B P Capital Ltd Management Discussions

INDUSTRY AND ECONOMY OVERVIEW INDIAN ECONOMY

The Indian economy in fiscal year 2024-25 experienced a growth rate of 6.5%, making it the fastest-growing major economy. Nominal GDP grew by 9.9%, while real GDP (at constant prices) increased by 6.5%, according to the Press Information Bureau. This growth is supported by various factors including a strong performance in the services sector, increased private consumption, and a rise in both domestic and foreign investments.

Indias economic journey over the past few years has been marked by remarkable growth and a steady rise in its position on the global stage. After overtaking the United Kingdom (UK) to become the fifth largest economy in Q1 FY23, India has continued this upward trajectory to surpass Japan in June 2025 to become the fourth largest economy in the world. With a nominal Gross Domestic Product (GDP) of Rs. 3,31,03,000 crore (US$ 3.78 trillion), Indias growth reflects a combination of strong domestic demand and policy reforms positioning the country as a key destination for global capital.

Further, India is projected to reach a GDP of Rs. 4,26,45,000 crore (US$ 5 trillion) by 2027 and is on course to surpass Germany by 2028. Rising employment and increasing private consumption, supported by rising consumer sentiment, will support GDP growth in the coming months.

Entering the new fiscal, Indias economic outlook is buoyed by three key engines: a resilient consumer base, a broadening investment landscape, and a digitally skilled, dynamic workforce. Urban spending is rising, private capital expenditures are showing green shoots, and Indias tech-adaptive talent is driving innovation and showcasing its global capabilities.

However, geopolitical tensions, global trade risks, and ongoing conflicts remain significant concerns. Inflationary trends indicate a decline, with retail headline inflation reducing from 5.4 percent in FY24 to 4.9 percent in April· December 2024. Capital expenditure has consistently improved, with an 8.2 percent year-on-year increase postgeneral elections (July-November 2024). India also maintains its position as the seventh-largest global exporter of services, reflecting its strong competitiveness in the sector.

Private consumption and investment remain crucial drivers of economic growth. Rural demand is showing signs of recovery, supported by higher agricultural output and government welfare measures. Urban consumption continues to be robust, driven by increased disposable incomes, a thriving services sector, and improved employment prospects. Meanwhile, government spending on social infrastructure, including healthcare and education, remains a priority to ensure inclusive growth.

Monetary and financial sector:

The Indian banking sector has shown resilience, with steady credit growth and improving profitability. The gross non-performing assets (GNPAs) of scheduled commercial banks fell to a 12-year low of 2.6 percent by September 2024, while the capital to risk-weighted asset ratio (CRAR) strengthened. Credit growth outpaced nominal GDP growth for two consecutive years, indicating a sustainable lending environment.

The stock markets outperformed emerging market peers despite election-driven volatility, and primary market mobilization from equity and debt reached INR 11.1 trillion, marking a 5 percent increase from FY 2023-24. Additionally, Indias insurance and pension markets experienced steady expansion, with total insurance premiums rising by 7.7 percent and pension subscriptions growing by 16 percent year-on-year. The growing fintech ecosystem is further enhancing financial inclusion, with digital transactions witnessing exponential growth across urban and rural areas.

MARKET OVERVIEW

Indias economy shows robust expansion, with real GDP for FY25 estimated at Rs. 1,87,97,000 crore (US$ 2.20 trillion), from Rs. 1,76,51,000 crore (US$ 2.06 trillion) in FY24 with a growth rate of 6.5%. This growth is driven by rising employment and stronger private consumption, supported by improving consumer sentiment, which is expected to keep the momentum going in the near future.

Trade remains a critical pillar of Indias growth story with exports reaching Rs. 37,31,000 crore (US$ 436.6 billion) in FY25, led by Engineering Goods (26.88%), Petroleum Products (13.86%) and Electronic Goods (8.89%). These exports helped the economy stay resilient during the pandemic when other sectors slowed. Union Minister of Commerce and Industry, Mr. Piyush Goyal projects exports to reach Rs. 85,44,000 crore (US$ 1 trillion) by 2030.

