Transwarranty Finance Ltd Management Discussions

Annexure A

Global Economic Overview

The global economy demonstrated resilience, recording a growth rate of 3.2%, despite ongoing geopolitical tensions, realignment of supply chains, shifting trade patterns and heightened policy uncertainty. Global inflation rates have stabilised after a period of general decline, enabling central banks to adopt more expansionary policies. Global average inflation declined from 5.7% in 2024 to 4.95% in 2025. The US economy maintained steady growth on firm job data and consumer demand. However, in Europe, growth remained sluggish with low consumer confidence. faced weak consumer demand, industrial oversupply and financial instability with its housing market crisis. Conversely, growth in emerging markets remained relatively stable, despite economic strain and trade uncertainty.

The global economic growth is expected to be moderate at 2.8% in CY 2025 and 3% in CY 2026. Ongoing trade and tariff uncertainty, sustained geopolitical conflicts, and shifting policies under the new US administration can affect the financial markets stability, hindering investment and economic growth. However, Emerging economies are expected to drive global growth. Indias growth to remain stable at 6.2% in 2025 and 6.3% in 2026 supported role that by is a strong complementary to the traditional services sector, proactive domestic policies and private consumption, particularly in rural areas.

Indian Economic Overview

Despite global economic uncertainty, the Indian economy retained its position as one of the fastest-growing economies in the world. Indias real GDP growth in FY 2024-25 remained stable at 6.5%. Some of the key sectors driving this growth are construction, utility services, finance, real estate, professional services, public administration, defence and other services. Both the Private Consumption and Government Consumption witnessed a growth rate of 7.3% and 4.1% respectively during FY 2024-25 over the previous year. On the external front, overall exports of India registered positive expansion during FY 2024-25. Although merchandise imports outpaced exports, widening the trade deficit, the sustained rise in net service receipts helped bolster the current account balance.

Going forward, sustained geopolitical conflicts, ongoing trade and tariff uncertainty, and shifting policies under the new US administration causing disruptions in global supply chains and volatile commodity prices could exert inflationary pressures.

However, the structural long-term growth story for India remains intact driven by favourable demographics and stable governance, ongoing domestic and foreign investments, robust manufacturing growth and improvement in trade and financial services. The proactive policies of the government, the income tax relief for salaried individuals in the Union Budget, the remarkable pace of digitalisation, the easing food inflation and growth in tier III and IV cities is expected to further augment the demand. Despite the potential risks, the Indian economy is predicted to sustain its growth with strengthened fundamentals.

Industry Overview

The Financial Services sector inIndiaisadiversifiedsector consisting of commercial banks, insurance companies, non-banking financial companies, housing finance companies, co-operatives, pension funds, mutual funds and various other smaller financial entities.

Non-Banking Financial Companies (NBFCs) have emerged as powerful engines of credit and growth, by expanding access to financial services, particularly for historically underserved or excluded segments. By complementing the traditional banking system, NBFCs have utilised innovative credit models that leverage technology and local insights to create customised financial products tailored to diverse borrower needs. Their agility and close customer contacts have enabled them to play bankssignificant and catalytic in building a new financial ecosystem. The NBFC sectors Assets Under Management (AUM) has surged by 20% YoY in FY 2025, in contrast to the growth in banks credits valued at 12%.

Retail lending continues to be a key facilitator of financial inclusion and profitability, with unsecured lending gaining notable traction. The ratio of unsecured to secured loans in

India is 30:70 which is significantly higher than the mix in most large economies. Earlier RBI raised the risk weights by 25 bps to 125% on unsecured retail loans, due to indiscriminate growth particularly in personal loans and credit cards. Despite the rising unsecured lending, asset quality has shown improvement. Non-Performing Assets have declined from 2.7% to 2.6% for NBFCs and from 2.8% to 2.2% for banks.

Indias fintech industry is the third largest in the world. AUM for mutual funds are expected to exhibit a sixfold rise over the last ten years till the end of 2025. These developments have positioned India as the global leader in fintech adoption, with rapid digitalisation across financial services. As NBFCs have become more significant, the RBI has enhanced its regulation of the sector and has issued various guidelines to address the industry specific issues such as contagion risk in the financial system, banking regulation, fintech and payment systems, simplified underwriting processes, concentration of credit risk, exposure towards technology related risks, co-lending guidelines etc.

Overall, the NBFC sector in India will continue to demonstrate resilience, innovation, and adaptability, thereby positioning itself for sustained growth and financial inclusion in the years ahead.

Company Overview

Transwarranty Finance Limited is a non-deposit accepting Non-Banking Finance Company ("NBFC"), holding a license from the Reserve Bank of India ("RBI") engaged in a wide spectrum of financial services, both advisory and fund-based lending mainly focussed on Digital Lending. The Company is headquartered in Mumbai and has a capital market subsidiary engaged in equity / commodities / currency broking and Merchant Banking activities.

