Reliance Capital Ltd Management Discussions

Statements in this Management Discussion and Analysis of financial condition and results of operations of the Company describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Company assumes no responsibility to publicly amend, modify or revise forward-looking statements, based on any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include determination of tariff and such other charges and levies by the regulatory authority, changes in Government regulations, tax laws, economic developments within the country and such other factors globally.

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules,

2015 (as amended)] and other relevant provisions of the Act and the Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 and the Master Direction - Core Investment Companies (Reserve Bank) Directions,

2016 and other guidelines issued by Reserve Bank of India (RBI) as applicable and other accounting principles generally accepted in India.

The management of Reliance Capital Limited has used estimates and judgments relating to the financial statement on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner, the state of affairs for the year.

The following discussions on our financial condition and result of operations should be read together with our audited financial statements and the notes to these statements included in the Annual Report.

Unless otherwise specified or the context otherwise requires, all references herein to “we”, “us”, “our”, “the Company”, “Reliance”, “Reliance Capital”, “RCL” or “Reliance Capital Limited” are to Reliance Capital Limited.

Global Economic Environment

According to International Monetary Fund, World Economic Outlook, July 2025 , the global economy is

expected to decelerate, with apparent resilience due to trade-related distortions waning. Growth is projected higher at 3.0 percent in 2025 and 3.1 percent in 2026 due to strong front-loading in international trade as well as to a lower worldwide effective tariff rate and to an improvement in global financial conditions even though risks to the outlook are tilted to the downside. A rebound in effective tariff rates could lead to weaker growth. Global inflation has increased, but core inflation has eased considerably.

Experts estimate that economic policy uncertainty is assumed to remain elevated this year and next year.

Indian Economic Environment

Surpassing all estimates, Indias economy grew by 7.4% in quarter ended March 31, 2025, much below 8.4% growth witnessed in the same quarter last fiscal. As of March 31, 2025, the annual growth is estimated at 6.5% as against 9.2% in previous year. The Gross Value Added (“GVA”) grew by 6.8% in quarter ended March 31, 2025 and 6.4% in financial year 2024-25. Core GVA grew by 6.4% in financial year 2024-25. Nominal GDP grew by 9.8% in financial year 2024-25 as against 12.0% growth in financial year 2023-24.

Almost all sectors exhibited better growth numbers in quarter ended March 31,2025. While sector grew by 6.5%, the services sector grew by 7.3% in quarter ended March 31, 2025. Within industry during quarter ended March 31, 2025, construction sector grew by 10.8% (6-quarters high) and manufacturing sector increased by 4.8%.

Agriculture sector grew by 5.4% in quarter ended March 31, 2025 over a low base of 0.9% in quarter ended March 31, 2024. For financial year 2024-25, Agriculture GVA grew by 4.6% in the current year as against 2.7% growth in financial year 2023-24. Among services (in quarter ended March 31, 2025), public administration, defence and other services grew by 8.7% and Financial, Real Estate & Professional Services grew by 7.8%. On a yearly basis services sector grew by 7.2% in financial year 2024-25 as against 9.0% in financial year 2023-24.

Indian economy is poised to remain the fastest- growing major economy in financial year 2025-26 (GDP growth expected at 6.3-6.5%) by leveraging its sound macroeconomic fundamentals, robust financial sector and commitment towards sustainable growth.

The GDP growth of 7.4% in quarter ended March 31,2025 was supported by strong uptick in the capital formation which registered a 9.4% yoy growth. The recovery

in capital formation was on account of revival in core sector in quarter ended March 31, 2025 as evident from high frequency indicators. The overall growth in capital formation for financial year 2024-25 now stands 7.1%. The private consumption maintained its health run in quarter ended March 31, 2025 and overall, the private consumption registered a growth of 7.2% for financial year 2024-25. The government expenditure grew by 2.3% in financial year 2024-25. Scheduled commercial banks (SCBs) credit growth slowed to 9.8%, compared to last year growth of 19.5%.

