Srestha Finvest Ltd Management Discussions

Industry Structure and Developments

Srestha Finvest Limited is a Non-Banking Finance Company (NBFC) registered with the Reserve Bank of India under the category as NBFC - Investment and Credit Company (NBFC - ICC) and is classified as NBFC - Base Layer pursuant to Reserve Bank of India (Non-Banking Financial Companies - Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025. Your company currently operating in the finance, Loans, investment, Consultancy, dealing in securities activity and it anticipates that there appears to be huge potential for growth.

Indias financial services industry enters the next phase of growth from a position of resilience, supported by strong macroeconomic fundamentals, healthy balance sheets and continued regulatory focus on financial stability. Investments in digital capabilities also contributed to greater operational efficiency and improved customer experience. Artificial intelligence and super app ecosystems are increasingly integrated into operations, improving efficiency and expanding access to financial services. Lower transaction costs, innovative products, quick decision making, customer orientation and prompt service standards have differentiated NBFCs from banks.

Opportunities, Threats, Risks and Concerns

In a dynamic industry such as financial sector the company has added opportunities and risks and is inherent aspect of business. The opportunities which the company is looking to harness are as mentioned below:

• Opening up of financial sector reforms in India

• Fast growing requirement for Industrial clusters leading to credit demand.

• Monetary measures of the government tightening the credit line from banks would open doors for non-banking finance companies to explore those avenues.

The companys business, results of operations and financial condition are affected by number of risks, so the risk management function is of paramount importance and integral to the functioning of the company.

The risk management framework is based on assessing risks through analysis and understanding of the underlying risks before undertaking any transactions and changing or implementing processes and systems. This risk management mechanism is supported by regular review, control, selfassessment, and monitoring of key risk indicators.

Segment wise / product wise performance

The company is currently engaged in two segments, financing and investment activities and is in line with the accounting standard on segment reporting.

Outlook

The NBFC sector demonstrated steady operating performance during FY2026. NBFCs continued to access diversified funding

sources and maintained adequate liquidity buffers. The focus on operational efficiency, disciplined cost management and portfolio quality enabled lenders to navigate funding pressures and sustain earnings performance. With strong distribution networks, deep customer reach and specialised product offerings, NBFCs are well positioned to address the diverse financing requirements of individuals and small businesses and reinforcing their role in supporting Indias credit ecosystem.

Financial Performance

The Company foresees a better business prospects in the upcoming years.

Internal Control System and Adequacy

The Company has adequate system of internal control in place. The Company believes that strong internal control system and processes play a critical role in the health of the Company. The Company has implemented required controls through systems and processes ensuring a robust control framework. This is to ensure that assets are safeguarded, all transactions are authorized, recorded and correctly reported and to ensure operational excellence. The Board and the Audit Committee reviews the performance of the audit and compliance functions and reviews the effectiveness of controls and compliance with regulatory guidelines. In the opinion of Board, internal control systems are well placed and working in an efficient manner.

Disclosure of Accounting Treatment

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India to extent and in accordance with the Indian Accounting Standards (Ind AS) as per the Companies Ind AS Rules 2015, as amended, to comply with the Ind AS notified under Section 133 of the Companies Act, 2013 read with Rules made thereunder. The financial statements have been prepared on accrual basis under the historic cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

Cautionary Statement

This Report is based on the current situation, past experience and information available to the Company about its various businesses and assumptions regarding economic and industrial scenario, Governmental and other regulatory policies. The Performance of the Company is, to a great extent, dependent on these factors. The future performance may be materially influenced by the changes in any of these factors, which are beyond the control of the Company and may affect the views expressed in or perceived from this Report. Therefore the investors are requested to make their own independent judgments by taking into account all relevant factors before any investment decision.

Key Ratios

The Key Ratios as applicable to the Company are disclosed in the Notes to the Financial Statements