Gowra Leasing & Finance Ltd Management Discussions

This Annual Report for 2024-25 provide an integrated assessment of your companys financial performance. It also outlines relevant information on the Companys strategy, governance, risks and prospects to offer better insights into its activities and progress, reporting principles and framework

BACKGROUND

Gowra Leasing & Finance Limited (‘GLFL or ‘the Company) is a Non-Systematically Important Non-Deposit taking NBFC registered with the Reserve Bank of India (RBI) and comes under the Base Layer (BL) with reference to Scale Based Regulation (SBR) of RBI. Your company is essentially a loan company categorized by Reserve Bank of India with asset size of less than Rs. 100 Crores. The main business of the company is to extend loans, advances etc.

MACROECONOMIC OVERVIEW

The Indian Economy in the FY 2024-25 has marked with significant geopolitical tensions, inflationary pressures and volatile global financial market. Despite turbulences and conflicts around the globe, Indian economy demonstrated resilience, achieving robust GDP growth at 6.5% for FY 2024-25 and emerged as 4^th largest economy of the World.

OPPORTUNITIES AND THREATS

NBFCs are an important section Indias financial sector, and has continue their growth during the year by better understanding of regional dynamics and customised products and services. The factors like lower transaction costs, quick decision making and prompt service standards have given edge to NBFCs from banks. Considering the reach and expanse of NBFCs, they are well-suited to bridge the financing gap in a large country like India.

Funding and liquidity management are major challenges faced by NBFCs, as they do not have the luxury of using customer deposits for lending activities unlike banks. They depend primarily on own fund and borrowing from other Companies and Banks which includes various restriction to credit. Balancing various funding sources, managing liquidity effectively and sustaining profitability are ongoing challenges for NBFCs in India. Lending business always has risk of non-performing assets and long pending judgements from the courts. Apart from NPAs, additional threats also exist in the form of growing number of fintech companies and other competitive NBFCs.

FUTURE OUTLOOK

NBFCs are growing at a higher rate than Indias overall economic growth and it is expected to continue its growth at a faster pace. NBFCs has played an important role in Indias financial system and is currently well positioned to continue expanding. They have provided customised financial products and solutions that are delivered efficiently to fulfil customer aspirations. The lending opportunities are sufficiently available in current scenario but your company extend the credits cautiously after thorough scrutiny of repaying capacity and the integrity of the borrowers.

The Company has raised Rs. 11.78 crores through preferential issue in the FY 2024-25 which has been efficiently deployed in the lending business and has positively affected the revenue and profit of the Company.

To meet the further market demand for funds, in the FY 2025-26 the Company is proposing for preferential issue of 24,97,500 number of Equity shares at the rate Rs. 120/- per share amounting to aggregate issue size of Rs. 29,97,00,000 /-.

RISK MANAGEMENT

Risk management is a crucial for survival and success of financial business. NBFCs are exposed to credit risk, liquidity risk, market risk and interest rate risks. Comprehensive risk assessment and mitigation is important part of risk management. Companys risk management framework is well embedded and continually reviewed by the Risk Management team. It enables the Board, to identify, evaluate and monitor principal risks and where possible, actively mitigate the risks that could affect the achievement of the Companys target. As a process, risks associated with the finance business are identified. The Board is satisfied that there are adequate systems and procedures in place to identify, assess, monitor and manage risks.

INTERNAL CONTROL

The Company has put in place an adequate internal control system to safeguard all its assets and ensure operational efficiency. The Companys well-defined organizational structure, documented policy guidelines, ensure efficiency of operations, compliance with internal policies and applicable laws and regulations as well as protection of resources. The Company has reputed audit firm as internal auditors to conduct internal audit. The reports are reviewed by the Audit Committee of the Board. Wherever necessary, internal control systems are strengthened, and corrective actions initiated.

PERFORMANCE HIGHLIGHTS

During the year your company earned a revenue of Rs. 767.83 Lakhs with a net profit before tax as Rs. 584.41 Lakhs.

DIVIDEND

The Company has not declared dividend for the year ended 31st March, 2025.

NON-PERFORMING ASSETS

The Company does not have Non-Performing Assets for the year ended 31st March, 2025.

HUMAN RESOURCES

Your Company firmly believes that Human Capital is its most important asset. It also strives hard to retain its experienced team rich in domain expertise as it recognizes their importance in the growth of the Company. Your company is committed to provide right opportunities to employees to realize their potential.

