Ramchandra Leasing and Finance Ltd Management Discussions

Your directors are pleased to present the Management Discussion and Analysis Report for the year ended 31st March, 2025.

NBFC

The Company continues to be engaged in the Business of a NonBanking Financial Company (NonDeposit taking, NonSystemically Important) and holds a valid Certificate of Registration from the Reserve Bank of India. The Company has not accepted any deposit from the public. It has complied with prudential norms relating to income recognition, accounting standards, asset classification, and provisioning for bad and doubtful debts, as applicable under the RBI Directions, 2007.

Over FY 202425, the NBFC sector witnessed increased regulatory tightening, evolving liquidity conditions, and rising competition from fintech players alongside the adoption of digital technologies. The RBI continued implementation of the Scale Based Regulatory (SBR) framework, aiming to strengthen oversight in proportion to risk, and promoting longterm transparency and sectoral stability.

ECONOMIC OVERVIEW

For FY 202425, Indias economy sustained resilient growth with GDP estimated at around 6.5%, supported by strong domestic consumption, robust governmentled infrastructure push, and revival in private capex. Despite global slowdown concerns and geopolitical tensions, India remained one of the fastestgrowing large economies

Inflationary pressures moderated further during the year, largely due to softening food and commodity prices, aided by RBIs calibrated monetary stance. The fiscal deficit was contained at 4.9% of GDP, reflecting fiscal prudence alongside continued infrastructure spending.

The Union Budget 202526 continued focus on green energy, manufacturing incentives, rural development, and digital innovation, strengthening Indias longterm growth prospects.

Key sectors such as IT, financial services, infrastructure, and pharmaceuticals remained growth engines, while agriculture remained impacted by climaterelated challenges and uneven rainfall, slightly moderating rural demand.

India continues to be a favorable destination for foreign direct investment (FDI), supported by policy reforms, improved ease of doing business, and ongoing digital infrastructure growth. Investor confidence has remained stable across sectors such as renewable energy, fintech, infrastructure, and ecommerce.

The government has reinforced its commitment to sustainable development, with substantial investments in green infrastructure, solar energy, electric vehicles, and climate adaptation technologies. These initiatives not only support Indias longterm environmental commitments but also open new avenues for green financing and innovation.

Overall, the Indian economy in FY 202425 reflects a balanced trajectory of growth, fiscal prudence, and inclusive development, offering a favorable operating environment for NonBanking Financial Companies (NBFCs). As credit demand rises across retail, MSME, and infrastructure sectors, NBFCs are expected to play a vital role in deepening financial access and driving economic momentum.

OPPORTUNITIES & THREAT

Being a Loan NBFC, the Company operates in a dynamic environment influenced by changing economic conditions, monetary policy movements, and evolving customer expectations. Key challenges include fluctuating interest rates, rising nonperforming assets (NPAs), and macroeconomic disruptions, which continue to pose threats to the business. However, these risks also create opportunities when addressed through effective strategic planning, conservative liquidity management, strengthened collection mechanisms, and operational efficiency.

Opportunities:

Digital Transformation: Technologyled innovations such as AI/ML in credit scoring, automated collections, and mobilefirst lending are enabling NBFCs to expand reach at lower cost.

Financial Inclusion Initiatives: Government focus on expanding credit access in semiurban and rural markets opens significant opportunities in MSME, microfinance, and consumer lending.

Rising Credit Demand: Expanding middle class, increased urbanization, and rising consumer aspirations continue to drive demand for housing loans, education loans, vehicle finance, and retail credit.

Infrastructure Financing: Governmentled projects and PPP models present longterm financing opportunities.

Green Finance: Growing adoption of electric vehicles, renewable energy, and ESG linked financing provides niche areas for NBFC growth.

Policy and Regulatory Support: The SBR framework, while stricter, provides stability, which may boost investor confidence in wellgoverned NBFCs.

Threats:

Regulatory and Compliance Burden: With the introduction of stricter norms around capital adequacy, asset classification, KYC/AML, and risk governance, smaller NBFCs may face challenges in adapting and managing compliance costs.

Macroeconomic Volatility: Global uncertainties, geopolitical tensions, and commodity price shocks can impact borrower repayment capacity, affecting the overall asset quality and credit performance of the NBFC sector.

Liquidity and Funding Risks: Dependence on marketbased funding sources makes NBFCs vulnerable to liquidity tightening and interest rate hikes, which can increase cost of capital and reduce lending margins.

Rising NPAs and Credit Risk: Certain borrower segments, especially in unsecured lending and microfinance, remain susceptible to credit stress, impacting collection efficiency and provisioning requirements.

Intensifying Competition: Increased competition from banks, fintechs and digital first NBFCs may lead to margin pressures and erosion of market share for traditional players unless differentiated services are offered.

Cybersecurity and Technology Risks: With growing reliance on digital infrastructure, NBFCs must remain vigilant against cyber threats, data breaches, and system downtimes, which can damage reputation and disrupt operations.

INDUSTRY OUTLOOK

The NBFC sector remains a vital component of Indias financial system, bridging the credit gap in underserved and emerging segments. With a stable macroeconomic outlook, rising retail and MSME credit demand, and supportive government policies, NBFCs are expected to maintain steady growth momentum.

