Repco Home Finance Ltd Management Discussions

1. MACROECONOMIC AND INDUSTRY STRUCTURE & DEVELOPMENTS:

The global economy entered 2024 with early signs of stabilization A. Macroeconomic Outlook following several years of major disruptions. Inflation, which had reached multi decade highs, showed a gradual—though uneven decline toward the targets set by central banks through tightening of monetary policy around the world. Labor markets also began to recover, with unemployment and job vacancies returning to levels seen before the pandemic.

However, recent developments have significantly altered the global economic outlook. In particular, the United States has introduced a wide range of new tariffs. These new trade barriers have pushed U.S. tariff levels to their highest point in over a century. Several key trading partners have responded with retaliatory tariffs, escalating tensions and contributing to growing uncertainty in global trade.

These trade actions are already placing downward pressure on global economic activity. Higher tariffs increase costs for businesses and consumers, disrupt supply chains, and reduce cross-border trade. Just as importantly, the speed and unpredictability of these measures have made it difficult for investors, businesses, and policymakers to plan effectively. This uncertainty is undermining business confidence, delaying investment decisions, and weighing on the broader outlook. As a result, producing reliable economic forecasts has become more challenging than usual, underscoring the need for close monitoring and policy flexibility. percent in CY26. Global headline inflation is expected to ease to Global GDP growth is projected at 2.8 percent1 in CY25 and 3.0 4.3 percent in CY25 and even lower at 3.6 percent in CY26. Despite the global challenges in the last few years, India has sustained its position as one of the fastest-growing economies globally, with a projected Gross Domestic Product (GDP) growth rate of 6.5% for FY2025-26 maintaining the same rate as estimated for FY2024-25. The IMF forecasts a growth rate of 6.2% for the current fiscal year (FY2024-25), mainly driven by private consumption, particularly in rural areas.

Agriculture remains on a positive footing, supported by healthy reservoir levels and robust crop production, which is expected to sustain rural demand. Manufacturing is showing early signs of revival amid improved business sentiment, and the services sector continues to demonstrate resilience. On the investment side, activity is gaining pace on the back of higher capacity utilization, continued government focus on infrastructure, and strong balance sheets of banks and corporates. Easing financial conditions have also aided this recovery. While services exports are likely to remain steady, merchandise exports could face headwinds from global uncertainties and trade disruptions. Looking ahead, the RBI has projected real GDP growth at 6.7 per cent for 2026–27, suggesting continued recovery momentum.

driven by a sharp decline in food prices. With uncertainties around 2 the rabi crop largely resolved, and second advance estimates indicating record wheat output and higher pulse production than last year, food inflation is expected to soften further. This favorable trend is supported by robust kharif arrivals and a sharp fall in inflation expectations over the next three and twelve months, as reflected in recent surveys. The decline in crude oil prices has further strengthened the disinflationary outlook. Accordingly, Consumer Price Index (CPI) inflation for 2025 26 is projected at 4.0 per cent, with quarterly estimates at 3.6 per cent in Q1, 3.9 per cent in Q2, 3.8 per cent in Q3, and 4.4 per cent in Q4. While the inflation outlook appears stable, global uncertainties and the possibility of weather related supply shocks continue to pose upside risks to the inflation path. The Reserve Bank of India has assumed a normal monsoon in framing its projections, and it considers the risks to be evenly balanced at this stage. Indias residential real estate market remained robust throughout B. Real Estate & Housing Industry Outlook 2024, driven by a growing desire for homeownership. This trend was supported by rising household incomes, evolving buyer preferences, improved infrastructure, and expanding economic opportunities in urban centers. As a result, more people, especially from middle-income groups, are actively looking to purchase homes, seeing it as a stable and valuable investment. The mid-range housing segment, with property prices between

It accounted for over 40% of total residential sales and continuedINR 45 lakh3 and INR 1 crore, was the most in-demand category. to attract a large number of first-time buyers. The high-end segment, priced between INR 1 crore and INR 2 crore, also saw steady interest, contributing around 27% to overall sales. Interestingly, the boundary between mid-range and high-end homes is becoming less distinct, as cities like Noida, Pune, and Chennai once dominated by mid-range buyers witnessed increased activity in the high-end market.

