Yaari Digital Integrated Services Ltd Management Discussions

ECONOMIC OVERVIEW

Indias economy has been undergoing a transformative shiftwith the rapid adoption of digital technologies and the expansion of the digital ecosystem. This shift presents significant opportunities for digital platform providing companies to thrive and innovate. India is experiencing a digital revolution, with a massive surge in internet and smartphone penetration. This digital transformation is creating a vast user base that ishungryforonlineservicesandsolutions The e-commerce sector is witnessing substantial growth, driven by changing consumer behaviour and increased digital literacy. This provides a fertile ground for digital platforms that offer e-commerce, payment solutions, and digital marketplaces. Indias regulatory environment is becoming increasingly favourable for digital businesses. Reforms and policies are being designed to encourage innovation, protect user data, and facilitate ease of doing business. While urban areas are rapidly adopting digital services, rural markets remain largely untapped. Companies that can bridge this divide by offering relevant solutions stand to gain. Indias start-up ecosystem is vibrant, with a strong emphasis on technology-driven solutions. Venture capital funding and investor interest continue to flow into innovative digital start-ups, digital landscape presents immense opportunities for companies offering digital platforms and services. The nations economic growth, rapidly expanding digital user base, and evolving regulatory environment create a conducive environment for digital.

INDUSTRY OVERVIEW

Prior to 2021, Indias GDP growth experienced fluctuations. The country had been one of the worlds fastest-growing major economies, with annual growth rates averaging around 6-8% in the years leading up to the COVID-19 pandemic. However, the pandemic had a significant impact on economic activity, resulting in a contraction of about 24% in the second quarter of 2020. Consumers are becoming more restrained in their purchases, with trading down for value buying, choosing convenience over anything else and sometimes opting for a combination of both.

India has a large and young population, which provides both opportunities and challenges. The workforce has contributed to economic growth, but also requires significant job creation and skill development.

The Company believes, despite the stressed economy there is a huge market potential in the social commerce space. The Indian E-commerce market is expected to grow to US$ 188 billion by 2025. The pandemic accelerated the adoption of multiple contactless services, including video and WhatsApp shopping and home delivery. Digital channel adoption for food delivery, grocery to all kind of shopping and services gained a higher share than before. Online sales increased by over 10% across most categories they are available in. The trend is expected to stay in India.

BUSINESS OVERVIEW

Due to change in business environment and economic scenario, which got impacted by the pandemic, the Company decided to upscale its digital platform business by being new age business ventures, where the Company management has a competitive edge, given Companys cutting edge technology platform and digital reach and in order to charter right direction for its continuous focus around promoting digital platform businesses and to grow to next frontier.

BUSINESS RESTRUCTURING

In line with the long term business objectives of the Company to further accelerate the scaling up of the operations and to provide synergy of consolidated business operations and management and to streamline the operations of the Company and /or its identified subsidiaries to have a simplified and streamlined holding structure with pooled resources, the Board of Directors of the Company, subject to all applicable statutory and regulatory approvals, including approval from the stock exchanges, SEBI, shareholders and creditors of the company and the jurisdictional bench of the NCLT, has approved a composite Scheme of Arrangement inter-alia involving Amalgamation of Indiabulls

Enterprises Limited and Dhani Services Limited (DSL) along with certain subsidiary companies of DSL with and into the Company.

The Scheme is subject to all applicable statutory and regulatory approvals, including approval from the stock exchanges, SEBI, shareholders and creditors of the company and the jurisdictional bench of the NCLT. Post filing the Scheme with National (NSE) and BSE Limited (BSE), the Company has received the Observation Letters from BSE and NSE on March 1, 2024 and March 4, 2024, respectively. Honble Competition Commission of India (CCI) has approved the Scheme on December 19, 2023 and detailed Order of CCI has also been received. First motion application has been filed with Honble National Company Law Tribunal, Chandigarh on April 10, 2024.

In Compliance with NCLT Order dated January 29, 2025, meeting of Equity Shareholders of Dhani Services Limited, Yaari Digital Integrated Services Limited and Indiabulls Enterprises Limited and meeting of Unsecured Creditors of Indiabulls Enterprises Limited were convened on March 29, 2025, wherein the shareholders and unsecured creditors have passed the resolutions with requisite majority approving the Scheme. Thereafter, NCLT appointed Chairperson filed its consolidated report on these meetings on April 01, 2025 to Honble NCLT, Chandigarh Bench. Further, the Second Motion Petition was filed with the Honble NCLT, Chandigarh Bench on April 07, 2025. Honble NCLT has reserved the matter for Order.

Upon the Scheme coming into effect, the fully paid-up equity shares of your Company will be issued to the shareholders of Dhani Services Limited, Indiabulls Enterprises Limited and India Land Hotels Mumbai Private Limited (ILHMPL) basis the swap ratio as mentioned in the

Scheme i.e.

