Qgo Finance Ltd Management Discussions

QGO FINANCE LIMITED - AN OVERVIEW

QGO Finance Limited ("the Company") is a professionally managed Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India ("RBI") as a Non-Deposit Taking Investment and Credit Company (NBFC-ICC). The Company is classified as a Base Layer NBFC (NBFC-BL) and its equity shares are listed on BSE Limited.

Over the years, the Company has demonstrated consistent operational growth by maintaining a balanced approach towards business expansion, asset quality, capital management and regulatory compliance. Its business philosophy is centred on sustainable growth, prudent risk management and responsible lending practices that create long-term value for customers, shareholders, lenders and other stakeholders.

In-depth knowledge: The Company possesses strong domain expertise in construction and infrastructure project financing, developed through extensive industry experience, continuous market research and a thorough understanding of evolving customer requirements. This enables the Company to make informed lending decisions while maintaining prudent risk management practices.

Strong customer base: Our strength lies in our expanding satisfied customer base. It is a testimony to our continued commitment to enhance the infrastructural development in the rural S. semi-urban areas S. to help support India?s growth.

Employee strength: Human capital remains one of the Companys key strengths. QGO Finance Limited focuses on attracting qualified professionals with strong local market knowledge and industry expertise. Continuous training, skill development and employee engagement initiatives enable the workforce to deliver superior customer service while supporting the Companys long-term growth objectives.

Faster disbursal: We have put in place an accelerated loan disbursement process, which is powered by technology. With minimal documentation and utmost flexibility, our loans are usually disbursed expeditiously.

Robust Corporate Governance and Risk Management: The Company follows sound corporate governance practices supported by a comprehensive risk management framework, effective internal controls and strict regulatory compliance. These practices strengthen stakeholder confidence and support sustainable long-term value creation.

This Report contains certain forward-looking statements relating to the Companys future business prospects, strategy, growth, operations, financial performance, market position and other objectives. These statements are based on the Companys current expectations, assumptions and estimates regarding future events and business conditions.

Forward-looking statements are inherently subject to various risks, uncertainties and other factors, many of which are beyond the Companys control. Actual results, performance or achievements may differ materially from those expressed or implied in these statements due to changes in economic conditions, regulatory developments, market dynamics, competitive environment, interest rates, inflation, geopolitical events and other unforeseen circumstances. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on basis of any subsequent developments, information or events.

India continued to reinforce its position as one of the worlds fastest-growing major economies during FY 2025-26, demonstrating resilience amid global geopolitical uncertainties, evolving trade dynamics and financial market volatility. According to the Economic Survey 2025-26, the Indian economy is estimated to have grown by 7.4% during FY 2025-26, supported by strong domestic demand, sustained public capital expenditure, resilient private consumption and improving private investment. The Survey projects real GDP growth in the range of 6.8% to 7.2% for FY 2026-27, reflecting confidence in Indias medium-term growth prospects despite external headwinds. As per the revised National Accounts Statistics (Base Year FY 2022-23) released by the Ministry of Statistics and Programme Implementation (MoSPI), Indias real GDP growth stood at 7.2% in FY 2023-24,7.1% in FY 2024-25 and is estimated at 7.6% in FY 2025-26, underscoring the countrys sustained economic momentum.

Private consumption continued to remain the primary driver of economic growth, supported by healthy household balance sheets, stable employment conditions and rising consumer confidence. The share of Private Final Consumption Expenditure (PFCE) increased to 61.5% of GDP, the highest level in over a decade, reflecting the strength of domestic demand and Indias consumption-led growth model. Simultaneously, improving corporate balance sheets and increasing investment intentions are expected to support the next phase of economic expansion.

The agriculture sector maintained steady momentum with favourable monsoon conditions, improved crop production and continued policy support, contributing to stronger rural incomes and consumption. Increased mechanisation, better agricultural productivity and government initiatives aimed at enhancing rural infrastructure and financial inclusion have strengthened the rural economy, thereby supporting demand for formal credit and financial services.

The services sector remained the largest contributor to Indias economic growth, driven by robust expansion in financial services, information technology, telecommunications, logistics and digital commerce. Continued growth in digital public infrastructure, including the Unified Payments Interface (UPI), Account Aggregator framework and Open Network for Digital Commerce (ON DC), has accelerated digital financial inclusion, improved payment ecosystems and enhanced access to formal credit across the country.

Inflation remained well anchored during FY 2025-26, supported by prudent monetary and fiscal policies, improved food supply conditions and stable macroeconomic fundamentals. The Reserve Bank of India maintained a balanced monetary policy approach to support economic growth while preserving price stability and financial system resilience. Stable inflation and supportive monetary conditions continue to provide a conducive environment for investment, consumption and sustainable credit expansion.

The Government of India continued its strong focus on infrastructure-led growth through sustained public investment. The Union Budget 2026-27 increased capital expenditure to approximately Rs.12.2 trillion, with significant allocations towards transport infrastructure, logistics, manufacturing, urban development, renewable energy and digital infrastructure. These investments are expected to create substantial opportunities across construction, infrastructure development and allied sectors, thereby increasing demand for project financing and structured lending solutions.

