BFL Asset Finvest Ltd Management Discussions

Pursuant to Schedule V to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis Report covering business performance and outlook is provided below:

COMPANY OVERVIEW

The Management Discussion and Analysis Report provides an overview of the business environment, industry developments, financial and operational performance, opportunities, risks and future outlook of the Company for the financial year ended March 31, 2026.

The Company is registered with the Reserve Bank of India (RBI) as a Non-Deposit Taking Non-Banking Financial Company Investment and Credit Company (NBFC-ICC) Base Layer . The principal business activities of the Company comprise investment and trading in equity shares, securities, derivative instruments, and other permissible financial assets in accordance with the applicable provisions of the Reserve Bank of India Act, 1934, the Companies Act, 2013, SEBI Regulations and other applicable laws.

The Company follows a disciplined investment approach focused on prudent capital allocation, effective risk management and long-term value creation. Its investment decisions are based on detailed research, market intelligence, macroeconomic developments and rigorous risk assessment. Through continuous monitoring of market conditions and portfolio performance, the Company seeks to optimise returns while preserving capital and maintaining adequate liquidity.

The financial year 2025-26 witnessed significant developments in domestic and global financial markets. While equity markets experienced periods of heightened volatility due to geopolitical developments, changing monetary policies and global economic uncertainties, Indias structural economic strengths continued to support investor confidence. Against this backdrop, the Company remained committed to maintaining a diversified investment portfolio, prudent risk management practices and a strong governance framework.

INDUSTRY STRUCTURE AND DEVELOPMENTS

NBFC Sector

The Non-Banking Financial Company (NBFC) sector continues to play a significant role in Indias financial system by complementing the banking sector and providing financial services across various segments of the economy. The Reserve Bank of India has strengthened regulatory oversight through the Scale Based

Regulatory Framework, enhancing governance standards, risk management practices, capital adequacy requirements and transparency across the sector.

Investment-focused NBFCs continue to contribute significantly towards capital formation by deploying capital efficiently across financial markets while facilitating market liquidity and improving price discovery mechanisms.

The increasing adoption of technology, improved regulatory framework and strengthening corporate governance standards have enhanced investor confidence in the NBFC sector.

Indian Capital Market

The Indian capital market continued to demonstrate resilience despite intermittent volatility arising from geopolitical conflicts, global inflationary pressures and changing monetary policy expectations.

The benchmark equity indices witnessed healthy participation from domestic institutional investors (DIIs), retail investors and foreign portfolio investors. Continuous growth in demat accounts, systematic investment plan (SIP) inflows, increasing mutual fund participation and growing financial awareness have significantly deepened Indias capital markets.

Primary market activity remained robust with several successful Initial Public Offerings (IPOs), Qualified Institutional Placements (QIPs), Rights Issues and preferential allotments, reflecting sustained investor confidence.

The derivatives market continued to witness substantial growth in trading volumes, supported by increasing participation from institutional investors, proprietary traders and retail participants. Enhanced risk management systems implemented by stock exchanges and regulatory initiatives by SEBI have strengthened market integrity and transparency.

Technology-driven trading platforms, algorithmic trading, artificial intelligence-based investment analytics and data-driven decision-making continue to transform investment management practices across the industry.

NBFCs aid economic development in the following ways:

Mobilization of Resources - It converts savings into investments Capital Formation - Aids to increase capital stock of a company Aid in Employment Generation Help in development of Financial Markets Helps in Attracting Foreign Grants

Helps in Breaking Vicious Circle of Poverty by serving as governments instrument Supporting Small and Medium Enterprises (SMEs) Boosting Consumption and Investment

Providing Loans to the Underserved Reducing Pressure on Banks

Non-Banking Financial Companies expect the government to continue pumping in liquidity as it will boost the sector s employment, and direct disposable income and consumption.

NBFC Role in Revolutionizing the Economy

Growth: Despite the slowdown in the economy and various setbacks faced in the last few years, the sector is still growing and enhancing operations.

Profitability: NBFCs have been more profitable because of lower costs involved for its operations and serve customers from different segments.

Enhancing the Financial Market : An NBFC caters to the urban and rural poor companies and plays a complementary role in financial inclusion. These financial companies bring much-needed diversity to the market by diversifying the risks, increasing liquidity in the markets thereby bringing efficiency and promoting financial stability to the financial sector.

Promoting Inclusive Growth: NBFC s in India cater to a wide variety of customers both in urban and rural areas. They finance projects of small-scale companies, which is important for the growth in rural areas. Microfinance provided by them plays an important role to attain stable financial inclusions.

Upliftment in the Employment Sector: With the growth in operations of the small industries and businesses, the policies of NBFCs are uplifting the job situation. More opportunities for employment are arising with the influence of the NBFCs in the private as well as government sectors. The business activities in the private sector provide more employment opportunities and occupation practices. And NBFC plays a key role in their growth and stability.

