Standard Capital Markets Ltd Management Discussions

ANN EXU RE-1 II

"ITS VISION IS TO EVOLVE INTO A DIVERSIFIED FINANCIAL SERVICES GROUP WITH A PAN-INDIA PRESENCE, DEDICATED TO DELIVERING COMPREHENSIVE, LIFE-CYCLE FINANCIAL SOLUTIONS TO ITS CUSTOMERS."

1. INDUSTRY STRUCTURE & DEVELOPMENT

The Indian Non-Banking Financial Company (NBFC) sector continues to serve as a critical pillar of the countrys financial ecosystem, particularly in reaching underserved and unbanked segments of society. The implementation of the Reserve Bank of Indias Scale-Based Regulation (SBR) framework has introduced a structured, risk-based classification and supervisory model, meaningfully enhancing the sectors resilience, transparency, and governance standards.

NBFCs have evolved significantly over the decades — transforming from a fragmented and informally governed landscape to a well-regulated sectorthat, in many instances, benchmarks against global best practices in innovation, governance, and risk management. Today, NBFCs provide a comprehensive suite of fund-based and fee-based financial services, catering to retail customers, corporate borrowers, and niche segments that are often underserved by conventional banking institutions.

The sector is widely regarded as complementary to the banking system, often offering more flexible, customised, and accessible products to its customers. In recognition of this systemic importance, the Reserve Bank of India has progressively harmonised the regulatory framework for NBFCs with that applicable to banks and financial institutions, reinforcing the sectors credibility and long-term sustainability.

A defining strength of NBFCs lies in their ability to serve Micro, Small & Medium Enterprises (MSMEs), which constitute the backbone of entrepreneurship and innovation in India. Their innate capacity to understand customer-specific credit needs and offer tailored financial solutions positions NBFCs as the preferred conduit for MSME credit delivery, directly contributing to economic growth and employment generation.

2. OPPORTUNITIES & THREATS

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Company operates within a single business segment, namely Non-Banking Finance activities. Accordingly, separate segment-wise or product-wise performance disclosure is not applicable as per the relevant accounting and regulatory requirements.

OUTLOOK AND FUTURE PROSPECT

The Indian economy continues to demonstrate commendable resilience, underpinned by robust domestic demand, sustained government-led infrastructure spending, and rapid digital adoption across sectors. The NBFC sector is we 11-positioned to play a pivotal role in supporting credit growth, advancing financial inclusion, and ensuring last-mile delivery of financial services to Indias vast and diverse population.

The overall industry outlook improved tangibly during the financial year 2025-26. The Reserve Bank of Indias proactive issuance of regulatory clarifications — following structured public consultations — has addressed longstanding regulatory gaps and arbitrage concerns. The industry has responded constructively to these measures, strengthening risk frameworks and governance practices in alignment with regulatory expectations. A well-regulated environment also reinforces customer confidence and enhances the overall credibility of the NBFC sector.

In the medium term, the Company anticipates meaningful opportunities in diversifying into new financial products and deepening its penetration across semi-urban and rural markets. SCML remains committed to growing its MSME and Education Loan portfolios, expanding its Customer Durables Loans business, improving Net Interest Margins (NIM), and augmenting fee-based income streams. The Company also intends to leverage advanced analytics capabilities and automate key operational processes to ensure faster turnaround times and superior customer experience.

The Company remains cognisant of prevailing challenges, including rising interest rate pressures, competitive intensification from banks and fintech, and the continuous evolution of the regulatory framework. A prudent risk management philosophy, strong corporate governance, and a focus on sustainable, high-quality growth will remain central to the Companys strategic direction.

Overall, the long-term outlook for the NBFC sector remains distinctly positive, anchored in Indias structural growth narrative and the sustained demand for innovative, inclusive financial solutions.

5. KEY RISKS AND CONTROLS

SCML is engaged in lending and related financial activities and is accordingly exposed to the following key risks. Robust mitigation frameworks are in place across each dimension:

Risk Category	Description & Mitigation
Credit Risk	The risk of non-recovery of principal or interest from counterparties. The Company has a comprehensive credit risk framework incorporating sectoral guardrails, robust policy and compliance structures, thorough due diligence and risk assessment processes, a prudent multi-level approval framework, and strong governance oversight to effectively mitigate credit risk exposures.
Market Risk	The risk arising from adverse market movements, including interest rate fluctuations and concentration risks. The Company maintains a rigorous monitoring process tracking key market parameters, with Asset-Liability Mismatch (ALM) assessed through internal risk models that are reviewed periodically by the relevant committee to enable timely and appropriate corrective actions.
Operational Risk	The risk associated with inadequate or failed internal processes, systems, and controls. The Company has instituted robust process frameworks and a strong compliance culture. The audit and compliance team conducts periodic reviews to assess process adequacy, ensure adherence, and continuously strengthen internal control mechanisms.
Liquidity Risk	The risk arising from mismatches in the maturity profile of assets and liabilities. The Company adopts a conservative approach to liquidity management, maintaining adequate buffers to withstand unforeseen stress events and adhering to strict internal guidelines for ALM management in compliance with applicable regulatory requirements.
Compliance Risk	The risk of legal penalties, financial losses, and reputational damage arising from failure to comply with applicable laws, regulations, internal policies, and industry best practices. The Companys dedicated compliance function ensures ongoing monitoring, timely reporting, and proactive adaptation to evolving regulatory requirements.
Technology Risk	Rapid technological change presents both an opportunity and a risk. The Company actively monitors developments in the digital and cybersecurity landscape and invests in strengthening its technology infrastructure to safeguard data integrity, ensure businesAcontinuity, and leverage technology as a strategic enabler.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established a robust, process-driven internal financial control framework commensurate with the nature and scale of its business operations. The Board of Directors is satisfied that the Companys internal financial controls are sound, operating effectively, and free of material weaknesses.