The Government also continued to promote manufacturing, innovation and entrepreneurship through various policy initiatives, including support for MSMEs, semiconductor manufacturing, clean energy, biotechnology and emerging technologies. Continued emphasis on ease of doing business, digital governance, financial inclusion and structural reforms is expected to strengthen Indias long-term competitiveness and accelerate progress towards the vision of Viksit Bharat 2047.

Overall, Indias macroeconomic fundamentals remain strong, supported by favourable demographics, increasing urbanisation, rising digital adoption, sustained policy reforms and expanding infrastructure investment. These structural strengths are expected to continue creating significant opportunities for the financial services sector, particularly Non- Banking Financial Companies (NBFCs), which play an important role in extending credit to underserved sectors and supporting inclusive economic growth.

Indias economic outlook remains positive, supported by resilient domestic consumption, sustained public infrastructure investment and a robust services sector. Moderating inflation, coupled with a balanced monetary policy, is expected to create a conducive environment for investment, credit expansion and overall economic growth. Strong banking sector fundamentals, increasing private capital expenditure and continued structural reforms are likely to further strengthen the countrys growth trajectory.

The rapid expansion of the digital economy, increasing financial inclusion and the formalisation of businesses continue to create significant opportunities across sectors, particularly in Tier-11 and Tier-Ill cities. Government initiatives focused on manufacturing, MSME development, digital transformation and ease of doing business are expected to enhance productivity, improve competitiveness and attract long-term investments. Backed by favourable demographics, a skilled workforce and a vibrant entrepreneurial ecosystem, India is well positioned to remain one of the fastest-growing major economies and play an increasingly significant role in the global economic landscape.

The Company is mainly engaged in the business of financing and investment in “bodies corporate” to yield greater revenue for its stakeholders. The Company is planning to expand and diversify the operational activities in the coming years ahead to tap higher revenues.

The Indian Non-Banking Financial Company (NBFC) sector continues to be a key pillar of the countrys financial system by complementing the banking sector and extending credit to underserved customer segments, including MSMEs, infrastructure projects, corporates and retail borrowers. Over the years, the sector has emerged as a significant contributor to financial inclusion and economic development, with total assets under management (AUM) expected to exceed ?50 lakh crore by March 2027. During FY 2025-26, the sector maintained healthy momentum, with retail NBFC AUM estimated to grow by 17- 19%, supported by robust domestic demand, increasing formalisation of the economy and sustained credit requirements across key sectors.

Growth during the year was driven primarily by secured lending segments such as MSME finance, vehicle finance, housing finance, loans against property (LAP) and infrastructure financing. The increasing adoption of digital technologies, data analytics and artificial intelligence has significantly enhanced credit underwriting, customer onboarding and operational efficiency. At the same time, fintech partnerships and embedded finance solutions have enabled NBFCs to strengthen their presence in Tier-ll and Tier-Ill cities, accelerating financial inclusion and expanding access to formal credit. The retail NBFC AUM is expected to exceed ?30 lakh crore by FY 2026-27, reflecting the sectors long-term growth potential.

The regulatory environment continued to strengthen during FY 2025-26, with the Reserve Bank of India (RBI) reinforcing governance, risk management and capital adequacy standards under the Scale-Based Regulation (SBR) framework. In addition, the restoration of the 100% risk weight on eligible bank lending to NBFCs has improved access to bank funding, supporting a more stable funding profile for the sector. Looking ahead, the NBFC industry is expected to remain on a sustainable growth trajectory, driven by rising domestic consumption, continued infrastructure investment, favourable demographics and rapid digitalisation. Despite challenges relating to funding costs and evolving regulatory requirements, the sector remains well positioned to support Indias long-term economic growth and financial inclusion objectives.

The Company operates in single business segment i.e. NBFC, it has witnessed considerable growth in the last few years and is now being recognised as complementary to the banking sector due to implementation of innovative marketing strategies, introduction of tailor-made products, customer-oriented services and simplified procedures, etc.

Digital innovation continues to enhance operational efficiency and customer experience across the NBFC sector. The adoption of cloud-based infrastructure, digital lending platforms and data analytics has streamlined credit assessment, customer onboarding and loan processing while improving data security and regulatory compliance.

These initiatives have enhanced operational effectiveness, streamlined business processes and strengthened the delivery of efficient and convenient financial solutions.

Funding diversification remains a key priority for NBFCs to strengthen liquidity management and enhance financial resilience. Expanding funding sources through bank borrowings, capital market instruments and co-lending arrangements with banks and other financial institutions helps reduce dependence on any single funding channel. A balanced funding mix, supported by longer-tenure borrowings and diversified financing options, is expected to improve financial stability, optimise funding costs and support sustainable long-term growth in an evolving regulatory and interest rate environment.

Customer-centric financial solutions continue to be a key differentiator for NBFCs in an increasingly competitive market. By leveraging data analytics and customer insights, NBFCs are able to better understand borrower requirements, enhance credit assessment and offer customised financial products. This customer-focused approach strengthens relationships, improves service delivery and supports sustainable business growth.

