E Factor Experiences Ltd Management Discussions

You should read the following discussion in conjunction with our restated financial statements attached in the chapter titled "Financial Information of the Company" beginning on page 132. You should also read the section titled "Risk Factors" on page 23 and the section titled "Forward Looking Statements" on page 17 of this Draft Red Herring Prospectus, which discusses a number of factors and contingencies that could affect our financial condition and results of operations. The following discussion relates to us, and, unless otherwise stated or the context requires otherwise, is based on our Restated financial Statements.

Our financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditor dated August 18, 2023 which is included in this Draft Red Herring Prospectus under "Financial Statements". The Restated Financial Information has been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. Our financial year ends on March 31 of each year, and all references to a particular financial year are to the twelve-month period ended March 31 of that year.

OVERVIEW

Incorporated in 2003, we are an award-winning Indian event management company engaged in providing the consumers and community with event experiences, event services, technology based permanent & semi-permanent multimedia light & sound installations and specialized turnkey event assignments, wedding management, private and social event solutions. Our portfolio of services includes turnkey assignments in the form of Government commissioned Tourism Events and Festivals, techno-cultural light & sound shows, Sporting Events & Contests, Conferences, Mega Ground Concerts, Televised Events, private and social events like wedding and anniversary celebrations etc.

We take pride in organizing and curating various turnkey events and experiences like "The Pushkar Fair" in the year 2015-19, converting the traditional Snake-Boat Races into league format in the year 2019, creating a beach destination with our Eco retreat project at Konark or the other Eco retreat destinations at Bhitarkanika, Odisha in 2021.

We believe that our strength lies in the quality of the events and the experience of the events felt by the audience during our events which includes institutional turnkey assignments, private & social events including wedding, anniversary celebrations and other sort of celebratory functions for undertaken by us across the globe. We offer our customers with a wedding management process which is designed based on the customer requirements, that ensures a hassle-free wedding management experience.

Apart from all the events that we curate and create in our events business, we entered into a permanent and sustained business with our experiential tourism brand, "Sky Waltz" owned by our Subsidiary company namely E-Factor Adventure Tourism Private Limited. Skywaltz is engaged in the business of managing and operating hot air ballooning and yachting activities in multiple locations in India and is a Government approved commercial hot air balloon operator for the last 12 years.

The Sky Waltz team consists of commercial pilots, along with trained operational staff and equipment sourced from international vendors to maintain the globally recognized standards of safety and international operating procedures. Our permanent Balloon Safari operation are currently commercially active in Jaipur, and we are planning to expand our hot air balloon activities in other parts of the country in near future. Apart from the regular commercial flying, the company takes part in various ballooning festivals at places like Agra, Varanasi, Mandu Festival, Araku Festival and many more.

Apart, from the above-mentioned subsidiary company, we have acquired 46.33% stake in Untamed Leisure and Hospitality Private Limited (formerly known as E Factor Leisure and Hospitality Private Limited) making this company our Associate company, which is engaged in the business of event management and hospitality services and other related activities of leisure and entertainment.

Our journey started from our office in New Delhi and presently we have expanded our network to different parts of the country including our offices at Delhi, Noida, Jaipur and Odisha. Our manpower is a prudent mix of the experienced employees of 32 team members in total which gives us the dual advantage of stability and growth, execution of services within time and quality. Our skilled resources together with our strong management team have enabled us to successfully implement our growth plans. The company with its team handles all possible aspects of an event and caters to all sorts of varying protocol, entertainment and promotional needs.

We have a strong track record of revenue growth and profitability. The following table sets forth certain key performance indicators for the years indicated:

Key Financial Performance	FY 2022-23	FY 2021-22	FY 2020-21
Revenue from operations (1)	11,926.16	5,661.55	621.62
EBITDA (2)	1,198.57	420.87	(114.98)
EBITDA Margin (3)	10.50%	7.43%	(18.50%)
PAT	761.35	253.25	123.39
PAT Margin (4)	6.38%	4.47%	19.85%

Notes:

(1) Revenue from operation means revenue from sales, service and other operating revenues ⁽²⁾ EBITDA is calculated as Profit before tax + Depreciation + Interest Expenses - Other Income ⁽³⁾ EBITDA Margin is calculated as EBITDA divided by Revenue from Operations ⁽⁴⁾ PAT Margin is calculated as PAT for the period/year divided by revenue from operations.

