Sera Investments & Finance India Ltd Management Discussions

FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2025

Regulation 34(2)(e) read with Paragraph B of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements)

In terms of the provisions of Regulation 34(2)(e) of the Listing Regulations, the Managements discussion and analysis are as follows:

GLOBAL ECONOMY OVERVIEW:

Global economic activity is expected to maintain modest but uneven momentum. According to the latest projections, global real GDP growth is anticipated to decelerate to around 3.0% in 2025 and 2.9% in 2026, following an estimated 3.2% expansion in 2024. Rising trade frictions, persistent geopolitical and policy uncertainty, elevated market volatility, and divergent inflation trajectories are reshaping the global outlook. Regional growth patterns remain fragmented, with developed markets showing signs of slowing, while emerging markets exhibit varied resilience across regions.

On the inflation front, global headline inflation is likely to ease further in 2025, though progress will remain uneven. For economies imposing tariffs, such measures act as a supply shock, adding to inflationary pressures, while in tariff-affected economies they function as a negative demand shock, weighing down inflation. Emerging markets continue to face localized cost pressures and currency volatility, particularly where monetary policy easing is constrained, though Asia is expected to experience ongoing disinflation.

Overall, global inflation is forecast to decline from 4.5% in 2024 to around 3.6% in 2025. However, the path of disinflation remains vulnerable to commodity price shocks, heightened trade frictions, foreign exchange volatility, and supply chain disruptions.

OUTLOOK:

At the midpoint of 2025, the global economy remains resilient but fragile, with growth momentum diverging across regions and sectors. Mounting policy uncertainty from shifting trade relationships, fiscal realignments, and financial market repricing is adding to business complexity.

Companies face challenges from supply vulnerabilities, volatile inflation, and inconsistent central bank signals, even as selective strength in emerging markets and key sectors offers some support. Risks from geopolitical tensions, tariffs, and commodity swings continue to weigh on the global outlook.

INDIAN ECONOMY OVERVIEW:

Indias economy continues to grow at a steady and confident pace, standing out as the fastest growing major economy in the world. In 2024-25, real GDP growth was estimated at 6.5 per cent. The Reserve Bank of India expects the same rate to continue in 2025-26. This performance comes at a time when the global economy faces uncertainty, making Indias steady momentum all the more significant.

Supported by strong domestic demand, easing inflation, robust capital markets and rising exports, the broader economic picture is one of resilience and balance. Key indicators such as record foreign exchange reserves, a manageable current account deficit, and increasing foreign investment reflect growing global trust in Indias long-term prospects. Together, these trends show an economy that is not only expanding but doing so with strength across sectors.

Indias economic performance over the past year reflects not just growth, but a deeper sense of stability and direction. With real GDP rising at 6.5 per cent and inflation easing to its lowest in years, the country has shown that it can balance expansion with price stability. At the same time, strong participation in capital markets, record levels of exports, and healthy foreign exchange reserves point to growing confidence both at home and abroad.

Key sectors such as manufacturing, services, and infrastructure are pushing ahead, supported by steady investment and policy focus. External risks remain, but Indias fundamentals are sound. As the global economy continues to face challenges, Indias consistent performance offers reassurance that it is well placed to lead from the front and keep building a stronger, more inclusive future.

INDIAN FINANCIAL SERVICE SECTOR SCENARIO:

Indias financial services industry has witnessed remarkable growth in recent years, a trend that is poised to continue. The private wealth management segment holds immense potential, with India expected to have 16.57 lakh High Net-Worth Individuals (HNWIs) by 2027, positioning the country as the fourth-largest private wealth market globally by 2028.

The insurance sector is also expanding rapidly, projected to reach US$ 250 billion by 2025. This opens an additional life insurance premium opportunity of US$ 78 billion between 2020 and 2030. Continued liberalisation in foreign investment norms has spurred renewed interest, with several global insurers planning to raise stakes in Indian joint ventures, =setting the stage for a wave of new partnerships in the quarters ahead.

