RSD Finance Ltd Management Discussions

1. INDIAS TRADE AND ECONOMIC OUTLOOOK

In an era marked by escalating global trade tensions and persistent geopolitical uncertainties, the Indian economy has demonstrated remarkable resilience and robust growth. The above findings are from Reserve Bank of Indias March 2025 bulletin which highlights the state of the economy in the country. The latest data- driven analysis underscores the strength of domestic fundamentals amidst a volatile global backdrop. While global economic uncertainties persist, Indias economy shows strong growth, supported by robust consumption and government spending. Inflation has moderated, and policy measures have helped stabilize market liquidity. However, foreign portfolio outflows and currency depreciation remain key risks. Domestic Economic Developments

Resilient GDP Growth Amidst Global Challenges •

Indias GDP is projected to grow by 6.5% in FY 2024-25, according to NSOs Second Advance Estimates.

• Quarter 3 GDP growth was 6.2%, rebounding from 5.6% in Q2 due to higher private consumption and government spending.

• Sectors driving growth: construction, trade, and financial services.

Foreign Portfolio Outflows & Currency Risks

• Sustained foreign portfolio investor (FPI) outflows put pressure on stock markets and the rupee.

• However, domestic investors increased their holdings, stabilizing market ownership structures. • Rupee depreciation risks remain due to external uncertainties.

Inflation Trends: Headline Inflation Eases

• CPI inflation fell to a 7-month low of 3.6% in February 2025, mainly due to a decline in vegetable prices.

• However, core inflation (excluding food & fuel) rose to 4.1%, indicating persistent price pressures. Employment Trends

• Manufacturing employment grew at the second-fastest rate since the PMI survey began.

• Services sector employment also expanded significantly, reflecting strong demand.

• Urban unemployment remains at a historic low of 6.4%.

Trade & External Sector

Import and Export Trends

• Exports grew marginally by 0.1% to $395.6 billion from April 2024-Feb 2025 but merchandise exports declined by 10.9% YoY in February, largely due to base effects and weak global demand.

• Top-performing export sectors: electronics, rice, and ores.

• Weak export sectors: petroleum

products, engineering goods, chemicals, and gems & jewellery.

Imports increased by 5.7% to $656.7 billion, driven by gold, electronics, and petroleum during April 2024-Feb 2025, however it fell by 16.3% in Feb 2025, leading to a narrowing trade deficit.

• Oil and gold imports dropped significantly, contributing to the decline in overall imports.

• Imports of electronic goods and machinery remained strong, reflecting domestic investment demand.

Financial & Monetary Policies

RBIs Liquidity Management

• RBI used open market operations (OMO), daily repo auctions, and dollar/rupee swaps to manage liquidity.

These measures helped stabilize domestic liquidity despite capital outflows. Sector-Specific Developments Agriculture Sector

Indias food grain production for 2024-25 is estimated at 330.9 million tonnes, marking a 4.8% increase from 2023-24, driven by kharif production up 6.8% and rabi up 2.8%, according to second advance estimates.

Automobile Sector

• Car and motorcycle sales declined in February due to weaker demand.

• Tractor sales saw double-digit growth, indicating strong rural economy demand. Infrastructure & Construction

• Toll collections and E-way bills recorded double-digit growth, signalling robust infrastructure activity.

• Government spending on infrastructure projects supported economic momentum.

Global Setting

Trade War & Tariffs Impacting Growth

• The global economy entered 2025 with strong momentum but is now slowing due to increased protectionism and trade restrictions.

• US-China tariff escalations could reduce US GDP growth by 0.6 percentage points in 2025 and shrink the economy by 0.30.4% in the long run.

• OECD lowered global GDP forecasts to 3.1% in 2025 and 3.0% in 2026 due to slowing demand.

Market Volatility & Currency Fluctuations

• US dollar lost gains made since November 2024 due to trade policy uncertainty.

• European bond yields surged as Germany and others increased military spending.

• Equity markets worldwide have been volatile, reflecting fears of slowing growth.

Commodity Markets & Inflationary Pressures

• Global oil prices fell 15% since mid- January 2025 due to reduced demand expectations.