(i) To the shareholders of Dhani Services Limited

"294 equity shares of Yaari INR 2/- each fully paid-up for every 100 equity shares of DSL of INR 2/- each fully paid-up" "162 equity shares of Yaari INR 2/- each fully paid-up for every 100 equity shares of DSL of INR 2/- each partly paid-up. The paid-up value of partly paid-up share is 55% i.e. INR 1.1. The exchange ratio has been computed in proportion to paid up value."

(ii) To the shareholders of Indiabulls Enterprises Limited

"110 equity shares of Yaari of INR 2/- each fully paid-up for every 100 equity shares of IEL of INR 2/- each fully paid-up."

(iii) To the shareholders of India Land Hotels Mumbai Private Limited (ILHMPL)

In considerationof demerger of the Real Estate Business Undertaking (as more elaborately defined under the Scheme) of ILHMPL and vesting of the same with and into Indiabulls Pharmacare Limited: "322 Fully Paid-up equity shares of Yaari of INR 2/- each for every 1 equity share of ILHMPL".

INDUSTRY STRUCTURE AND DEVELOPMENT AND BUSINESS OUTLOOK

The Company is resolutely dedicated to constructing a steadfast, secure, and sustainable business model, driven by an unwavering focus on capitalizing on growth opportunities within the industry. We envision ourselves as an emerging online commerce entity grounded in fundamental business principles, with a strong emphasis on effective governance, streamlined operations, innovation, and fostering trust. At present, the Indian social commerce landscape is in its fledgling phase, projected to burgeon to a valuation of US$ 70 billion by FY 2030. This remarkable expansion is attributed to its ability to cater to distinct consumer demands. The phenomenon of social commerce is poised to democratize the entire e-commerce sector, predominantly propelled by decentralized models built upon foundations of trust and community. Additionally, it is poised to restructure the traditionally disorganized long-tail segments within the online commerce industry. The Companys digital app, Yaari, combined with the digitally connected Bharat, is primed to expedite the acceleration of online commerce growth. In doing so, it aims to establish an ecosystem that provides income support to more than 40 million aspiring Indians.

The Government of India has introduced a slew of initiatives, including Digital India, Make in India, Start-up India, Skill India, and the Innovation Fund. Effective and timely implementation of these initiatives is poised to substantiate the growth of E-commerce within the country. Noteworthy initiatives undertaken by the Government to bolster E-commerce include: Foreign Direct Investment (FDI): The allowance of 100% FDI in B2B Commerce and automatic route-based 100% FDI in the marketplace model of ecommerce.

Government eMarketplace (GeM): With over 38 lakh sellers and service providers across 21,000+ product and 240+ service categories,

GeM has been a significant platform for government procurement. In FY 22, government procurement from micro and small enterprises amounted to Rs. 42,586 crore.

National Retail Policy:The proposed national retail policy has identified key areas for improvement, including ease of business, license process rationalization, retail digitization, reforms focus, and facilitating an open network for digital commerce. Digital India Initiatives:The launch of initiatives like Umang, Start-up India Portal, Digital India movement has played a pivotal role in boosting

5G Infrastructure Investment: Substantialgovernmentinvestmentinrollingoutfibernetworks for 5G is poised to significantly enhance

E-commerce in India.

Beyond this, the confluence of technology adoption, positive demographic shifts, and educational advancements have all contributed to this impressive growth trajectory. Consequently, the outlook for online commerce markets in emerging economies remains highly favourable, even in the face of cyclical and structural factors that impact overall macro growth prospects.

OUR STRATEGY

Our strategic vision centres around placing our customers at the heart of every endeavour. We are steadfast in our commitment to establishing a sustainable organization that aligns seamlessly with the aspirations of our stakeholders. Our core tenet lies in delivering exceptional value to our clients while concurrently cultivating growth prospects for our employees and ensuring lucrative returns for our investors. The bedrock of the Companys long-term, profit-oriented growth strategy rests on the perpetual expansion of its diverse business verticals within the Indian market. Simultaneously, we are unwavering in our determination to channel investments into uncharted territories, exploring new markets, and embarking on novel business avenues.

The customer experience is at the centre of the industry

Contemporary consumers are increasingly seeking a level of transparency and seamlessnessintheirinteractions, edge facilitatedbycutting-technology that furnishes swift access to information and feedback. These evolving customer preferences are establishing fresh benchmarks for convenience, ease, and value, prompting an anticipation of round-the-clock accessibility along with personalized offerings at competitive price points. Consequently, the trajectories of customer journeys have assumed paramount significance, with a growing emphasis on enriching customer experiences. This dynamic shift is manifesting as a pivotal mandate within the online commerce sector.