One of the key factors boosting buyer confidence was the Reserve Bank of Indias recent 50 basis point interest rate cut, with expectations of more reductions in the near future. Lower interest rates make home loans more affordable, encouraging those who were previously unsure to make their purchase decisions. Additionally, the narrowing gap between monthly rent and home loan EMIs is making homeownership a more attractive financial choice.

shaping buyer decisions. Elements such as the availability of ready-to-move-in homes, the credibility of developers, investor confidence, and proximity to infrastructure projects like highways, metro stations, and commercial hubs are expected to remain important drivers of residential sales in the months ahead.

This market has advanced thanks to government initiatives like

PMAY 2.0 and the SWAMIH Fund-2, which provided incentives and subsidies to both developers and purchasers. As they work together to meet the housing needs of an expanding population, cooperation between the public and private sectors is anticipated to have an additional impact on the market.

C. AccordingHousing to Finance IndustrysIndustry variousOutlook reports, Housing Finance Companies (HFCs) Growth and earnings to remain stable in FY2025-26. Various macroeconomic factors coupled with Government schemes and interventions like interest subsidies, tax benefits, and initiatives to promote affordable housing have improved the demand for real estate, especially the residential housing and government initiatives like Housing for All. Also, introduction of Real Estate Investment Trusts (REITs) have also provided alternative funding options in the housing sector.

Growth in HFCs is expected to grow at a CAGR of 15-16% between FY2024-25 to FY2029-30, driven by housing loans, which account for about three-fourths of their AUM. Profitability of HFCs is expected to remain healthy in FY2025-26, driven by easing credit costs and improving margins, HFCs have witnessed a rebound in profitability metrics to pre-pandemic levels. The rebound in NIMs is primarily driven by increased credit demand, improvement in yield, and an overall decline in gearing levels. HFCs have also begun to strengthen their presence in the affordable housing segment to protect spreads, which is positively impacting NIMs.

The2. REGULATORY Reserve Bank ofCHANGES India (RBI) has introduced a variety of regulations applicable to Housing Finance Companies (HFCs) and other Non-Banking Financial Companies (NBFCs) in an effort to unify the laws that apply to HFCs/NBFCs and banks. The following are examples of these regulations: a. have at least 60 percent of its Principal Business Criteria: total assets towards housingNBFC-HFCs are expected to be towards housing finance for individuals. [As of March 31, 2025, approximately 70% of RHFLs total loan assets were allocated to housing finance for individuals. The

Company does not have any non-individual exposure]. b. to maintain liquidity buffers to Liquidity Coverage Ratio (LCR): NBFC-HFCs are expected overcome any liquidity disruptions by ensuring that they have adequate High-Quality Liquid Assets (HQLA) to withstand any temporary liquidity stress situation lasting up to 30 days. The Companies have a phased manner.until December 1st, 2025, to achieve a 100% LCR criterion in

[As of March 31st, 2025, RHFLs LCR was 144.40%.] c. Scale-based the regulations further align the rules applicable to NBFCs regulations: Applicable since October 2022, with those of banks regarding internal capital adequacy assessment processes, concentration of investments and credit, large exposure framework, role of compliance officer, senior management compensation, and the like. RBI has defined four layers Base Layer, Middle Layer, Upper Layer, and the Top Layer. [RHFL falls into the middle layer. In line with RHFLs compliance policy, a Chief Compliance

Officer (CCO) was appointed during the year]. d. Fair Lending Practices:

Regulatory guidelines during FY2024-25 were as under:- Penal Charges in Loan Accounts Applicable with effectto all Regulatedfrom April Entities1st, 2024.on RBIlevyinghas issuedpenal chargesdirectionsin loan accounts to bring uniformity and transparency to customers. [RHFL has implemented the guidelines

since In its notification reference RBI/2024-25/18 DOR. April 1st, 2024].

