Master Trust Ltd Management Discussions

(Disclosures pertaining to Schedule V of SEBI (LODR) Regulation, 2015)

A. INDUSTRY STRUCTURE AND DEVELOPMENTS:

Indian Financial Services Industry

• Indian equity market performed exceptionally well in FY2021 and FY2022, with both Sensex and Nifty posting double digit returns. The performance of the Indian market remained stagnant in FY2023 amid geo-political tensions, central banks rate hikes, and economic slowdown.

• During 2022-23, the primary securities market (Equity + Debt) recorded a total number of issues of 276, from which Rs. 75232 cr were raised as compared to Rs. 150484 cr raised through 192 issues during 2021-22. The benchmark equity index BSE Sensex gained 0.72% to 58,991.52 on March 31, 2023 from 58,568.51 on March 31, 2022. Likewise, the 50-share Nifty index declined 0.60% to 17,359.75 during the same period. It was a dismal year for midcap and smallcap stocks, the year saw the S&P BSE Small-cap index and the S&P BSE Midcap index down by 4.46% and 0.18% respectively in FY23. During 2022-23, the Small and Medium Enterprises (SME) market recorded a total number of issues of 125, from which Rs. 2333 cr were raised as compared to Rs. 943 cr raised through 69 issues during 2021-22.

• Foreign portfolio investors (FPIs) flows for the last two years have been negative. FPI pulling out Rs 37,632 cr from Indian equities in FY23, as compared to outflow of Rs 140010 cr in FY22, before these outflows, FPIs invested a record Rs 274032 crore in equities in FY21. Major sales in FPIs in the Indian market have been absorbed by domestic investors (Dlls), including insurance companies and mutual funds.

NBFC Industry

• NBFCs have demonstrated agility, innovation, and frugality to provide formal financial services to millions of Indians. The pivotal role of NBFCs in driving sustainable fiscal growth is well recognized, given their last-mile connectivity and agile system. Non-Banking Financial Companies (NBFCs) sector plays an extremely crucial role in the development of an economys core infrastructure by providing a fillip to employment generation, bank credit in rural segments, wealth creation and to support financially weaker sections of the society and promoting financial inclusion. The sector has played a decisive role in accelerating last-mile funding and understanding the credit requirement of the Unbanked and Underserved. Aided by the governments thrust towards a digital economy, the sector has also undertaken significant digital transformation and invested heavily to become tech- agile institutions offering personalized products and services, ensuring faster credit disbursement

• NBFCs have become important constituents of the financial sector and have been recording higher credit growth than scheduled commercial banks (SCBs) over the past few years. These financial companies bring much needed diversity to the market by diversifying the risks, increasing liquidity in the markets thereby bringing efficiency and promoting financial stabilityto the financial sector

Indian Broking Industry

• At industry level, equity turnover at the exchanges increased to Rs 38709 trillion in FY2023 from Rs. 17792 trillion in FY2022, registering a growth of 117.57%. The Average daily turnover (ADTO) increased to Rs. 155.46 trillion from Rs. 71.74 trillion during the same period, registering a growth of 116.69%. The total cash turnover reported de-growth in FY2023, with a total traded volume of Rs. 143 trillion (Rs. 179 trillion in FY2022) registering a YoY decline of 19.94%. The cash segment ADTO decreased to Rs.

0.57 trillion from Rs. 0.72 trillion in the same period. The assets of the FPIs in India, as reported by the custodians, at the end of March 2023 were Rs 48,70,792 or, out of which the Notional value of ODIs on Equity & Debt excluding Derivatives was Rs 88,600 or (or 1.82 % oftotal assets of FPIs).

• The derivatives or futures and options (F&O) segment, witnessed a 118.08% growth in ADTO in FY2023 as compared to growth of 160.57% % in FY2022. The total turnover for the derivatives segment increased to Rs. 38566.41 trillion in FY2023 (ADTO of 154.88 trillion) from Rs 17613.11 trillion (ADTO of 71.02 trillion) in FY2022, registering a growth of 118.96%. The options (ADTO) growth rate remained healthy in FY2023, registering a year-on-year (YoY) growth ofl20.15%, as against declines of 3.36% and 20.26% for the futures and cash segments respectively. The options segment remains the most active in the derivatives market accounting for 99.3% of the derivatives turnover in FY2023 (98% in FY 2022), with index options accounting for 97.7% of the derivatives turnover (95.1% in FY2022).