• Gold prices hit a record high of $3000

per ounce due to investor flight to safety.

• Food production outlook improved, with cereal production exceeding 2024 levels.

Overview

Despite global economic headwinds, Indias growth remains stable at 6.5%, supported by strong domestic demand. Inflation is under control, though core inflation remains sticky, necessitating careful monetary management. Trade challenges persist due to weak global demand, but a narrowing trade deficit offers some relief. While foreign investor outflows pose risks, robust domestic investment provides resilience. The RBIs proactive policies have played a crucial role in stabilizing liquidity and inflation expectations. Overall, Indias economy is well-positioned for growth, but uncertainties in global markets, financial volatility, and trade disruptions remain key risks. Sustained policy support and domestic resilience will be essential in maintaining economic momentum.

2. NBFC OUTLOOK

The growth trajectory for Indias nonbanking finance companies (NBFCs) is set with asset growth projected at 15-17% year-on-year (Y-o-Y) for FY25 and FY26, compared to 23% in FY24. Despite the slowdown, the projected growth remains above the decadal average of 14%, driven largely by core segments such as home and vehicle loans, according to CRISIL Ratings and Fitch.

The outlook for NBFCs in 2025 shows a period of strategic recalibration as they face a more challenging funding and regulatory terrain. However, the sector remains well-positioned to leverage its fundamentals and capitalise on emerging opportunities in a gradually stabilizing economic environment.

3. OPPORTUNITIES& THREATS

The RBI has been continually strengthening the supervisory framework for NBFCs in order to ensure sound and healthy functioning and avoid excessive risk taking. It has issued several new guidelines in the recent past. The uncertainties and volatility in the financial market are a continuing threat to the organizational performance. However, the twin features of foresightedness and focused analysis of the market have challenged the threat of adverse performance.

As various factors are posing constant threats and high volatility in the Capital Markets, it appears beneficial to diversify the portfolio to reduce the risk and insulate from the vagaries of stock- market. Mutual Funds help to reduce risk through diversification and professional management. Therefore, the Company invests its surplus funds in debt/ equity oriented Mutual Funds. One of the biggest advantages of Mutual Fund investment is Liquidity. Open end funds provide option to redeem on demand, which is beneficial during rising or falling markets. The management is exploring other avenues of business.

4. FINANCIAL PERFORMANCE

The Company follows accrual basis of accounting under the historical cost convention. It has adopted Indian

5. FINANCIAL RATIOS

Accounting Standards ("Ind AS") notified under section 133 of the Companies Act 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, 2015.

Balance Sheet

? Net worth increased to Rs. 77.96 crores as on March 31, 2025as compared to Rs. 73.10 crores as on March 31, 2024.

? The Borrowings for FY 2024-25is Nil compared to Rs. 39.81 lakhs during FY 2023-24 owing to debt repayments during the year.

Profit and loss statement

? Total income for FY 2024-25 stood decreased to Rs. 8.79crores as compared to Rs. 12.37 crores in FY 2023-24.

? Total expenses for FY 2024-25 stood decreased toRs. 2.15 crores as compared to Rs. 2.71 crores in FY 2023-24.

Depreciation and amortization decreased to Rs. 5.27 lakhs in FY 2024-25 compared to Rs. 6.03 lakhs in 2023-24.

Following are ratios for the current financial year and their comparison with preceding financial year, along with explanations where the change has been 25% or more when compared to immediately preceding financial year:

Summary of Key Financial Metrics and Key Ratios (Amount in Lakhs except EPS)

KEY METRICS	STANDALONE		CONSOLIDATED
	FY2024-2025	FY 2023-2024	FY 2024-2025	FY 2023-2024
Revenue from Operations	875.12	957.22	13000.62	10311.27
Other Income	4.50	280.19	499.70	810.01
Total Expenses	214.94	270.56	10964.02	8935.46
Profit/(Loss) before Tax	664.68	966.85	2536.30	2185.82
Profit/(Loss) After Tax	512.24	762.15	1781.47	1740.29
EPS (Rs. per share)	3.75	6.26	13.96	15.75