Indias ability to attract Foreign Direct Investment (FDI) has also strengthened. The country received record FDI inflows amounting to Rs. 4,21,929 crore (US$ 49.3 billion) in FY25 a 15% increase over FY24, supportedby a stable policy environment, a large domestic market and steady economic growth positioning the country as a key destination for global capital. This capital inflow also complements government plans for increased investment in infrastructure and asset-building projects to further boost economic growth.

Indias external economic position is improving. The current account deficit narrowed to Rs. 1,98,726 crore (US$ 23.30 billion), or 0.6% of GDP, in FY25 from Rs. 2,21,754 crore (US$ 26.00 billion), or 0.7% of GDP, in FY24. This improvement was due to higher net receipts from services and secondary income, according to the Reserve Bank of India (RBI).

RECENT DEVELOPMENTS

India is primarily a domestic demand-driven economy, with consumption and investments contributing to 70% of the economic activity. With Indias economy showing resilient growth, supported by strong domestic demand, policy reforms, and a healthy investment pipeline, several new projects and developments are underway across key sectors. This positive development across key sectors is evident from following key economic data points: ^•

• According to the Department for Promotion of Industry and Internal Trade (DPIIT), Indias cumulative FDI inflow stood at Rs. 91,45,988 crore (US$ 1.07 trillion) between April 2000-March 2025 with major share coming from Mauritius at Rs. 15,36,849 crore (US$ 180.19 billion) with a total share of 25%, followed by Singapore at 24% with Rs. 14,91,603 crore (US$ 174.88 billion), the United States (US) at 10% with Rs. 6,02,574 crore (US$ 70.65 billion), the Netherlands at 7% with Rs. 4,54,613 crore (US$ 53.3 billion), and Japan at 6% with Rs. 3,78,653 crore (US$ 44.39 billion).

• As of July 4, 2025, Indias foreign exchange reserves stood at Rs. 59,68,048 crore (US$ 699.74 billion).

• In May 2025, private equity (PE) and venture capital (VC) investments reached Rs. 20,470 crore (US$ 2.4 billion) across 97 deals.

• Foreign Institutional Investors (FII) outflows in FY25 were close to Rs. 1,27,000 crore (US$ 14.89 billion), while Domestic Institutional Investors (DII) bought in Rs. 6,00,000 crore (US$ 70.34 billion) in the same period.

• The HSBC India Manufacturing Purchasing Managers Index (PMI) rose to a 14-month high of 58.4 in June 2025 from 57.6 in May, indicating a strong improvement in manufacturing conditions. Robust domestic and international demand drove sharp increases in output and new orders, while employment saw a record rise as firms expanded their workforce to meet rising workloads. New export orders surged, marking the third- fastest growth since the survey began in 2005. Although input cost inflation eased, producer prices increased as companies passed on higher freight and labour costs to customers.

• India saw a robust 10.35% growth in passengers carried by domestic airlines at 431.98 lakh in FY25, from 391.46 lakh in FY24, according to the Directorate General of Civil Aviation (DGCA).

• India secured 39th position out of 133 economies in the Global Innovation Index 2024. India rose from 81st

position in 2015 to 39th position in 2024. India ranks third position in the global number of scientific

publications.

• In FY25, the Goods and Services Tax (GST) recorded its highest-ever gross collection at Rs. 22,08,000 crore (US$ 258 billion), registering a YoY growth of 9.4%. The average monthly collection stood at Rs. 1,84,000 crore (US$ 21.57 billion).

• In May 2025, the overall Index of Industrial Production (IIP) stood at 156.6 (base 2011-12= 100), reflecting a YoY growth of 1.2%. The mining, manufacturing and electricity sectors stood at 136.6, 154.3 and 216, respectively.

• According to data released by the Ministry of Statistics & Programme Implementation (MoSPI), Indias Consumer Price Index (CPI) - Combined inflation was 3.34% in March 2025 against 4.85% in March 2024.