STR.REC.13/13.03.00/2024-25 dated April 15 the Reserve Bank of India (RBI) has implementedth, 2024,a requirement for regulated entities (REs) to provide borrowers with a Key Fact Statement (KFS). This document contains essential information regarding loan agreements, including the all-in-cost of the loan, presented in a simple and easily understandable format. This is being done in order to enhance transparency and reduce information asymmetry on financial products being offered by different regulated entities. (RHFL has implemented the guidelines since October 1st, 2024).

3. SWOT ANALYSIS OF THE COMPANY

S STRENGTHS Adequate capitalisation profile. Strong presence in South India and a significant Strong profitability ratios.

Brand in Tamil Nadu.Diversified products cater to all segments of customers. Loyal Customer base.

•• A sound collection team Strong in house sales team.

stable leadership team Minimal attrition in senior management, reflecting management system Robust credit appraisal system and risk

W WEAKNESSES

• peers.Moderate digital transformation compared to

challenging. Finding and retaining exceptional talent can be

• Geographical concentration of credit exposure. Restricted borrowing profile.

Concentration of Bank borrowings

O • OPPORTUNITIES Credit demand across the majority of customers to

remain healthy. Healthy profitability, notwithstanding some margin and borrowing cost pressures. Increase in Housing demand due to continued initiatives by GoI for affordable housing. Underserved semi-urban and rural markets.

T • THREATS Competitive pressures to remain elevated, especially from banks.

• Rise in Borrowing costs and stress on margins.

• competitive rates. Inadequate access to commensurate funding at

• Attrition of managerial personnel.

In FY2024-25, our company aims to capitalize on the momentum 4. OUTLOOK landscape with strategic initiatives and a focus on sustainable established in FY2023-24, navigating the evolving economic growth. having a humble beginning in April 2000 proudly celebrates its We are happy to announce that Repco Home Finance Limited, customers, Board of Directors, Promoters, Regulators, investors,This milestone is a testament to the trust and support of our valued contributions have shaped Repco Home Finance into a trusted vendors, rating agencies, analysts, bankers, and employees whose cumulative disbursements of Rs. 35,847.31 crores and an AUM of brand that turns aspirations of homeownership into reality. With lakh active customers. Expanding across 12 states and one unionRs. 14,492 crores as of FY 2024-25, we continue to serve over 1.1 territory,fulfilling homeownership dreams. This milestone is a testament our 233 touchpoints cater to tier-2 and tier-3 cities, tovendors, credit rating agencies, analysts, and employees, whosethe trust and support of our valued customers, investors, brand that turns aspirations of homeownership into reality.contributions have shaped Repco Home Finance into a trusted growth, ensuring greater accessibility and impact for years to As we embrace the future, we remain committed to sustained come.

Strategic Focus Areas The Company will continue to maintain an optimal LoanBookComposition: blend of salaried and non-salaried loans, ensuring a Maintain a balanced portfolio with a slight tilt towards salaried balanced risk profile and catering to diverse customer segments. industry peers. professionals, ensuring a healthy risk profile and aligning with beNon-Housing maintained Portfolio: around 30%, The aligningnon-housingwith ourbookstrategic will diversification goals. penetrationGeographical inExpansion: Andhra Pradesh,Efforts will be intensified to deepen Karnataka, Telangana and into underserved markets through new branch openings.Western part of India, enhancing brand presence and tapping acquiringCustomercreditworthyAcquisition customers& Upticking and Ticket increasingSize: ticketFocussizes,on by rising property prices, leveraging the regulators dispensation aligning with the upward trend in average loan amounts driven risk weight etc. to enhance fee-based income streams, contributing to revenue Fee-Based Income: Cross-selling initiatives will be emphasized diversification.

Net maintain consistent NIM and spread levels, ensuring profitability Interest Margin (NIM) & Spread: Efforts will be made to amidst market fluctuations.