Explanation for KPI metrics

KPI	Explanations
Revenue from Operations	Revenue from Operations is used by our management to track the revenue profile of the business and in turn helps to assess the overall financial performance of our Company and volume of our business.
EBITDA	EBITDA provides information regarding the operational efficiency of the business.
EBITDA Margin (%)	EBITDA Margin (%) is an indicator of the operational profitability and financial performance of our business.
PAT Margin (%)	PAT Margin (%) is an indicator of the overall profitability and financial performance of our business.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

For details in respect of Statement of Significant Accounting Policies, please refer to "Annexure D of Restated Financial Statements beginning" on page 132 of this Draft Red Herring Prospectus.

Factors Affecting our Results of Operations

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factors" beginning on page 23 of this Draft Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

1. General economic and business conditions in the markets in which we operate and in the local, regional, national and international economies;

2. Uncertainty in relation to continuing effect of the COVID-19 pandemic on our business and operations;

3. our ability to respond to technological changes;

4. Adverse natural calamities having significant impact on regions where we are having projects under implementation;

5. our ability to attract and retain qualified personnel;

6. Inability to promptly identify and respond to changing customer preferences or evolving trends;

7. Any change in government policies resulting in increases in taxes payable by us;

8. Changes in laws and regulations that apply to the industries in which we operate.

9. Our ability to grow our business;

10. General economic, political and other risks that are out of our control;

11. Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; 12. Companys ability to successfully implement its growth strategy and expansion plans;

13. Failure to comply with regulations prescribed by authorities of the jurisdictions in which we operate; 14. Inability to successfully obtain registrations in a timely manner or at all;

15. Occurrence of Environmental Problems & Uninsured Losses;

16. Conflicts of interest with affiliated companies, the promoter group and other related parties; 17. Any adverse outcome in the legal proceedings in which we are involved; and

18. Concentration of ownership among our Promoters.

19. We depend on our brand recognition and reputation and our failure to maintain or enhance our brand image could have a material adverse effect on our business, financial condition, and results of operations.

Discussion on Result of Operations

The following discussion on results of operations should be read in conjunction with the Restated Financial Statements for the financial years ended on March 31, 2023, March 31, 2022 and March 31, 2021.

	For the Year ended on
Particulars	March 31, 2023	% of Total Income	March 31, 2022	% of Total Income	March 31, 2021	% of Total Income
Revenue from operations	11,926.16	99.84	5,661.55	99.32	621.62	62.75
Other income	19.05	0.16	38.69	0.68	368.93	37.24
Total Income	11,945.21	100.00	5,700.24	100.00	990.56	100.00
Expenses
Employee Benefit Expenses	639.34	5.35	385.61	6.76	266.50	26.90
Finance Costs	99.04	0.83	45.61	0.80	86.71	8.75
Depreciation and Amortisation Expenses	93.68	0.78	66.62	1.17	41.02	4.14
Other Expenses	10,076.04	84.35	4,855.06	85.17	469.75	47.42
Total expenses	10,908.10	91.32	5,352.91	93.91	863.98	87.22
Profit/ (Loss) before tax	1,037.1	8.68	347.33	6.09	126.57	12.78
Tax expenses
(1) Tax Expense for Current Year	247.46	2.07	94.98	1.67	-	-
(2) Deferred tax	20.78	0.17	(0.90)	(0.02)	3.18	0.32
(3) Reversal of MAT Credit Entitlement	7.53	0.06	-	-	-	-
Profit/ (Loss) after tax	761.35	6.37	253.25	4.44	123.39	12.46

Revenue from operations:

Revenue from operations mainly consists of revenue from event fees, fee on tour operator service and fee on tour operator service.

Other Income:

Our other income primarily comprises of Interest Income, sundry balance written back, profit on sale of asset and exchange fluctuation net.

Expenses:

Companys expenses consist of Employee benefits expense, Finance costs, Depreciation and amortization and other expenses.

Employee benefits expense:

Our employee benefits expense primarily comprises of Salaries & Wages, Staff Welfare Expenses, Gratuity, Leave Encashment, and Contribution to provident Fund.

Finance Costs:

Our finance cost includes Interest expense and Other Borrowing cost.

Depreciation and Amortization Expenses:

Depreciation includes depreciation on Property, Plant & Equipments etc.

Other Expenses:

Our other expenses include Advertisement & Sales Promotion, Event Expenses, Travelling & Boarding & Lodging Expenses, Rent & Maintenance, Electricity & Water Expenses, Office Expenses, Miscellaneous Expenses, etc.

