SIL Investments Ltd Management Discussions

The management of the Company is pleased to present the Management Discussion and Analysis Report (to the extent applicable to the Company) covering overall performance and outlook of its activities.

ECONOMIC SCENARIO AND OUTLOOK Global Economy

According to the International Monetary Fund (IMF), the global economy grew by 3.3% in 2024. For 2025, global growth is projected to moderate to 2.8%, with advanced economies expected to expand by 1.4% and emerging market and developing economies by 3.7%, driven primarily by robust activity in Asia. However, the global economic environment remains challenging due to persistent geopolitical tensions, elevated interest rates, and renewed trade frictions, notably between the United States and China. These factors have led to increased tariffs, disrupted supply chains, and growing uncertainty in global policies.

Looking ahead, the IMF expects global GDP growth to remain steady, supported by easing inflation and a gradual recovery in global trade.

The Reserve Bank of India (RBI), in its April 2025 Monetary Policy Statement, acknowledged that the global economic outlook is clouded by uncertainties stemming from trade tensions and protectionist measures. The RBI noted that while these global headwinds may weigh on Indias merchandise exports, services exports are expected to remain resilient, helping to cushion the external sector impact.

Indian Economy

Indias economic growth is projected to moderate in FY 2024 - 25, with the Reserve Bank of India (RBI), revising its real GDP growth forecast to 6.5%, down from an earlier estimate of 6.7%. This adjustment reflects headwinds from weakening urban consumption, sluggish private investment, and external uncertainties arising from global trade tensions. In response, the RBI reduced the policy repo rate by 25 basis points to 6% and shifted its stance to "accommodative" to support growth. Additionally, CPI inflation is projected at 4%, slightly lower than earlier estimates.

The World Bank projects a GDP growth rate of 6.5% for FY 2024 - 25, attributing this to resilient private consumption driven by improved rural incomes and a recovery in agricultural output. Services activity has remained steady, while growth in the agricultural sector has recovered. Furthermore, the 2025 Union Budget introduced several measures aimed at stimulating domestic demand, including tax incentives and increased expenditure in infrastructure and innovation sectors.

NBFC

As per RBI reports, Non-Banking Financial Companies (NBFCs) have continued to play a pivotal role in extending credit and financial services to under-served and unbanked segments of the Indian economy. As of September 2024, the sector maintained a healthy Capital to Risk-Weighted Assets Ratio (CRAR) of 26.1%, well above the regulatory minimum of 15%. The Gross Non-Performing Assets

(GNPA) ratio improved further to 3.4%, reflecting a continued strengthening in asset quality. Profitability indicators remained stable, with Net Interest Margin (NIM) and Return on Assets (RoA) at 5.1% and 2.9% respectively. While credit growth moderated to 6.5% during the first half of FY 2024 - 25, following regulatory tightening on certain loan categories, the sector remains resilient, supported by strong capital buffers and prudent risk management practices. Investment and Credit Companies (NBFC-ICCs) continued to demonstrate their critical role in capital formation and credit intermediation during

FY 2024-25. They have expanded their operations across capital market investments, funding to

MSMEs, and retail financing, helping bridge credit gaps in key economic segments. Building on this momentum, NBFC-ICCs are using their funds to support important sectors, helping the economy grow and making finance more accessible.

Your Company

Your Company is a NBFC registered with RBI since 22^nd May, 2009. The mainstay of your Companys operations continued to be investments in various companies, under which steady dividend income flows appreciation in capital. During the year under review, your Company has earned income in the form of dividends, interest, and profit on sale of investments.

Financial Performance

Your Companys standalone and consolidated financial performance for F.Y. 2024-25 vis a vis the previous year is given below: (Rs. in lakhs)

	Standalone		Consolidated
Particulars	F.Y.	F.Y.	F.Y.	F.Y.
	2024-25	2023-24	2024-25	2023-24
Total Income	4,583.40	4,277.04	5,634.06	5,427.86
Finance	-	43.38	0.87	43.72
Costs
Net Income	4,583.40	4,233.66	5,633.19	5,384.14
Operating	1,158.44	1,044.82	1,443.97	1,244.78
Expenses
Profit Before	3,424.96	3,188.85	4,189.22	4,139.36
Tax
Profit after	2,649.39	2,387.57	3,129.43	3,002.02
Tax

Profits after tax on a consolidated basis over the last five years and movement of net worth are plotted

Charts A and B respectively:

Segment-wise or product-wise performance

The main business of the Company is investment and financing activity. As such there are no separate reportable segments or product wise performance reports applicable to the Company.

Human resources

The Company considers its employees as its key strength and remains committed to providing a respectful, inclusive, and performance-driven work environment. There were no employee-related concerns during the year. As on 31^st March, 2025, the Company had 7 permanent employees.

Details of significant changes in key financial ratios

Ratio	2024-25	2023-24	% Change
Current Ratio	4,692.59	1,200.73	290.81
Operating Profit	75.65	79.10	(4.36)
Margin (%)
Net Profit Margin (%)	58.52	59.22	(1.19)
Return on Net	1.02	1.36	(24.47)
Worth (%)
Interest Coverage	-	77.74	(100)
Ratio
Debtors Turnover	NA	NA	-
Inventory Turnover	NA	NA	-
Debt Equity Ratio	NA	NA	-

Notes:

Above ratios are based on standalone financials of the Company.