About Reliance Capital Limited

A. Corporate Insolvency Resolution Process of the Company and its completion:

(a) The Reserve Bank of India (“RBI”) vide Press Release dated November 29, 2021 in exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934 (“RBI Act”), superseded the Board of Directors of the Company on November

29, 2021 and appointed Mr. Nageswara Rao Y, exExecutive Director of Bank of Maharashtra as the Administrator of the Company under Section 45-IE

(2) of the RBI Act.

(b) Thereafter RBI vide press release dated November

30, 2021 in exercise of its powers conferred under Section 45-IE (5)(a) of RBI Act constituted a three-member advisory committee to assist the Administrator in the discharge of his duties.

(c) On December 02, 2021 the RBI filed the Petition before the Honble National Company Law Tribunal, Mumbai Bench (“NCLTVAdjudicating Authority”) under sub-Clause (i) of clause (a) of Rule 5 of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudication Authority) Rules, 2019 (“FSP Rules”) to initiate Corporate Insolvency Resolution Process (“CIRP”) against RCL read with Section 227 of Insolvency and Bankruptcy Code, 2016, read with the rules and regulations framed there under and amended from time to time (the “Code”).

(d) Further CIRP was initiated against the Company under Section 227 read with clause (zk) of sub section (2) of section 239 of the Code and read with rules 5 and 6 of the FSP Rules by an order dated December 06, 2021 of the NCLT. The Adjudicating Authority vide the above order, appointed the Administrator to

perform all the functions of a resolution professional to complete the CIRP of the Company as required under the provisions of the Code and declared a moratorium.

(e) The resolution plan submitted by IndusInd International Holdings Limited (“IIHL”), for acquisition of Reliance Capital Limited on a going concern basis was approved (“Approved Resolution Plan”) by the Honble NCLT by its order dated February 27, 2024 (“NCLT Approval Order”).

(f) A Monitoring Committee (“MC”) was constituted in terms of the Approved Resolution Plan to manage the operations of the Company on a going concern basis and MC was the decision-making committee to do all such acts, deeds, matters and things which were required for implementation of the Approved Resolution Plan including but not limited to transfer of assets or investments as articulated in the Approved Resolution Plan.

(g) In terms of the Approved Resolution Plan, the securities (Equity and NCDs) of RCL were delisted with effect from February 13, 2025 from the stock exchanges in accordance with the NCLT Approval Order read with SEBI (Delisting of Equity Shares) Regulations, 2021. Upon implementation of the Approved Resolution Plan the entire existing share capital of RCL was cancelled and extinguished for NIL consideration by virtue of the NCLT Approval Order such that IIHL and/or the Implementing Entity, and its nominees, are the only shareholders of RCL.

(h) The following are the components of the total amount provided under the Approved Resolution Plan ( 9,86,100 lakh):

i. Upfront Cash Amount: 9,65,000 lakh

ii. Amount for “Avoidance Transactions” under IBC 2016: 1,100 lakh

iii. Reimbursement for amount infused by the CoC in Reliance General Insurance Company Limited (“RGICL”): 20,000 lakh

B. Steps for Implementation of Approved Resolution Plan:

(a) The Company on March 10, 2025 sold the following investments to Aasia Enterprises LLP, an implementing entity, at Purchase Consideration Amount of 3,20,000 lakh:

i. 6,60,89,400 equity shares of Reliance General Insurance Company Limited (“RGIC”) constituting 24.95% of the total share capital of RGIC;

ii. 31,10,44,110 equity shares of Reliance Nippon Life Insurance Company Limited (“RNLIC”) constituting 26% of the total share capital of RNLIC; and

iii. 5,04,14,000 equity shares of Reliance Health Insurance Limited (“RHIL”) constituting 26% of the total share capital of RHIL.

(b) The Company also sold the 100% equity share capital of Reliance Financial Limited (“RFL”) and Reliance Wealth Management Limited (“RWML”) to Cyqurex Technologies Private Limited for a total consideration of 4,696 lakh on March 10, 2025.