Asset assessments and proactive recovery measures. Quality: Prioritize asset quality through stringent credit

Digitization: turnaround times and process efficiencies, enhancing customer Ongoing digitization efforts will aim to improve experience and operational effectiveness.

advancementsoverall operational capabilities and efficiency. across various departments, strengthening its

Operational Enhancements In FY2023-24, the Company initiated the verticalizationVerticalization:of its operations, focusing on the sales and strengthened the verticalization of these areas in FY2024-25 collections verticals. Building on this foundation, it has further whileunderwriting in the current financial year. also introducing dedicated verticals for operations and Origination, Loan Management, Loan Collection and EnterpriseTechnological Implementation: LLMS comprising of Loan Generalsuccessful data migration in all our branches. Likewise, Mobile Ledger have gone live after complete integration and and Field Investigation have been rolled out in all the branches.applications in respect of Direct Selling Agents, Field Collection Further,Dedupe, Goods & Services Tax, and Branch Reconciliation Systemapplications like Document Management System, measures to ease business operations. Besides, applications have been implemented after complying with necessary security System and Enterprise Data warehousing are being implemented like Human Resource Management System, Audit Management September 2025. in a Phased manner and targeted for entire closure by end of by systematically attending to all its NPA accounts and following Recovery Efforts: The Company intensified its recovery efforts notices were issued during the year (FY2024-25). This assisted the remedies available under the SARFAESI Act. More than 3,600 reducing the NPA numbers. The actions would continue. in bringing the borrowers up for discussion and ultimately localized file processing by establishing region-level operations Regional Optimization: The Company has implemented andturnaround time (TAT) and operational efficiency. deploying technical and legal resources to enhance implemented will contribute to enhancing its performance over The Company remains confident that the strategic measures operational excellence. the medium to long term, fostering sustainable growth and Technological scoring and digital platforms will enhance our ability to assess Integration: The adoption of AI-driven credit segments. and serve a broader customer base, particularly in underserved Byaim to strengthen our position in the housing finance sector, aligning our strategies with these market dynamics, we broader goal of translating aspirations of people to own a delivering value to our stakeholders and contributing to the house into reality.

The Company operates in two business segments: Individual Home Loans and 5. CORPORATE OVERVIEW employedHome Equity. For individual borrowers in the salaried and non-salaried (self- professional and self-employed non-professional) segments, the needs. Company offers a range of customized home loan products to meet their specific

6. GEOGRAPHIC PRESENCE which included 44 satellite centers and 189 branch outlets. We The Company has 233 points of presence as of March 31st, 2025, are present in 12 states as well as a Union Territory. acrossIn FY2024-25, the Company established fifteen new branches Andhra Pradesh, Maharashtra, Pondicherry, Rajasthan, Tamil Nadu and Telangana in addition to nine new satellite centersCompany also converted six satellite centers to branches.in Maharashtra and Tamil Nadu. During the year, the TamilMaharashtra, Odisha, West Bengal, Gujarat, Madhya Pradesh, Nadu, Karnataka, Andhra Pradesh, Telangana, Kerala, all part of the Companys retail network. Jharkhand, Rajasthan, and the Union Territory of Puducherry are

Tamil Nadu	119
Karnataka	29
Maharashtra	20
Andhra Pradesh	20
Telangana	12
Gujarat	9
Kerala	7
Rajasthan	7
Madhya Pradesh	4
West Bengal	2
Puducherry	2
Jharkhand	1
Odisha	1
Total	233

Trainees (DST). Majority of the sales is through in house saleswalk-ins, referrals, Direct Selling Agents (DSA), and Direct Sales team, walk in customers and referrals.