The mutual fund industry is targeting a nearly five-fold jump in assets under management (AUM) to Rs. 95,00,000 crore (US$ 1.15 trillion), along with a tripling of investor accounts to 130 million by 2025. Simultaneously, Indias mobile wallet segment is expected to grow at a Compound Annual Growth Rate (CAGR) of 23.9% between 2023 and 2027 to reach US$ 5.7 trillion.

With growing investor participation, rising digital adoption, and sustained policy support, Indias financial services sector is well-positioned to become a global powerhouse, driving inclusive growth and long-term economic resilience.

COMPANY OVERVIEW:

Sera Investments & Finance India Limited, is a non-deposit taking Non-Banking Financial Company registered with the Reserve Bank of India (RBI) and is classified as an NBFC-Investment and Credit Company (NBFC-ICC). It is a prominent NBFC has emerged as a progressive and growth oriented Non-Banking Financial Company (NBFC) over the past few years. The Company is primarily engaged in providing retail loans. It has established a diversified business management system which enables optimal balance of risk and profitability to deliver a sustainable business. The Company is focused on continuous innovation to transform customer experience and create sustainable and profitable growth opportunities. The Company is optimistic about its growth potential in the future years, with its strong financial position, low NPAs, growth momentum, well provisioned balance sheet, strong capital adequacy, omnichannel business approach and strong start into FY2026.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Financial and operational performance forms part of the Annual Report and is presented elsewhere in the report.

HUMAN RESOURCES:

Sera Investments & Finance India Limited highly values its human capital, recognising that the organisations success hinges upon the competencies, capabilities, contributions and experiences

of its employees. Rooted in a core philosophy of fostering a safe, healthy, and joyful workplace, the Company prioritises nurturing an environment that supports employee well-being and productivity.

The Company actively nurtures a culture of integrity, honesty and continuous learning, while upholding principles of equality and preventing harassment and strives for promoting trust, confidence and transparency. In line with this philosophy, the Companys Human Resource policies are tailored to empower its workforce with the knowledge and skills needed to thrive in a supporting work environment. Through a culture that values performance, the Company inspires its employees to pursue excellence, thereby enhancing the organisations brand and effectively addressing business challenges.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company maintains a well-defined organisational structure, documented policy guidelines to ensure operational efficiency, compliance with internal policies, laws and regulations, as well as the protection of resources. The Company believes that a robust internal control system and processes are vital for its day-to- day operations.

In pursuit of this goal, Company established an effective internal control system to align its business processes, operations, financial reporting, fraud control and compliance with regulatory guidelines. Stringent internal control measures are in place to uphold the highest standards of governance. The Company ensures the implementation of a standardised and effective internal control framework across the organisation, ensuring the protection of assets and precise transaction execution in accordance with authorised procedures. The Companys internal control system is complemented by comprehensive internal audits, regular management reviews and standardised policies and guidelines, all aimed at ensuring the accuracy and reliability of financial and other records.

The Company maintains, in all material respects, adequate internal financial control over financial reporting, which operates effectively.

SWOT ANALYSIS:

Strengths:

• Prioritises serving underserved retail markets through a unique relationship-based business model;

• Boasts a strong brand pedigree and successful track record in credit appraisal and collection processes;

• Operates with a well-defined and scalable organisational structure based on product and process knowledge;

• Employs an integrated technology platform for streamlined processes and customer on boarding;

• Supported by an experienced management team;

• Nurtures strong relationships with all the stakeholders including lenders, investors, fixed deposit holders etc.

