Richfield Financial Services Ltd Management Discussions

RICHFIELD FINANCIAL SERVICES LIMITED CIN:L65999TN1992PLC193915

1. INDUSTRY OVERVIEW

Richfield Financial Services Limited is a Base Layer Non-Banking Financial Company (NBFC-BL) registered with the Reserve Bank of India and is primarily engaged in lending activities.

NBFCs continue to play an important role in the Indian financial system by complementing the banking sector and providing credit to a wide range of customers and businesses. Their ability to serve customers through diversified products and an extensive branch network provides opportunities for continued growth in the financial services sector.

The Reserve Bank of India has implemented the Scale Based Regulation (SBR) framework for NBFCs, under which NBFCs are classified into Base Layer, Middle Layer, Upper Layer and Top Layer based on the nature, size and systemic importance of the institution. The Company is presently classified as an NBFC - Base Layer.

2. BUSINESS OVERVIEW

During the financial year 2025-26, the Company continued to focus on strengthening its lending operations, expanding its geographical presence and building a sustainable customer base.

The Company has maintained a particular focus on Gold Loans, which continue to represent an important area of growth for the Company. The Company also continues to undertake lending activities through other products, including Personal Loans and other loan products, based on market opportunities and the Companys risk appetite.

The Companys growth strategy is supported by prudent credit appraisal, effective collateral management, collection monitoring, internal controls and compliance with applicable regulatory requirements.

3. OPERATIONAL PERFORMANCE

During the year under review, the Company made significant progress in expanding its operational footprint. The number of branches increased from 19 branches as at 31st March, 2025 to 50 branches as at 31^st March, 2026.

The expansion included the establishment of 9 branches in Bangalore, Karnataka, thereby strengthening the Companys presence in the Karnataka market and providing greater accessibility to its financial products and services.

The increased branch network is expected to provide a stronger platform for customer acquisition, portfolio expansion and deeper penetration in the markets in which the Company operates.

The Company recorded a Profit After Tax of f35.26 lakh during the financial year ended 31^st March, 2026.

4. SEGMENT-WISE / PRODUCT-WISE PERFORMANCE

The Companys income is primarily derived from interest income generated from its lending activities.

During the year, the Company continued to strengthen its presence in the Gold Loan segment, while also maintaining its lending operations through Personal Loans and other loan products.

Gold Loans remain a key focus area for the Company, supported by the increasing demand for secured credit and the Companys expanding branch network. The Company intends to continue strengthening this segment while maintaining prudent lending standards and appropriate collateral appraisal and monitoring mechanisms.

The Company will continue to evaluate opportunities in other lending segments based on market conditions, customer requirements, risk-return considerations and regulatory requirements.

5. OPPORTUNITIES

The Company believes that the Indian financial services sector continues to provide significant opportunities for well-managed NBFCs.

The key opportunities identified by the Company include:

• Increasing demand for secured retail credit;

• Strong demand for Gold Loans;

• Rising gold prices supporting customer demand for gold-backed financing, subject to prudent loan-to-value management;

• Expansion of financial services into under-served markets;

• Increasing adoption of digital technologies in financial services;

• Expansion of the Companys branch network and customer base;

• Growth opportunities in Karnataka, particularly following the Companys expansion in Bangalore; and

• Opportunities to diversify and deepen the Companys lending portfolio in accordance with its risk appetite and regulatory framework.

6. THREATS

The Company operates in a competitive and highly regulated financial services environment. The principal challenges and threats include:

• Increasing competition from banks, NBFCs and fintech companies;

• Changes in regulatory and compliance requirements;

• Changes in interest rates and borrowing costs;

• Macroeconomic uncertainties and inflationary pressures;

• Credit quality and collection-related risks;

• Volatility in gold prices and its impact on the value of collateral;

• Operational and technology-related risks; and

• Liquidity and funding-related risks.

The Company seeks to address these challenges through prudent credit practices, effective risk management, diversification of funding sources, strong internal controls and continuous monitoring of regulatory and market developments.

7. OUTLOOK

The Company remains cautiously optimistic about the growth prospects of the financial services sector and intends to leverage its expanding branch network and increasing focus on Gold Loans to support sustainable business growth.

The Companys strategy for the financial year 2026-27 is focused on strengthening its Gold Loan business, expanding its customer base, improving operational efficiency and maintaining prudent risk management practices.

The Company is working towards achieving Gold Loan AUM of ?150 crore during FY 2026-27.

This objective is proposed to be supported by further strengthening the branch network, particularly in key markets, enhancing customer acquisition and service capabilities and maintaining disciplined credit and collection practices.

As part of its funding strategy, the Company is also exploring a public issue of Non-Convertible Debentures (NCDs) of up to ?50 crore, subject to the requisite statutory, regulatory and other approvals. The proposed fund raising is intended to strengthen the Companys funding base and provide additional resources for supporting its lending operations and future growth.

The Company will continue to pursue growth opportunities while maintaining appropriate capital adequacy, liquidity, asset quality, regulatory compliance and risk management standards.

8. RISKS AND CONCERNS

As a lending institution, the Company is exposed to various risks arising from its lending activities and the operating environment. The Company has established appropriate policies, systems and processes for identifying, assessing, monitoring and mitigating these risks.

