Morgan Ventures Ltd Management Discussions

MANAGEMENT DISCUSSION & ANALYSIS REPORT

INDUSTRY OPERATIONS:

(a) Treasury Operations & Fund Based Activities

The Company in its treasury division is carrying activities relating to placement of funds with other Bodies Corporate by way of Inter Corporate Deposits/ Bill Discounting Facilities. During the year under review, Treasury operation of the Company remains non functional.

(b) Investment Activities

During the year under review, the company explored and made investment in new investment opportunities from which the company is expecting good return in future. Investment activities of the company remained functional.

(c) Non Banking Financial Companies (NBFC) Activities

Company is Non - Banking Financial Company.

INDUSTRY STRUCTURE - AN OUTLOOK:

The Non-Banking Financial Companies (NBFCs) section in India has undergone remarkable growth, establishing itself as a significant player within the countrys financial landscape. Also, the space as a whole, has witnessed notable transformations ever since its emergence, with segments such as housing finance, microfinance and consumer finance contributing its expansion. This growth is driven by various factors, such as a rising middle class, enhanced financial inclusions and positive policy interventions.

Indias Non-Banking Financial Companies have emerged as a core pillar of the rapidly expanding financial services to ecosystem in India, playing a crucial role in credit inclusion, investment activities and catering to diverse financial needs. As the industry expands, its needs to align with the dynamic landscape comprising evolving regulations, emerging technological advancements, and charging consumer demands.

India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth of existing financial services firms and new entities entering the market. The financial sector in India had an overall growth of 15%, which has exhibited stability over the last few year although several other markets across the Asian region were going through a turmoil. The development of the system pertaining to the financial sector was the key to the growth of the same. The recoup of contact-intensive services and rising discretionary spending is leading private consumption to regain its momentum. Because of the monsoon forecast, the agricultural prospects are brighter too. Along with this, even the investment cycle show signs of revival. However, challenges in the form of geo political tensions, elevated commodity prices and slowing external demand may remain as a barrier towards sustained and inclusive growth of the economy.

Non-banking financial companies form an integral part of the Indian system. The NBFCs sector is divided into equipment leasing/ hire purchase finance, loan and investments. NBFCs always played an important role in promoting financial inclusion in India, these companies are deeply interconnected with entities in financial sectors. They have been complementing and supplementing the banking sector in reaching out credit to the Un-banked segments of the society. The biggest contribution of NBFCs is their ability to cater to the needs of the MSMEs which form the cradle of Entrepreneurship and innovation in India.

Looking at growth opportunities in the financial sector, the management has proposed to shareholders to increase the borrowing powers to expand investments.

DIGITALISATION IN NBFC SECTOR:

With the increased widespread of internet access, NBFCs are offering faster, convenient and easily accessible financial services. These digital platforms provide seamless loan applications, faster processing, and personalized financial investments products, catering to the requirements of consumers.

NBFCs are at the forefront of adopting emerging technologies like Artificial Intelligence (AI) and Machine Learning (ML) for automated credit scoring, fraud detections, and personalized recommendations.

ECONOMIC GROWTH DATA OVERVIEW:

The NBFC sector in India is projected to experience a CAGR of 13.2% from FY19 to FY25, with total AUM i ncreasing from about ?23 trillion to nearly ?48 trillion. This growth is driven by factors such as financial inno vation, regulatory arbitrage, and the increasing demand for customized financial products. However, the se ctor also faces risks due to less stringent regulatory oversight, liquidity mismatches, and interconnectednes s with banks. Despite these challenges, the sectors growth trajectory is expected to continue, with a focus on deeper market penetration and sustainable lending practices.

GDP growth for FY26 at -7.5% YoY vs. projected growth rate of 6.4-6.5%; RBI and other agencies project FY27 GDP growth at 6.0-7.1 %.

NBFCs credit growth (19%) outpaces that of Banks (15%) in FY26 led by Diversified and Gold NBFCs.