While the applicable ESG reporting requirements are presently not mandatory for QGO Finance Limited, the Company remains committed to conducting its business in a responsible and sustainable manner. As part of its environmental initiatives, the Company has installed solar panels to encourage the use of renewable energy, maintains a green workplace through plantation initiatives and promotes paperless operations to optimise resource utilisation and minimise environmental impact. These initiatives reflect the Companys commitment to responsible corporate citizenship and sustainable business practices.

The evolving regulatory landscape and increasing focus on sustainability continue to reshape the NBFC industry. While these developments present enhanced compliance and governance expectations, they also create opportunities to strengthen institutional capabilities, improve transparency and build long-term resilience. Supported by prudent risk management, sound governance practices, digital transformation and a disciplined business approach, the NBFC sector remains well positioned to contribute to Indias economic growth, deepen financial inclusion and create sustainable value for all stakeholders.

As financial inclusion continues to deepen, NBFCs are increasingly expanding their presence beyond metropolitan markets into Tier-11 and Tier-Ill cities and semi-urban regions, where demand for organised credit continues to grow. The increasing adoption of digital channels, customised financial solutions and region-specific lending strategies is expected to enhance credit penetration and create sustainable long-term growth opportunities.

QGO Finance Limited continues to strengthen its presence in Tier-11 and Tier-Ill markets, with a strategic focus on the Navi Mumbai region. The Navi Mumbai region continues to witness significant infrastructure-led development, driven by the commencement of operations at the Navi Mumbai International Airport and other major infrastructure projects. These developments have strengthened economic activity and created attractive opportunities across the real estate and allied sectors.

Due to stiff competition in the finance field where the company?s activities are centered in, the overall margins are always under pressure, but maintainable with the constant effort and good services rendered by the company.

The Company has in place adequate internal control systems covering all its operations. Proper accounting records highlight the economy and efficiency of operations, safeguarding of assets against unauthorised use or losses, and the reliability of financial and operational information.

Some of the significant features of internal control system are:

Financial and Commercial functions have been structured to provide adequate support and control of the business.

Risk Management policy has been adopted by the Company.

The Company has an Internal Audit System conducted by the Internal Auditor of the Company. Standard operating procedures and guidelines are reviewed periodically to ensure adequate control

During the financial year under review, operational revenue rose from Rs. 16,40,27,905/- in the 2024-25 financial year to Rs. 18,19,17,921/- in the 2025-26, financial year.

The Management believes that it has been objective and prudent in making estimates and judgments relating to the Financial Statements and confirms that these Financial Statements are a true and fair representation of the Company?s Operations for the period under review.

QGO Finance Limited delivered a resilient financial and operational performance during FY 2025-26, supported by steady growth in its lending portfolio, disciplined underwriting practices and a continued focus on operational efficiency. Total Revenue from Operations increased from Rs. 16,40,27,905 in FY 2024-25, to Rs. 18,19,17,921 in FY 2025-26, reflecting sustained business growth and expansion across the Companys lending activities.

The Companys profitability remained robust during the year, with Profit Before Tax increasing from Rs. 40,170,662 to Rs. 44,892,837, while Profit After Tax rose from Rs. 30,662,216 in FY 2024-25 to Rs. 33,727,871 in FY 2025-26. The improvement in earnings was driven by healthy growth in the loan book, effective cost management and continued emphasis on portfolio quality.

The Company maintained a strong capital position, with its Capital Adequacy Ratio remaining comfortably above the regulatory requirement prescribed by the Reserve Bank of India, providing a solid foundation for future growth. Earnings Per Share (EPS) improved from Rs. 4.41 to Rs. 4.85 during the FY 2025-26. These results reflect the Companys prudent risk management practices, sound asset quality, strong governance framework and its continued commitment to delivering sustainable value to all stakeholders.

The Financial Statements have been prepared in accordance with the requirements of Indian Accounting Standards as prescribed by the Institute of Chartered Accountants of India.

At QGO our human resources are critical to our success and carrying forward our mission. With their sustained, determined and able work efforts we were able to cruise smoothly through the hard time of the economic volatility and rapidly changing market conditions. The requirement of the markets given the economic scenario has made this even more challenging. Attracting new talent with the drive, training and upgrading existing skill sets and getting all to move in a unified direction will definitely be a task in the company. Plans to execute the mandate on this count are already underway and we should see it impacting the results from the next financial year.

By creating a conducive environment for career growth, your Company is trying to achieve the maximum utilisation of employees? skills in the best possible way.

There is a need for and the company is focused on retaining and bringing in talent keeping in mind our ambitious plans. The company also believes in recognizing and rewarding employees to boost their morale and enable them to achieve their maximum potential.

As on March 31,2026, the Company had 13 employees on its rolls.

Industrial Relations throughout the year continued to remain very cordial and satisfactory.

RETURN ON NET WORTH (RONW)

The Companys capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. As on March 31,2026, the Capital to Risk Assets Ratio (“CRAR”) of your Company was 18.16% which is above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

The Company has prepared its Financial Statements in accordance with the Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013, read with the relevant rules issued thereunder, and other accounting principles generally accepted in India.