The increase in the Current Ratio is attributable to a rise in the fair value of investments.

There is decrease in Interest Coverage Ratio as the Company does not have borrowings during the year.

The decrease in Return on Net Worth is primarily in net worth, largely duetoasignificant driven by higher Other Comprehensive Income.

Asset Liability Management (ALM)

The Companys Asset-Liability Committee (ALCO), set up in line with the guidelines issued by the RBI, monitors asset-liability mismatches to ensure that there is no imbalance or excessive concentration on either side of the Balance Sheet. The Company continues to closely monitor liquidity in the market and as part of its ALCO strategy, maintains a liquidity management desk to reduce its liquidity risk.

Fulfilment of RBIs Norms and Standards

Your Company fulfils the standards laid down by

RBI relating to recognition and provisioning of non-performing assets, capital adequacy, statutory liquidity ratio, etc. The capital adequacy ratio of the Company is well above the RBI norm of 15%.

Investments

The portfolio of the Company in quoted investments as on 31^st March, 2025 was Rs. 2,36,553.24 lakhs, at market value.

Opportunities, Threats, Risks and Concerns

Your Company holds investments through a growth momentum of the diversified

Indian economy bodes well for the growth of the Company due to several measures that have been introduced by the government which are aimed at stimulating domestic demand, including tax incentives and increased expenditure in infrastructure and innovation sectors.

The business prospects of your Company is closely linked to the performance and growth of the companies forming part of its portfolio. Any positive development in these businesses or sectors present opportunities, while adverse movements or uncertainties in the financial markets or in the operations of the investee companies may pose risks to the Companys performance.

Your Company is exposed to specific risks that are peculiar to its business and the environment in which it operates, which includes market risk, interest rate volatility, execution risk and economic cycle. quoted investments TheCompanyhas significant which are exposed to fluctuations in stock prices.

These investments represent a substantial portion of the Companys core capital and are vulnerable to fluctuations in the stock markets. Any decline in these quoted investments may severely impact its financial position and results of operations.

Liquidity Risk: Asset / Liability Management: The Company is exposed to liquidity risk if its assets cannot be readily converted into cash to meet operational or strategic needs. Financial firms are now increasingly focused on asset-liability risk. Asset-liability risk is a leveraged form of risk.

The capital of most financial institutions is small relative to the firms assets or liabilities, small percentage changes in assets or liabilities can translate into large percentage changes in capital.

The risk is that the value of assets might fall or that the value of liabilities might rise. The Company is cognizant of the dynamics of this risk and has in place a control structure for closely monitoring incipient signs of risk in this area and to take necessary corrective measures, if needed. The Companys treasury actively manages asset liability positions in accordance with the overall guidelines laid down by the management in the Asset Liability Management (ALM) framework.

The Company is exposed to interest rate risk due to fluctuations in market interest rates, which can impact the returns on its interest-earning investments and the valuation of fixed-income securities. Changes in interest rates may affect the yield on new investments, as well as the market value of existing holdings. The Company actively monitors interest rate movements and adjusts its investment strategy as needed to manage this risk.

While the Indian economy has shown sustained growth over the last several years, a slowdown could cause the business of the Company to suffer. The Company manages such risks by maintaining a conservative financial profile and following prudent business and risk management practices.

The risk appetite is determined by the Board from time to time. The Company has in place specially mandated Committees such as ALCO, Risk Management Committee, besides Nomination and Remuneration Committee and Audit Committee.

Internal Control Systems

The Company has an independent internal control system which is commensurate with the size and scale of the Company. It evaluates the adequacy of all internal controls and processes and ensures strict adherence to clearly laid down processes and procedures as well as to prescribed regulatory and legal framework. Conforming to the requirements of regulatory authorities such as the RBI and SEBI and consistent with the requirements of the

Listing Regulations of the Stock Exchanges, the

Company has institutionalized an elaborate system hence of control processes designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, reliability of financial controls and compliance with applicable laws and regulations. The Internal Auditors are mandated to carry out periodical audit and report on areas of non-compliances / weaknesses. Corrective actions in case of reported deficiencies, if any, are taken actively to further strengthen the internal control systems. These reports are reviewed by the Audit Committee of the Board of Directors for follow-up action and instructions are issued for taking necessary measures.

Outlook

The Companys present business operations are primarily that of an investment company, future of which largely depends upon financial and capital markets. Your Company has investments in debt instruments (including through mutual funds), financially and immovable properties. The income from Dividends will continue to contribute to the income of the Company. The management is optimistic about the future outlook of the Company. The Company will expand its activities, consistent with its status as a NBFC.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be ‘forward looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied. Important factors that could make a difference to the Companys operations include changes in Government regulations and tax regime, economic developments within India and abroad, financial markets, etc.

The Company assumes no responsibility in respect of forward-looking statements that may be revised or modified in future on the basis of subsequent developments, information or events. The financial statements are prepared in accordance with the

Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The management of the Company has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner, the state of affairs and profit / loss for the year. The narrative on our financial condition and result of operations should be read together with our audited consolidated financial statements and the notes to these statements included in the Annual Report.