SRG Fingrow Finance Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW

The global economy reflected resilience in 2025, navigating ongoing challenges such as increased tariffs, heightened trade policy issues, fiscal consolidation across major economies, and persistent geopolitical disparities. Ongoing geopolitical tensions, including conflicts in Eastern Europe and the Middle East and the Russia-Ukraine war, continued to disrupt global supply chains, energy markets, and investor sentiment, resulting in periodic volatility in commodity prices and financial conditions. However, economies gradually adapted through diversified trade routes, stronger energy security measures, and policy support, supporting a more stable and balanced recovery. According to the International Monetary Fund (IMF), global growth remained steady from 3.3% in 2024 to 3.4% in 2025. Headwinds from shifting trade policies are offset by surging technology-related investment, including artificial intelligence (AI), fiscal and monetary support, and broadly accommodative financial conditions. The economy in advanced countries expanded at a moderate pace, at 1.9% in 2025, reinforced by relatively stable labour markets, accommodative financial scenarios and recovering demand. Similarly, Emerging Markets and Developing Economies (EMDEs) witnessed steady growth, rising to 4.4% in 2025. This outlook is supported by improving manufacturing and services activity, continued infrastructure investment and resilient domestic consumption.

Global inflation is projected to decline, with headline inflation falling to an estimated 4.1% in 2025. Inflation remains above target in the United States, while it remains subdued across much of the rest of the world. Central banks must tailor monetary policy to uphold price stability amid ongoing shifts in the global economic landscape.

INDIAN ECONOMY

The Indian economy remained one of the fastest-growing major economies in FY 2025-26, supported by resilient domestic demand, infrastructure-led investment, and structural reforms. According to the Second Advance Estimates released by the National Statistical Office (NSO), real GDP is estimated to grow by 7.6% in FY 2025-26, with strong momentum driven primarily by private consumption and investment, with the services sector remaining the key driver. The manufacturing sector improved while agriculture provided stability despite structural challenges. Real GVA is estimated at ?294.40 lakh crore, reflecting a growth of 7.7% against ?273.36 lakh crore in FY 2024-25.

INDUSTRY STRUCTURE AND DEVELOPMENT

The Indian Non-Banking Financial Company ("NBFC") sector continues to play a significant role in the countrys financial ecosystem by complementing the banking sector and improving access to formal credit across diverse customer segments and geographies. The sector is supported by growing credit demand, increasing financial inclusion, digitalisation and the expanding requirements of retail customers, self-employed individuals and MSMEs. The regulatory environment continues to evolve with an increased focus on governance, capital adequacy, liquidity management, asset quality and risk management. Going forward, the long-term outlook for the NBFC sector remains positive, supported by Indias economic growth prospects and increasing demand for credit, while sustainable growth will continue to depend on prudent underwriting, strong risk management, diversified funding sources and efficient use of technology.

STRENGTHS

- High Capital Adequacy Ratio

- Diversified Product & Customer Profile

- Adequate Internal Control System

- Experienced Promoters

- Brand Name of SRG Group in Rural Sector

- Speedy processing and sanctioning of loan

- Hassle-free documentation process offering maximum flexibility to the Customers

OPPORTUNITIES & THREATS

SRGFFL witnessed significant opportunities driven by the continued growth of the Indian economy and the increasing demand for tailored financial solutions in underserved markets. The adoption of digital financial services and innovative fintech partnerships have enabled us to enhance customer experience and broaden our reach. However, the sector also faced notable challenges, including heightened regulatory scrutiny, evolving compliance requirements, and the rising threat of cyber risks.

According to a recent RBI report, the Department of Supervision will focus on examining licensing requirements for NBFCs and initiating supervisory actions against non-compliant NBFCs in the fiscal year 2024-25. The year 2024 saw many regulatory changes impacting the business model of NBFCs.

SEGMENT REPORTING

The Company is exclusively engaged in the Finance business and revenues are mainly derived from this activity. Accounting Standard 17 regarding Segment-wise Reporting issued by the Institute of Chartered Accountants of India and notified under the Companies (Accounting Standards) Rules, 2006 does not apply to your Company since revenues are derived from only one segment i.e. From finance activity.

RISKS AND CONCERNS

Your Company is exposed to internal and external risks. The internal risks relates to the risks within the Company due to change in management, personnel and policies, lapses / inadequacy in existing infrastructure facilities, delinquencies on the part of employees, staff attrition, misfeasance etc. The external risks can be associated to those factors which are not within the control of the Company like change in interest rates, government regulations, competition from others operating in similar business, etc.

RISK MANAGEMENT

Comprehensive risk management practices form an integral part of the operations at SRGFFL. The nature of business the Company is engaged in exposes it to a slew of complex and variable risks. The rapid and continuous changes in the business environment have ensured that the organization becomes increasingly risk focused to achieve its strategic objectives. SRGFFLs policies ensure timely identification, management and mitigation of relevant risks, such as credit Risk, liquidity risk, interest rate risk, operational risk, reputational and regulatory risks, which help the company move forward with vigour.

INTERNAL CONTROL SYSTEMS & ADEQUACY

SRGFFL has an adequate system of internal control in place which has been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliance with regulations and for ensuring reliability of financial reporting. SRGFFL has documented procedures covering all financial and operating functions.

SRGFFL has robust internal audit programme, where the internal auditors, an independent firm of chartered accountants, conduct a risk-based audit with a view to not only test adherence to laid down policies and procedures but also to suggest improvements in processes and systems. Internal audit observations and recommendations are reported to the Audit Committee, which monitors the implementation of such recommendations.