Weaknesses:

• Business and growth correlate closely with the countrys GDP growth rate;

• Companys customer base is particularly susceptible to the adverse impacts of economic downturns;

Opportunities:

• Providing financing solutions to face challenges accessing credit from traditional banks. Opportunities of co-lending with the Banks to the end customer;

• Boosting MSME spending, government initiatives encourage demand for MSME loans, while Indias financial inclusion remains at an early stage, offering NBFCs opportunities to reach the unbanked and underbanked population;

• Rising disposable income, evolving consumption patterns and a shift towards spending drive demand for consumer loans;

• Expanding geographical reach and customer base facilitates deeper penetration into hinterland markets;

• Streamlining customer on boarding process through the technology platform;

• Forming partnerships with private financiers to expand reach without substantial investments;

• Presenting financial opportunities, growth in the financial markets remains significant;

Threats:

• Facing competition from captive finance companies, small banks, Fintechs and emerging players;

• Managing limited access to bank finance, expected rise in the borrowing cost and incremental borrowings;

• Addressing external risks related to liquidity strain, political uncertainties and fiscal instability;

• Navigating intense competition from global and local rivals in product innovation and technological advancements, resulting in narrow margins;

• Adapting to regulatory and compliance shifts impacting the NBFC sector;

• Confronting the increasing challenge of financial product commoditisation;

RISKS MANAGEMENT:

The Company places a high priority on risk management to safeguard the interests of customers, colleagues, shareholders, and the organisation itself, all while promoting sustainable growth. The Companys risk management framework strictly adheres to industry standards, with a robust control framework serving as its foundation.

The Risk Management Committee oversees major risk categories, encompassing credit, market, legal and regulatory, operational, liquidity, interest rate, cybersecurity, information technology, strategic and economic risks. To effectively address these increasingly intricate risks, the Companys risk management system conducts thorough risk analysis and proactively implements measures.

Risk Management Framework Process

• Identification of cause of the risk and its effect as it is vital for appropriate plans and controls to address the risk.

• Assessment of risk considering all possible scenarios and thoroughly examine every aspect of the risk.

• Respond to Risk: Develop strategies to minimize, accept, transfer, or avoid the risk.

• Continuous risk monitoring.

• Evaluation of risk management processes & update.

Key Risks and Mitigation

a) Interest Rate Risk: The risk arising from a financial loss, owing to unfavourable interest rates for both lending and treasury operations. It has a significant influence upon a Companys net- interest income and profitability.

Mitigation: The Company has implemented comprehensive policies and procedures to ensure compliance with regulatory guidelines concerning asset and liability exposure.

b) Credit Risk: This is the risk arising from the potential loss due to borrowers and/or counterparties failing to fulfil their contractual obligations. This risk stems primarily from the Companys lending activities.

Mitigation: With operational expertise, Company effectively manages credit risk through stringent credit protocols and robust procedures. This involves various measures like a rigorous credit assessment process, meticulous evaluation of borrowed capital considering customer cash flows. Furthermore, Risk exposures are carefully managed through a comprehensive analysis of counterparty fundamentals, industry dynamics and sector-specific risks.

c) Operation Risk: This risk is about failure of processes and controls in operations, which can also have an adverse impact on business continuity, reputation and profitability of the Company.

Mitigation: A robust control and audit mechanism has been implemented to identify and mitigate operational risks. The Company has a strong operating model and well-documented

Standard Operating Procedures and a good reporting framework. This ensures that operational risks are minimised at any given point of time.

d) Regulatory Risk: A complex regulatory framework exists in the financial sector. Any noncompliance with regulations could result in monetary losses and has the capability to damage the Companys reputation.

Mitigation: The Company ensures strict adherence to applicable rules and regulations owing to a strong internal control framework, robust IT systems and an expert team. It closely monitors actions and proactively responds to changes in government policies to keep a tab on regulatory risk.

e) Fraud Risk: We may face fraud risks such as loan fraud, identity theft, internal fraud, and cyber fraud. These risks pose the threat of financial loss and reputation loss, resulting from intentional deception or misrepresentation by individuals or entities, internally or externally.