• Indias wheat procurement for FY26 has reached 29.7 million tonnes as of May 22, 2025, the highest in

four years and up 13.5% YoY. Strong production of 115.43 million tonnes, favourable weather, and

bonuses above the Minimum Support Price (MSP) in key states have driven this growth. The Food Corporation of India expects procurement to hit 32.5 million tonnes by season end, raising stocks to 44 million tonnes, well above the 18.4 million tonnes needed for the Public Distribution System.

FUTURE OUTLOOK

Indias economy grew by 6.5% in FY25. With a 7.4% growth rate in Q4 FY25, with RBI projecting a growth rate of 6.5% in FY26 as well. Indias comparatively strong position in the external sector reflects the countrys positive outlook for economic growth and rising employment rates. In 2024, India rose to 15th place globally in FDI rankings and retained its position as South Asias top recipient.

In H1 FY25, Indias growth-focused approach was underscored by the governments capital expenditure outlay of Rs. 15,02,000 crore (US$ 176 billion), reinforcing its commitment to infrastructure-led development.

In the Union Budget of FY26, capital expenditure took lead by steeply increasing the capital expenditure outlay by 10% to Rs. 11,21,000 crore (US$ 131 billion) over Rs. 10,18,000 crore (US$ 119 billion) in FY25. Stronger revenue generation because of improved tax compliance, increased profitability of the company, and increasing economic activity also contributed to rising capital spending levels.

Indias total goods and service exports surged by 76% over the past decade, touching Rs. 70,36,425 crore (US$ 825 billion) in FY25, driven by strong performance in engineering goods, electronics, and pharmaceuticals. With a reduction in port congestion, supply networks are being restored.

With a proactive set of administrative actions by the government, flexible monetary policy, and a softening of global commodity prices and supply-chain bottlenecks, inflationary pressures in India look to be on the decline overall.

INDIAS NEAR-TERM OUTLOOK

The Indian economy is expected to maintain its position as the fastest-growing major economy in 2025 and 2026, with projections ranging from 6.2% to 6.7%. Several factors contribute to this optimistic outlook, including strong domestic demand, government investment in infrastructure, and a resilient financial sector.

Key Factors and Projections:

• Growth Rate:

Most forecasts predict a growth rate between 6.2% and 6.7% for both fiscal years 2025 and 2026.

• IMF Forecast:

The International Monetary Fund (IMF) projects a growth of 6.4% for both 2025 and 2026.

• Other Projections:

The Reserve Bank of India (RBI) expects 6.5% growth in FY 2025-26. Morgan Stanley

forecasts a 5.9% growth on a Q4-over-Q4 basis in 2025 and 6.4% in 2026, according to The Economic Times.

• Factors Boosting Growth:

Strong domestic demand, government capital expenditure, and a robust manufacturing sector are key drivers.

• Continued Government Focus:

The government is expected to continue its focus on infrastructure development, skill development, and digital initiatives.

• Challenges:

While positive, the Indian economy also faces challenges, including global economic uncertainty and potential trade tensions.

• Inflation:

Inflation is expected to remain within the targeted range, with retail inflation falling to 4.6% in 2024-25.

• Digital Transactions:

Digital transactions continue to surge, with UPI processing a massive number of transactions.

GOVERNMENT INITIATIVES

Over the years, the Indian government has introduced many initiatives to strengthen the nations economy. The Indian government has been effective in developing policies and programmes that are not only beneficial for citizens to improve their financial stability but also for the overall growth of the economy. Over recent decades, Indias rapid economic growth has led to a substantial increase in its demand for exports. Besides this, several of the governments flagship programmes, including Make in India, Start-up India, Digital India, the Smart City Mission, and the Atal Mission for Rejuvenation and Urban Transformation, is aimed at creating immense opportunities in India. In this regard, some of the initiatives taken by the government to improve the economic condition of the country are mentioned below:

• On July 5, 2025, the Union Cabinet approved the Rs. 1,00,000 crore (US$ 11.72 billion) Research, Development and Innovation (RDI) Scheme, launching long-term, low- or zero-interest funding via a special purpose fund under the ANRF to jump-start Indias R&D ecosystem and support deep-tech and startup innovation.