Comparison of Financial Year 2023 with Financial Year 2022 (Based on Restated Consolidated Financial Statements)

Total Income:

Total income for the Fiscal year March 31, 2023 stood at 3 11,945.21 Lakhs. Total income for the financial year 2021-22 stood at

5,700.24 Lakhs representing significant increase of 109.56%. The main reason of increase was increase in the business operations of the company and the new tenders procured by the company from Tourism department of Odisha and the event related to the light and sound show at Gateway of India.

Revenue from Operations:

During the Fiscal year 2023 revenue from operations was 3 11,926.16 Lakhs. Revenue from Operations for the financial year 2021-22 stood at 3 5,661.55 Lakhs representing significant increase of 110.65%. The main reason of increase was due to increase in the number of events done by the company and the revenue generated by the company from the tenders procured from Tourism department of Odisha and the event related to the light and sound show at Gateway of India.

Other Income:

During the Fiscal year 2023, other income was 19.05 Lakhs. For financial year 2021-22, it was 38.69 Lakhs representing a decrease of 89.51%. The decrease was mainly due to decrease in the sundry balance written off.

Total Expenses:

The Total Expenses for the Fiscal year 2023 stood at 10908.10 Lakhs. The total expenses represented an increase of 103.78% as compared to previous year. The increase in total expenses was mainly due to increase in the event expenses i.e., 111.81% due to the events undertaken by the company.

Employee benefits expense:

Our Company has incurred 639.34 Lakhs as Employee benefits expense for the Fiscal year 2023. It stood at 385.61 Lakhs during the financial year 2021-22, representing an increase of 65.80%. The said increase is due the significant increase in salaries.

Finance costs:

Finance costs for the Fiscal year 2023 was 99.04 Lakhs. For financial Year 2021-22, it was 345.61 Lakhs, representing an increase of 117.15%, which is mainly due to the increase in Interest Expenses and other borrowing cost.

Depreciation and Amortization Expenses:

Depreciation for the Fiscal year 2023 was 3 93.68 Lakhs. For financial year 2021-22, it stood at 66.62 Lakhs, representing an increase of 40.62% due to increase in the fixed assets of the Company.

Other Expenses:

Other Expenses for the Fiscal year 2023 stood at 10,076.04 Lakhs. For Financial Year 2021-22, other expenses were 4,855.06 Lakhs. The significant increase of 107.54% was mainly due to

(i) increase in the event expenses by 111.81% from 4,507.89 lakhs in financial year 2021-22 to 9,548.19 lakhs in financial year 2022-23

(ii) increase in interest rate fluctuation (Net) by 2,118.64% from 0.59 lakhs in financial year 2021-22 to 13.03 lakhs in financial year 2022-23

(iii) increase in rates & taxed by 3,987.50% from 0.24 lakhs in financial year 2021-22 to 9.81 lakhs in financial year 2022-23

(iv) increase in legal & professional fees by 67.96% from 9.30 lakhs in financial year 2021-22 to 15.62 lakhs in financial year 2022-23 and

(v) increase in licence fees, advertisement & sales promotion, conveyance expenses etc.

Restated Profit/ (Loss) before tax:

Restated Loss before tax for the Fiscal year 2023 was 1037.11 Lakhs. For financial year 2021-22, it was 347.33 Lakhs in the financial year 2020-21, representing an increase of 198.59% which was due to the increase in the revenue of the company which increase by 110.65% and the corresponding increase in expenses of the company which were 107.54% as compared to the increase in revenue.

Restated Profit/ (Loss) after tax:

The Company reported Restated Loss after tax for the Fiscal year 2023stood at 761.35 Lakhs. For financial year 2021-22, it stood at 253.25 Lakhs in comparison to 123.39 Lakhs in the financial year 2020-21, representing an increase of 200.63% in Fiscal year 2023 as compared to fiscal year 2022.

Comparison of Financial Year 2022 with Financial Year 2021 (Based on Restated Consolidated Financial Statements)

Total Income:

Total income for the financial year 2021-22 stood at 5,700.24 Lakhs whereas in Financial Year 2020-21 the same stood at 990.56 Lakhs representing significant increase of 475.46%. The main reason of increase was increase in the business operations of the company which got effected during the Fiscal year 2021 due to the covid effect.

Revenue from Operations:

Revenue from Operations for the financial year 2021-2 stood at 5,661.55 Lakhs whereas in Financial Year 2020-21 the same stood at 621.62 Lakhs representing significant increase of 810.77%. The main reason of increase was due to increase in the number of events done by the company which got effected during the Fiscal year 2021 due to the covid effect.