(c) The Company has issued and allotted on March 11, 2025, 25,000 lakh new equity shares of 10 each at par aggregating to 2,50,000 lakh to IIHL BFSI (India) Limited (Mauritius), an implementing entity as per the Approved Resolution Plan.

(d) The Company has issued and allotted 4,30,000 lakh secured, unlisted, non-convertible debentures on a private placement basis to certain identified investors on March 18, 2025.

(e) With the above, IIHL has deposited Resolution Amount on March 19, 2025 in terms of the Approved Resolution Plan in entire settlement and extinguishment of dues as per the Approved Resolution Plan. The Distribution of Resolution Plan Amount was done by the Administrator in terms of the resolution passed by the Committee of Creditors.

(f) Post payment of resolution amount to the financial creditors, the Company had issued equity shares for remaining debt at par. The entire existing share capital of the Company including all outstanding equity shares (including any part of financial debt of financial creditor which were converted to equity), were cancelled and extinguished for NIL consideration on March 19, 2025, such that IIHL and its nominees are the only shareholders of the Company.

(g) The Company has successfully settled all admitted claims and liabilities in terms of the Approved Resolution Plan.

(h) From the NCLT Approval Date, all inquiries, investigations, attachments, notices, show cause notices, causes of action, suits, settlement agreements, claims, disputes, criminal proceedings, tax proceedings, litigation, arbitration or other judicial, regulatory or administrative proceedings in connection with the Company or affairs of the Company any judicial or quasi judicial authority or any rating agency against the Company pending or threatened, present or future in relation to any period prior to the NCLT Approval Date from any Person or Governmental Authority, or arising on account of implementation of Resolution Plan shall stand withdrawn and dismissed and all liabilities and obligations therefore, whether or not set out in the balance sheets of the Company or the profit and loss account statements of the Company will be deemed to have been permanently extinguished and no adverse orders passed in the said matters should apply to the Company. Further, all new inquiries, notices, suits, claims, disputes, litigations, arbitrations or other judicial, regulatory or investigations, administrative proceedings will be barred and will not be initiated or admitted against the Company for the period prior to Plan Approval Order.

(i) Out of the entire Resolution Plan Amount an amount of 2,300 lakh has been kept in escrow account as corpus to be utilised for the Administrators litigation and other related expenses.

(j) Upon implementation of the Approved Resolution Plan, the Monitoring Committee had appointed Directors on the Board of Company on March 19, 2025 and Monitoring Committee was dissolved.

(k) Implementation of Resolution Plan submitted by IIHL has been completed and management and control of RCL has been vested with IIHL w.e.f. March 19, 2025.

(l) NCLT at its hearing dated March 25, 2025 had noted the implementation of Approved Resolution Plan and completion of CIRP of RCL. National Company Law Appellate Tribunal (NCLAT) on March 24, 2025 also noted completion of implementation of Resolution Plan by IIHL.

(m) RNLIC, RFL and RWML have ceased to be subsidiaries of the Company on March 10, 2025. RNLIC has become an associate of the Company

w.e.f. March 11,2025.

(n) Authorised Share Capital of the Company has been increased from 30,000 lakh to 4,00,000 lakh. Divided into 4,00,00,00,000 Equity shares of 10 each.

(o) Upon appointment of Board of Directors of the Company, term of Shri Nageswara Rao Y, the Administrator of the Company, appointed by RBI under Section 45-IE (2) of the RBI Act, has been completed.

(p) RCL is currently a wholly owned subsidiary of IIHL BFSI India Limited (Mauritius) with a paid-up share capital of Rs 2,50,000 lakh.

C. Post Implementation of Resolution Plan

(a) In order to give effect to the Approved Resolution Plan, the Company has drawn up the financial statements such that it truly reflects the claims verified and the realizable, fair value of the assets. For this purpose, the Company has carried out necessary write offs of assets, revaluation of assets, creation of additional liabilities or expenses or write back of liability or provision in the books of accounts of the Company.