• On March 27, 2025, the Reserve Bank of India proposed doubling the investment cap for individual foreign investors in listed firms from 5% to 10%, with a combined foreign individual limit increasing to 24%, to counter Foreign Portfolio Investment (FPI) outflows.

• According to a report by Wood Mackenzie in January 2025, India, the US, and West Asia are expected to collectively add 100 Gigawatts (GW) of solar capacity by 2025, while China is anticipated to continue its leadership in the solar industry. ^•

• In July 2024, the Ministry of Finance held the Union Budget and announced that for 2024-25, the total receipts other than borrowings and the total expenditure are estimated at Rs. 32,07,000 crore (US$ 375 billion) and Rs. 48,21,000 crore (US$ 564 billion), respectively.

• In February 2024, the Finance Ministry announced the total expenditure in Interim 2024-25 estimated at Rs. 47,65,768 crore (US$ 571.64 billion) of which total capital expenditure is Rs. 11,11,111 crore (US$ 133.27 billion).

• On January 22, 2024, Prime Minister Mr. Narendra Modi announced the Pradhan Mantri Suryodaya Yojana. Under this scheme, one crore households will receive rooftop solar installations.

• On September 17, 2023, Prime Minister Mr. Narendra Modi launched the Central Sector Scheme PM- VISHWAKARMA in New Delhi. The new scheme aims to provide recognition and comprehensive support to traditional artisans & craftsmen who work with their hands and basic tools. This initiative is designed to enhance the quality, scale, and reach of their products, as well as to integrate them with Micro, Small and Medium Enterprises (MSME) value chains.

• On August 6, 2023, Amrit Bharat Station Scheme was launched to transform and revitalize 1,309 railway stations across the nation. This scheme envisages development of stations on a continuous basis with a long-term vision.

• On June 28, 2023, the Ministry of Environment, Forests, and Climate Change introduced the ‘Draft Carbon Credit Trading Scheme, 2023.

• From April 1, 2023, Foreign Trade Policy 2023 was unveiled to create an enabling ecosystem to support the philosophy of ‘Aatmanirbhar Bharat and ‘Local goes Global.

• To enhance Indias manufacturing capabilities by increasing investment and production in the sector, the government of India has introduced the Production Linked Incentive Scheme (PLI) for Pharmaceuticals.

B.P. CAPITALLIMITED OVERVIEW

During the year under review, the company continued to explore avenues for revival of its operations. B.P. Capital Limited was earlier registered as an NBFC with the Reserve Bank of India and had voluntarily surrendered its Certificate of Registration, which was cancelled by the RBI on 06 October 2016.

Subsequently, the company had initiated a merger process with Diamond Footcare Udyog Pvt. Ltd. to acquire its footwear business as a going concern. However, the scheme of merger was withdrawn by the transferor company, and the Honble NCLT, Chandigarh Bench, dismissed the petition as withdrawn vide its order dated 28 August 2019.

At present, the management is actively evaluating and shortlisting viable business opportunities to ensure long-term growth and sustainability. The areas under consideration include:

* Resumption of NBFC activities with a focus on retail and SME lending.

* Entry into trading and distribution of consumer goods.

* Strategic partnerships or joint ventures with established businesses to leverage brand value and market reach.

* Development of an e-commerce platform to cater to niche markets.

The management firmly believes that a diversified business model will help mitigate risks and generate sustainable revenues. Necessary groundwork, including market research, feasibility studies, and regulatory evaluations, is already in progress. The Board is confident that suitable business arrangements will be finalized in the near future to restart the companys operations and deliver enhanced value to stakeholders.

OPPORTUNITIES AND THREATS

In a vast country like India, with diversified economic structure, multi agency approach is adopted in the financial sector. Both commercial banks and Non Banking Financial Companies have come into play in shaping the economy of the country. NBFCs have an undeniable role in the Indian economy. Almost every sector of the economy has utilized HP and leasing as its source capital from NBFCs. During the last decade, NBFCs have undergone wide volatility and change as an industry and have been witnessing considerable business upheaval over the last decade because of market dynamics, public sentiments and regulatory environment.