7.The Companys business activities expose it to various risks, RISK MANAGEMENT includingLiquidity risk, Reputational risk, Compliance risk and SolvencyCredit risk, Operational risk, Interest Rate risk, business. The objective of the Companys risk management risk. Risk management forms an integral part of the Companys to quantify the risks and control/mitigate various types of risks system is to identify, assess, measure, manage and suggest ways involved in each area of activity.

most crucialCompany identifies the risks in each function/activity by taking function in managing and mitigating the risk. The existing processes and procedures. The overall responsibility inputs from all the departments and by analyzing gaps in the departmentalof identifying,headsmonitoring,and executiveand evaluatingmanagement.risksThe liesCompanywith analyzesimpact. The analysis considers a range of potential outcomes andrisks in terms of consequence and likelihood of its the possibility of those consequences occurring. Risk Officer and other senior management team members, meets The Companys risk management committee, comprising the Chief systemregularly to assess the adequacy of the existing risk managementand discuss emerging risks, operational or otherwise. Management. The Board reviews the risk management practicesThe Company has constituted a Board Level Committee for Risk of the Company and assists the Company in its efforts.

I) Rigorous credit appraisal keeps credit risk mitigated The Companys credit approval process is organized and complete credit evaluation. The process, which happens atdefined and comprises a well-established protocol for level of checks. A preliminary appraisal is performed by the branch, Regional and Head Office level, ensures a high lawyers. The same is again revalidated at the Regional Office the branch manager, assisted by branch-level valuers, and Office level above the threshold limit. Each borrower is rated level up to a certain threshold before sanction and at Head parameters, including credit bureau score, carrying different based on a dynamic credit scoring model comprising over 15 and proposals with scores below a threshold limit without weights. Credit bureau scores are tracked and taken seriously, now capturing and analyzing granular characteristics of loanjustifications are not onboarded. Apart from that, we are credit underwriting process more effective. Pricing of a loanaccounts, identifying patterns and behaviors, and making the specific characteristics like quantum, risk and deviations. All comprises of a minimum lending rate plus premium to loan underwrite. Such pricing discipline, we believe, will generate efforts are made to ensure that our pricing covers the risk we consistentwill introduce pricing of loan on the basis of ALM model. In and superior return ratios, going forward we are laid down on various aspects of credit such as individualorder to limit the magnitude of credit risk, prudential limits properties, etc. The Loan to Value (LTV) ratio is fixed for borrower-wise limits for housing loans and loan against prescriptions.done on half-yearly basis and going forward review of high, Further review of high-risk customers is medium and low risk will be done on half-yearly basis.

II) OperationalOperational risk is mitigated using various tools risk includes the risk of loss due to internal The Company has put in place various controls to mitigatesystem, process, or people failures or external occurrences. operationalis ensured by the credit monitoring department at the risks. An ongoing monitoring of loan accounts capacity of the borrower, cash flow adequacy and proper head office that tracks, among other things, the repayment immediately.valuation for the security etc. and informs process ownersCredit review team, checks at random, if the

Credit Policy of the Company. Credit offsite team at Head approval by the sanctioning authority is in line with the to loan sanction conditions before giving disbursement Office checks loan documentation and ensures compliance introduction of specific Key Risk Indicators (KRIs) for each clearance. Operational risk is also being monitored through track the current risk and control environment and can actline of business activity. KRIs are objective measures used to They form part of Quarterly Operational Risk Management as early warning signals to potential risk and control issues. Reportingthe loan, our Customer Service Department takes a feedback to the Board level committees. Post sanction of from the customers on their onboarding experience.

Audit system is performed by the internal inspection team at Inspection of each branch based on Risk Based Internal identified in terms of outstanding loans and NPAs by retired regular intervals. Concurrent audit is done at key branches Company officials also make surprise visits to branches to senior officials of banks entrusted with special duty. Senior fromcheck if all processes and best practices are followed. Apart that, we take the help of external Risk Containment customer and facility as defined in the credit policy. Our Unit to perform KYC documents check and risk checks on action when an account defaults on payment. Recovery team starts following up with customers and takes discussions are held on reports shared by recovery officers, To improve operational efficiency, quarterly board level

Operations team, who oversee monitoring of the Companysexternal audit firm, internal Inspection team and the offsitelearning is put to use immediately.transactions and KYC-related compliance. New twice a year by the senior management team.

