TCI Finance Ltd Management Discussions

Industry Structure and Developments Business Environment

TCI Finance Limited (TCIFL or the Company), is a non-deposit taking Non-Banking Financial Company (NBFC) registered with RBI and classified as an NBFC-non deposit taking Company. TCIFL engaged in the business of financial services. The Indian Non-Banking Financial Companies (NBFC) sector remains a critical pillar of Financial inclusion and economic. growth. Over the years, NBFCs have demonstrated remarkable endurance, expanding their prominence within the Financial ecosystem.

INDUSTRY AND ECONOMIC SCENARIO

India entered FY 2025-26 as one of the worlds fastest-growing major economies and the year reinforced that position. Real GDP is estimated to have expanded at a robust pace of 7.6% in FY 2025-26, as highlighted in the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) review of April 2026, with growth remaining broad-based across consumption, investment and sectoral activity. Private Final Consumption Expenditure expanded contributing the largest share of GDP, reflecting stable urban demand and a gradual recovery in rural consumption. Gross Fixed Capital Formation rose, sustaining investment levels at around 30% of GDP, driven by infrastructure creation, manufacturing expansion and capacity additions. Services remained the primary growth engine, while industrial growth also strengthened, aided by infrastructure activity, construction momentum and improved capacity utilization.

Indias NBFC sector is on a sustained growth trajectory, with assets under management (AUM) expected to surpass 50 Lakh Crore in FY 2026-27 excluding government-owned NBFCs, as per CRISIL Ratings. NBFC credit growth has historically outpaced Indias GDP growth and this trend is expected to continue. The AUM growth trajectory reflects both its expanding relevance and demonstrated resilience within Indias financial ecosystem.

For FY 2025-26, the credit growth of NBFCs is estimated at 16.7% year on year, a slight moderation from 18.4% in FY 2024-25. Amid declining interest rates, NBFCs faced intense pricing competition from banks, particularly in housing, auto and MSME loans. However, NBFCs gained significant ground in the consumer durable segment, with their market share surging to 59% in FY 2025-26. While banks remained dominant in wholesale lending, NBFCs leveraged rising disposable income and rate cuts to drive retail expansion.

The near-term outlook remains constructive. For FY 2026-27, momentum is expected to gain further pace in specialized segments like Consumer Durable financing, with NBFC market share projected to reach 63%. Growth trajectories will nonetheless vary across segments, shaped by risk calibration, regulatory oversight and funding access. Balance sheet strength and funding diversification remain the critical differentiators.

Opportunities

Rising credit demand in Tier 2, 3 and rural markets.

Growth in secured lending including LAP and gold loans.

Growing digital adoption enabling cost efficiencies and wider reach.

Threats

Regulatory tightening for NBFCs impacting capital and compliance requirements.

Competitive intensity from banks, fintechs and other NBFCs.

Macroeconomic volatility affecting borrower cash flows and asset quality.

Interest rate fluctuations impacting spreads and funding costs.

Segment-wise or product-wise performance of the Company

The Company is a NBFC. However, no activity is carried on either in the business of financing or investing in the Company. Hence, the results for the year under review contains no operating income.

The Companys total Revenue during the year were Rs. 48.37 Lakhs and the net loss is Rs. (178.35) Lakhs as against Rs. 346.42 lakhs respectively in the previous year.

Outlook

The Company being an investment company seeks opportunity in the capital market. The Volatility in stock indices represents both an opportunity and challenge for the company. We continue to see significant opportunities in the market for long term.

The company carry shares and securities in its books. The effect of mark to market thereon have been taken into account for the year. The Company will continue to monitor for any material changes to future economic conditions.

Risks and concerns

The Company recognizes that risk is an integral and unavoidable component of business and is committed to managing the risk in a proactive and effective manner. The Company is an NBFC Company registered under RBI and categorized as a Loan Company. In todays challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks for the Company are financial risks, credit risk, liquidity risk, market risk, etc.

Risk mitigation is also an exercise aiming to reduce the loss or injury arising out of various risk exposures. The Company adopts a systematic approach to mitigate risks associated with accomplishment of objectives, operations, revenues and regulations. The Company believes that this would ensure mitigating risks proactively and help to achieve stated objectives. The NBFC industry in general faces the risk of re-entry and new entry of players and existence of several unorganized regional players increasing the competition which mainly affects the asset quality. This is further characterized by captive NBFCs floated by other business houses. The ever existing systemic and delinquency risks and fluctuations in interest rates and risk weight make the companies more vulnerable. Deployment of funds in sensitive and volatile sectors increases the risk exposure while concentration risk increases dependency.

