F Mec International Financial Services Ltd Management Discussions

("MDAR")

F Mec Internationaf Financial Services Limited (or the Company) is a Non-Deposit-taking Non-Banking Financial Company (NBFC-ND) registered with the Reserve Bank of India (RBI) and is engaged in the business of lending. The Company has a diversified lending portfolio across retail, SMEs and commercial customers with significant presence in urban and rural India.

1. Global Economy

Global Growth is projected at global growth at 3.0% for 2025 and 3.1% for 2026, an upward revision from the April forecast. This increase reflects factors like stronger front-loaded trade ahead of potential tariffs, lower effective tariff rates, improved financial conditions, and fiscal expansion in some economies. However, the IMF notes that risks remain tilted to the downside, and overall growth is still below pre-April 2025 forecasts due to the ongoing impact of trade tensions. Inflation rates are expected to decline but at a slower pace than anticipated, and downside risks remain, particularly from trade tensions and volatile financial markets.

The average age of the worlds population is projected to increase by 11 years between 2020 and the end of the century. However, improvements in health and longevity have significantly enhanced the quality of life in older age. Healthy aging is projected to add 0.4% to global GDP growth between 2025 and 2050.

*Source: IMF Word Economic Outlook, 2025

2. Indian-Economy

Indias economy continues to grow at a steady and confident pace, standing out as the fastest growing major economy in the world. In 2024-25, real GDP growth was estimated at 6.5 per cent. The Reserve Bank of India expects the same rate to continue in 2025-26. Growth next year will be even stronger, and the momentum over the next two years is set to lift GDP beyond its pre-COVID trend. The pandemic-induced gap will not just be closed, it will be decisively surpassed.

Indias resilient economic growth, driven by robust private consumption, structural reforms, and strategic investments, positions it as a global leader amidst economic uncertainties. With demographics supporting its trajectory, Indias outlook remains positive. The countrys ability to leverage these factors ensures it will continue to play a pivotal role in shaping the global economic landscape.

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. By 2030, India is set to become the worlds third-largest economy with a projected GDP of $7.3 trillion.

3. Industry Overview

The NBFC sector in India has witnessed remarkable transformations since its emergence, with segments such as housing finance, microfinance and consumer finance contributing to its expansion. This growth is driven by various factors, such as a rising middle class, enhanced financial inclusion and positive policy interventions. NBFCs have emerged as the crucial source of finance for a large segment of the population, including SMEs and economically unserved and underserved people. They have managed to cater to the diverse needs of the borrowers in the fastest and most efficient manner, considering their vast geographical scope, understanding of the various financial requirements of the people and extremely fast turnaround times.

One of the key drivers for the expansion of the NBFC sector is the escalating demand for credit from the MSMEs. The collaborative efforts of NBFCs and digital lenders are contributing to the sectors overall dynamism and its ability to serve as a vital source of financial support for diverse economic entities, especially the MSMEs facing obstacles in accessing traditional bank loans.

Also, the regulatory landscape for NBFCs has witnessed significant changes, particularly with the Reserve Bank of India (RBI) tightening rules for consumer lending. The new rules mandate regulated entities to establish board-approved limits for consumer credit exposure, emphasizing strict adherence and continuous monitoring by the Risk Management Committee.

Looking ahead to 2026, the NBFC sector in India is poised for continued growth, driven by several factors. The governments commitment to financial inclusion, coupled with the sectors digital transformation, is expected to contribute to sustained demand for NBFC services.

4. Business review

F Mec International Finance Limited- Non-Deposit taking Non- Systemically Important ("NBFC"), is a professionally managed Company. It focuses on four broad categories: (I) consumer lending, (ii) SME tending, (iii) commercial lending, (iv) rural lending

The financial performance of your Company during the financial year ended March 31, 2025, remained healthy with the Total Net Revenue (Net Interest Income Plus Other Income) to Rs. 664.25 Lakhs as compared to Rs. 375.06 Lakhs in FY 2023-2024.

The profit after tax (PAT) for the FY 2024-2025 increased to Rs. 161.85 Lakhs as compared to Rs. 77.60 Lakhs in FY 2023-2024. However, reflecting on steady growth in the balance sheet, Total Liabilities (including capital and reserves) increased to 27.40 crore as on March 31, 2025 to 14.95 crore as on March 31, 2024 whereas Total Advances (Net) stood at Rs. 23.77 crore a growth in Fy 2024-25 over 13.41 FY 2023-24.

The Earning per Share (EPS) of the Company for the FY 2024-2025 also increased to Rs 1.8203 per share as compared to Rs. 1.1302 per share in FY 2023-2024.

5. RESPONSIBILITY FOR THE MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Board of Directors have reviewed the Management Discussion and Analysis prepared by the Management, and the Independent Auditors have noted its contents. Statement in this report of the Companys objective, projections, estimates, exceptions, and predictions are forward looking statements subject to the applicable laws and regulations. The statements may be subjected to certain risks and uncertainties. Companys operations are affected by many external and internal factors which are beyond the control of the management. Thus, the actual situation may differ from those expressed or implied. The Company assumes no responsibility in respect of forward looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.