The Company has obtained an independent registered valuer report for impairment testing and fair value assessment of the assets, resultant impact has been considered in the books of accounts.

(b) Further, in terms of the Approved Resolution Plan, all the existing reserves of the Corporate Debtor under the head Other Equity including balance, if any, in capital reserve, securities premium account, capital redemption reserve, statutory reserve fund and general reserve has been transferred to the retained earnings, which shall be construed as free reserves under Companies Act, 2013 and all other applicable provisions of law.

(c) Approved Resolution Plan provides that the Resolution Applicant shall be entitled to transfer, assign, demerge and / or merge the assets and/or undertakings of the Corporate Debtor to any entity as it deems fit. The Company has disposed off certain Non-Core Assets and Non-Group Assets and accordingly following companies have ceased to be subsidiaries/associates of the Company with effect from April 11, 2025.

Subsidiaries: Reliance Commodities Limited, Reliance Corporate Advisory Services Limited, Reliance Money Services Private Limited, Reliance Capital Pension Fund

Limited, Reliance Money Precious Metals Private Limited, Reliance Exchangenext Limited, Reliance Underwater Systems Private Limited, Quant Capital Private Limited, Quant Broking Private Limited, Quant Securities Private Limited, Quant Investment Services Private Limited and Reliance ARC SBI Maan Sarovar Trust.

Further the Company has also transferred / assigned all non-group exposure, Credit Facilities / Inter Corporate Deposits.

Further, the Company has also disposed off Non-Core Assets and accordingly Ammolite Holding Limited have ceased to be an associate of the Company with effect from April 23, 2025.

Post above transfer following are the subsidiaries and associates of the Company:

i. Subsidiaries

a. Reliance General Insurance Company Limited

b. Reliance Health Insurance Limited

c. Reliance Securities Limited

ii. Associates

a. Reliance Nippon Life Insurance Company Limited

b. Reliance Asset Reconstruction Company Limited Financial Performance

The Companys standalone performance has been provided under the head Financial Performance in the Directors report. The consolidated performance of the Company is as follows:

RCLs consolidated total income for the financial year ended March 31, 2025, was at 22,83,334 lakh as against 24,44,367 lakh. Staff costs for the year were 1,52,683 lakh as against 1,68,478 lakh in the previous year, an decrease of 9.38 per cent. Selling, administrative and other expenses in the year were 22,52,623 lakh as against 22,12,830 lakh in the previous year, an increase of 1.80 per cent. Interest & finance charges for the year were 1,77,163 lakh as against 3,879 lakh in the previous year, increase of 4467.23 per cent. Depreciation for the year stood flat at 13,798 lakh against 11,434 lakh. Tax expenses for the year was 3,230 lakh as against 4,536 lakh in the previous year. Total comprehensive income attributable to owners and excluding non-controlling interest for the year was (4,63,492) lakh as against 57,892 lakh in the previous year.

Key financial ratios (consolidated basis):

Debt Equity Ratio: 1.09 times, Net Profit Margin: (20.39%). The Interest Coverage Ratio, Debtors Turnover, Inventory Turnover, Current Ratio and Operating Profit Margin are not applicable. Networth for the financial year ended March 31, 2025, was at 4,07,762 lakh as against (9,93,132) ) lakh in the previous year.

Resources and Liquidity

As of March 31, 2025, the consolidated total assets stood at 38,18,080 lakh.

Reliance General Insurance

Reliance General Insurance offers insurance solutions for auto, health, home, property, travel, marine, commercial and other specialty products. RGIC is amongst the leading private sector general insurance players in India with a private sector market share of 7.7 per cent for financial year 2024-25.

During 2024-25, Gross Direct Premium of the total general insurance industry increased by 6.2 per cent to 3,07,612 crores. During 2024-25, Gross Direct Premium of the private Indian general insurance industry increased by 5 per cent to 1,62,896 crores. RGICs gross written premium for the year ended March 31, 2025 was 12,667 crores, an increase of 7 per cent over the previous year.