Digitisation

The advent of digital technology has ushered in a transformative era in online commerce, marking a significant paradigm shift. reach of the internet, poised to encompass an anticipated 900 million users by 2025, is poised to exert a lasting impact on the landscape of online commerce as well as various other industries.

The boundaries that once demarcated distinct business domains have become increasingly indistinct, complemented by an exponential influx of information. This confluence has engendered an ultra-competitive market milieu wherein constant innovation and agility are pivotal for survival. The swift evolution of consumer behavior underpins the necessity to deliver an uninterrupted, end-to-end purchasing experience that is devoid of friction.

Considering the existing and prospective digital clientele of Yaari, along with the substantial potential within the digital business realm, the Company is poised to embark on a trajectory that aligns with its significant existing and future ventures. This strategic pursuit will particularly encompass the domain of social commerce business, conducted digitally under the banner of Yaari, through the dedicated Yaari app. This paradigm shift foresees the cessation of physical branches. Leveraging its extensive customer outreach, Yaari will undertake the sales, service, and dissemination of consumer products from the Companys subsidiaries, as and when these products are introduced. This process will be facilitated through an intuitive product user interface bolstered by astute product recommendations and a streamlined claims process.

Presence of dynamic leadership and professional management team

The stewardship of the Company and its group entities is entrusted to seasoned industry stalwarts, each distinguished in their respective domains. These dynamic teams are overseen by Boards comprising accomplished industry veterans, fostering a nexus of unparalleled expertise. The Groups strength is derived from the amalgamation of the multifaceted experiences of these accomplished individuals. The impending foray into the realm of social commerce business is poised to tap into the reservoir of insights and know-how that these experts bring to the table.

In addition to the existing wealth of knowledge, the Company will also be bolstered by a cadre of online commerce specialists. The Company is poised to capitalize on the acumen of highly skilled and seasoned key management personnel, alongside a well-trained and proficient workforce. The strategic collaboration with business partners, coupled with the potent amalgamation of robust analytical capabilities strong technical foundation, further augments the Companys competitive edge.

Technological expertise

The Company has adeptly harnessed technology to extend its footprint into the hinterlands. The technological orientation of the directed towards enhancing customer-centricity, with an objective of providing unparalleled customer convenience while optimizing cost efficiencies to the maximum extent.

Robust systems and process

The Company places a profound faith in the potency of its systems and processes, recognizing them as a cornerstone of its strengths. In light of the enduring nature of its business pursuits, the Company is resolute in establishing resilient systems and processes that facilitate the systematic expansion of its operations. A paramount endeavor on our agenda involves the development of robust and appropriate systems and processes, meticulously crafted to ensure the Companys investments are fully aligned with prevailing regulatory prerequisites and asset-liability norms.

OPPORTUNITIES

The social commerce sector in India is poised for substantial growth and teems with vast potential and opportunities. In the contemporary landscape, buoyed by a regulatory framework, an increasingly digitally literate customer base, and technological facilitators, we are poised advantageously to harness the existing possibilities. While the current market is predominantly centered around urban demographics, we are firm believers in the prospect of uncharted territories by reimagining the social commerce paradigm. This, in turn, holds the potential to unlock hitherto untapped markets.

The Company identifies several pivotal growth catalysts within the current market that substantiate its various business operations and opportunities.

Favourable demographics and economic factors

Indias demographic and economic landscape presents a significant advantage for the growth and development of various industries, including online commerce. With a population exceeding 1.3 billion people, India boasts a youthful demographic profile, with a substantial proportion of its population under the age of 35. This demographic dividend translates into a large and increasingly digitally savvy consumer base, eager to engage with online platforms for various needs.

Moreover, the growing middle class and rising disposable incomes contribute to higher consumer spending patterns. As more individuals join the digital realm, particularly in rural areas, there is an expanding market for online goods and services. This trend aligns well with the online commerce sector, which can tap into this burgeoning consumer demand.

Indias economic growth trajectory, despite its fluctuations, has maintained a positive momentum over the years. A stable and growing economy provides a conducive environment for consumers to explore online purchasing options. Additionally, initiatives such as "Digital India" and "Make in India" have fostered digital adoption and ease of doing business, further propelling the growth of online commerce.

Shifting towards Online Commerce

The apprehensions stemming from the Covid-19 pandemic have led to heightened awareness among individuals regarding the merits of online commerce. The enforced lockdowns, necessitated by the pandemic, have prompted both new buyers and sellers to migrate towards digital platforms. The imperative of adhering to social distancing norms, combined with the heightened accessibility of the internet, has catalysed the adoption of online commerce, extending its reach beyond urban centers and into smaller towns and rural regions.

