Jagsonpal Finance & Leasing Ltd Management Discussions

Industry structure and development

Indian economy has demonstrated resilience and maintained healthy macro-economic fundamentals, despite global economic challenges. There has been strong growth across sectors. The accelerated pace of economic reforms and strong domestic consumption have led to higher and sustainable growth of the Indian economy and strengthened its position in the world. In the three quarters of the fiscal year, Indias GDP growth touched 8.2% year over year (YoY) in these quarters. The geopolitical tensions, supply chain disruptions, high inflation, and tighter monetary conditions were some of the challenges for economic recovery.

Due to the business scenario, it has become extremely competitive & difficult to carry on with business associated with Fintech Companies in any significant manner. The old Management was looking for the appropriate time to re - enter the business as soon as the business climate & economy improve. Hence the business was taken over by new management. Fintech have grown rapidly in India and globally due to financial inclusion initiatives, Specialized lending (e.g., MSMEs, agriculture, personal loans), and technology adoption. The new management is focused on Digital transformation i.e., Fintech partnerships and app-based lending and Customized products i.e., Tailored for niche segments (e.g., education loans). Lending industry experienced significant recovery and growth in 2024-25, marked by increased domestic and international demand, increased digitization like e-KYC, AI-driven credit assessment. Digital-first NBFCs helps in reduced costs, faster credit decisions, last-mile credit delivery, diversify financial intermediation and complement traditional banking, especially in credit-starved sectors. The government has also initiated various measures like Co-Lending Model (CLM) encouraging partnerships between banks and NBFCs, Digital Infrastructure Initiatives, India Stack (e-KYC, e-sign, Aadhaar) which enables faster customer onboarding for Fintech, Digital Public Infrastructure (DPI) which Promotes tech-based lending through UPI, OCEN (Open Credit Enablement Network).

Outlook and Opportunities

Fintech is poised for strong growth, driven by digital adoption, AI, and blockchain technologies transforming financial services worldwide. It offers vast opportunities in digital payments, lending, insurtech, wealth management, and embedded finance, especially in underserved markets. As fintech evolves, collaboration with regulators and traditional finance will be key to unlocking its full potential.

Threats, Risks and concerns

Some of the biggest threats or risks faced remains unchanged which are the economic uncertainty or slow recovery, business interruption, failure to innovate or meet customer needs, Financial Services rely heavily on market borrowings (e.g., debentures, CPs). Sudden market shocks can freeze funding sources. Increasing digitization makes Financial Services vulnerable to data breaches, frauds, and cyber-attacks.

The industry was among the hardest hit by the COVID-19 pandemic. Employee management continues to be a major challenge faced by the industry, shortage of experienced personnel, high attrition rate, lack of workforce quality. Changing government guidelines, regulatory scrutiny, funding constraints, and asset quality deterioration becomes difficult to adhere to, numerous clearance / licenses /approvals from authorities, are some of the concerns faced by the industry. Non-Performing Assets (NPAs) in this segment increased by 30 basis points in Q1 FY25, indicating declining asset quality.

Ever changing scenario demands the industry to adapt to a new reality and innovation to stay competitive in the market. While some of the changes may be temporary, others become permanent as the evolution is inevitable to meet the changing needs and expectations.

Segment–wise or product-wise performance

The Company is presently operational in only one segment i.e. Financial Services and allied activities.

Internal control systems and their adequacy

Your Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. Review of the internal financial controls mechanism of the Company was undertaken during the year under review which covered verification of entity level controls, process level control and IT controls, review of key business processes and analysis of risk control etc. During the period under review, effectiveness of internal financial controls was

evaluated. Reasonable Financial Controls are operative for all the business activities of the Company and no material weakness in the design or operation of any control was observed.

Our Company has developed a set of rules, systems, policies and procedures to ensure the reliability of financial reports, the effectiveness of the operations and its activities comply with applicable laws, rules, regulations and code of conduct. The Board of directors, management team and other connected personnel of the

Company are integral part of the internal control system.

The Company has appointed M/s Swayam Bansode and Associates, Chartered Accountant firm to carry out the internal audit of the Company for the financial year 2024-2025. The Audit

Committee of the Company reviews the internal audit report submitted by the internal auditor and provides suggestion, if any.

Discussion on financial performance with respect to operational performance

The net worth of the Company is Rs. 1,613.40 Lakhs as compared to Rs. 96.51 Lakhs over previous year. There were no Secured or unsecured loans in the previous year. The Company has registered total income of Rs. 0.15 Lakhs as compared to Rs. 49.98 Lakhs in the previous year. Further, the

Company incurred Loss before tax of Rs. 71.22 Lakhs as compared to Profit before Tax of Rs. 35.75 Lakhs earned in the previous year. The operational performance is illustrated in detail in the financial statement.

Material developments in Human Resources / Industrial Relations front, including number of people employed.

The Company has always perceived its Manpower as its biggest strength. The emphasis is on grooming in-house talent enabling them to take higher responsibilities. As on 31st March 2025 the Company has 2 employees on its payroll. The Employee relations continue to be cordial at all the divisions of the Company. The directors place on records their deep appreciation for exemplary contribution of the employees at all levels. Their dedicated efforts and enthusiasm have been integral to the Companys steady performance.

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 therefor, including:

There are significant changes in key financial ratios mainly on the operations and working of the Company. Details are mentioned under:

Sr. No.	Particulars	Financial Year 2025	Financial Year 2024	YOY Change	F/A
1.	Debtors Turnover (times)	0.03	5.92	-5.89	Favourable
2.	Inventory Turnover (times)	2.00	0.79	1.21	Favourable
3.	Interest Coverage Ratio (times)	0.00	0.00	0.00	Favourable
4.	Current Ratio (times)	21.66	3.55	18.11	Favourable
5.	Debt Equity Ratio (times)	0.00	0.00	0.00	Favourable
6.	Operating Profit Margin (terms)	-469.15	0.72	-469.86	Adverse
7.	Net Profit Margin (terms)	-468.35	0.72	-469.06	Adverse
8.	Return on Net Worth (terms)	-4.42	37.05	-41.46	Adverse

F – Favourable A – Adverse

Disclaimer:

Statements mentioned in this report are forward looking statements and based on certain assumptions and expectations of future events which are out of control of the Company and the actual results can differ materially from those reflected herein. The Company assumes no responsibility to publicly amend, modify or revise any statement on basis of any development, information, event.