Profit before tax for the year ended March 31, 2025, stood at 378 crores as against 401 crores in the corresponding period of the previous year, a decrease of 6 per cent over the previous year. The distribution network comprised of 128 branches and approx. 1,17,493 agents and point of sales person (POSP) at the end of March 31, 2025. At the end of March 31, 2025, the investment book increased by 4 per cent to 21,358 crores.

Reliance Nippon Life Insurance

Reliance Nippon Life Insurance currently offers individuals and group products under life insurance business. RNLIC is committed to emerging as a transnational Life Insurer of global scale and standard and attaining leadership rankings in the industry within the next few years. In financial year 2024-25, the Indian life insurance industry recorded new business premium of 3,97,337 crore as against 3,77,960 crore in the previous year, an increase of 5.1 per cent. During the year, the Indian private sector life insurance industry recorded new business premium of 1,70,667 crore as against 1,55,437 crore in the previous year, an increase of 9.8 per cent. RNLIC is

amongst the leading private sector life insurers with a private sector market share of 1.5 per cent, in terms of individual weighted new business premium.

The total premium for financial year 2024-25 stood at 5,711 crore as against 5,537 crore. The new business premium income for the year ended March 31, 2025, was 1,245 crore as against 1,230 crore for the previous year. The individual weighted new business premium income for the year ended March 31, 2025, was 1,046 crore as against 1,103 crore for the previous year. For the year ended March 31, 2025, the renewal premium was 4,466 crore as against 4,307 crore.

The total assets under management were at 38,725 crore as on March 31, 2025, as against 35,508 crore as on March 31, 2024. The number of policies sold during the year was approximately 1.61 lakh. The distribution network stood at 713 branches and over 68,700 active advisors at the end of March 2025.

Broking and Distribution business

Reliance Capitals broking and distribution business is carried out by its subsidiary viz. Reliance Securities Limited, one of the leading retail broking houses in India that provides customers with access to equities, commodities, derivatives and wealth management solutions. As of March 31, 2025, the equity broking business had over 9,83,704 (March 2024, 9,82,497) equity broking accounts and achieved average equity cash & intraday daily turnover of 43.99 crore for the year March 2025 (March 2024, 39.92 crore). As of March 31,2025, the commodity broking business had over 1,12,271 (March 2024 1,15,967) commodity broking accounts and recorded average daily commodities broking turnover of 29.21 crore for the year March 2025 (March 2024, 29.07 crore). The distribution business is a comprehensive financial services and solutions provider, providing customers with access to mutual funds, life and general insurance products, and other financial products having a distribution network of 27 Branches and over 456 customer touch points (March 2024, 45 Branches and over 1,292) across India. Broking & Distribution business reported a profit after tax of 13.71 crore for the year ended March 31, 2025 (March 2024, 12.75 crore).

Reliance Asset Reconstruction (RARC)

Reliance Capital does not intend to focus on the business of acquisition, management and resolution of distressed debt / assets.

Risks and Concerns

RCL has exposures in various lines of business through its subsidiaries and associate entities. RCL, its subsidiaries and associates are exposed to specific risks that are particular to their respective businesses and the environments within which they operate, including market risk, competition risk, credit risk, liquidity and interest rate risk, human resource risk, operational risk, information security risks, regulatory risk and macro-economic risks. The level and degree of each risk varies depending upon the nature of activity undertaken by them.

Market risk

The Company along with subsidiaries and associates has quoted investments which are exposed to fluctuations in stock prices.

RCL monitors market exposure for both equity and debt and, in appropriate cases, also uses various derivative instruments as a hedging mechanism to limit volatility.

Competition risk

The financial sector industry is becoming increasingly competitive and the Companys growth will depend on its ability to compete effectively. The Companys main competitors are core investment companies, commercial banks, life and non-life insurance companies, both in the public and private sector, broking houses, depository participants and other financial service provider. Further liberalization of the Indian insurance sector could lead to a greater presence or entry of new foreign financial services companies offering a wider range of products and services. This could significantly toughen our competitive environment. The Companys wide distribution network, diversified product offering and quality of management place it in a strong position to deal with competition effectively.