Other Income:

For financial year 2021-22, it has decreased to 38.69 Lakhs as against 368.93 Lakhs in the Financial Year 2020-21 representing a decrease of 89.51%. This decrease was due to the profit on sale of fixed assets which was earned by the Company during the year 2021 amounting to 335.94 lakhs.

Total Expenses:

For financial year 2021-22, it has significantly increased to 5,352.91 Lakhs from 863.98 Lakhs in the financial year 2020-21 representing a significant increase of 519.56%. The increase in total expenses was mainly due to increase in the event expenses i.e. 1793.12% due to the events undertaken by the company.

Employee benefits expense:

Our employees benefit expenses stood at 385.61 Lakhs during the financial year 2021-22 as compared to 266.50 Lakhs in the financial year 2020-21, representing an increase of 44.69%. The said increase is due the increase in salaries and wages by 45.78% and increase in staff welfare expenses by 101.78%.

Finance costs:

For financial Year 2021-22, it has decreased to 45.61 Lakhs as against 86.71 Lakhs during the financial year 2020-21, representing a decrease of 47.40%, which is mainly due to the decrease in Interest Expenses on loan and others.

Depreciation and Amortization Expenses:

For financial year 2021-22, it stood at 3 66.62 Lakhs as against 41.02 Lakhs during the financial year 2020-21, representing an increase of 62.42% due to the capitalization undertaken by the company during the current year.

Other Expenses:

For Financial Year 2021-22, other expense was RS 4,855.06 Lakhs as against 469.75 Lakhs during the financial year 2020-21. The significant increase of 933.54% was mainly due to covid effect and seasonality fluctuations of the business as the most of the events and festivals are undertaken during second half of the year. Further, the event expense was increased by 1,793.12% from 3 238.12 lakhs to 34,507.89 lakhs in financial year 2021-22 as the fixed cost such as rent, security, manpower expenses, accommodation, marketing, business promotion expenses, etc. was already booked by the company. Also

Restated Profit/ (Loss) before tax:

For financial year 2021-22, it has increased to 3 347.33 Lakhs as compared to 3 126.57 Lakhs in the financial year 2020-21, representing an increase of 174.41% which was due to the increase in the revenue of the company which increase by 810.77% and the corresponding increase in expenses of the company which were 519.56% as compared to the increase in revenue.

Restated Profit/ (Loss) after tax:

For financial year 2021-22, it stood at 3 255.73 Lakhs in comparison to 3 123.39 Lakhs in the financial year 2020-21, representing an increase of 107.25%.

Information required as per Item (II) (C) (iv) of Part A of Schedule VI to the SEBI Regulations:

An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:

1. Unusual or infrequent events or transactions

There has not been any unusual trend on account of our business activity. Except as disclosed in this Draft Red Herring Prospectus, there are no unusual or infrequent events or transactions in our Company.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations.

There are no significant economic changes that may materially affect or likely to affect income from continuing operations.

3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.

Apart from the risks as disclosed under Section "Risk Factors" beginning on page 23 of the Draft Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Future changes in relationship between costs and revenues

Other than as described in the sections "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 23, 90 and 165 respectively, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

5. Total turnover of each major industry segment in which our Company operates

Our business activity primarily falls within a single business and geographical segment, i.e., is engaged in the business of event management services, wedding planning services and adventure tourism, as disclosed in "Restated Consolidated Financial Statements" on page 132, we do not follow any other segment reporting.

6. Status of any publicly announced New Products or Business Segment

Except as disclosed in the Chapter "Our Business", our Company has not announced any new product or service.

7. Seasonality of business

Our business is not subject to seasonality. For further information, see "Industry Overview" and "Our Business" on pages 75 and 90, respectively.

8. Dependence on single or few customers

Our business is majorly depends upon government authority and tourism department. For further details, refer "Risk Factor" on page 23 of this Draft Red Herring Prospectus.

9. Competitive conditions

Competitive conditions are as described under the Chapters "Industry Overview" and "Our Business" beginning on pages 75 and 90 respectively of this Draft Red Herring Prospectus.

10. Details of material developments after the date of last balance sheet i.e. March 31, 2023.

After the date of last Balance sheet i.e., March 31, 2023, the following material events have occurred after the last audited period:

i) Our company has approved the Consolidated Audited Financial statements for the financial year ending March 31, 2023 in the Board meeting dated July 08, 2023.

ii) Our Company has approved the Restated Consolidated Financial Statements for the financial year ending March 31, 2023, March 31, 2022 and March 31, 2021 in the Board meeting dated August 18, 2023.

iii) Our Company has approved the Draft Red Herring Prospectus vide resolution in the Board Meeting dated August 23, 2023.