Mobilization of Asset: Due to their easier norms for investing, these companies create a balance between intra-regional income and asset distribution. Turning the savings into investments, these companies contribute to economic development. Proper organization of capital helps in the development of the trade and industry, leading to economic progress. They operate not intending to maximize their profit and are, therefore, engaged in activities that generate zero or very low revenue.

Financing for Long-Term: NBFC plays a key role in providing firms with funds through equity participation. NBFCs supply long-run credit to the trade and commerce industry. They facilitate to fund large infrastructure projects and boost economic development. Long-term finance permits growth with stable and soft interest rates.

Innovative Products: NBFCs, by being flexible in terms of lending and investment opportunities than banks, are more proactive in innovating financial products. This facilitates their growth in an exceedingly prudent manner. They fine-tune their selling campaigns in regard to their target customers. These corporations are the game changers within the developing economy. For instance, the factorization & bill payment service has been revolutionized.

Over the past few years, NBFCs have been at the forefront of catering to the financial needs and creating livelihood sources of the so-called un-bankable masses in the rural and semi-urban areas. Through strong linkage at the grassroots level, they have created a medium of reach and communication and are very effectively serving this segment. Thus, NBFCs have all the key characteristics to enable the government and regulator to achieve the mission of financial inclusion in the given time. Your Company is a Non-Banking Financial Company dealing in shares & stock trading.

OUTLOOK ON OPPORTUNITIES

The Indian economy continues to present significant opportunities for businesses operating in the financial services and capital market sector. Supported by favourable demographics, increasing financial awareness, technological advancements and sustained policy reforms, Indias capital markets are expected to witness robust long-term growth.

The Company continuously evaluates emerging investment opportunities while maintaining a prudent risk-return framework. The management believes that the following factors will continue to support the Companys future growth:

Opportunities

1. Increased retail participation in capital markets;

2. Leverage advanced technology to enable best practices and processes;

3. Expansion of financial literacy and digital infrastructure supporting greater investor onboarding.

4. Diversifying portfolio through different and diversified products available in the Indian Capital Market e.g. commodity futures, currency derivatives, interest rate derivatives, and volatility derivatives, green finance etc.;

5. Effective use of futures and options to effectively hedge the Company against various types of risks e.g. risk of price volatility etc.

6. Development of new financial products and margin trading facilities.

7. Use of algorithmic and data-driven trading strategies.

OUTLOOK ON THREATS, RISKS AND CONCERNS

The Company is dealing in shares & stock trading which is quite unpredictable in terms of the economic scenario, GDP Growth of the Country, Government policies, political situation and global trends etc. Moreover, after the introduction of online trading in commodities, the attention of high net worth investors has also diverted into commodities futures. The overall economic environment will impact all our business but we expect that we will be able to overcome it easily. The performance of the Company largely depends on the Capital Markets.

Being a NBFC-Investment and Credit Company, our Company is exposed to specific risks that are particular to its business and the environment within which it operates, including:

1. Economic Uncertainty: Global economic uncertainty, geopolitical tensions, and domestic economic challenges can adversely impact investor sentiment and stock prices;

2. Regulatory Changes: Changes in regulatory policies or tax laws can affect investor behavior and market dynamics, leading to uncertainty and volatility;

3. Cyber security Risks: Growing reliance on technology exposes the stock market to cyber security threats such as hacking, data breaches, and ransomware attacks;

4. Natural Disasters and Pandemics: Events such as natural disasters or pandemics can disrupt economic activity, leading to market downturns and financial losses.

5. Market Risk : Exposure to price fluctuations in shares and derivatives.

6. Credit Risk : Inherent in margin and funding activities.

7. Liquidity Risk : Volatility in the market may affect liquidity positions

MITIGATION MEASURES TAKEN BY THE COMPANY

The Company is committed to best benchmarking in good corporate governance, which promotes the long-term interests of all stakeholders which help in building public trust in the Company.

The Company believes that managing risks helps in maximizing returns. The risk management framework is reviewed periodically by the Board and the Audit Committee.

The Company considers activities at all levels of the organization and its Risk Management with focus on three key elements, viz.;

Risk Assessment- Study of threats and vulnerability and resultant exposure to various risks. Risk Management and Monitoring- The probability of risk assumption is estimated with available data and information. Risk Mitigation- Measures adopted to mitigate risk by the Company.

Company mitigate market risks by tracking microeconomic and macroeconomic level data, market trends and forecasts by expert agencies, internal review by team of experts. The Company shall only undertake those transactions which are permitted by the applicable laws including the RBI guidelines.