Credit risk

Credit risk is a risk arising out of default or failure on the part of borrowers or investee entities in meeting their financial obligations towards repayment of loans or investment instruments debit / credit such as debentures, commercial papers, PTCs etc. Thus, credit risk is a loss as a result of non-recovery of funds both on principal and interest counts.

RCL is a Core Investment Company (CIC) and obtained the Certificate of Registration as a CIC. In view of this the investments and RCL have been restricted to and within the Group companies.

The Company has adopted the IND-AS since the financial year 2018-19 for identification of Expected Credit Losses (ECL) and provision thereof.

Liquidity and Interest Rate Risk

The Company along with its subsidiaries and associates are exposed to liquidity risk principally, because of lending and investment for periods which may differ from those of its funding sources. Asset liability positions are managed in accordance with the overall guidelines laid down by various regulators in the Asset Liability Management (ALM) framework. The Company may be impacted by volatility in interest rates in India which could cause its margins to decline and profitability to shrink. It is exposed to interest rate risk owing to fixed income portfolio of group companies. Interest rates are highly sensitive to many factors beyond the Companys control, including the monetary policies of the RBI, deregulation of the financial sector in India, domestic and international economic and political conditions and inflation. As a result, interest rates in India have historically experienced a relatively high degree of volatility. The Company seeks to match its interest rate positions of assets and liabilities to minimize interest rate risk. However, there can be no assurance that significant interest rate movements will not have an adverse effect on its financial position. As stated in Credit risk, being a CIC, all the lending and investments of Reliance Capital Limited are expected to be within group companies. Thus, the liquidity position of the company also depends upon the realisation and monetisation of its investments.

Human resource risk

The Companys success depends largely upon the quality and competence of its management team and key personnel. Attracting and retaining talented professionals is therefore a key element of the Companys strategy and a significant source of competitive advantage. While the Company has a salary structure designed to encourage employee retention, a failure to attract and retain talented professionals, or the resignation or loss of key management personnel, may have an impact on the Companys business, its future financial performance and the results of its operations.

Operational risk

The Company may encounter operational and control difficulties when undertaking its financial activities. The rapid development and establishment of financial services businesses in new markets may raise unanticipated operational or control risks. Such risks could have a

materially adverse effect on the Companys financial position and the results of its operations.

The operations of the Company have been extensively automated which minimizes the operational risk arising out of human errors and omissions. A robust system of internal controls is practiced ensuring that all its assets are safeguarded and protected against loss from unauthorised use or disposition and all its transactions are authorised, recorded and reported correctly. The Company has implemented SAP systems across functions. With this initiative, along with other key systems and checks and balances established, we believe that our overall control environment has been enhanced. It is pertinent to note that Reliance Nippon Life Insurance, Reliance General Insurance, Reliance Securities have obtained an ISO 9001:2008 certification. They are among the few companies in their respective industries to be ISO certified.

The Company initiated a strategic rebranding exercise involving the transition of its brand identity from Reliance Capital to IndusInd Capital. While this change aligns with the Companys current ownership structure and long-term strategic vision, it also introduces certain transitional risks. To mitigate these risks, the Company will implement a comprehensive brand transition strategy. The Company remains committed to maintaining its reputation, service standards, and stakeholder confidence throughout this transition.

The Company has issued 4,30,000 lakh secured, unlisted, non-convertible debentures on a private placement basis governed by the terms outlined in the Debenture Trust Deed. Debenture Trustees are mandated to undertake continuous due diligence and periodic monitoring of compliance with the conditions subsequent, covenants of the issue, including the adequacy of asset cover, creation of security, and timely submission of relevant disclosures. To mitigate these risks, the Company has instituted robust internal controls and compliance mechanisms to ensure adherence to all regulatory requirements and timely engagement with the Debenture Trustee. The Company remains committed to maintaining transparency and protecting investor interests.

