Industrial Investment Trust Ltd Management Discussions

Global economy has witnessed multiple shocks during the year. The economy demonstrated notable instability across regions during the financial year 2025. In its April 2025 World Economic Outlook, the IMF downgraded global growth forecasts for 2025 to 2.8%. While global GDP growth is projected to moderate, the extent of the slowdown and its impact vary by region and country.

This sharp downgrade reflects a global economy grappling with trade tensions and policy uncertainty. While advanced economies face slower growth, emerging markets are vulnerable to trade disruptions and constrained financial conditions.

The global economy for 2025 and 2026 remains clouded by multiple challenges with elevated public debt across several economies; protracted geopolitical tensions; heightened trade tensions; financial market volatility; and climate shocks. Inflation remains a concern in some areas, and policy uncertainty continue to pose challenges. Global growth is likely to face significant headwinds going ahead emanating from overlapping factors of trade-related tariff barriers, rapid currency swings and disintegrated capital/investment flows. Geopolitical tensions and trade uncertainties remain significant risks to the global economy.

INDIAN ECONOMIC SCENARIO:

During the Financial Year 2024-25, the Indian economy exhibited a consistent trajectory of growth despite enduring three turbulent years marked by a global pandemic, supply chain disruptions, elevated interest rates aimed at curbing high inflation, ongoing conflict between Russia-Ukraine. Amidst the apprehensive global situation, the Indian economy continues to remain hopeful. As per RBI estimates, GDP has grown by 6.5% for FY25.

Driven by accelerated consumer demand, a pick-up in capex, improved trade dynamic strong macroeconomic fundamentals, including services export growth, increased forex reserves, India emerged as the worlds fastest-growing major economy. India has also recorded a healthy growth in net GST revenue for FY25, indicating robust domestic economic activity. Furthermore, service exports surged 12.4% and FDI inflows grew by a significant 13.7%, reflecting Indias strengthening position in the global market and continued international confidence in Indias growth story and its attractive investment environment. The Government has made significant policy changes, paying closer attention to new and emerging industries. Bold policy resets, job creation, concerted efforts towards sustainable growth, have been the remarkable developments.

The Indian economy is poised to sustain its position as the fastest- growing major economy during 2025-26 as per the estimates of major multilateral agencies. RBI projects a similar Real GDP growth of 6.5% for FY26 also.

INDIAN CAPITAL MARKETS:

The year 2024-25 was a volatile year for the Indian stock markets. The capital markets exhibited a mixed performance, characterized by strong domestic buying, particularly in the financial sector and

mid-cap stocks, alongside increased investor participation and record market capitalization.

However, volatility persisted, with corrections occurring due to concerns over stretched valuations, subdued corporate earnings, and global uncertainties. Despite this, Indias markets generally outperformed peers in emerging markets.

As the year went on, the markets continued their upward trajectory, with minor corrections, including the fall after the national election results. In July, the Sensex touched 80,000, and by September, it had scaled the 85,000 mark. Thereafter, sentiment was shaken and selling pressures intensified. It was a time of big ups and downs, with different parts of the market performing very differently. The second half of the year exhibited sharp correction. There are several global and domestic reasons for the correction. The steep upward climb of the markets had raised investor concerns over stretched valuations. Economic indicators were also pointing towards a slowing growth momentum, especially in the July-September quarter.

Locally, Indian investors (Domestic Institutional Investors or DIIs) bought a lot of stocks, which helped cushion the impact of foreign investors selling their shares, especially when company earnings werent growing much. The number of IPOs increased by 32.1 per cent to 259 during April to December 2024 from 196 in the corresponding period of the previous year, Qualified Institutional Players (QIPs) emerged as the preferred equity fundraising mechanism for the corporates during FY25, with a 11.4 per cent share in total capital raised

BUSINESS OVERVIEW OF THE COMPANY & ITS SUBSIDIARIES:

Your Company is registered with Reserve Bank of India (RBI) as a Non-Deposit taking Non- Banking Financial Company (NBFC) and is classified as a NBFC-Investment and Credit Company (NBFC-ICC). Since October 01, 2022, it has been categorized as a Base Layer NBFC (NBFC-BL) pursuant to the Scale Based Regulation (SBR) put forth by the RBI. It is primarily a Holding Company, holding investments in its subsidiaries. The activities of the Company comprises of Investment in equity shares, quoted as well as unquoted, units of mutual funds, Fixed deposits with renowned banks, Treasury Bills, Corporate loans. The Committee of Investments / Loans is entrusted with the power to make investments and grant loans and the Board of Directors is apprised of the investments / loans made by the Company and monitors the deployment of resources on regular basis.

Subsidiary Companies :

The Company through its subsidiary viz., IITL Projects Limited (IITLPL) is in the business of real estate.

The two wholly-owned subsidiaries viz. (i) IIT Investrust Limited; and (ii) IITL Management and Consultancy Private Limited formerly known as IIT Insurance Broking and Risk Management Pvt. Ltd had surrendered their Stock Broking license and Insurance Broking license respectively in the year 2023-2024. Subsequent to the surrendering of the licenses the subsidiaries did not have any business activity.

The Management decided to merge these subsidiaries with the holding company as a part of consolidation strategy. The merger would result in operational synergies resulting in cost optimization, improved cash flows, more efficient utilization of human resources, reduction in multiplicity of legal and regulatory compliances.

The Company filed Scheme of Amalgamation with NCLT, Mumbai for merger of the subsidiaries with the holding Company. (details are provided in the Directors Report)

During the year under review, the Company has incorporated a subsidiary company, IITL Investment Advisors Private Limited (IIAPL) in Mumbai, Maharashtra, on January 16, 2025, inter-alia to conduct the business of launching AIF category II fund in real estate sector. IIAPL has not commenced any business till date.