III) Interest rate risk is mitigated by matching maturity and repricing of assets and liabilities The Company has formulated Asset-Liability Management various(ALM) policy,types whichof riskslaysanddowndynamicallymechanismsalteringfor theassessingasset-of assets and liabilities are monitored on an ongoing basis by liability portfolio to manage such risks. The maturity profile decision-making body constituted by the Board, to mitigate Asset Liability Management Committee (ALCO) - a strategic of the Managing Director, Chief Operating Officer, Chief the risks arising from cash flow mismatches, comprising Officer, Chief Compliance Officer, Chief Risk Officer and Development Officer, Chief Business Officer, Chief Financial Company has put in place an efficient and transparent a other senior members of the Company. In addition, the interestLending rateRate transmission(MLR), whichpolicyis reviewedin the formeveryofmonthMinimumand pricing reset for the existing loans is three months. applicable immediately on all new loans. The frequency of and long-term borrowings is maintained in sync with the At any point in time, an optimal balance between short-term and on-lending happen at floating rates, which act as a hedge extant asset and liability profile. Most long-term borrowings when interest rate volatility is high.

IV) Liquidity Risk is mitigated by ensuring availability of regular funding sources to enable uninterrupted lending activity by the Company Management of liquidity risk is the ability of a Company adversely affecting the Companys financial condition. This to meet debt obligations as they become due, without crisis,assumes significance on account of the fact that liquidity even at a single institution, can have systemic liquidity is adequately incorporated in the internal productimplications. The cost incurred in maintaining sufficient approval process for all material business lines, products pricing, performance measurement and new product optimization of cost of liquidity and profitability of the and activities. Therefore, management of liquidity involves maturity gap) in the balance sheet positioning are identified Company. Maturity based cash flow mismatches (traditional measured by following a flow approach on a regular basis.as a potential source of liquidity risk and they are being time buckets, maturity profile as suggested by RBI/NHB For measuring the net funding requirements under various is used and the cumulative deficits in each time bucket is monitored vis- a- vis. the pre-determined tolerance levels. are monitored regularly. In addition to the above, we adhere The funding requirement and deployment of surplus funds to the guidelines on Liquidity Coverage Ratio (LCR), which stood at 144.40% as on March 31st, 2025 as against the regulatory prescription of 100%.

V) Solvency risk is mitigated by keeping liquid investments To mitigate solvency risk, the Company has an investment policyemergency buffer to be used in the unlikely event that in place. The idea is to create and maintain an thethings go out of hand. During the year ending March 2025,Company made multiple investments in short-term Liquid Mutual Funds. The value of short-term investmentsfixed deposits with Banks, Government securities and Company had a bank balance to the tune of Rs.61.25 crores.at the end of the year was Rs.254.67 crores. In addition, the

The total liquidity was about 2.16% of the balance sheet size as of March 31st, 2025.

The Company has funding sources spread across three verticals8. BORROWING PROFILE facilities from Repco Bank and other banks. The Company did not viz. refinance from NHB, term loans and working capital loan Papers (CPs) during the year.issue any Non-Convertible Debentures (NCDs) and Commercial by way of borrowings from Commercial Banks, 7.9% by way of As of March 31st, 2025, 82.9% of the Companys borrowings were Repco Bank.refinancing from the National Housing Bank (NHB), 9.2% from fixed rate basis and 99.20% on floating rate basis. The average As of March 31st, 2025, 0.80% of overall borrowings were on a tenor on borrowings was 7.85 years.

Borrowing source	Rs. Crores
National Housing Bank	875.54
Repco Bank	1,026.12
Commercial Banks	9,246.36
Total	11,148.02

9. CREDIT RATING

The Companys short-term and long-term debt facilities are rated by two rating agencies – CareEdge Ratings & ICRA Limited.

The long-term facilities include both Companys term loan facilities with banks and other financial institutions. The Companys Non-Convertible Debentures facility is rated AA- (Stable) rating by ICRA Limited.

During the year FY2024-25, rating agencies ICRA Limited & CareEdge Ratings reaffirmed AA- (Stable) rating assigned to

Companys term loan facilities and A1+ rating assigned to Companys Commercial Paper facility.