The Internal Auditors conduct periodic, structured evaluations of the adequacy and effectiveness of internal controls — including internal financial controls as mandated under the Companies Act, 2013 — and verify compliance with applicable regulatory and statutory frameworks. Internal Auditors have expressed their satisfaction regarding the adequacy of existing control systems and the managements proactive

efforts to continuously update and strengthen internal audit systems to meet evolving business requirements.

Material audit observations and the corresponding corrective actions are formally reported by the Internal Auditors to the Audit Committee. The Audit Committee and the Board of Directors regularly review internal audit reports and evaluate the overall adequacy and effectiveness of the internal control environment, ensuring that all audit recommendations are implemented in a timely manner.

7. FINANCIAL PERFORMANCE

The Companys operations remain primarily focused on NBFC activities, encompassing financing and inter-corporate investments. The following table presents the key financial highlights for the year under review:

(Amount in Lakhs)

ll Particulars	FY 2025-26	FY 2024-25
Revenue from Operations	22,178.58	6,424.92
Total Revenue	39,578.14	10,077.65
Profit Before Tax	11,241.36	3,154.52
Profit After Tax	8,049.23	2,834.71

8. KEY FINANCIAL RATIOS

[l Financial Ratio	FY 2025-26	FY 2024-25
Debt Equity Ratio	5.00%	3.21%
Interest Coverage Ratio	1.36%	1.54%
Operating Profit Margin	29.39%	32.12%
Net Profit Margin	20.34%	28.13%
Return on Net Worth	18.51%	8.02%

9. OPERATIONAL HIGHLIGHTS

a. Disbursement

The Company offers a wide range of Business Loans, Personal Loans and . Disbursement in Financial Year 2025-26.

b. Assets Under Management (AUM)

The Companys Assets Under Management recorded robust growth during the year under review. AUM stood at 72,28,621.99 Lakhs as at 31 st March 2026, compared to 71,31,885.49 Lakhs as at 31 st March 2025, reflecting a significant expansion in the lending book and the Companys strong origination capabilities.

c. Performance review

SCML India aspires to scale its business through focused strategic initiatives, leveraging its established foothold in the Commercial Finance segment. The Commercial Finance business remains committed to being a comprehensive financial solutions partner to its customers, delivering high-quality service and innovative products that create measurable value.

Going forward, the Company plans to grow its MS ME and Education Loan portfolios, with a continued emphasis on high NIM products, increased customer acquisition, and expansion of the Customer Durables Loans vertical. The Company will pursue a balanced product mix strategy aimed at ramping up fee-based income, optimising operating costs, and improving collection efficiency to further enhance profitability.

Standard Capital also intends to leverage analytics capabilities to identify market opportunities and develop unique, customer-centric products. Process automation initiatives are planned to ensure quickerturnaround and superior service delivery.

10. HUMAN RESOURCES

The Company recognizes its human capital as its most valuable and

enduring asset. A supportive, inclusive, and professionally enriching work environment is actively fostered to enable employees to perform at their highest potential. In an increasingly competitive talent market, Standard Capital Markets Limited remains steadfast in its commitment to attracting, developing, and retaining the right talent at all levels of the organization. The Company provides meaningful opportunities for employees to realize their professional aspirations, grow within the organization, and contribute to the Companys long-term mission of delivering superior financial solutions to its customers.

DISCLAIMER

Certain statements in this Management Discussion and Analysis Report describing the Companys views regarding the industry, expectations, objectives, and prospects may constitute forward-looking statements within the meaning of applicable laws and regulations. These statements are based on assumptions and expectations of future events that may or may not materialise. Actual results may differ materially from those expressed or implied. Internal and external factors, including but not limited to changes in government regulations, tax laws, economic and market conditions, industrial relations, and other developments beyond the control of the management, may further influence the Companys operations and outcomes. The Company is under no obligation to publicly amend, modify, or revise any forward-looking statement based on subsequent developments, information, or events.

	For and on behalf of Board of Directors of Standard Capital Markets Limited
Date: 06/09/2026 Place: New Delhi
Sd/-	Sd/-
Anshita Sharma	Ram Gopal Jindal
Director	Managing Director
DIN:09706011	DIN:06583160