Credit costs stabilized at 1.6% for NBFCs in FY26, with a negligible increase of 0.1 bps, whereas HFCs experienced a significant deterioration, with credit costs rising by 51 bps

ROA for NBFCs remained on a declining trajectory, falling by 31 bps from 2.6% in FY25 to 2.3% in FY26. Meanwhile, banks ROA remained largely stable at 1.3% in FY26, down marginally by 4 bps YoY

NIM declined for both Banks (2.9% in FY26 vs 3.1% in FY25) and NBFCs (6.4% in FY26 vs 6.7% in FY25)

Large NBFCs continue to command premium valuation outpacing Banks on 3-year returns (NBFCs delivering 23% vs. 19.9% for Banks), and the gap opening-up in FY26

NBFC sector witnessed improved GNPA for last 3 years driven by improved collections; GNPAs have improved 120 bps since FY23

Most NBFCs have shown a YoY de-growth from FY25, yet players continue to be well capitalised with CRAR above the minimum requirement of 15%

CHALLENGES FOR INDIAN FINANCE INDUSTRY:

There are challenges facing the finance industry that we regularly hear about from firms and the globe i.e. Operational Risk Management, Quality Data for Better Investment Decisions, Data Integration, Reporting driven by regulatory augmentation, Data Quality at Granular Levels for Accurate Aggregation Scale/ Expansion, Living with Spread Sheets and Data Governance Framework. Such Challenges can be:-

a. Increase in competition from existing players and potential new entrants.

b. Adapting to evolving regulations and ensuring compliance with data privacy and consumer protection guidelines.

c. Mitigating cyber security risks associated with increased reliance on technology.

OPPORTUNITIES:

These NBFCs have also been key in being able to mitigate and manage the spread of risks during times of financial distress and have increasingly become recognized as complementary services to banks. On going stress in public sector banks (PSUs) because of increase bad debt, lending in rural areas deterioration has provided NBFCs with the opportunity to increase presence. The success of these NBFCs vs. PSUs can be attributed to product line, lower cost, wider and effective reach, strong risk management capabilities to check and control bad debts, and a better understanding of customer segments versus banks.

The Reserve Bank of India (RBI) is actively shaping the NBFC Sector through regulations focused on transparency, governance, and consumer protection. NBFCs will need to adopt these evolving guidelines to ensure responsible practices and maintain regulatory compliances.

Strategic partnerships with traditional banks can unlock new growth opportunities for NBFCs, These collaborations can leverage the strengths of both, with banks offering their extensive infrastructures and NBFCs specialization in niche areas.

DETAILS OF SIGNIFICANT CHANGES:

There is no significant change vis-a-vis the previous financial year INTERNAL CONTROL SYSTEMS AND ADEQUACY OF INTERNAL CONTROL:

The Company has instituted adequate internal control systems commensurate with the nature of its business and the size of its operations. This provides a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls and compliance with applicable laws and regulations.

Moreover, the Company continuously upgrades these systems in line with the best available practices. The Board has an Audit Committee with independent directors in majority to maintain the objectivity.

Proper and adequate internal control systems are in place to ensure that all the business dealings are performed on sound business ethics and all assets are protected against loss of unauthorized use or disposition and that the transactions are authorized, recorded and properly reported.

The internal control system is designed to ensure that financial and other records are reliable for all purposes.

Based on its evaluation, the Audit Committee has concluded that, as of March 31,2026, our internal financial controls were adequate and operating effectively.

HUMAN RESOURCES:

The Company regards its human resource as a valuable assets. The Company has a team driven work process with completely flat organization system. This not only help us nurture leaders but also gives us capable and assured colleagues at all levels.

CORPORATE GOVERNANCE:

The Company follows principle of effective Corporate Governance. The endeavour of the Company is not only to comply with regulatory requirements but also to practice Corporate Governance principles that lay emphasis on integrity, transparency and overall accountability.

The Company adheres to most of the recommendations made by the SEBI and incorporated by the Stock Exchanges in the Standard Listing Agreement.

RISK AND CONCERNS:

Risk is integral part of the business operations. The Company is exposed to major risks namely credit risk, market risk, operational risk, liquidity risk and interest rate risk and has put in place measures, policies, systems, and procedures to manage and mitigate those risks.

COMPLIANCE:

Our Compliance function monitors compliance with regulatory requirements laid down by the Securities and Exchange Board of India (SEBI) with respect to portfolio investments and alternative investment funds activities and other business activities. The Compliance function is an interface between us and various regulators and agencies, such as SEBI, the RBI, Companies Act , depositories , Registrar and stock exchanges.

Our compliance team keeps itself updated on new regulatory requirements and communicates the requirements to the relevant functions together with meaningful inputs for implementation. The Compliance team also reviews the implementation status by coordinating with the respective functions.

	For and on Behalf of the Board of Directors
	Sd/-	Sd/-
Place: New Delhi	Kuldeep Kumar Dhar	Madhu
Date: 07/08/2026	Managing Director	Director
	DIN 00299386	DIN 09065199