The principal risks relevant to the Companys business include the following:

Credit Risk

Credit risk represents the possibility of financial loss arising from the failure of a borrower or counterparty to meet its contractual obligations.

The Company seeks to manage credit risk through established credit appraisal procedures, customer due diligence, appropriate documentation, collateral appraisal, loan-to-value monitoring, portfolio monitoring and collection mechanisms.

In the Gold Loan business, particular emphasis is placed on appropriate valuation and custody of pledged gold, adherence to applicable loan-to-value requirements and monitoring of the quality and adequacy of collateral.

Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its financial obligations as they fall due.

The Company manages liquidity risk through monitoring of cash flows, asset-liability positions, funding requirements and available liquidity. The Company also seeks to diversify its funding sources to support the sustainable growth of its lending portfolio.

Interest Rate Risk

Interest rate risk arises from fluctuations in market interest rates which may affect the Companys borrowing costs, lending yields and profitability.

The Company monitors changes in interest rates and seeks to manage the impact through appropriate pricing of its lending products, funding strategy and asset-liability management.

Market and Gold Price Risk

Given the Companys focus on Gold Loans, changes in gold prices may affect the value of collateral supporting the Companys loan portfolio.

The Company seeks to mitigate this risk through prudent loan-to-value management, appropriate valuation of gold collateral, periodic monitoring and compliance with applicable RBI directions relating to lending against gold and silver collateral.

Operational Risk

Operational risk arises from inadequate or failed internal processes, systems, people or external events.

The Company manages operational risk through internal controls, defined operating procedures, segregation of duties, internal audit, branch inspections, technology controls and periodic review by the management and appropriate Board-level committees.

Regulatory and Compliance Risk

As an NBFC, the Company operates within a highly regulated environment. Changes in laws, regulations, RBI directions and SEBI requirements may affect the Companys operations and compliance obligations.

The Company has established compliance monitoring mechanisms to identify applicable regulatory requirements and ensure timely adherence thereto.

9. RISK MANAGEMENT FRAMEWORK

Risk management forms an integral part of the Companys business operations.

The objective of the Companys risk management framework is to identify, assess, measure, monitor and mitigate the risks associated with its business activities.

The Company has implemented policies and procedures covering various areas of risk, including credit risk, liquidity risk, operational risk, interest rate risk, market risk, regulatory risk and risks associated with lending against gold collateral.

The risks are monitored periodically by the management and the appropriate Board-level Committees, as applicable. Necessary corrective and mitigating measures are undertaken wherever required.

The Company endeavours to ensure that its risk management practices remain aligned with the applicable directions, guidelines and regulatory framework prescribed by the Reserve Bank of India and other applicable regulatory authorities.

10.INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an appropriate system of internal controls commensurate with the size and nature of its operations.

The internal control framework is designed to safeguard the Companys assets, ensure the reliability of financial and operational information, promote operational efficiency and ensure compliance with applicable laws, regulations and internal policies.

The Company has an Internal Audit function which undertakes periodic reviews of the Companys operations, processes and internal control systems. Internal Audit Reports are placed before the Audit Committee and the Board of Directors, as applicable, for review and necessary corrective action.

Branch operations are also subject to periodic audit and inspection to assess compliance with established policies and procedures and to identify areas requiring improvement.

The Companys internal control systems are periodically reviewed and strengthened based on business requirements, regulatory developments and observations arising from internal audits and inspections.

11.HUMAN RESOURCES

Human resources continue to be an important contributor to the Companys growth and operational effectiveness.

The Company provides periodic training and development programmes to employees across various functions with a view to enhancing their knowledge, skills and capabilities and keeping them abreast of developments in the financial services industry.

The Company encourages employees to continuously improve their professional capabilities and align their efforts with the Companys business objectives, customer service standards and regulatory requirements.

The commitment and contribution of employees have played an important role in supporting the Companys branch expansion and business growth.

Industrial relations during the year remained cordial and harmonious.

12.INTERNAL AUDIT

The Companys Internal Audit function assists management in evaluating the effectiveness of internal controls and operational processes and in identifying areas of operational and compliance risk.

Internal audits and branch inspections are conducted periodically. The observations arising from such audits are reviewed by the management and placed before the Audit Committee and the Board, as applicable, and appropriate corrective measures are taken.

The Company continues to strengthen its internal audit and monitoring framework in line with the growth of its operations and branch network.

13.CAUTIONARY STATEMENT

This Management Discussion and Analysis Report contains certain forward-looking statements concerning the Companys business, financial performance, growth prospects and future plans.

These statements are based on certain assumptions and expectations and are subject to various risks and uncertainties. Actual results may differ materially from those expressed or implied in such statements due to factors including changes in economic conditions, government policies, regulatory requirements, interest rates, market conditions, competition, credit quality, liquidity conditions, gold prices and other factors beyond the Companys control.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, except as may be required under applicable laws and regulations.

	By and on behalf of Board of Directors
	For Richfield Financial Services Limited
	Sd/-
	Mr. Vadasseril Chacko Georgekutty
Place: Kochi	Managing Director
Date: 12-08-2026	DIN:09194854