10. CAPITAL ADEQUACY

RHFLs Capital Adequacy Ratio (CAR) as of March 31st, 2025, was

37.09% consisting of Tier-1 capital of 36.41% & Tier-2 capital of 0.68%.

11. ASSET QUALITY

Over the years, the Company has developed robust risk management systems & processes in all areas of operations like loan origination, credit appraisal, loan disbursement, and collection & recovery. The new Loan Lifecycle Management System (LLMS) software introduced during the year also facilitates in improving our monitoring mechanism.

The Company was successful in bringing down its Gross- Non-performing Assets (GNPA) numbers significantly. Delinquency of a few accounts is unavoidable considering the Companys exposure to unorganized sector. To strengthen its provision the Company has retained most of the provisions released due to recoveries made during the year. NPAs (Stage-3) has decreased to 3.26% (Rs. 472.91 crores excluding Interest Accrued) of the 551.6 crores excluding Interest Accrued) in the previous year. overall loan book as of March 31st, 2025, compared to 4.1% (Rs.

The Provision Coverage Ratio on Stage-3 assets stood at about 59.61% as of March 31st, 2025. About 88.30% of the loans in

2025.Stage-3 were under various stages of SARFAESI as of March 31st,

12. INVESTMENTS

Repco Micro Finance Limited (RMFL) was incorporated in 2007 as Repco MSME Development & Finance Ltd. and registered as an NBFC with the Reserve Bank of India in 2010. Later, it was classified as an NBFC-MFI in December 2013. The company is promoted by Repatriates Cooperative Finance & Development

Bank Ltd. (Repco Bank), which is a Government of India enterprise. RMFL is engaged in the activity of extending loans to economically backward women through the Women Self-Help Group for income generation purposes. The main objective of the company is to assist poor women in their upliftment by promoting entrepreneurship and providing microcredit and finance in different loan cycles at reasonable rates of interest. Upscaling the underprivileged through financial inclusion and the creation of first-generation entrepreneurs.

The Company held investments in the equity of this unlisted associate Company, RMFL, to the extent of Rs. 31.6 crores

(3,16,00,000 equity shares of Rs.10/- each) as of March 31st, 2025. During FY2024-25, we have received Rs. 3.79 Crore in the form of dividend from Repco Micro Finance Limited.

13. OPERATIONAL HIGHLIGHTS & PERFORMANCE SUMMARY

The Company ended the year with a resilient balance sheet, higher provision cover, and strong capital levels. The Companys primary business is housing finance. All other activities of the Company revolve around the main business.

During the year, the Company remained focused on preserving the quality of the balance sheet. Business performance in the last quarter was meaningfully better as the consumer confidence of our target group started showing an improvement.

A Business Summary

FY2024-25	Sanctions *	Disbursements*
Q1 FY2024-25	727	680
Q2 FY2024-25	926	867
Q3 FY2024-25	806	761
Q4 FY2024-25	1,059	975
Total	3,519	3,284

B. The ratio of income and expenses to average loan assetsReturn on Assets Tree

Metric	FY 2022-23	FY 2023-24	FY 2024-25
Net interest margin	4.8%	5.2%	5.2%
Other income	0.1%	0.1%	0.3%
Non-interest expenses	1.2%	1.3%	1.5%
Credit cost	0.4%	0.0%	(0.3%)*
Income Tax	0.8%	1.0%	1.1%
Return on assets	2.5%	3.0%	3.1%

C. 5-years historical performance at a glance

D. Other ratios

The present provisions available are in compliance with the RBI Master Circular dated October 1 on Income Recognition, Asset Classification and provisioning st, 2021 on prudential norms pertaining to Advances. The lower provisioning on account of reduction in GNPA facilitated in increasing the profitability ratios like Return on Assets of the Company during the year.