The focus of the government should be on competitive and cooperative federalism which presents a great potential to attract skills, investment and technology.The Government should focus on those agendas of structural reforms which are yet to be finished after the demonetisation drive of high-value currencies.

SWOT ANALYSIS

B.P. Capital Limited was registered as NBFC Company with RBI. Your company had made an application to RBI to voluntary surrender its Certificate of Registration with RBI so as to discontinue its NBFC activities. Pursuant to the aforesaid application sent by the company to the RBI, the RBI vide its order dated 06.10.2016 had cancelled the Certificate of Registration of the Company. Thereafter, the company was in the process of merger with Diamond Footcare Udyog Pvt. Ltd. The Management of both the companies had decided to implement the plan of merger of the companies and transfer the Footwear business of Diamond Footcare Udyog Pvt. Ltd. to B. P. Capital Ltd. as a going concern along with its brand and goodwill. However, the Transferor Company ie, Diamond Footcare Udyog Private Limited had filed an application for withdrawal of the Scheme of merger between Diamond Footcare Udyog Private Limited and B.P. Capital Limited and the same had been allowed by the Honble NCLT, Chandigarh Bench vide its order dated August 28, 2019 and the merger petition was dismissed as withdrawn.

The management of the company is now exploring the possibilities of starting a new business including the NBFC businessand is putting necessary efforts in this respect so that the operations of the company can be started again.The management firmly believes that the company would be able to restart its business operations and is of the opinion that the new deals would be finalized soon. Since your company was earlier into NBFC business and as on date the management of your company is exploring the new business opportunities including restarting the NBFC business, a SWOT analysis of NBFC business is provided hereinbelow:

INTERNAL CONTROL SYSTEM

The Company has adequate internal audit and control systems. Internal auditors comprising of professional firm of Chartered Accountants has been entrusted with the job to regular conduct the internal audit and report to the management the lapses, if any. Both internal auditors and statutory auditors independently evaluate the adequacy of internal control system. Based on the audit observations and suggestions, follow up, remedial measures are being taken including review thereof. The Audit Committee of Directors in its periodical meetings, review the adequacy of internal control systems and procedures and suggests areas of improvements.

In view of the changes in Companies Act, the Company has taken additional measures from the financial year 201415 to strengthen its internal control systems. Some of the additional measures in this regard are strengthening background verification process of new joiners, whistle blower policy and strengthening the process of risk assessment.

The organization is well structured and the policy guidelines are well documented with pre defined authority. The Company has also implemented suitable controls to ensure that all resources are utilized optimally, financial transactions are reported with accuracy and there is strict adherence to applicable laws and regulations. The Company has put in place adequate systems to ensure that assets are safeguarded against loss from unauthorized use or disposition and that transactions are authorized, recorded and reported.

The Audit Committee of Directors in its periodical meetings, reviews the adequacy of internal control systems and procedures and suggests areas of improvements. Needless to mention, that ensuring maintenance of proper accounting records, safeguarding assets against loss and misappropriation, compliance of applicable laws, rules and regulations and providing reasonable assurance against fraud and errors will continue to remain central point of the entire control system.

HUMAN RESOURCES

Human resource is considered as key to the future growth strategy of the Company and looks upon to focus its efforts to further align human resource policies and processes to meet its business needs. The Company aims to develop the potential of every individual associated with the Company as a part of its business goal. Respecting the experienced and mentoring the young talent has been the bedrock for the Companys growth.

Human resources are the principal drivers of change. They push the levers that take futuristic businesses to the next level of excellence and achievement.

CAUTIONARY STATEMENT

Investors are cautioned that this discussion contains statements that involve risks and uncertainties. Words like anticipate, believe, estimate intend, will, expect and other similar expressions are intended to identify “Forward Looking Statements”. The company assumes no responsibility to amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events. Actual results could differ materially from those expressed or implied. Important factors that could make the difference to the Companys operations include cyclical demand and pricing in the Companys principal markets, changes in Government Regulations, tax regimes, economic developments within India and other incidental factors.