Quest Softech India Ltd Management Discussions

This Management Discussion and Analysis report provides analysis of the operating performance of the Companys business as well as discussion on the business of the Company, outlook, risk and opportunities. Statements in this Management Discussion & Analysis Report describing the Companys objectives, projections, estimates and expectation may be "forward looking statements" within the meaning of applicable laws and regulations and actual results may differ.

Industry overview

India aims to expand its electric mobility market, yet the development of EV charging infrastructure, also known as EV supply equipment (EVSE), remains in the early stages. A robust charging infrastructure is crucial for EV market growth, and a healthy ratio between the number of EVs to charging stations is important to encourage early adopters and relieve drivers of range anxiety.

India is estimated to have approximately 500 public EV charging stations and is in early stages of developing charging infrastructure. In January 2020, the Department of Heavy Industry (DHI) approved setting up 2,636 electric vehicle charging stations (1,633 fast and 1,003 slow charging stations) across

62 cities in 24 states and union territories in the country under the FAME II scheme. A strong public charging system is needed to support robust EV use.

The Indian government has made strong progress to spur transportation electrification with national and state EV plans. Yet, a gap remains in charging infrastructure. Both capital investments and installations are needed to achieve state and national ambitions. To expand the EV market, the national government and leading states are determining the locations of the charging infrastructure. In the Guidelines and

Standards from MoP, location factors are explicitly included in the document, which states "at least one charging station should be available in a grid of 3 km by 3 km, and one charging station should be set up at every 25km on both sides of highways/roads." In July 2019, the Department of Heavy Industry, issued an Expression of Interest, inviting installation of charging stations in cities with populations over one million, satellite towns connected to the seven major metropolitan regions, and other cities meeting certain criteria.

E-MOBILITY MARKET IN INDIA

The electric mobility sector has also grown significantly over the previous five years, and India is on track to become one of the worlds major EV markets by 2030. The market is anticipated to expand at an average annual rate of 49% between 2021 and 2030, propelled by favourable government efforts and policies, rising air quality concerns, and rising fuel prices. India is on track to become the largest EV market by 2030, with a total investment opportunity of more than US$ 200 billion over the next 8-10 years.

Between 2019 and 2020, the industry witnessed a 15% decline in global car sales. However, sales of EVs experienced an unparalleled surge, rising by 43% in the same timeframe. The increase in EV sales prompted the expansion of other parts of the e-mobility ecosystem, such as the charging infrastructure segment, which increased by 40% from 2020 to 2021, to 1.8 million publicly available charging infrastructure points. Between 2020 and 2021, global battery demand more than doubled to 340 GW. Between 2022 and 2030, the e-mobility sector is expected to increase at a 22.5% annual rate, reaching US$ 1.1 trillion by 2030.

Since 2018, EV adoption in India has expanded at an annualised rate of 55%. Adoption has been particularly strong in the electric 2-wheeler (E2W) and electric 3-wheeler (E3W) divisions. India

1 million EVs in 2022. New innovative business accomplished a significant models and technologies emerge in this space, and the Indian start-up ecosystem is poised to lead the way for the mobility market revolution.

Business Overview:

M/s AV AC DC Renew Private Limited has acquired the Company with the intention to specialize in providing electric vehicle charging solutions. In the month of February, 2023, the main object clause of the company was changed and includes the Business of operating and maintenance of chargers of Electric Vehicles and its Charging Stations and allied business activities. The Growth of Electric vehicles are increasing and the Leading Car Manufacturing Companies have started Electric Vehicles in their plants. The Growth of Electric Vehicles depends upon the infrastructure facilities like availability of Charging Station all over the country. System Level Solutions (India) Private Limited (SLS) who has developed the EV chargers is also the strategic Investor holding 24.70% stake in the Promoter Company.

The Company offers a wide range of charging products and services, including home charging solutions, public charging stations, and fleet management solutions. The products are designed to meet the needs of both electric vehicle owners and businesses that are looking to invest in electric vehicle charging infrastructure. Along with the trading of EV Chargers/stations the company also operates its own charging stations. It also provides different services to the EV Chargers like installation of Chargers, check feasibility and also provides Annual Maintenance Services (AMC Services) to the installed chargers.

Electric Vehicle (EV) Charging Station Business:

EVs are cheaper to run and maintain, safer to drive, and better for the environment, ticking all boxes when it comes to preferences of modern car buyers. EVs continue to prove themselves as viable alternatives to petrol and diesel cars. Hence, EV charging stations are becoming more and more available as greater EV adoption is taking place. The requirement & demand of EV penetration is increasing day by day in India and world. The charging infrastructure availability also played a significant role in EV adoption rates.

Indian Government, in its push for green environment, has been advocating to move from fossil fuel to green fuel. To make this possible, Government of India has a vision to have maximum electrical vehicles by the year 2030. By 2030, the country is forecasted to be home to 102 million EVs, with 2.9 million public charging stations needed to accommodate the growing EV adoption. This increasing number of public charging stations is expected to be driven by a range of players, such as pure-play charge point operators, oil marketing companies, utilities and EV fleet operators.

The Company is operating under both the verticals COCO model and trading model. COCO refers to the money spends towards procuring, installing and maintaining the EV chargers all at its own cost. For chargers that are sold the company provides the service of procuring, installing and provide AMC services for a price. The company has tried to develop the Sale vertical but the response and sale of the charging machines was not picked up. The Company has decided to go for COCO model where the company makes investment in developing own charging station network. Once the chargers are live for usage the company will get regular income. The Company has ventured in the EV charging field in last

Financial Year 2022-23.

SWOT Analyses STRENGTH a) Company has tied up with regular supply of chargers with the Company having developed the quality product b) Professionally managed board of Directors c) End to End Charging Services d) Scalable Infrastructure Development

WEAKNESS a) New entrant in the field of EV charging Station b) The industry depends upon Government Policies c) Charging Time Comparing to ICE Counterparts. d) For passenger cars and LDVs only

OPPORTUNITY a) Growing field of Eclectic Vehicles b) Advanced World-Wide infrastructure set up

THREAT a) Uncertain Consumer Behavior b) The high cost of battery restrict the growth of business c) Uncertain impact on distribution Grids

Review of financial and operating performance:

During the financial year ending March 2024, the Company revenues stood at 106.20 lakhs and loss after tax 210.17 lakhs.

Internal Controls and its adequacy

Adequate internal control ensures transactions are authorized, recorded and reported correctly and assets are safeguarded against loss from unauthorized use or disposition. In addition, there are operational controls and fraud risk controls, covering the entire spectrum of internal financial controls.

The Company has been reviewing its internal control systems and processes continuously and company have a separate department of internal control for continuous surveillance.