Baid Finserv Ltd Management Discussions

Pursuant to Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis Report covering business performance and outlook is provided below:

Baid Finserv Limited is a non-systematically important non-deposit-taking Non- Banking Financial Company (NBFC) registered with the Reserve Bank of India and is classified as a NBFC-Investment and Credit Company (NBFC-ICC). Since 30 September 2022, it has been categorised as an Base layer NBFC (NBFC-BL) pursuant to the Scale Based Regulation (SBR) put forth by the RBI.

The Company has a diversified lending portfolio in MSME/ Mortgage loan (LAP) and financing of commercial vehicle including Car Loans, Commercial vehicles, Tractors, Construction Equipment with significant presence in both urban and rural India.

The Company got its equity listed on BSE Ltd. on April 04, 1995 and National Stock Exchange on January 20, 2023.

Over the years, Baid Finserv Limited has emerged as a leading player in the countrys NBFC sector

INDUSTRY STRUCTURE AND DEVELOPMENTS

Non-Banking Financial Companies (NBFCs) have become an important part of the financial system. They help give loans and other financial services to people who may not always get support from regular banks like small business owners, rural borrowers, or those with limited credit history. NBFCs often use new technology and local knowledge to design loan products that suit different types of customers.

Unlike traditional banks, NBFCs are more flexible and can quickly understand and meet the needs of their customers. This has helped them support financial growth in areas that banks may not fully reach.

In the last 10 years, NBFCs have grown faster than banks, showing how useful and strong they are.

But as they grow bigger and more important, its very important that they follow good rules, manage risks properly, and treat their customers fairly so that their growth remains healthy and long-lasting.

These institutions have complemented the traditional banking sector by offering financial services tailored to the unique needs of their clients, leveraging their extensive geographical reach and quick service delivery.

The future growth of the NBFC sector in India will be shaped by a confluence of factors, including policy support, regulatory oversight, and the continued digitisation of the financial value chain.

These elements will collectively contribute to the sectors ability to support the broader narrative of Indias economic expansion, making NBFCs indispensable to the nations growth story.

NBFCs (Non-Banking Financial Companies) play an important role in promoting inclusive growth in the country, by catering to the diverse financial needs of bank excluded customers. NBFCs do play a critical role in participating in the development of an economy by providing a fillip to transportation, employment generation, and wealth creation, credit in rural segments and to support financially weaker sections of the society. Emergency services like financial assistance and guidance is also provided to the customers in the matters pertaining to insurance.

Non-Banking Financial Companies ("NBFCs"), along with banks, have been the main stay for the financial services ecosystem in India. They have served as an alternative channel of credit flow to both retail as well as commercial sectors in a bank-dominated financial system like India, bringing in efficiency and diversity into financial intermediation. NBFCs play an important role in the Indian financial system by complementing and competing with banks, specializing in credit delivery to a wide variety of segments.

NBFCs aid economic development in the following ways:

Mobilization of Resources - It converts savings into investments Capital Formation - Aids to increase capital stock of a company Provision of Long-term Credit and specialized Credit Aid in Employment Generation Help in development of Financial Markets Helps in Attracting Foreign Grants

Helps in Breaking Vicious Circle of Poverty by serving as governments instrument. Supporting Small and Medium Enterprises (SMEs) Boosting Consumption and Investment Providing Loans to the Underserved Reducing Pressure on Banks

Non-banking financial companies expect the government to continue pumping in liquidity as it will boost the sectors employment, and direct disposable income and consumption.

NBFC Role in Revolutionizing the Economy

Growth: In terms of year-on-year growth rate, the NBFC sector widely contributing to the economy every year. On average, this segment grew by 20% every year, in its initial stages. Despite the slowdown in the economy and various setbacks faced in the last few years, the sector is still growing and enhancing operations.

Profitability: NBFCs have been more profitable because of lower costs involved for its operations and serve customers from different segments.

Enhancing the Financial Market: An NBFC caters to the urban and rural poor companies and plays a complementary role in financial inclusion. 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 stability to the financial sector.

Promoting Inclusive Growth: NBFCs in India cater to a wide variety of customers both in urban and rural areas. They finance projects of small-scale companies, which is important for the growth in rural areas. Microfinance provided by them plays an important role to attain stable financial inclusions.

Upliftment in the Employment Sector: With the growth in operations of the small industries and businesses, the policies of NBFCs are uplifting the job situation. More opportunities for employment are arising with the influence of the NBFCs in the private as well as government sectors. The business activities in the private sector provide more employment opportunities and occupation practices. And NBFC plays a key role in their growth and stability.