RISKS AND CONCERNS:

As an NBFC, IITL is mainly exposed to credit, liquidity, operational, market and interest rate risk. At the highest level, the Board of Directors has established a Risk Management Committee (RMC), which assists the Board in maintaining an oversight and review of the risk management principles and policies, strategies, risk appetite, processes and controls. This is enabled by a robust governance system and review mechanisms which include quarterly risk management review. The RMC meets four times in a Financial Year.

Besides that, the equity markets become extremely volatile due to various other factors like policy changes, capital inflows/ outflows etc. The Company manages these risks by maintaining conservative financial profile and by following prudent business and risk management practices.

The Company manages the risks through proper frame work of policy and procedures approved by the Board of Directors from time to time. The Company has formulated a Risk Management Policy. The Risk Management Committee identifies, evaluates, analyses and prioritize risks in order to address and minimize such risks. This exercise facilitates identifying high level risks and implement appropriate solutions for minimizing the impact of such risks on the business of the Company. The Company is exposed to Credit risk which can be on account of loss of interest income and the Companys inability to recover the principal amount of the loan disbursed to the borrowers.

The assets are classified from time to time as performing and non-performing in accordance with RBI guidelines. Provisions are made on standard, sub-standard and doubtful assets at rates prescribed by RBI. An asset is classified as non-performing if any amount of interest or principal remains overdue for the number of stipulated days. The Company has an asset - liability management framework and maintains enough liquidity to meet its repayment obligations and emerging credit demand.

The subsidiaries of the Company manage their business risks by following proper risk management policies to avoid any adverse

impact on the holding company.

SIGNIFICANT FINANCIAL RATIOS

As per the provisions of SEBI Listing Regulations, 2015, the significant financial ratios are given below:

Particulars		2024-2025	2023-2024
Net Profit margin	%	24.08%	149.03%	Due to Fair Value Loss on Investments
Operating Profit margin	%	26.80%	150.59%
Current ratio	Times	21.99	9.22	Due to reduction in Current Liabilities
Return on Net worth	%	0.78%	12.55%	Due to Fair Value Loss on Investments
EPS		1.42	22.62
PE Ratio		153.38	9.06	Due to lower Earning Per Share

FINANCIAL PERFORMANCE:

The Company has earned a profit after tax of Rs. 321.13 lakhs during the year compared to profit of Rs. 5,100.28 lakhs in the previous year. The revenue from operations during the year is Rs. 1,496.27 lakhs compared to Rs. 3,767.43 lakhs in the previous year.

After initial recognition, the company measures its investments in quoted assets (except investment in Subsidiaries) at Fair Value through profit or loss account.

Net Loss on fair value changes for the above transactions in the current year is Rs. (758.94) lakhs compared to a profit of Rs. 1,420.10 lakhs in the previous year.

HUMAN RESOURCE:

Your company considers Human Resource as key drivers to the growth of the Company. The Company has performance based appraisal system. As on March 31, 2025 the total number of employees including subsidiaries was 25.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company maintains appropriate systems of Internal Control, including monitoring procedures, to ensure that all assets are safeguarded against loss from unauthorised use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances and are meant to ensure that all transactions are authorized, recorded and reported correctly.

The Company has established appropriate Internal control framework in its operations and financial accounting and reporting practices to ensure due adherence to the Internal Financial Control over Financial Reporting under section 143(3) of The Companies Act 2013.

The Board of Directors have adopted Related Party Transactions Policy and Whistle Blower /Vigil Mechanism for ensuring efficient conduct of the business of the Company, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the

timely preparation of reliable financial information.

The internal control is supplemented by an effective internal audit carried out by an external firm of Chartered Accountants. The management regularly reviews the findings of the Internal Auditors and takes appropriate steps to implement the suggestions and observations made by them. The management ensures adherence to all internal control policies and procedures as well as compliance with all regulatory guidelines. The Audit Committee of the Board of Directors reviews the adequacy of Internal Controls. The Internal Auditors are present at the Audit Committee Meetings where Internal Audit Reports are discussed alongside of management comments and the final observation of the Internal Auditor. All these measures assist in timely detection of any irregularities and remedial steps that can be taken to avoid any pecuniary loss.

OUTLOOK:

Global economy is at a pivotal moment entering an era of heightened uncertainty and unpredictability. The IMF has projected global growth to be around 3.0% for 2026.Several major economies are expected to experience slower growth compared to previous forecasts. This slowdown is attributed to various factors, including heightened trade tensions, policy uncertainty, and geopolitical

instability.

Indias economic outlook for 2025 and 2026 remains one of the brightest among major global economies, as highlighted by the IMF. Despite global uncertainties and downward revisions in growth forecasts for other large economies, India is set to maintain its leadership in global economic growth. Supported by strong fundamentals and strategic government initiatives, the country is well-positioned to navigate the challenges ahead. With reforms in infrastructure, innovation, and financial inclusion, India continues to enhance its role as a key driver of global economic activity. The IMFs projections reaffirm Indias resilience, further solidifying its importance in shaping the global economic future. Overall, Indias economy is well-positioned for growth, but uncertainties in global markets, financial volatility, and trade disruptions remain key risks.

DISCLAIMER:

The information and opinion expressed in this section of the Annual Report may contain certain statements, which the Management believes are true to the best of its knowledge at the time of its preparation. The Company and the Management shall not be held liable for any loss, which may arise as a result of any action taken on the basis of the information contained herein.

On Behalf of the Board of Directors,

Dr. Bidhubhusan Samal

Chairman

(DIN: 00007256)

Place: Mumbai

Date: August 06, 2025