Mitigation: We have implemented a control framework to prevent, detect, investigate and deal with fraud. We maintain a zero-tolerance policy towards fraud, actively raising awareness and implementing robust controls to prevent any occurrence. Our Fraud Risk Management reports to the Chief Risk Officer and monitors all fraud risks, while our Audit Committee and Board of Directors monitor frauds specified by the regulator.

f) Liquidity Risk: The risk arises when Company is unable to fulfil its financial obligations as required or within predetermined timelines.

Mitigation: The Company has implemented various policies, procedures and controls to effectively handle liquidity risk. To standardise the assessment of liquidity risk on specific maturity dates, the Company has established a contingency plan for liquidity management during crisis situations. Furthermore, proactive monitoring of capital adequacy and asset exposure levels allows the Company to evaluate potential funding requirements. Company maintains a diversified funding base, which includes borrowings from banks, financial institutions, capital markets and public fixed deposits, ensuring flexibility in meeting funding needs.

g) Cash Management Risk: Cash management risk related to the collection of loan instalments denotes the possible obstacles and risks encountered by a financial institution. It pertains to ensuring the timely and complete receipt of payments from borrowers.

Mitigation: The Company maintains an indomitable focus on customer on boarding onto its technology platform, emphasising digitisation.

h) Information Technology Risk: This risk stems from IT infrastructure failure or threats to data integrity, leading to operational disruptions and financial losses.

Mitigation: To effectively manage potential IT risks associated with such a setup, the Company has established a robust IT risk management mechanism with comprehensive measures, checks and controls in place. In the event of any functional section becoming non-operational, Company has contingency plans in place to ensure the continuity of critical business functions for its customers.

i) Cybersecurity Risk: The risk stemming from cyberattacks and hacking has escalated due to the heightened reliance on the internet and digital platforms.

Mitigation: The Company has implemented a robust cybersecurity framework to effectively manage and mitigate cyber threats. To ensure comprehensive information security throughout the organisation, Company has established a detailed security framework, policies and procedures aligned with industry best practices. The Company scrutinizes fraud protection measures to authenticate risk-based transactions effectively.

The Company operates in single business segment i.e. NBFC, it has witnessed considerable growth in the last few years and is now being recognised as complementary to the banking sector due to implementation of innovative marketing strategies, customer-oriented services, attractive rates of return on deposits and simplified procedures, etc.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Your Company is a Non-Banking Financial Company (NBFC), therefore, disclosure of significant changes in key financial ratios is not applicable to our Company as our Company.

DISCLOSURE OF ACCOUNTING TREATMENT:

Sera Investments & Finance India Limited has prepared financial statements for the F.Y. 2024-25 in accordance with the Indian Accounting Standards (INDAS) as specified under Section 133 of the Companies Act, 2013.

CAUTINARY AND FORWARD-LOOKING STATEMENTS:

Statements made in this Management Discussion and Analysis Report may contain certain forwardlooking statements based on various assumptions about the Companys present and future business strategies and the environment in which it operates. Actual results may differ substantially or materially from those expressed or implied due to risk and uncertainties. These risks and uncertainties include the national and global effects of economic conditions, political conditions, volatility in interest rates, changes in regulations and policies impacting Companys businesses and other related factors. The information contained herein is as referred to. The Company does not undertake any obligation to update these statements. The Company has obtained the data and information referred here from sources believed to be reliable or from its internal estimates, the accuracy or completeness of which cannot be guaranteed.

Registered Office

306, 3^rd Floor, Ashirwad Paras-1, Near Kanti Bharwad PMT, Opposite Andaj Party Plot,

S.G. Highway, Makarba, Ahmedabad-380051, Gujarat

Place: Ahmedabad Date: September 05, 2025

For and on the behalf of the Board of Directors SERA INVESTMENTS & FINANCE INDIA LIMITED
Sd/-	Sd/-
SHWETA SAMIR SHAH	SAGAR SAMIR SHAH
MANAGING DIRECTOR	WHOLE-TIME DIRECTOR
DIN:03082967	DIN:03082957