of the fiscal year 2024 surpassed all expectations, as market analysts had penciled in a slower growth this quarter, between 6.6% and 7.2%. With substantial revisions to the data from the past three quarters of the fiscal year, Indias GDP growth already touched 8.2% year over year (YoY) in these quarters.

We have revised our growth prediction for this year to a range of 7.6% to 7.8%, up from our previous estimates due to GDP revisions and stronger-than-expected growth in fiscal 2024. However, we expect growth in the fourth quarter to be modest because of uncertainties related to Indias 2024 general elections and modest consumption growth.

There are new emerging trends in Risk man agent.

> Artificial Intelligence (AI) and Machine Learning (ML):

> Cybersecurity:

> ESG Risks - Environmental , Social and Governing Risks

The challenges plaguing the NBFC sector extend well into 2024. Experts are talking of consolidation, capital raising, and profitability pressures in 2024.

Non-Banking Financial Companies played an important role by fulfilling the diverse financial needs of those customers that dont have access to banks and their services.

Taking into account the new emerging factors in Risk management following risk management techniques have been adopted by KFSL.

1. Identifying risk,

2. Analysing risk,

3. Creating a mitigation plan,

4. Executing the plan and

5. Continuously monitoring how changes in the external business environment influence the risks an organization faces

6. Reviewing of Artificial Intelligence, Cyber Security and ECG risks.

However we at KFSL being nonbanking, non- deposit taking systemically Important NBFC, have adopted Risk Management Strategies suitably.

Cautionary Statement

Estimates and expectations stated in this Management Discussion and Analysis may be "forward-looking statements" within the meaning of the applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Companys operation include economic conditions affecting the interest rate, inflation, changes in the interest rate, changes in the Government regulations, tax laws, other statues and incidental factors. The Company undertakes no responsibility to update or revise any forward-looking statement.