Your Company will continue to focus on strengthening its risk governance framework, adopting digital solutions, managing asset quality, and scaling operations in a cautious and sustainable manner

REGULATORY

The RBI continues to refine its supervisory and regulatory framework for NBFCs, focusing on governance, transparency, and financial stability. During FY 202425, the key areas of emphasis were:

Enhanced KYC/AML compliance norms.

Revised reporting and monitoring framework for frauds.

Guidelines on securitization of standard assets.

Greater emphasis on NBFCs risk management and governance standards.

The Company, categorized under the Base Layer of the SBR Framework, remains fully compliant with all applicable RBI norms including:

Prudential norms on income recognition, asset classification, and provisioning.

Minimum Net Owned Fund (NOF) requirements.

Periodic regulatory filings and statutory disclosures.

The Company remains fully compliant with all applicable RBI guidelines and continues to maintain strong internal controls and governance in line with the Base Layer regulatory framework.

UNION BUDGET HIGHLIGHTS

The Union Budget 202526 reaffirmed Indias vision of inclusive growth, digital transformation, fiscal discipline, and sustainability, while projecting GDP growth of 6.5% and targeting a fiscal deficit of 4.8%. This balance reflects the governments intent to sustain momentum while maintaining macroeconomic stability.

1. Infrastructure Development:

A significant stepup in capital expenditure has been announced for roads, railways, logistics parks, ports, and urban transport. These initiatives are expected to generate employment, boost demand, and create credit opportunities. For NBFCs, this opens avenues in infrastructure financing, contractor funding, and equipment loans, particularly across TierII and TierIII cities.

2. Green Energy & Climate Action:

The Budget laid strong emphasis on renewable energy with allocations for solar expansion, green hydrogen, electric vehicle ecosystem, and energy storage solutions. Tax incentives and creditlinked schemes are expected to accelerate adoption. NBFCs can benefit by expanding into green finance, EV loans, and ESGdriven financial products.

3. MSME & Startup Support:

Credit guarantee schemes have been strengthened with higher coverage and reduced

fees, while compliance requirements have been simplified. Enhanced allocations for entrepreneurship, skilling, and technology adoption will strengthen small businesses. NBFCs can leverage this to grow MSME lending in semiurban and rural areas.

4. Taxation Reforms:

The rationalization of income tax slabs, simplification of GST filings, and lower compliance burdens aim to increase disposable income and improve compliance. This is expected to stimulate consumption, indirectly boosting retail credit demand in consumer finance, housing, and auto loans.

5. Healthcare & Education:

Healthcare received greater funding for primary infrastructure, digital health, and affordable medical access. In education, the focus on digital learning, skilling programs, and scholarships will improve employability, especially in rural regions. These measures may indirectly enhance demand for education loans, healthcare financing, and insurancelinked products.

6. Agriculture & Rural Development:

Expanded allocations for irrigation, agrilogistics, rural roads, mechanization, and crop insurance will support farmer incomes and rural prosperity. Emphasis on agritech and rural infra is expected to increase credit demand in agrifinance, microfinance, and rural lending segments.

Overall Impact on NBFCs:

The Budget provides a strong policy framework that supports credit expansion, portfolio diversification, and digital adoption. NBFCs stand to benefit by deepening their presence in retail, MSME, rural, and green financing segments while strengthening governance under the ScaleBased Regulatory (SBR) framework.

In conclusion, the Union Budget 202526 is expected to stimulate demand, enhance financial inclusion, and create sustainable growth opportunities, thereby positioning NBFCs as key enablers of Indias growth journey.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has maintained adequate internal control systems commensurate with its size and business operations. The controls are designed to provide reasonable assurance regarding the accuracy of financial reporting, safeguarding of assets, and compliance with applicable regulations.

Periodic reviews by Management and evaluation by the Statutory Auditors ensure the effectiveness of internal controls. The Audit Committee reviews these observations regularly and recommends improvements wherever required.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

Employees remain the cornerstone of the Companys success, and during FY 202425, the Company focused on enhancing digital skills, leadership capabilities, and overall talent development. Structured training programs and improved recruitment practices helped strengthen the workforce and align it with future business needs. The Company continued to implement employee engagement and wellness initiatives, including teambuilding and motivational activities, to foster a positive and collaborative work environment. Leadership development, mentorship, and career progression mapping were emphasized to build a strong talent pipeline. A transparent performance evaluation and recognition system ensured fair rewards for contributions. Open communication channels and feedback mechanisms further reinforced trust and inclusivity across the organization. Industrial

relations during the year remained cordial, with strong collaboration between employees and management. The Company remains committed to nurturing a performancedriven, innovationled culture that supports employee growth alongside organizational objectives.

FINANCIAL REVIEW

The Company has registered a turnover of Rs. 37.64 lakhs and made profit before depreciation and tax of Rs. 1.60 Lakhs. The depreciation provided during the year was Rs. 0.06 lakhs and the Net Profit for the year after depreciation and tax was Rs. 1.50 Lakhs. The above turnover is out of both operational activities.

CAUTIONARY STATEMENT

The statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, and expectations may be "forwardlooking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially due to various factors beyond the control of the Company, including changes in regulatory environment, macroeconomic conditions, and market dynamics. The Company assumes no responsibility to publicly amend, modify, or revise such statements on the basis of subsequent developments.

By order of Board of Director For Ramchandra Leasing and Finance Limited Sd/ Sd/

Pradeep Saremal Jain Harsha Hitesh Bhanshali Place: Vadodara WholeTime Director Director

Date: 01/09/2025 DIN: 03363790 DIN: 08522254