• Indias commodity markets the total turnover for the derivatives future segment decreased to Rs. 62.51 trillion in FY2023 from Rs 72.17 trillion in FY2022, registering a de-growth of 13.39%. The Multi Commodity Exchange (MCX) achieved a record market share in future segment of 96.67% in FY23. The Future segment ADTO of MCX decreased to Rs. 0.23 trillion in FY23 from Rs. 0.26 trillion in FY22 de-growth oflO.52%.

• The Financial Year 2022-23 was a landmark year for the Indian passive funds industry as it registered record fund inflows of Rs 1.55 lakh crores over the financial year. In addition, 121 new passive products (ETFs + Index Funds) were launched in FY 22-23. During the last five years, passive funds AUM has increased from Rs 80,755 crore (March 31, 2018) to Rs 6,74,783 crore (March 31, 2023). The number of passive funds in the country also increased from 90 to 349 during this period.

The Indian Growth Story

• The Indian economy grew at a rate of 6.1 % in Q4FY23, higher than an upwardly revised 4.5% in Q4FY22 and well above market forecasts of 5%. The expansion was mainly boosted by private consumption, services exports and manufacturing amid easing input cost pressures. Also, services have emerged as a major driver, comprising more than half of GDP. Private spending rose at a faster 2.8% (vs 2.2% in Q4FY22), public expenditure rebounded (2.3% vs -0.6%), GFCF rose faster (8.9% vs 8%), stocks recovered (5.9% vs -0.1%), and exports increased (11.9% vs 11.1%) way more than imports (4.9% vs 10.7%). On the production side, the manufacturing sector grew for the first time in three quarters (4.5% vs -1.4%) and faster increases were recorded for the farm sector (5.5% vs 4.7%), construction (10.4% vs 8.3%), financial and real estate (7.1% vs 5.7%), and public administration (3.1% vs 2%). GDP Growth for the fiscal year 2022- 23 was revised higher to 7.2% from 7%.

• Indian economy is expected to be the fastest-growing economy in the world growing nearly 6% in the current fiscal years despite confronting considerable challenges such as financial sector turmoil, inflationary pressures, effects of the Russia-Ukraine war, and the persistent impact of the Covid-19 pandemic. Indias inflation is expected to ease up to 4.9% in FY24 from 6.7% in the previous year. This is a clear indication of Indias economic prowess and its unwavering determination to overcome even the toughest ofobstacles.

B. OPPORTUNITY & THREATS

Opportunities

Our long-standing relationship with our customers has been one of the most significant factors contributing to our growth. Our commitments to quality and customer service practices have been strong contributing factors to our robust customer relations. Over the 38 years, we have steadily developed a robust base of customers for our products in national level.

To overcome the challenges and competition, we have taken various initiatives to reduce the operational costs, to develop new value added products, improve the performance and quality of existing value- added products as well as to explore new markets in India. Currently our group is operating in Equity Trading, Depository, Derivatives Trading, NBFC Activity, Wealth Management, Currency Trading, Insurance, Commodity Trading, Research &Advisory, Algo Trading Systems, PMS, Merchant Banking etc.

The digitization, unparalleled expertise and an excellent corporate strategy has resulted in an unprecedented growth of the company over the years. We have an experienced and dedicated team of professionals, catering to the needs of clients, delivering products at reasonable interest rates & timely.

Threats

- Change in Policy and Regulations.

- New entrants in the market and intense competition by existing players.

- Technology may become obsolete due to Innovation in Technology.

C. SEGMENT WISE AND PRODUCT WISE PERFORMANCE

During the financial year 2022-23, the company have performed its activities in various type of segments as mentioned in the Financial Statement.

The segment wise revenue and performance (on Standalone Basis) is described in the Financial Statement under Note No. 29 written as Disclosure as per Ind AS 108 "Operating Segments", that is the part of Annual Report.