The Company achieved a total Income of Rs. 1246.56 lakh compared to Rs. 1216.26 lakh in previous year on standalone basis. On consolidated basis, the revenue was Rs. 1574.07 lakh during the current year as compared to Rs. 1738.03 lakh in the previous year, mainly due to lower total income of subsidiary operations. The subsidiary company, Vertex Securities Limited achieved consolidated revenue of Rs. 910.95 lakh against Rs.908.85 lakh in the previous year.

The Company has been in the personal and consumer lending business on digital platform. It has developed its own digital lending OROBORO app as well. The Company has collaborated with many channel partners and have accelerated lending activities. The number of disbursements during the year have increased substantially to Rs. 2270.11 lakh (12,125 No. of loans). The Company has taken necessary steps to further upgrade the technology platform and has put in place the systems to cater to higher scale of operations. The business activity is very encouraging and there is huge potential to scale up the business.

Business Outlook

Transwarranty Finance Limited, an RBI registered NBFC is active in a wide gamut of Financial Services like Corporate Finance, Project Finance, Trade Finance, Investment Banking, Digital Lending etc. Excellent domain expertise combined with a strong client and institutional relationship network nurtured over last 30+ years has ensured that all the companies in the Group are well poised to unlock value for its shareholders in the fast-evolving financial landscape in India.

The Company has collaborated with multiple channel partners for lending. This will accelerate the scale up in fund based digital lending business. The Company strives to be an important player in pocket loans segment. It is exploring equity capital from strategic / financial investors to finance the growth in its lending business.

The Company has developed OROBORO app for seamless digital lending. It is in the process of integrating it with other technology platforms for complete automation. Application Program Interface (API) based integrations and full set of digital payment options and the integration with partner networks is likely to improve operational efficiency.

The Company conducts all capital market activities through its subsidiary company, Vertex Securities Limited. This includes broking into equity & equity derivatives, commodities and currency broking and distribution of third-party products and Merchant Banking Activities.

Strengths, Weakness, Opportunities and Threats (SWOT) analysis

Strengths:

• Professional and ethical management

• Availability of basic funding

• Various Channel partners

• Stringent cost control

• Follows risk management systems

Strong collection field force

• Strong Technological base

Weakness:

• Limitations in raising capital for scaling of business

Opportunities:

• Scalability of digital lending business

• Leveraging technology for ease of operations

Distribution of various financial products

• Wealth management

Threats:

• Exposed to systemic risks and economic risks

Risk Management

Risk Management is an integral part of the Companys business strategy. The Company is exposed to specific risks that are peculiar to its business including interest rate volatility, economic cycle, market risk and credit risk. The Management continuously assesses the risk and monitors its business and risk management policies to mitigate risk.

Internal Control Systems and their Adequacy

The Companys internal control system is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance with laws and regulations. The internal control system is supported by an internal audit process for reviewing the adequacy and efficacy of the Companys internal controls, including its systems and processes and compliance with regulations and procedures. Internal Audit Reports are discussed with the Management and are reviewed by the Audit Committee of the Board which also reviews the adequacy and effectiveness of the internal controls in the Company.

Human Resource

The Company believes that the Human resources play a vital role in giving the Company a competitive edge. The Companys philosophy is to provide congenial work environment, performance-oriented work culture, knowledge acquisition / dissemination, creativity and responsibility. As in the past, the Company has enjoyed cordial relations with the employees at all levels. Our employee strength is 37 as on 31st March, 2025.

Key Ratios

Particulars	FY 2024-25	FY 2023-24
Current Ratio (Current Assets/ Current Liabilities)	3.14	1.15
Return on Equity (Profit for the period / Equity Share Capital)	0.01	0.08
Debt Equity Ratio (Debt/Equity)	0.73	0.75
Debt Service Coverage Ratio (Operating Income/ Debt)	1.12	3.46
Operating Profit Margin (%)
(Profit Before Tax/Revenue from operation)	18.33%	67.65%
Net Profit Margin (%) (Profit for the period/Revenue from operation)	9.26%	67.65%
Interest Service Coverage Ratio (Earnings EBIDTA/Interest)	6.19	14.22

Cautionary Statments

Statements in this Report describing the Companys objectives, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. These statements are subject to risks and uncertainties. Actual results could differ materially from those expressed or implied since there could be many factors which are beyond the control of the Management. The Company assumes no responsibility in respect of forward-looking statements that may change due to subsequent developments.

For and on behalf of the Board of Directors

Kumar Nair

Chairman

DIN : 00320541

Date: July 31, 2025

Place: Mumbai