Margo Finance Ltd Management Discussions

1. INDUSTRY STRUCTURE AND BUSINESS OUTLOOK

Non-Banking Financial Company (NBFC) has played a vital role in the financial system over the last decade. NBFCs have become important constituents of the financial sector and have been recording higher credit growth than scheduled commercial banks (SCBs) over the past few years. Lower transaction costs, quick decision making, customer orientation and prompt service standards have typically differentiated NBFCs from banks. Considering the reach and expanse of NBFCs, they are well-suited to bridge the financing gap in a large country like India. Mar go Finance Limited (the Company) is a NBFC registered with the Reserve Bank of India (RBI). The Company is engaged in Investment activity and is Non-Deposit accepting NBFC.

India s NBFC sector is on a sustained growth trajectory, with assets under management (AUM) projected to exceed 50 lakh crore by FY 2026 27 (excluding government-owned NBFCs), according to CRISIL Ratings. Historically, NBFC credit growth has consistently outpaced Indias GDP growth, a trend expected to continue in the coming years. This strong AUM growth trajectory underscores the sectors expanding role, resilience, and increasing significance within Indias financial ecosystem.

The near-term outlook for the NBFC sector remains positive, with growth momentum expected to strengthen further in FY 2026 27. Specialized segments such as consumer durable financing are likely to lead this expansion, with NBFCs market share projected to reach 63%. However, growth dynamics are expected to vary across segments, by factors such as risk management strategies, regulatory developments, and access to funding. In this evolving landscape, robust balance sheets and diversifiedfunding sources will continue to be key differentiators, enabling stronger and more resilient players to sustain growth.

2. OPPORTUNITIES, THREATS, RISK & CONCERNS

Risk is synonym with NBFCs which is inherent part of their business. Your Company is also subjected to various types of such risks. Your Company has identified these risks and guarded itself by measures to reduce the impact of such risks.

The Company continues to benefit from the growing depth and maturity of the Indian capital markets, supported by increasing retail participation and rising domestic institutional investments. Indias favorable economic growth prospects, government-led infrastructure initiatives, digital transformation, and expanding corporate sector provide a broad range of investment opportunities across industries. The increasing adoption of technology, data analytics, and research-driven investment strategies further enhances the Companys ability to identify quality investment opportunities and optimize portfolio returns over the long term.

The Companys performance remains exposed to fluctuations in domestic and global financialmarkets. Economic slowdowns, geopolitical tensions, inflationary pressures, changes in monetary policies, and adverse global markets may negatively impact investor sentiment and market valuations. Changes in regulatory frameworks, taxation policies, or capital market regulations may also affect investment decisions and overall profitability.

As the Company is primarily engaged in investments in equity and capital market instruments, it is exposed to market risk arising from fluctuations in stock prices, interest rates, and overall market conditions. Concentration of investments in specific sectors or securities may increase portfolio risk during periods of sectoral weakness. The

Company continuously monitors these risks through established internal control systems and prudent investment practices.

Any slowdown in economic growth or corporate earnings may adversely affect investment performance and portfolio valuations. Corporate governance issues, unexpected regulatory changes, and global financial market disruptions could also impact the Companys investment portfolio.

3. INTERNAL CONTROL AND THEIR ADEQUACY

F oundation of your Companys control mechanism vests in Management Information systems (MIS). Your Company has devised effective systems so that assets and business of the Company are safeguarded. The internal control is regularly reviewed and augmented by the Audit Committee. The management feels that the systems of internal controls are adequate considering the size of operations of the Company.

4. HUMAN RESOURCES

As on 31st March, 2026, Company has only two (2) employees on its payroll.

5. DISCUSSION ON FINANCIAL PERFORMANCE

During the financial year under review, the Companys total income and net profit after tax are 196.32 lakhs and 107.14 lakhs respectively. Your Company is looking for an opportunity for future due growth prospects.

6. COMPLIANCE WITH INDIAN ACCOUNTING STANDARDS (IND-AS)

In the preparation of the financial statements, the Company has followed the Indian Accounting Standards (Ind-AS) notified by Ministry of Corporate Affairs from time to time. The significant applied have been set out in the Notes to the Financial Statements.

7. CAUTIONARY STATEMENT

The statement in the “Management Discussion and Analysis Report” describes Companys objectives, estimates, and expectations which may be “Forward Looking Statement” within the meaning of applicable laws and regulations. The actual results could differ materially from those expressed or implied, depending upon the economic and climate conditions, government policies, taxation and other incidental factors.

	On behalf of the Board of Directors
	Anil Kumar Jain
Date : 27th May, 2026	Chairman
Place: Mumbai	DIN: 00086106