India Finsec Ltd Management Discussions

I. COMPANY OVERVIEW

India Finsec Limited (“India Finsec” or “the Company”) was incorporated on August 10, 1994 under the provisions of the Companies Act, 1956. The Registered Office of the Company is situated at D-16, First Floor, Prashant Vihar, Sector-14, Rohini, New Delhi 110085. The Equity Shares of the Company are listed on BSE Limited.

The Company was previously registered with the Reserve Bank of India (“RBI”) as a Non-Banking Financial Company Investment and Credit (“NBFC-ICC”) and was engaged in providing financial services, including lending and related activities.

The Board of Directors, at its meeting held on April 15, 2025, approved the surrender of the Certificate of Registration (CoR) granted by the Reserve Bank of India (RBI) for carrying on the business as a Non-Banking Financial Company Investment and Credit Company (NBFC-ICC).

Pursuant to the approval of the Board, the Company submitted an application to the RBI for surrender of its CoR. The RBI approved the application, and accordingly, with effect from July 17, 2025, the Company ceased to be an RBI-registered NBFC and is now functioning as an unregistered Core Investment Company (CIC).

The surrender of the CoR was undertaken to facilitate the conversion of the Companys subsidiary, IFL Finance Limited (formerly known as IFL Housing Finance Limited), from a Housing Finance Company (HFC) to a Non-Banking Financial Company Investment and Credit Company (NBFC-ICC).

The conversion of the subsidiary has since been successfully completed, and the Reserve Bank of India has issued a fresh Certificate of Registration dated June 26, 2025, recognising IFL Finance Limited as an NBFC-ICC.

This surrender forms part of the Companys broader strategic initiative to streamline its group structure, optimise regulatory alignment, and strengthen its focus on core investment activities.

Following this change in status, the Companys business strategy has evolved from its earlier NBFC-oriented lending activities towards an investment-oriented business model. The Company may make investments in its subsidiaries or group companies within the applicable statutory and regulatory framework and subject to the approval of the Board of Directors. The Board may also consider strategic investments in other group companies for furtherance of the Companys business objectives, subject to applicable laws and regulatory requirements.

The Company continues to focus on prudent financial management, efficient utilisation of resources, strengthening of its group ecosystem and identification of appropriate strategic investment opportunities. The Company remains committed to maintaining high standards of corporate governance, transparency, accountability and regulatory compliance.

The financial performance for FY 2025 26 should therefore be viewed in the context of this transition in the Companys business and regulatory status during the year.

II. INDUSTRY STRUCTURE AND DEVELOPMENT

The Indian economy continued to demonstrate resilience during FY 2025 26, supported by domestic consumption, infrastructure development, government initiatives, digitalisation, technological advancement and continued formalisation of the economy.

The Indian financial and investment ecosystem continues to undergo significant transformation. Capital markets, investment companies, financial institutions and corporate groups are increasingly adopting technology-enabled systems, data-driven decision-making and more sophisticated risk-management practices.

Digitalisation has significantly changed the manner in which businesses operate. The increasing use of automation, data analytics, artificial intelligence, digital platforms and other emerging technologies has contributed to greater operational efficiency and improved access to information. These developments are creating opportunities for businesses to optimise their operations and make informed strategic and investment decisions.

The regulatory environment governing companies, listed entities and investment activities continues to evolve with greater emphasis on transparency, corporate governance, investor protection, risk management and compliance. Companies are required to maintain robust systems and processes to ensure compliance with applicable statutory and regulatory requirements.

For investment-oriented entities such as the Company, the changing economic and capital-market environment provides opportunities for strategic deployment of capital, while also requiring careful assessment of investment risks, market conditions, liquidity and regulatory developments.

The Company continues to monitor developments in the domestic and global economic environment and evaluates opportunities consistent with its revised business strategy, investment objectives and applicable legal and regulatory framework.

III. OPPORTUNITIES AND THREATS

Opportunities

India continues to offer significant opportunities on account of economic growth, infrastructure development, technological advancement, digitalisation, financial-market development and increasing corporate activity.