Significant Ratios

The Disclosure w.r.t. details of significant changes in key financial ratios as stipulated under Regulation 34(3) read with Schedule V Clause B of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are as follows:

Segment-Wise Performance

On a consolidated basis, the Investment and Financial Segment has posted a revenue of Rs.1699.43 lakhs (Previous Year Rs. 1631.78 lakhs), Job Work segment has posted a revenue of Rs. 94.87lakhs (Previous Year Rs. 102.47 lakhs), Hotel business segment has posted a revenue of Rs. 2726.10lakhs (Previous Year Rs. 2764.38 lakhs) and heat treatment activity generated revenue of Rs. 9015.49lakhs (Previous Year Rs. 6654.00 lakhs) including inter segmental revenue of Rs. 35.57 Lakhs for the FY 24-25.

On a standalone basis, the Investment and Financial Segment posted segment revenue of Rs. 784.75lakhs (Previous Year revenue of Rs. 1134.94 lakhs) and

the Job Work segment recorded a profit of Rs. 94.87lakhs (Previous Year profit of Rs. 102.47 lakhs).

The Company operates only in India, hence there is no other significant geographical segment that requires disclosure.

6. RISKS AND CONCERNS

NBFCs in India operate in a dynamic and complex risk landscape

comprising of plethora of challenges and opportunities. Indian NBFCs confront a multifaceted risk landscape that necessitates robust risk management practices, stringent regulatory compliance, and proactive adaptation to changing market conditions to ensure their stability and sustainability in this dynamic environment.

Various risk management strategies employed by your company, and the strategies impact their financial stability and growth trajectory. Using a

combination of industry reports, annual financial data, regulatory frameworks, and case-based analysis, the study focused on the evolving role of risk governance in a post-crisis NBFC environment. Additionally, RBIs Scale- Based Regulation framework has played a crucial role in pushing NBFCs toward more structured governance and accountability. The NBFC sectors average GNPA reduction from 6.3% to 5.2%, along with CRAR improvement to 23.7%, serves as numerical evidence of better risk alignment in recent years.

Further, change in regulatory requirements for NBFCs from time to time, can have a bearing on the running of the Company. The overall economic fluctuations/ slowdown and its impact on service sector are also a cause of concern.

7. INTERNAL CONTROL SYSTEM

Effective internal controls are necessary for building up an efficient organization. Your Company has in place, an adequate internal control and internal audit system managed by qualified and experienced people to ensure the compliances under statutory regulations. Corporate policies are made to figure out the weaknesses persisting in the system and suggest remedial measure for the same.

The system is improved and modified continuously to meet with the changes in business condition, statutory and accounting requirements. Internal controls are supplemented by an effective Internal Audit being carried out by M/s. S. K. Naredi & Co., LLP Chartered Accountant and are periodically reviewed by the management.

The Audit Committee also met the

Companys statutory auditors to ascertain their views on the financial statements, including the financial reporting system, compliance to accounting policies and procedures, the adequacy and effectiveness of the internal control and systems followed by the Company.

8. HUMAN RESOURCES MANAGEMENT

The Company always regards human resources as its most valuable asset and ensures friendly work environment that encourages initiatives by individuals and recognizes their performance. Total 8 employees were employed during the financial year.

To maintain competency and to improve the analytical abilities of employees for gearing them to face challenges, proper training and development is imparted by the Company before the employee takes up any responsibility. Our Company has always valued its employees whose dedication and contribution have helped us to reach the levels of excellence and rewarded them appropriately during the appraisal.

9. DISCLOSURE UNDER THE SEXUAL

HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,

PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2024-25.

Number of complaints received: NIL Number of complaints disposed off: Nil

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimate, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Important factors that could make a difference to the Companys operations include changes in Government regulations, tax regimes, economic developments within India and other such factors over which the Company does not have any direct control.

	For and on behalf of the Board
	Sd/-	Sd/-
	Rajeev Singh Dugal	Upneet Dugal
	Managing Director	Director
	DIN: 00052037	DIN:07680726
Place: Jamshedpur
Date: August 13, 2025