INFORMATION TECHNOLOGY

Pursuant to RBI Master Direction - Information Technology Framework for the NBFC Sector, the Company having asset size below 500 crores, adopted the measures as mentioned under Section-B of Master Direction - Information Technology Framework for the NBFC Sector. The board has approved the Information technology policy. The Company has adopted various measures for physical/ logical access controls, well-defined user role, a Maker-checker concept to reduce the risk of error and misuse and to ensure reliability of data/information, information security and cyber security, BCP Policy etc. Your Company is currently using in-house software for operations and accounting. Adequate arrangements have been made for backup of data.

DISCUSSION ON FINANCIAL PERFORMANCE AND OPERATIONAL HIGHLIGHTS

The financial and other operational performance of the Company for the year under review has been discussed in detail in the Directors Report. The Cash-Flow Statement and the Balance Sheet are annexed to this Annual Report.

KEY CHANGES IN FINANCIAL INDICATORS

The Key financial ratios of the company are as under:

Sr. No.	Ratios	As on 31.03.2026	As on 31.03.2025	Growth/degrowth %
1	Capital Adequacy Ratio%	125	119.22	4.85%
2	Net Interest Margin (NIM)%	12.5	14.16	-11.72%
3	Cost to Income ratio%	76.87	61.63	24.73%
4	Return on Average Asset%	1.39	2.31	-39.83%
5	Return on Average Equity%	1.44	2.39	-39.75%
6	Revenue (Rs. In Lakhs)	120.48	130.32	-7.55%
7	PAT (Rs. In Lakhs)	27.96	34.83	-19.72%

RETURN ON NET WORTH

Return on net worth as on Net Worth Mar 26 Rs 1497.50 Lakhs & Mar 25 Rs 1476.29 Lakhs

HUMAN RESOURCES

The Company places significant emphasis on human resource management, recognizing its critical role in driving organizational growth and operational excellence. As of March 31, 2025, the company employed total of 4 individuals.

The companys HR strategy focuses on attracting, retaining, and developing talent aligned with its mission to provide affordable housing finance. This involves creating a supportive work environment that fosters both personal and professional growth. Regular training and development programs are conducted to enhance employees skills and knowledge, ensuring they are well-equipped to meet the companys objectives.

RELATED PARTY TRANSACTIONS:

Transactions with related parties entered into by the company in the normal course of business were placed before the audit committee. None of the transactions with any of the related parties were in conflict with the interests of the company. The details of transactions with the company and related parties are given for information under notes to accounts.

LOAN PRODUCTS AND PROCESS:

SRGFFL is primarily engaged in the business of providing Vehicles, construction and mining equipments and Business Loan by offering: (i) Equipment Finance (ii) Vehicle Finance (iii) Business Loan and (iv) Loan Against Property. Entire operations of the Company are handled at the Registered Office in Udaipur, Rajasthan along with the branch/Satellite offices of Group Companies.

Company has a well-established and streamlined credit appraisal process. The loan approval & Disbursement process mainly consists of four simple steps – (i) Appraisal (ii) Security Evaluation (iii) Loan Sanction (iv) Loan Disbursement.

LOAN SANCTIONS AND DISBURSEMENTS:

The company is currently making efforts to regularize outstanding portfolio and looking for new opportunities in the market. Your company has not made any new sanction or disbursement during the year.

ACCOUNTING STANDARDS:

Your Company has complied with the Accounting Standards issued by the ICAI, Accounting Standards and Schedule III of Companies Act, 2013.

OTHER COMPLIANCES:

As required under Section 215 of the Insolvency and Bankruptcy Code, 2016, the Company has registered itself with National e-governance Services Limited (NeSL) authorized by IBBI obtained and an agreement is executed with NESL.

The Company has complied with all the applicable Regulations of Companies Act, 2013 and related Rules thereunder, SEBI (LODR) Regulations and circulars, notifications etc. issued by SEBI.

Other related statutory Guidelines/ Directions as applicable to the Company from time to time have also been strictly adhered to. Compliance of all Regulatory guidelines of RBI/other statutes is periodically reviewed at Audit Committee/Board.

CAUTIONARY STATEMENT:

Statements in this Directors Report and Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. These statements are based on certain assumptions and expectations of future events over which the Company has no direct control. Important factors that could make a difference to the Companys operations include performance of the overall economy; rate of interest position in the economy; performance of the real estate market and other relevant external and internal factors.

Statements in this report, describing the companys objectives, estimations, projections, expectations are "forward looking statements" based on the managements current expectations and beliefs concerning future developments and their potential effect upon the Company. Several factors could make significant difference to the companys operations. These include economic conditions affecting demand and supply, Government regulations and taxation, natural calamities, etc. over which the company does not have any direct control. SRGFFL assumes no responsibility in case the actual results differ materially due to change in internal or external factors

OUTLOOK:

As we move into FY 2026-27, we remain cautiously optimistic about the future. The economic landscape presents both opportunities and challenges, with anticipated growth in key sectors such as SME lending, and digital financial services. Our focus will be on leveraging technology to enhance operational efficiency, deepen customer engagement, and expand our product offerings. We will continue to prioritize compliance, risk management, and governance to ensure sustainable growth in a dynamic regulatory environment. By fostering innovation and maintaining our customer-centric approach, we are well-positioned to capitalize on emerging trends while navigating potential uncertainties in the market.

For and on behalf of the Board of Directors

Sd/- Sd/-

Vinod K. Jain Seema Jain

Managing Director Director

DIN: 00248843 DIN: 00248706

Place: Udaipur

Date: 04-09-2026