Internal Control Systems and their adequacy

Internal Control measures and systems are established to ensure the correctness of the transactions and safe guarding of the assets. The Management ensures adherence to all internal control policies and procedures as well as compliance with regulatory guidelines. The audit committee of the Board of Directors reviews the adequacy of internal controls. This has improved the management of the affairs of the Company and strengthened transparency and accountability. The Companys Internal Financial Control System is commensurate with the size, scale and complexity of its operations. The Company has in place policies and procedures required to properly and efficiently conduct its business, safeguard its assets, detect frauds and errors, maintain accuracy and completeness of accounting records and prepare financial records in a timely and reliable manner. Further, your Companys Internal Financial Controls (IFC) has been reviewed and actions have been taken to strengthen financial reporting and overall risk management procedures. Detailed procedural manuals are in place to ensure that all the assets are safeguarded, protected against loss, proper prevention & detection of frauds & error, the accuracy and completeness of the accounting records, and all transactions are authorized, recorded and reported correctly.

The Internal Auditors monitor and evaluate the efficiency and adequacy of Internal Financial control system in the Company, its compliance with operating systems, accounting procedures and policies. To maintain its objectivity and independence, the Internal Auditors report directly to the Chairman of the Audit Committee of the Board, all the significant audit observations and follow up actions thereon. Both Statutory Auditor on quarterly basis and Internal auditor on annually basis have sessions with the Audit committee. The Internal audit reports are placed before the Audit committee on annual basis and all findings and observation, if any are recorded thereon. The said observation and comments, if any of the Audit Committee are placed before the board. The Internal Auditor is a permanent invitee to the Audit Committee Meetings. The Audit Committee advises on various risk mitigation exercises on a regular basis.

The audit committee also reviews reports submitted by the management and audit reports submitted by internal auditors and statutory auditors on periodic basis. Suggestions for improvement are considered and the audit committee follows up on corrective action. The audit committee also meets companys statutory Auditor to ascertain, inter alia their views on the adequacy of internal control systems and keeps the board of directors informed of its major observations, if any, periodically.

Your Board is of the opinion that the Internal Financial Controls, affecting the Financial Statements of your Company are adequate and are operating effectively.

Discussion on Financial Performance with respect to operational performance

TCI Finance Limited follows accrual basis of accounting under the historical cost convention. It has adopted Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act 2013 (the Act) read with the Companies (Indian Accounting Standards) Rules, 2015 from April 1, 2019 and the effective date of such transition is April 1, 2018. Your company is a small sized, BSE and NSE listed, Non-Banking Financial Company (NBFC).

The Companys total Revenue from Operations during the year were Rs. 48.37 Lakhs and the net loss is Rs. (178.35) Lakhs as against Rs. 346.42 lakhs respectively in the previous year.

The loss in the current year is mainly on account of increase in the interest cost

The Company is in the process of identifying various alternatives/ new areas to venture into for reviving the Company.

Material Developments in Human Resources/Industrial Relations

The Company always considers its human resources as a valuable asset and is committed towards their development for continuous growth. Focus on training to enhance the skill-sets of employees in line with the business and market requirements continued throughout the year and it confers rewards and recognition based on merit.

The employee relations have continued to be harmonious throughout the year. The Company has 4 permanent employees as on 31st March 2026.

Financial Ratios

Particulars	2025	2026	Change (%)
Debtor Turnover	-	-	0.00%
Inventory Turnover	Not Applicable as there is no Inventory	Not Applicable as there is no Inventory
Interest coverage Ratio	0.00	-0.91	0.00%
Current Ratio	-	-	0.00%
Debt equity Ratio	-1.09%	-1.08%	-1.15%
Operating Profit Margin(%)	-	-	0.00%
Net Profit Margin (%)	-	-	0.00%

Explanation

1. Debtor turnover: Not Applicable

2. Interest Coverage Ratio: The reduction in Profit has been mainly on account of increase in the interest cost.

3. Debt Equity ratio: There has been a reduction in debt equity ratio in the current year on account of Write-off of HGI and Hindustan General loan.

4. Operating Profit Margin: There has been no operating margin on account of no operating income during the current year.

5. Net Profit Margin: There has been no operating margin on account of no turnover during the current year.

Return on Net Worth

The Company recorded a loss of Rs. 178.35 Lakhs for FY 2025-26 as compared to the profit of Rs. 346.42 lakhs for FY 2024-25. The Net Worth of the Company Rs. (7684.74 Lakhs) as of 31st March 2026 as compared to Rs. (6335.98 Lakhs) as of 31st March 2025. Due to adverse developments in the entities to whom the company has advanced loans / given guarantees / investments made, the Company had incurred these losses and adversely affect the future income from operations. These factors substantially affected the operations of the Company.

Cautionary Statement

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of the applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic and political conditions in which the Company operates, interest rate fluctuations, changes in Government/ RBI regulations, Tax laws, other statutes and incidental factors.