The Company is committed to best benchmarking in good corporate governance, which promotes the long-term interests of all stakeholders which help in building public trust in the Company.

The Company believes that managing risks helps in maximizing returns.

Threats

1. Unfavorable economic conditions;

2. Intense competition from local and global players;

3. High market volatility and global uncertainty impacting investor sentiment Instances of market manipulation;

4. Restrictions on foreign investments etc.

PRODUCT WISE PERFORMANCE

As per the results of the Company as on March 31, 2026, the Company is working in only one segment, viz. shares and securities, interest income, and futures and options and other finances. Snapshot of the Company s financial performance during FY 2025-26 and 2024-25 are as follows:-

(Amount in Lakh)

Particulars	2025-26	2024-25
Revenue from shares and securities	1944.28/-	1,747.24/-
Dividend Income	23.96/-	11.24/-
Revenue from Interest Income	0	60.28/-
Revenue from F&O	13.91/-	283.06/-
Revenue from other finances	(121.11/-)	40.16/-

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has established an adequate and effective system of internal financial controls commensurate with the size, scale and nature of its business operations. The internal control framework is designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, safeguarding of assets, reliability of financial reporting and compliance with applicable laws, regulations and internal policies.

The internal control environment is built upon clearly defined organisational structures, documented policies and procedures, appropriate delegation of authority, segregation of duties and well-defined approval mechanisms. The Company continuously reviews and strengthens its internal control processes to address emerging business risks and regulatory requirements.

Key features of the Companys internal control framework include:

? Clearly documented policies governing investment decisions and financial transactions. ? Periodic reconciliation of investment records, bank balances and financial transactions. ? Continuous monitoring of statutory and regulatory compliances.

? Comprehensive accounting policies aligned with applicable Indian Accounting Standards (Ind AS). ? Robust internal financial controls over financial reporting. ? Regular review of operational processes to enhance efficiency and minimise operational risks.

The Company has appointed an independent Internal Auditor to conduct periodic internal audits covering operational, financial and compliance functions. The Internal Auditor evaluates the adequacy and effectiveness of internal controls and submits reports to the Audit Committee of the Board.

The Audit Committee periodically reviews the internal audit findings, management responses and implementation status of corrective actions. Based on such reviews, the Committee is satisfied that the Companys internal control systems are adequate and operating effectively.

The Board of Directors is of the opinion that the internal financial controls with reference to the financial statements are adequate and were operating effectively throughout the financial year.

INFORMATION TECHNOLOGY

Information Technology continues to play a significant role in enhancing the operational efficiency, security and governance framework of the Company. The Company recognises that technology-driven processes are essential for efficient investment management, regulatory compliance, financial reporting and business continuity.

The Company has implemented appropriate technology solutions for accounting, financial reporting, investment monitoring and regulatory compliance. These systems facilitate timely availability of financial information, efficient transaction processing and effective decision-making.

The Company continuously upgrades its technology infrastructure to improve operational resilience and data security. Appropriate safeguards have been implemented to protect information assets from cyber threats and unauthorised access.

The Companys information technology framework includes:

? Secure information systems for financial and accounting operations. ? Periodic system backups and disaster recovery arrangements. ? Periodic review of cyber security measures. ? Data confidentiality and information security controls.

? Compliance with applicable regulatory requirements relating to information technology.

The management continues to evaluate emerging technologies that can improve investment analytics, operational efficiency and risk management while maintaining appropriate cyber security standards.

Our Company has taken further steps in its technology roadmap toward future readiness and digitalization. The Company has been using the best possible information technology as a management tool for internal control. The Company continues to invest reasonable into information technology for monitoring operation.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial performance of the Company during the financial year was influenced by prevailing market conditions, movements in capital markets and investment performance.

During the year, the Company generated revenue from investment and trading activities, dividend income and other financial income. The overall financial performance reflected the impact of fluctuations in equity markets, changing investor sentiment and market volatility experienced during the year.

The Companys operating performance continued to be driven by disciplined investment management, prudent capital allocation and efficient deployment of financial resources. The management remained focused on preserving liquidity and strengthening the overall financial position of the Company.

Snapshot of the Company s financial performance for the last three years is as follows:-

Year	Total Revenue (in Lakh)	Revenue growth %	Profit after Tax (PAT) (in Lakh)	PAT change %	EPS (in Rs.)	EPS change %
2025-2026	1,861.04/-	-13.11	-557.65/-	-551.10	(5.47)	-552.07
2024-2025	2,141.98/-	-21.84	123.62/-	-46.23	1.21	-46.23
2023-2024	2,740.53/-	1,730.70	229.94/-	527.13	2.25	525

The movement in revenue and profitability during the year was primarily attributable to market conditions, changes in the fair value of investments, realised gains/losses on sale of investments and income generated from securities and derivative transactions.