The Companys transition to an unregistered CIC provides an opportunity to focus on strategic investments and strengthening of the group structure. The Company may evaluate investment opportunities in subsidiaries and group companies based on their financial performance, growth prospects, strategic importance and potential for long-term value creation.

The Company may also consider opportunities arising from the growth of businesses within its group and from evolving market conditions, subject to applicable regulatory requirements and appropriate approvals.

Technological developments and digital transformation also provide opportunities to improve internal processes, strengthen information systems, enhance monitoring mechanisms and improve the efficiency of decision-making.

The Companys established presence, experienced management and governance framework provide a foundation for evaluating and pursuing suitable opportunities.

Threats

The Company operates in an environment that is subject to various economic, financial, regulatory and market-related risks.

Changes in interest rates, market conditions, liquidity conditions, economic growth, investment valuations and regulatory requirements may affect the Companys financial performance and investment decisions.

As an investment-oriented company, concentration of investments, volatility in the value or performance of investee entities and changes in the financial position of subsidiaries/group companies may also impact the Companys overall financial position.

The evolving regulatory environment represents another important area of consideration. The Company is required to ensure that its activities remain consistent with its status as an unregistered CIC and with applicable provisions of the Companies Act, SEBI regulations and other applicable laws.

Cybersecurity risks, technological disruptions, operational risks and changes in stakeholder expectations may also impact businesses and their operations.

The Company seeks to address these risks through prudent decision-making, appropriate internal controls, regular monitoring, compliance mechanisms and oversight by the Board of Directors and its committees.

IV. SEGMENT-WISE PERFORMANCE

The Company operates primarily as an investment-oriented entity following its transition to an unregistered Core Investment Company.

Based on the nature of the Companys operations and the manner in which the business is managed and reviewed by the Management, the Company has determined its applicable reportable segment(s) in accordance with the relevant accounting standards

V. OUTLOOK

The Company views the transition from an NBFC-ICC to an unregistered CIC as an important development in its business strategy.

Going forward, the Company intends to focus on strengthening its investment-oriented business model and evaluating suitable opportunities within its group structure and other permissible areas, subject to applicable statutory and regulatory requirements.

The Company will continue to monitor economic conditions, capital-market developments, investment opportunities, regulatory changes and the performance of its subsidiaries and group companies.

The Companys focus will remain on prudent deployment of capital, efficient utilisation of resources, appropriate risk assessment and creation of sustainable long-term value for shareholders.

For FY 2026 27, the Company expects the Indian economy to remain supported by domestic demand, infrastructure development, digitalisation and continued policy initiatives. At the same time, global economic uncertainties, market volatility and evolving regulatory requirements may present challenges. The Company will therefore adopt a balanced and disciplined approach towards its investment decisions and business initiatives.

The Company intends to strengthen its governance framework, internal controls, risk-management practices and monitoring mechanisms while continuing to explore opportunities that are commercially viable and consistent with its long-term objectives.

VI. RISK MANAGEMENT

Risk management forms an integral part of the Companys corporate governance and decision-making framework.

The Companys risk profile has evolved following its transition from an NBFC-ICC to an unregistered CIC. The principal areas of risk relevant to the Company include investment risk, market risk, liquidity risk, concentration risk, regulatory and compliance risk, operational risk, technology and cybersecurity risk and other risks associated with its investments and business activities.

Investment Risk

Risk of decline in the value of investments in subsidiaries, associates, joint ventures, or other group companies due to adverse business performance or market conditions.

Market Risk

Exposure to fluctuations in equity prices, interest rates, foreign exchange rates (if applicable), or other market variables affecting investment values and returns.

Liquidity Risk

Risk that the Company may not have sufficient liquid resources to meet its financial obligations or funding requirements, particularly where investments are long-term and not readily marketable.

Regulatory and Compliance Risk

Risk arising from changes in RBI regulations, Companies Act provisions, SEBI regulations (if applicable), or becoming eligible for mandatory CIC registration. Non-compliance may result in penalties or business restrictions.

Operational Risk

Risk arising from inadequate or failed internal processes, systems, human error, fraud, cyber incidents, or external events.