This seismic shift in consumer behavior is attributed to the necessity brought about by the pandemic, hastening the uptake of online commerce. According to Forrester Research, the Indian e-commerce sector witnessed a 7-8% surge in sales in 2020. Furthermore, the sector experienced remarkable growth, largely driven by consumers pivoting towards online shopping as an alternative to physical store visits due to the restrictions imposed by lockdowns.

In essence, the Covid-19 pandemic has ushered in a transformation in consumer behavior, fostering a swifter and wider embrace of online commerce. This shift has not only driven growth in the sector but has also underscored the pivotal role online platforms play in catering to consumer needs, particularly during unprecedented times.

Untapped Market

India ranks second in terms of the number of internet users. This number is split almost equally among urban and rural users. The number of internet users is further set to rise, with initiatives such as Digital Village providing internet access to more people. While the primary focus of the industry has been urban population, the potential to tap the tier 2 and tier 3 consumer is huge.

The majority of the consumers from tier2, tier 3 cities and rural areas engage in value-based shopping driven via members, friends, acquaintances or connections

Uncertainty

Uncertainty encapsulates the challenge of foreseeing future outcomes with assuredness. Given the pervasive nature of uncertainty, it becomes imperative to factor in the potential consequences of deviations from anticipated projections. The prevailing environments inherent unpredictability, encompassing market volatility and fluctuations in consumer confidence, introduces the likelihood of a decline in demand. This prospective dip could stem from wavering consumer confidence in the stock market, further exacerbated by the overarching uncertainty that pervades the landscape.

Supply chain management

The extensive disruptions resulting from Covid-19-induced lockdowns have triggered a myriad of challenges that encompass various aspects such as production, supply chain management, and distribution networks. These multifaceted risks are characterized by their fluid nature, continuously evolving and presenting significant dangers. The implications stretch to the possible disruption of supply chains and manufacturing processes, thereby adversely impacting the entirety of business operations.

Cyber security risk:

Our operational landscape is progressively reliant on IT systems, digital interactions, and information management. The looming threat of cyber-attacks, encompassing unauthorized access, sensitive data misuse, or operational disruptions, can significantly impede business operations across various dimensions.

SEGMENT -WISE OR PRODUCT -WISE PERFORMANCE

The Groups primary business segment is reflected based on principal business activities carried on by the Company. As per Indian Accounting Standard 108, which was notified under the Companies (Indian Accounting Standards) Rules, 2015 and is specified in Section 133 of the

Companies Act, 2013, the Group operates in one reportable business segment and primarily operates in India. Therefore, it is considered a single geographical segment.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS AND CHANGE IN RETURN ON NETWORTH

In compliance with the requirements of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with other key financial ratios and changes in Return on Networth of the Company (on standalone basis) including detailed explanations therefore are as under:

CHANGE IN RETURN ON NETWORTH:

During the FY 2024-25 and FY 2023-24, the total equity of the Company has negative balances and hence return on net worth is negative/ not applicable in both the years.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate systems of internal control commensurate with its size and nature of business. It has institutionalised a robust and comprehensive internal control mechanism across all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws, and regulations. The Board Audit Committee oversees the compliance framework of the Company. The Company has formulated various internal policies/procedures and an employee code of conduct, which govern the day-today activities to ensure compliance. The Internal audit function provides independent and reasonable assurance about the adequacy and operating effectiveness of the Internal Controls to the Board and the Audit Committee.

HUMAN RESOURCES

The Company firmly believes that its employees are the key to driving performance and developing competitive advantage. The emphasis has been on proper recruitment of talent and empowerment while devoting resources for their continuous development. The structured recruitment process, which the Company employs, focuses on recruiting people who have the right mind set for working, supported by structured training programs and internal growth opportunities. As of March 31, 2025, our workforce for business purposes consists of 3 employees. To optimize resources and streamline operations some of the erstwhile employees of the Company were shifted to its other group companies. It is noteworthy that the transition was executed seamlessly, with all employees of group companies and subsidiaries offering their unwavering support to the functioning of our company.

CAUTIONARY STATEMENT

"Statements in this Report on Management Discussion and Analysis describing the Companys objectives, estimates, and expectations may be forward-looking based on certain assumptions and expectations of future events. Actual results might differ substantially or materially from those expressed or implied by such forward-looking statements due to various factors and uncertainties.

The term Company referred to herein pertains to the consolidated entity, including its subsidiary(ies).

The Company wishes to cautions that any forward-looking statements contained in this report are inherently uncertain and subject to uncertainties, and changes in circumstances that are difficult to predict. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from the expressed or implied expectations Factors that could cause or contribute to differences in actual results include, but are not limited to, changes in economic, business, competitive, technological, regulatory, market, and other factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date of this report." This disclaimer helps communicate to stakeholders that forward-looking statements inherently involve uncertainties and that actual outcomes might differ from the expressed expectations. It emphasizes the Companys commitment to transparency while acknowledging that changes in circumstances can impact future events and results.