Information security risk

The Company has robust Information Security Risk monitoring systems and tools to guard and protect sensitive customer data and guard against potential hackers and viruses. Robust governance, controls and sophisticated technology is adopted across lines of business to ward off

cyber threats and protect information residing within the Company. The Information Security system is in alignment with the respective regulatory requirements.

Information Security is under the Enterprise Risk Management Framework to enhance data protection and ward off cyber risks effectively, thereby making our overall Risk, Control & Governance framework more robust.

The Company undertook a strategic digital transition involving the transfer of its official domain to indusindcapital. com. This change reflects the Companys evolving brand identity and alignment with its current business operations and ownership structure. The domain transfer was executed in accordance with applicable regulatory and IT governance standards, ensuring continuity of services, data integrity, and stakeholder communication. All official communications, investor relations updates, and digital assets have been migrated to the new domain. Stakeholders are advised to update their records and direct all future correspondence and digital interactions to the new domain.

Regulatory risk

As a financial conglomerate in the financial services sector, the Company and its entities are subject to regulations by Indian governmental authorities and regulators including Reserve Bank of India, Insurance Regulatory and Development Authority of India and Securities and Exchange Board of India.

The laws and regulations of respective Regulators impose numerous requirements on the Company, including asset classifications and prescribed levels of capital adequacy, solvency requirements and liquid assets. There may be future changes in the regulatory system or in the enforcement of the laws and regulations that could adversely affect the Companys performance.

Macro-economic risk

First half of the financial year 2024-25, witnessed a global outperformance of Indian assets driven by healthy growth momentum, continued improvement in fiscal health, which led to prospect of rating upgrade, and bond index inclusion flows. Softening global yield environment helped India benchmark 10y G-sec yield to ease decisively below 7%, while rupee remained stable. Second half of the financial year 2024-25, witnessed a large outflows from foreign portfolio investors, softening of growth momentum in India and resurgence of China as an investment destination. This had a depreciative effect on Indian rupee and tightened banking system liquidity. As a result, from December 2024

onwards, RBI began easing financial conditions through a mix of Cash Reserve Ratio cut, Repo rate cuts and injection of rupee liquidity. Macro-economic risks have a significant impact on the business environment and can influence the performance, financial position, and growth prospects of the company.

Internal Control

The Company maintains a system of internal controls designed to provide assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, and compliance with applicable laws and regulations.

The organization is well structured, and the policy guidelines are well documented with pre-defined authority. The Company has also implemented suitable controls to ensure that all resources are utilized optimally, financial transactions are reported with accuracy and in adherence to applicable laws and regulations.

The Company has put in place adequate systems to ensure that assets are safeguarded against loss from unauthorised use or disposition and that transactions are authorised, recorded and reported. The Company also has commensurate budgetary control system to monitor all expenditures against approved budgets on an ongoing basis.

The Company uses information technology adequately in its operations for ensuring effective controls besides economy. It also helps the Company in providing accurate MIS and prompt information / services to its customers and other stakeholders The Company has implemented enhanced level of Information System Security controls with monitoring systems to address technology risks.

The Company has an independent internal audit function which continuously evaluates the adequacy of, and compliance with policies, procedures, plans, regulatory and statutory requirements. Risk based approach is adopted while carrying out the internal audits. Internal audit also evaluates and suggests improvement in effectiveness of risk management, control and governance process.

Opportunities

i. Low retail penetration of financial services / products in India

ii. Extensive distribution reach and strong brand recognition of parent i.e. IIHL

iii. Opening of financial sector in India along with introduction of innovative products

iv. Opportunity to cross sell services

v. Increasing per-capita GDP

vi. Changing demographic profile of the country in favour of the young

Threats

i. Competition from local and multinational players

ii. Execution risk

iii. Regulatory changes

iv. Attraction and retention of human capital

Corporate Social Responsibility

At RCL and its group companies, as a socially responsible financial services conglomerate, we strive to improve the quality of life of the under-served sections of society, by focusing on Skill Development, Education, Healthcare and Environment & Animal Welfare for the service of the nation and the greater good of the communities in which we operate.