Particulars	March 2024	March 2025
Interest Coverage Ratio	1.6	1.6
Debt Equity Ratio	4.0	3.6
Margin Operational Profit	34.0%	32.6%
Net Profit Margin	25.6%	26.1%
Return on Equity	15.8%	15.2%
Return on Assets	3.0%	3.1%

14. INTERNAL AUDIT & CONTROL

The Company has put in place organized and effective internal control systems in sync with nature of business and scale of operations. The Company has implemented "Risk based Internal Audit" methodology as per guidelines specified by Reserve Bank of India (RBI).

Risk Based Internal Audit (RBIA) is an internal audit methodology which is primarily focused on assessing the inherent risk involved in the activities or system and provide assurance to the management that risk is being managed within the defined risk appetite level.

RBIA team was further strengthened to intensify the thrust on evaluation of branches and department/process to ensure that the functioning is in consonance with carefully formulated and well documented policies of the Company, in order to plug loopholes and improve customer service. Details of the audit report of Branch Audit, Concurrent Audit and

Departmental Audit are placed before Audit Committee of the Board on a quarterly basis for review. The report of standalone Information Security (IS) audit of IT systems by external IT

auditors and special audit for evaluating the efficiency and effectiveness of existing internal control system are reviewed by

Audit Committee as well as IT strategy committee periodically. The operation and performance of Audit department are reviewed by Audit Committee of the Board.

Evaluation of the effectiveness and appropriateness of Internal

Control systems and their compliance, the robustness of internal processes, policies, accounting procedures, and compliance with laws and regulations are the goals of these efforts. Stringent policies are in place to ensure that the assets and properties of the Company are utilized in the best interest.

15. INFORMATION TECHNOLOGY

In FY2024-25, the Company undertook a comprehensive Digital

Transformation initiative, rolling out several applications and features aimed at enhancing experiences for both customers and employees. A key milestone was the implementation of a deduplication feature in the Loan Lifecycle Management System, ensuring rigorous due diligence during the credit appraisal process. Additionally, software solutions for Goods & Services Tax and the Bank Reconciliation System were introduced to streamline operations for the Finance team.

An Audit Management System—incorporating various internal audit methodologies—was also implemented in a phased manner. To enhance employee experience, a Human Resource Management System (HRMS) was launched, covering key functionalities such as employee lifecycle management, payroll and time & attendance. Further enhancements and features within the HRMS are planned for FY2025-26.

Moreover, a mobile application was launched for Direct Selling

Agents, Field Investigators, and Field Collectors to facilitate smooth business operations.

The Company continues to drive various technology initiatives, with ongoing development in areas including the Customer Mobile Application and Portal, Treasury System, Asset and Liability

Management System, Securitization, Anti-Money Laundering and Enterprise Data Warehousing which will be rolled out during FY2025-26. In line with regulatory requirements, features such as Interest Calculations and Key Fact Statements were also successfully implemented.

applications, the Company has engaged a reputed third-party vendor to conduct Vulnerability Assessment and Penetration Testing (VAPT) and Source Code Review for new application as they come. VAPT was also performed on the Companys website following the addition of new features, ensuring protection against potential security threats.

Furthermore, in response to business growth and the expansion of branch operations, security features are enhanced with the latest technological advancements.

The company conducts periodical DR Drills to ensure business continuity in case of any eventuality.

16. HUMAN RESOURCES

To achieve its long-term goals, the Company thinks that recruiting, developing, and keeping a quality team is essential. In order to do this, the Company gives staff members the internal and external training they need, to stay current on industry benchmark practices in the home finance sector. 1006 employees took part in

44 training programs during the course of the year. and engaging through the use of strategic job design (KRA and KPI), extending career paths, manageable skill sets, and internal talent pools to establish long-term talent access.

Because of the ever-changing nature of the sector, the Company actively responds to employee needs, embraces flexible work arrangements, and provides a professional work environment while upholding positive working relationships. Throughout the year, the Company hired 364 new staff members. As of March 31st, 2025, the Company had 1256 employees on its rolls.

For and on behalf of the Board of

Directors

Sd/-

Managing Director T Karunakaran & CEO

DIN: 09280701

Date : 27 Place : Chennai th June, 2025