The management continues to focus on improving operational efficiency, strengthening investment processes and enhancing shareholder value through disciplined portfolio management and prudent financial planning.

The Company remains committed to maintaining a strong balance sheet, adequate liquidity and a conservative risk profile while pursuing sustainable long-term growth opportunities.

HUMAN RESOURCE MANAGEMENT

Human resources constitute one of the Companys most valuable assets and are fundamental to achieving sustainable business growth. The Company believes that its continued success depends on attracting, retaining and developing talented professionals while fostering a culture of integrity, accountability, innovation and continuous learning.

The Company is committed to providing a professional, inclusive and performance-oriented work environment that encourages employee engagement, teamwork and individual growth. Equal opportunity, merit-based performance evaluation and ethical conduct form the cornerstone of the Companys human resource philosophy.

During the year, the Company continued to focus on enhancing employee capabilities through continuous learning, professional development and knowledge sharing. Employees were encouraged to strengthen their technical, analytical and regulatory knowledge to effectively respond to the evolving business and regulatory environment.

The Company maintains well-defined human resource policies covering recruitment, training, performance management, employee welfare, workplace safety, prevention of sexual harassment, code of conduct and grievance redressal. These policies are reviewed periodically to ensure alignment with statutory requirements and industry best practices.

The Company also promotes a culture of compliance and ethical behaviour through regular awareness programmes on corporate governance, regulatory developments, information security and risk management.

Industrial relations remained cordial throughout the financial year, and the Company did not experience any material employee disputes or disruptions to its operations.

As on March 31, 2026, the Company had 5 employees on its rolls.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Pursuant to Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the significant changes (i.e., change of 25% or more as compared to the immediately preceding financial year) in key financial ratios, together with explanations thereof, are provided below:

	F.Y. 2025-26	F.Y. 2024-25	Change in %	Reason (if more than 25% change)
(i) Debtors Turnover	1.19	0.93	27.72	Faster collection from customers, a positive sign
(ii) Inventory Turnover	1.44	1.88	(23.42)	Slower inventory movement decline in COGS relative to average inventory held
(iii) Interest Coverage Ratio	(7.81)	14.63	(153.36)	EBIT turned negative during the period, resulting in earnings being insufficient to cover interest expense
(iv) Current Ratio	279.70	44.12	533.96	Significant increase, mainly due to reduction in current liabilities and/or build-up of current assets (cash/investments) during the year
(v) Debt Equity Ratio	1.37	0.18	659.88	Sharp rise due to increase in total debt and/or erosion of shareholders equity (accumulated losses reducing net worth)
(vi) Operating Profit Margin (%)	(0.22)	5.95	(103.72)	Operating profit turned negative higher operating costs and/or lower revenue from operations
(vii) Net Profit Margin (%)	(0.28)	5.88	(104.78)	Company reported a net loss for the period vs. net profit in the previous year

DETAILS OF ANY CHANGE IN RETURN ON NETWORTH

The following changes occurred in the return and net worth of the Company as compared to the immediately previous financial year:

(Amount in Lakh)

Particulars	FY 2025-2026	FY 2024-2025
Net Worth
Share Capital	1,020.35/-	1,020.35/-
Special Reserve	2.85/-	2.85/-
Statutory Reserve	115.81/-	115.81/-
Capital Redemption Reserve	37.87/-	37.87/-
Securities Premium	176.74/-	176.74/-
Surplus in P&L	(311.14)/-	246.52/-
Total Net worth	1042.47/-	1600.13/-
PAT	(557.66)/-	123.62/-
Return on Net Worth	(53.49)%	7.72%

CAUTIONARY STATEMENT

Statements contained in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may constitute forward-looking statements within the meaning of applicable securities laws and regulations.

These statements are based on certain assumptions and expectations of future events and are subject to various risks and uncertainties including, but not limited to, changes in economic conditions, capital market performance, interest rates, inflation, government policies, taxation laws, regulatory changes, geopolitical developments, global financial market conditions and other factors beyond the Companys control.

Actual results may differ materially from those expressed or implied in such forward-looking statements. Readers are therefore advised not to place undue reliance on these statements.

The Company assumes no obligation to publicly update, amend or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable laws and regulations.

This Management Discussion and Analysis should be read in conjunction with the Companys audited financial statements, notes thereto and other sections forming part of the Annual Report.

Date: August 07, 2026	For and on behalf of the Board of Directors
Place: Jaipur	For BFL Asset Finvest Limited
	Sd/-	Sd/-
Registered Office: 1 Tara Nagar,	Mahendra Kumar Baid	Aditya Baid
Ajmer Road, Jaipur 302006	Managing Director	Director
(Rajasthan)	DIN: 00009828	DIN: 03100584