MATERIALITY AND SCOPE

This report includes information which is material to all stakeholders of the company and provides an overview of its business and related activities. The report discloses matters that substantially impact or affect the Companys ability to create value.

CAUTIONARY STATEMENT

The Board of Directors have reviewed the Report. Statements 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.

For and on behalf of the Board of Directors

	Sd/-	Sd/-
Place: Secunderabad	Gowra Lakshmi Prasad	Gowra Srinivas
Date: 19-07-2025	Director	Managing Director
	(DIN: 00268271)	(DIN: 00286986)

ANNEXURE-II

NOMINAITON AND REMUNERATION POLICY

1 . INTRODUCTION

Gowra Leasing & Finance Limited (GLFL) recognizes the importance of aligning the business objectives with specific and measurable individual objectives and targets. The Company has therefore formulated the remuneration policy for its Directors, Key Managerial Personnel and other employees keeping in view the following objectives:

a) Ensuring that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate, to run the company successfully.

b) Ensuring that relationship of remuneration to performance is clear and meets the performance benchmarks.

c) Ensuring that remuneration involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

2. SCOPE AND EXCLUSION:

This Policy sets out the guiding principles for the Nomination and Remuneration Committee for recommending to the Board the remuneration of the Directors, key managerial personnel and other employees of the Company.

3. TERMS AND REFERENCES:

In this Policy, the following terms shall have the following meanings:

"Director" means a Director appointed to the Board of the Company. "Key Managerial Personnel" means:

(i) the Chief Executive Officer or the Managing Director or the manager; (ii) the Company Secretary; (iii) the Whole-Time Director; (iv) the Chief Financial Officer; and (v) such other officer as may be prescribed under the Companies Act, 2013

"Nomination and Remuneration Committee" means the committee constituted by GLFL Board in accordance with the provisions of Section 178 of the Companies Act, 2013 and SEBI (LODR) Regulation, 2015.

4. POLICY:

A. Criteria for Appointment of Non-Executive Directors & Independent Directors

a) The Non-Executive Directors shall be of high integrity with relevant expertise and experience so as to have a diverse Board with Directors having expertise in the fields of marketing, finance, taxation, law, governance and general management.

b) In case of appointment of Independent Directors, the Nomination & Remuneration (N&R) Committee shall satisfy itself with regard to the independent nature of the Directors vis-?-vis the Company so as to enable the Board to discharge its function and duties effectively.

c) The N&R committee shall ensure that the candidate identified for appointment as a director is not disqualified for appointment under section 164 of the Companies Act 2013.

d) In case of re-appointment of Non-Executive Directors & Independent Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level.

Remuneration of Non-Executive Directors & Independent Directors

i. A Non-Executive Director & Independent Director shall be entitled to receive sitting fees for each meeting of the Board or Committee of the Board attended by him, of such sum as may be approved by the Board of Directors within the overall limits prescribed under the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 including any amendment or modification thereto as may be in force;

ii. The Independent Directors of the Company shall not be entitled to participate in the Stock Option Scheme of the

Company, if any, introduced by the Company.

B. Criteria for Appointment of Executive Directors and Key Managerial Personnel (KMP)

For the purpose of appointment of any Executive Director and Key Managerial Personnel (KMP), the N&R Committee shall identify person of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee shall also ensure that the incumbent fulfils such other criteria as laid down under the Companies Act, 2013 read with Rules made there under or other applicable laws.

Remuneration of Executive Directors & KMP

i. The Board, on the recommendation of the Nomination and Remuneration (N&R) Committee, shall review and approve the remuneration payable to the Executive Directors of the Company within the overall limits prescribed under Companies Act, 2013 including any statutory modification or amendment thereto as may be in force, subject to approval by the shareholders in General Meeting.

ii. The Board, on the recommendation of the Nomination & Remuneration Committee, shall also review and approve the remuneration payable to the Key Managerial Personnel of the Company.

iii. The remuneration of the Executive Directors and KMP may be broadly divided into fixed and variable components. The fixed component comprises salary, allowances, perquisites, amenities and retirement benefits. The variable component comprises performance bonus.

D. Remuneration to Other Employees:

i. Employees shall be assigned grades according to their qualifications and work experience, competencies as well as their roles and responsibilities in the organization. Individual remuneration shall be determined within the appropriate grade and shall be based on various factors such as job profile, skill sets, seniority, experience and prevailing remuneration levels for equivalent jobs.

ii. The remuneration may be divided into two components viz. fixed component comprising salaries, perquisites and retirement benefits and a variable component comprising performance bonus.