Nikki Global Finance Ltd Management Discussions

REPORT

A year of turnaround - translating operational discipline and prudent stewardship into

a return to profitability.

0 Industry Structure and Developments

The Non-Banking Financial Company (NBFC) sector remains a vital pillar of Indias financial ecosystem, extending credit and services to segments that traditional banking channels often leave underserved. Financial Year 2025-26 saw the sector navigate a gradual recovery, persistent inflationary pressures, and interest-rate volatility. Continued regulatory support from the Reserve Bank of India, alongside a sustained emphasis on liquidity management, helped reinforce the sectors overall resilience.

Indias GDP growth eased to 6.5 per cent in FY 2024-25, following three consecutive years of robust expansion averaging 8.8 per cent. The moderation was largely a function of softer urban consumption amid elevated inflation and interest rates, subdued momentum in fixed investment, and a slower start to government spending on account of the national and state elections held during the year.

The underlying strength of Indias economy and the soundness of its financial system provided a solid platform from which the Company operated through FY 2025-26. While the Reserve Bank of India has projected some moderation in growth for FY 2026-27 amid global geopolitical and monsoon-related uncertainties, the overall outlook for the financial sector remains constructive.

0 Opportunities and Threats

The Companys financial performance this year marks a decisive turnaround. Having recorded a net loss of Rs3,37,965 in FY 2024-25, the Company closed FY 2025-26 with a net profit of Rs21,38,907 - its first profitable year following a period of sustained consolidation.

Rs21.39 Lakh	Rs3.38 Lakh	Turnaround
Net Profit - FY	Net Loss - FY 2024-	From Loss to Profit
2025-26	25

This is more than an improved number on a balance sheet - it is confirmation that the Companys turnaround strategy has taken hold. With a clear, forward-looking vision and firm confidence in the strength of its foundation, the Company has converted the lessons of past challenges into concrete results, setting the stage for sustainable growth, operational excellence, and long-term value creation.

0 Business Overview

The Company is driven by a singular vision: a more financially inclusive India. Its continued focus on niche and underbanked segments extends access to formal finance while enabling genuine economic empowerment for the communities it serves. Anchored by a well-defined market strategy, rigorous regulatory compliance, and performance- driven goals, the Company continues to widen its footprint across the financial sector - delivering solutions that are as inclusive in reach as they are effective in impact.

0 Outlook

The NBFC sector stands at the threshold of continued transformation, shaped by advancing technology, evolving regulatory reforms, and ongoing consolidation. Having returned to profitability, the Company enters FY 2026-27 with renewed confidence, prioritising stronger underwriting standards, deeper digital integration, and more robust recovery mechanisms. The year ahead will see the Company build on this momentum, growing its loan book cautiously, sharpening asset quality, and working purposefully to sustain and deepen profitability.

0 Financial Performance

The Company reported a net profit of Rs21,38,907 for FY 2025-26, as against a net loss of Rs3,37,965 recorded in the previous financial year - a turnaround underpinned by three reinforcing factors:

- A substantial increase in total income, from Rs 14,41,371 in FY 2024-25 to Rs39,88,200 in FY 2025-26.

- Improved cost discipline, with total expenses declining from Rs 17,79,103 to Rs 14,53,155 over the same period.

- Stronger asset quality and more effective recovery mechanisms, supporting sustained operational efficiency.

The Company also maintained a cautious and selective approach to disbursements, with a deliberate tilt toward lower-risk segments. The scale of this turnaround is a clear marker of the Companys strategic shift toward sustainable growth and prudent financial stewardship, and management remains focused on consolidating this profitability in the years ahead.

0 Economic Overview

Indias economy demonstrated notable resilience through FY 2025-26, underpinned by steady GDP growth, strengthening consumption, and sustained government investment in infrastructure. Inflationary pressures, though present, were managed effectively, aided by a balanced monetary policy stance from the RBI. The financial services sector, in turn, benefited from improved liquidity conditions and rising credit penetration - particularly across underbanked and semi-urban regions, where the Companys own strategic focus is concentrated.

0 Risks and Concerns

The Companys risk landscape is shaped by several interconnected factors, each actively monitored and managed:

- Credit risk - arising from the possibility of borrower default.

- Liquidity risk - stemming from potential mismatches in asset-liability tenures or constrained access to funding during periods of market stress.

- Interest rate risk - volatility that can compress net interest margins and elevate borrowing costs.

- Regulatory risk - an evolving compliance landscape under RBI and other regulatory bodies, where tightening norms or revised provisioning requirements could influence profitability and capital adequacy.

0 Internal Control Systems and Their Adequacy

Robust internal controls are the backbone of trust in any NBFC - safeguarding the accuracy of financial reporting, ensuring regulatory compliance, and underpinning operational effectiveness. These systems are the Companys first line of defence against credit defaults, operational lapses, financial misstatements, and non-compliance.

The Company has instituted a comprehensive internal control framework designed to protect its assets, uphold prudent lending discipline, and support sound, timely decisionmaking - while embedding transparency, accountability, and rigorous risk management into everyday operations.

0 Human Capital

People remain the Companys most valuable asset. In an NBFC, human capital is the engine behind growth, compliance, and customer-centric service - the skills, experience, and commitment of the workforce directly shape the Companys ability to manage financial risk, meet regulatory expectations, drive operational efficiency, and innovate in lending and financial services.

0 Disclosures

Transparency is central to the Companys relationship with its stakeholders. Operating under the regulatory purview of the Reserve Bank of India, the Company is committed to providing accurate, timely, and comprehensive disclosure of its financial position, operational performance, risk management practices, and governance framework.

All material developments - including changes in accounting policy, related-party transactions, governance structures, or significant business risks - are communicated openly and responsibly through periodic reports, investor updates, regulatory filings, and public disclosures.