The segment wise revenue and performance (on Consolidated Basis) is described in the Financial Statement under Note No. 33 written as Disclosure as per Ind AS 108 "Operating Segments", that is the part of Annual Report.

D. OUTLOOK

Indias GDP in FY23 grew at 7.2%, supported by strong growth in Q4FY23 at 6.1% which shows the resilience of Indian economy. FY22 posted a GDP growth of 9.1% because of low base effect of Covid-19 hit in FY21. The Indian economy performance in FY24 will continue to be sustained on macroeconomic, financial, and fiscal stability with easing of peak inflation in the past couple of quarters due to robust rabi crops, easing commodity prices and expectation of normal monsoon. The private sector is expected to perform well on account of strong corporate balance sheet which is also supported by Govt, capex push. The sectors can witness margin expansion with cooling of commodity prices, while revenue will be expanded on account of volume growth in the economy with key risk mainly of EL Nino to watch out. The RBI has forecasted GDP for FY24 at 6.5%. As per World Bank and IMF projections, India was set to remain the fastest growing economy in the FY24. World Bank has predicted Indias GDP growth for FY24 at 6.3% while IMF has forecasted the same at 5.9%.

NBFCs are leveraging their superior understanding of regional dynamics and customized products and services to expedite financial inclusion in India. Lower transaction costs, quick decision making, customer orientation and prompt service standards have typically differentiated NBFCs from banks. Small businesses, start-ups, and MSMEs/SSIs are dependent on funds offered by NBFCs. Considering the reach and expanse of NBFCs, they are well-suited to bridge the financing gap in a large country like India.

Indian Financial Sector will continue to perform well in FY24 due to improvement in asset quality and robust private sector credit growth. Though the outgoing challenges in the global economy especially in

US need to be watch as Fed stance on the interest rate hike continues. The brokerage industry generated a revenue of INR 382.00 Bn in FY 2023, expanding at a compound annual growth rate (CAGR) of -13.73% from FY 2019 to FY 2023. The industry gained popularity owing to a significant increase in trading activities. The financial brokerage market operates through different business verticals, such as full-service, discount, and hybrid brokerage.

Over the past 3 years, Indian broking industry has gone through with the rapid changes in the business environment, which leads to surge in customer growth. Digitization & disruption has changed the traditional way of business. Brokers are now more focused towards diversifying their revenue streams by adding value services like wealth-management, research, advisory, AMC, and financial planning are more focused to capture more customer engagement and helps to create wealth. Funds based activities like margin fundings are expected to be the sustained earning for the broking industry going forward.

The Company has recognized its role as a corporate citizen and continuously endeavors to adopt the best practices and the highest standards of corporate governance. We look forward to the future with renewed optimism as your Company will continuously focus on its resources, strengths and strategies to achieve its vision.

E. RISKSANDCONCERNS

Risk Management forms an integral part of the Companys operations. The Company continues to focus on a system based approach to business risk management. It broadly involves identification of potential risks, their analysis and impact as also risk mitigation initiatives to address the same. The Board of Directors of the Company oversees the risk management process.

F. INTERNAL CONTROL SYSTEMS AND THEIRADEQUACY

The Company has adequate systems of internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business.

G. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Financial performance of the Company for the year 2022-23 is described in the Directors Report under the head financial highlights.

H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company has undertaken employees development initiatives, which have very positive impact on the morale and team spirit of the employees. The company has continued to give special attention to human resourcesand overall development.

I. DETAILS OF KEY FINANCIAL RATIOS

The Company has identified the following ratios as applicable key financial ratios:

Ratio	31.03.2023	31.03.2022
(a) Capital to risk-weighted assets ratio (CRAR)	41	32
(b) Tier 1 CRAR	41	32
(c) Tier II CRAR	41	32
(d) Liquidity Coverage Ratio	2	3

J. CAUTIONARY STATEMENT

Statement in this Management Discussion and Analysis Report, Describing the Companys objectives, estimates and expectations may constitute Forward Looking Statements within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.

K. DETAILS OF ACCOUNTING TREATMENTS

Accounting treatment are mentioned in Financial Statement and Auditors report for the year ended 31.03.2023 that is the part of Annual Report.