Mobilization of Asset: Due to their easier norms for investing, these companies create a balance between intra-regional income and asset distribution. Turning the savings into investments, these companies contribute to economic development. Proper organization of capital helps in the development of the trade and industry, leading to economic progress. They operate not intending to maximize their profit and are, therefore, engaged in activities that generate zero or very low revenue.

Financing for Long-Term: NBFC plays a key role in providing firms with funds through equity participation. NBFCs supply long-run credit to the trade and commerce industry. They facilitate to fund large infrastructure projects and boost economic development. Long-term finance permits growth with stable and soft interest rates.

Innovative Products: NBFCs, by being flexible in terms of lending and investment opportunities than banks, are more proactive in innovating financial products. This facilitates their growth in an exceedingly prudent manner. They fine-tune their selling campaigns in regard to their target customers. These corporations are the game changers within the developing economy. For instance, the factorization & bill payment service has been revolutionized.

Over the past few years, NBFCs have contributed significantly in expanding as well as deepening the formal financial services sector, providing credit to market segments usually neglected by banks or when banks were unable to provide credit, given their own constraints.

NBFCs provide an alternative to bank financing, and thus, bridge the credit gap emanating from traditional banks limitations to reach out to the financially active but under banked segments of the economy. The Indian NBFC sector has grown significantly ahead of aggregate credit over the last decade, delivering credit to customers not served by banks, developing niche credit segments and pricing risks appropriately.

The NBFC segment has witnessed considerable growth in the last few years and is now being recognized as complementary to the banking sector due to implementation of innovative marketing strategies, introduction of tailor-made products, customer-oriented services, and attractive rates of return on deposits and simplified procedures, etc.

NBFCs have been at the forefront of catering to the financial needs and creating livelihood sources of the so-called un-bankable masses in the rural and semi-urban areas. Through strong linkage at the grassroots level, they have created a medium of reach and communication and are very effectively serving this segment. Thus, NBFCs have all the key characteristics to enable the government and regulator to achieve the mission of financial inclusion in the given time. Your Company is a Non-Banking Financial Company engaged in the business of vehicle financing and loan against property.

Loan against property is a flourishing segment with increased demand, simultaneously complimented with huge supply chain. However, this segment still remains untapped and with good scope for growth.

BUSINESS

The Company provide financing solutions to its customers that offer the best practical economics this has driven us to pioneer concept of valuing aspirations and dreams more than documentation and credit history pertaining to our customers.

Commercial Vehicle Loan:

The Company provides loan to first time vehicle users and used vehicle. We offer funding for most types of commercial vehicles including buses, trucks, tankers, trailers, light commercial vehicle and small commercial vehicles at attractive rates of interest through our Commercial Vehicle Loan. We provide the facility of balance transfer as well as top up loans.

Key Elements:

? Transparent process and fair dealings ? Easy & Simple documentation

? Affordable Commercial Vehicle Loan Interest Rates ? Customized Solutions as per the need of customers

Loan against Property:

The Company provides customized Loan against Property to salaried and self-employed individuals.

Benefits of Loan against Property:

? High value loans made affordable ? Hassle free loan disbursal ? Flexible Tenor ? Easy balance transfer facility ? Online Account Management

MSME Loan:

The Company provides loan to MSME sector to finance working capital and/or capital expenditure requirements of businesses involved in the trading, manufacturing and service sectors.

Since 2015, the Company has forayed into MSME Loans (mortgage loans to SME sector). Presently SME loans portfolio comprises more than 67.26% of total portfolio of the company and its share in overall exposure is growing.

The pre-owned commercial vehicle and loan against property segment is the key segment. There pre-owned trucks being affordable for small, aspiring owner-cum-drivers are preferred to hold them initiate their entrepreneurial journey as a small road transport operator. The Company empowers such new drivers with affordable financing and advice regarding commercial vehicles. The Company continued to prudently manage its Asset Liability Management (ALM) with a strategy of raising long-term borrowings.

Construction Equipment

The Indian construction equipment market is on an upward trajectory, supported by government-led infrastructure projects and the integration of modern technologies. As the industry transitions towards sustainable solutions, the adoption of electric and hybrid models is expected to gain traction, ensuring long-term efficiency and environmental sustainability.

OUTLOOK ON OPPORTUNITIES

1. Expanding Financial Access

NBFCs have a big chance to grow by giving loans in rural and semi-urban areas where many people still dont have easy access to credit. Helping people in these regions can grow local businesses and improve their livelihoods.

2. Growing Need for MSME Loans

Indias small and medium-sized businesses (MSMEs) are growing fast. They need more funding to expand. This creates a big opportunity for NBFCs to offer special loans designed for different industries.

