Octal Credit Capital Ltd Management Discussions

1. Industry Structure and Developments

India continues to remain one of the fastest-growing major economies globally. Stable macroeconomic indicators, increasing digitisation, favourable demographics and continued infrastructure spending have created significant opportunities for the financial services sector.

The NBFC sector continues to complement the banking system by providing credit to sectors and customer segments that remain relatively underserved. Regulatory reforms introduced by the Reserve Bank of India have strengthened governance standards, enhanced risk management practices and improved financial resilience across the industry.

The sector continues to witness increased adoption of digital technologies, data-driven credit assessment models and customer-centric financial solutions. However, competitive intensity remains high due to participation from banks, fintech companies and other financial institutions.

The Company is registered as a Non-Banking Financial Company (NBFC) with the Reserve Bank of India and is listed on the Bombay Stock Exchange and The Calcutta stock exchange.

The Company continues to focus on conducting its business prudently while maintaining adequate liquidity, regulatory compliance and sound governance practices. The management remains committed to evaluating suitable lending and investment opportunities within the framework approved by the Board of Directors.

The Company continuously reviews its business strategy considering prevailing economic conditions, regulatory developments and market opportunities.

The Indian economy is expected to maintain a positive growth trajectory supported by:

• Strong domestic consumption.

• Continued government capital expenditure.

• Stable banking and financial system.

• Increasing digital adoption.

• Growth in formal credit demand.

• Expanding MSME ecosystem.

• Rising financial inclusion.

Nevertheless, global inflationary pressures, geopolitical developments, fluctuations in commodity prices and interest rate movements may continue to influence economic conditions.

The Company remains cautiously optimistic regarding the medium to long-term growth prospects of the Indian financial services industry.

The Company believes the following factors present significant opportunities:

• Growing demand for formal credit.

• Expansion of MSME financing.

• Digital lending ecosystem.

• Increasing financial inclusion.

• Government policy support.

• Growing capital market participation.

• Technology-driven operational efficiencies.

• Strategic investment opportunities.

The Company continues to monitor various business risks including:

• Changes in RBI regulatory framework.

• Credit risk.

• Liquidity risk.

• Interest rate volatility.

• Increased competition.

• Technology disruptions.

• Cybersecurity risks.

• Economic slowdown.

• Market volatility.

• Operational risks.

The Company has implemented appropriate policies to monitor and mitigate these risks.

The Company primarily operates in the business of financing and investment activities.

The Company expects gradual improvement in business opportunities during the coming years driven by increasing credit demand and sustained economic growth.

The management intends to continue adopting a cautious approach towards lending, investment decisions and capital deployment while maintaining adequate liquidity and strong governance standards.

The Company remains committed to sustainable and profitable growth over the long term.

Risk management forms an integral part of the Companys business strategy.

Major risks include:

• Credit Risk

• Liquidity Risk

• Market Risk

• Interest Rate Risk

• Compliance Risk

• Operational Risk

• Cybersecurity Risk

• Reputational Risk

• Fraud Risk

• Information Security Risk

The Board periodically reviews the Companys risk management framework to ensure effective identification, monitoring and mitigation of risks.

The Company has established adequate internal financial controls commensurate with the size, nature and complexity of its business.

The internal control framework ensures:

• Protection of assets.

• Accuracy of accounting records.

• Compliance with applicable laws.

• Reliability of financial reporting.

• Prevention and detection of fraud.

• Operational efficiency.

The Internal Auditor periodically reviews internal controls, and significant observations are placed before the Audit Committee along with corrective actions taken by the management.

The Audit Committee regularly reviews the adequacy and effectiveness of internal financial controls.

During the financial year under review, the Company continued to maintain a prudent financial position while focusing on operational efficiency and regulatory compliance.

The management continuously monitors income, expenses, liquidity, capital adequacy and asset quality to ensure long-term sustainability.

Detailed financial performance has been discussed in the Financial Statements together with the Notes forming part thereof.

The Company considers its employees as one of its most valuable assets.

The Company promotes a professional work environment that encourages ethical conduct, teamwork, learning and employee development.

Industrial relations remained cordial throughout the year.

As on 31 March 2026, the Company had an adequate workforce commensurate with its operational requirements.

The Company continues to strengthen its information technology infrastructure to improve operational efficiency, enhance customer experience and ensure robust cybersecurity measures.

The Company regularly upgrades its systems to meet evolving regulatory and business requirements.

The Company remains committed to maintaining the highest standards of corporate governance, transparency and ethical business practices.

The governance framework seeks to protect the interests of all stakeholders while ensuring compliance with applicable statutory and regulatory requirements.

The key financial ratios, together with explanations for significant changes, are disclosed in accordance with applicable provisions of the Companies Act, 2013 and SEBI (LODR) Regulations in the Annual Report wherever applicable.

There were no material developments relating to human resources that had a significant impact on the Companys operations during the year.

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

Actual results may differ materially from those expressed or implied depending upon economic conditions, government policies, taxation laws, interest rates, regulatory developments, market conditions and other incidental factors beyond the control of the Company.

The Company undertakes no obligation to publicly update or revise any forward-looking statements based on subsequent events or developments.