Reputation Risk

Risk of adverse publicity, stakeholder concerns, or regulatory actions affecting the Companys reputation and ability to raise capital or conduct business.

VII. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an internal control framework designed to ensure: safeguarding and protection of assets; accuracy and reliability of financial information; proper accounting and recording of transactions; operational efficiency; compliance with applicable laws, rules and regulations; prevention and detection of errors and irregularities; and effective monitoring of business activities.

The internal control framework is supported by appropriate internal audit and review mechanisms.

Internal Audit Reports, wherever applicable, are placed before the Audit Committee for review and discussion. Significant observations, if any, are considered by the Management and appropriate corrective measures are undertaken.

The Companys internal control systems are reviewed periodically to ensure that they remain adequate and commensurate with the size, nature and complexity of its operations.

The Management believes that the internal control systems in place are adequate and effective for the Companys present operations.

VIII. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial performance of the Company during the year under reference was reasonably good. For detailed information, please refer to Directors Report, which forms part of this Annual Report.

IX. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company recognises its employees as a valuable asset and is committed to fostering an open, transparent and merit-based work culture. The Company focuses on talent development, employee engagement, retention and continuous improvement.

The Company provides a conducive working environment that encourages professionalism, teamwork, accountability and innovation. Effective communication and grievance-redressal mechanisms are in place to address employee concerns promptly.

The Company continues to focus on developing and retaining talent in line with its evolving business requirements. Industrial relations remained cordial during the year under review.

Number of employees as at March 31, 2026: 3

X. RATIO ANALYSIS AND ITS COMPONENTS

Particulars	Numerator	Denominator	March 31st, 2026	March 31st, 2025	% change	Reason for change more than 25%
a) Current ratio (In times)	Current Assets	Current Liabilities	19.12	14.97	27.74%	Increase in Current Asset in the Current Year when compared with the last year.
b) Debt- equity ratio (In times)	Total Debt	Shareholders Equity	NA	NA	NA	NA
c) Debt service coverag e ratio (In %)	Earnings for debt service = Net profit after taxes + Non-cash operating expenses	Debt service = Interest & Lease Payments + Principal Repayments	NA	NA	NA	NA
d) Return on equity ratio (In %)	Net Profits after taxes Preference Dividend	Average Shareholders Equity(Includin g Quasi Equity)	0.00	0.00	2600.20 %	Increase in profit in current year
e) Inventor y turnover ratio (In times)	Cost of goods sold	Average Inventory	NA	NA	NA	N.A.
f) Trade receivab les turnover ratio (In times)	Net credit sales= Gross credit sales- sales return	Average Trade Receivable	NA	NA	NA	NA
g) Trade payable turnover ratio (In times)	Net credit purchases = Gross credit purchases - purchase return	Average Trade Payables	NA	NA	NA	NA
h) Net capital turnover ratio (In times)	Net Sales = Total sales- sales return	Working capital = Current assets Current liabilities	0.03	0.26	-88.46%	Due to decrease in Revenue from operation
i) Net profit ratio (In %)	Net Profit	Net Sales = Total sales- sales return	1.08	0.00	26021.5 0%	Due to significant rise in net profit despite a substantial drop in sales during the current year.
j) Return on capital employe d (In %)	Earnings before interest and taxes	Capital Employed = Tangible Net Worth + Total Debt + Deferred Tax Liability	0.00	0.00	-66.58%	Decrease in EBIT in current year
k) Retun on investm ent (In %)	Income generated from Investments (Finance Income)	Time weightage average Investment	NA	NA	NA	N.A

XI.CAUTIONARY STATEMENT

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

These statements are based on certain assumptions and expectations concerning future events 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 economic conditions, market developments, regulatory changes, investment performance, competition, business risks and other factors beyond the control of the Company.

The Company does not undertake any obligation to publicly update or revise any forward-looking statements, except as may be required under applicable laws and regulations.

	For and on behalf of Board India Finsec Limited
	SD/-	SD/-
	Mukesh Sharma	Gopal Bansal
Date: 03.09.2026	Director	Managing Director
Place: Delhi	DIN: 00274217	DIN: 01246420