3. Going Digital

NBFCs can grow faster by using new technology. Working with fintech companies, using AI to decide who qualifies for loans, and connecting with customers through mobile apps will make operations smoother and reach more people.

OUTLOOK ON THREATS, RISKS AND CONCERNS

Being a NBFC company, our Company is exposed to specific risks that are particular to its business and the environment within which it operates, including interest rate volatility, economic cycle, credit risk and market risk. The most important among them are credit risk, market risk and operational risk. The measurement, monitoring management of risk remains key focus areas for the company.

1. Changes in Rules

If the Reserve Bank of India (RBI) makes rules stricter for NBFCs, it could make their work harder and cost more money to stay compliant.

2. Fluctuating Interest Rates

If interest rates go up, it will cost NBFCs more to borrow money. This can reduce their profit from lending to customers.

3. Rising Competition

NBFCs now face more competition from banks, digital lenders, and new-age fintech startups. This could reduce their share of the market and force them to lower their prices or profits.

4. Economic Slowdowns

If the overall economy slows down, especially in key areas like transport and small businesses, many borrowers might find it hard to repay loans. This increases the risk of defaults (bad loans).

5. Handling Bad Loans

One of the biggest challenges is managing Non-Performing Assets (NPAs) loans that are not being repaid on time. NBFCs need to be very careful and smart in how they give loans to avoid too many defaults.

6. Credit Risk

The Company has a strong governance framework and it ensures that the Board of Directors and its committees approve risk strategies and delegate appropriate credit authorities. Its robust underwriting practices and continuous risk monitoring ensure that portfolios stay within acceptable risk levels. Company continues to invest in increasing collections capacity.

7. Market Risk

To effectively manage market risk on its investment portfolio, Company continues to follow a prudent investment policy.

8. Operational Risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, systems or human factors, or from external events. Operational risk is inherent in business activities, as well as related support functions. The goal is to keep operational risk at an appropriate level relative to the characteristics of its businesses, the markets in which it operates and the regulatory environment.

The Company has in place an internal Operational Risk Management Framework to manage the operational risk in an effective and efficient manner. This framework aims at assessing and measuring the magnitude of risks, its monitoring and mitigation.

The businesses, along with support units and operations, play a critical part in managing operational risk on a daily basis, in addition to implementing internal control-related policies and procedures.

The Company is committed to best benchmarking in good corporate governance, which promotes the long-term interests of all stakeholders which help in building public trust in the Company.

The Company believes that managing risks helps in maximizing returns. The risk management framework is reviewed periodically by the Board and the Audit Committee.

Mitigation measures taken by the Company:-

Company adopts a systematic approach to mitigate risks associated with accomplishment of its objectives, operations, revenues and regulations;

1. Strengthening Credit Checks

The company will improve loan approval process by checking credit scores, income documents, and repayment history more carefully. This helps in avoiding loans to risky borrowers.

2. Diversifying Loan Portfolio

The company is spreading their loans across different sectors and regions (like retail, MSME, rural, transport, etc.) so that if one sector struggles, others can balance the risk.

3. Robust Recovery Mechanisms

The Company have improved their collection and recovery systems including using legal options, outsourcing recovery agents, and working with borrowers for repayment plans.

4. Liquidity Management

To ensure smooth operations even in difficult times, The company maintain a liquidity buffer (extra cash or liquid assets) and arrange multiple sources of funding like term loans, NCDs, and bank lines.

5. Training and Skill Development

The company is arranging training of their staff regularly on risk assessment, regulatory changes, and customer service to keep operations professional and efficient.

6. Customer Awareness Initiatives

The official of company is helping borrowers understand loan terms, repayment schedules and other terms reducing defaults caused by lack of knowledge.

PRODUCT WISE PERFORMANCE

The Company mainly has two products, viz. financing of vehicles and providing loan against property. The performance from both the sectors as on March 31, 2025 is as follows:

		(Amount in Lakhs.)
Particulars	Vehicle	Loan against property
Asset Under	12,973.06	26,652.87
Management

INTERNAL CONTROL SYSTEM

The Company has a well-established internal financial control and risk management framework, with appropriate policies and procedures, to ensure the highest standards of integrity and transparency in its operations and a strong corporate governance structure, while maintaining excellence in services to all its stakeholders. Company is having adequacy on such internal control systems also in below paragraph to ensure:

(a) The orderly and efficient conduct of business, including adherence to policies (b) Safeguarding of assets and ensure operational excellence (c) Prevention and detection of frauds/errors (d) Accuracy and completeness of the accounting records and (e) Timely preparation of reliable financial information.

The Company has instituted the three lines of defence model, viz. (i) management and internal control measures, (ii) financial controls, risk management practices, security measures and compliance oversight, and (iii) a robust internal checks and balances providing the third level of defence.

The Companys internal controls and risk management practices are validated periodically with suitable review mechanisms in place. The Internal Control over Financial Reporting is the bedrock for the risk and control framework for the Company. The Companies Act, 2013 requires the Board of

Directors and statutory auditors of the Company to comment on sufficiency and effectiveness of internal controls.

The Company has appointed M/s. Shiv Shankar Khandelwal & Co., Chartered Accountants (Firm Registration No. 006852C) as an internal auditor to conduct internal audit and to ensure that all transactions are correctly authorized and reported. The reports are reviewed by the Audit Committee of the Board. Wherever necessary, internal control systems are strengthened, and corrective actions initiated.

INFORMATION TECHNOLOGY

Our Company has taken further steps in its technology roadmap toward future readiness and digitalization. The Company has been using the best possible information technology as a management tool for internal control. The Company continues to invest reasonably into information technology for monitoring operation. The Company has procured services of Jaguar software which provides end to end solution of Loan Originating System (LOS) to final accounts and balance sheet. All our Branches are connected through the web based version of this software which enables us to get real time connectivity and gives access to all branches to view various statements and customer ledger etc. The organization has been strengthening its enterprise platform benefits through the use of mobile application development platform.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Snapshot of the Companys financial performance for the last three years is as follows:-

Year	Total Revenue	Revenue growth %	Profit after Tax (PAT)	PAT Change %	EPS	EPS Change %
2024-25	8,254.58	24.39%	1,344.55	4.03%	1.12	3.70%
2023-24	6,635.83	19.06%	1,292.40	24.52%	1.08	11.34%
2022-23	5,573.46	11.35%	1,037.89	18.11%	0.97	(86.74)%

Total asset under management (AUM) stood at Rs. 39,625.93 for the financial year ended on March 31, 2025 against Rs. 36,571.83/- for the financial year ended on March 31, 2024.

HUMAN RESOURCE MANAGEMENT

Human resources are a valuable asset for any organization. We ensure a workplace that is fair, equitable, enabling and responsive to the needs and aspirations of our employees so that they can realize their full potential and contribute their best to the organization. The Company is committed to create an environment of constant learning and development, drive an effective and transparent performance culture and build a culture of appreciation & transparent communication. We constantly strive to upgrade the skills of employees and give them the edge to compete in the dynamic market and become future ready. The Company is giving emphasis to upgrade the skills of its human resources. This is in keeping with its policy of enhancing the individuals growth potential within the framework of corporate goals. Our employee-friendly and inclusive policies, health and fitness benefits ensure safe and secured environment for employees at workplace. Total number of employees as on 31^st March 2025 stood at 234.

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 detailed explanations therefore, including:

There were no significant changes in the key financial ratios as compared to the immediately previous financial year, details of the same are as follows:

Particular	F.Y. 2023-24	F.Y. 2024- 25	Change in %	Reason (if more than 25% change)
(i) Debtors Turnover	--	--	--	--
(ii) Inventory Turnover	--	--	--	--
(iii) Interest Coverage Ratio	1.81	1.65	-8.84%	--
(iv) Current Ratio	1.51	1.43	-5.04%	--
(v) Debt Equity Ratio	1.45	1.43	-1.39%	--
(vi) Operating Profit Margin (%)	29.39%	23.72%	-19.29%	--
(vii) Net Profit Margin (%)	19.47%	16.28%	-16.38%	--

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH

(Rs. in Lakhs)

Particulars	2023-24	2024-25
Share Capital	2,401.37	2,401.37
Special Reserve	1,529.04	1,797.95
Securities Premium	7,053.37	7,053.37
Amalgamation Reserve	93.33	93.33
General Reserve	221.11	222.70
Surplus in P & L	5,383.37	6,338.94
Less: Fictitious Asset	551.19	631.86
Total Net worth	16,661.65	17,885.08
PAT	1,292.40	1,344.55
Return on Net worth	7.75%	7.51%

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be ‘forward-looking statements within the meaning of applicable laws and regulations. This report contains statements extracted from reports of Government Authorities / Bodies, Industry Associations etc. available on the public domain which may involve risks and uncertainties including, but not limited to, economic conditions, government policies, dependence on certain businesses and other factors. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements.

This report should be read in conjunction with the financial statements included herein and the notes thereto. The Company does not undertake to update these statements.

Date: August 07, 2025

	For and on Behalf of The Board
Place: Jaipur	For Baid Finserv Limited
Registered. Office: "Baid House",
IInd Floor, 1, Tara Nagar, Ajmer
Road, Jaipur-302006

Sd/-Panna Lal Baid Chairman and Managing Director DIN: 00009897