Upsurge Investment & Finance Ltd Management Discussions

For the financial year ended 31^st March, 2026

BUSINESS REVIEW AND STATE OF AFFAIRS OF YOUR COMPANY

Upsurge Investment and Finance Limited ("the Company") is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India and engaged in providing financial advisory, structured financing, capital-raising advisory and other allied financial services. With over two decades of experience in the financial services sector, the Company has established itself as a trusted financial partner for businesses by offering innovative, customized and value-driven financial solutions.

The Company primarily focuses on providing comprehensive financial and managerial advisory services to small and medium enterprises (SMEs), startups and emerging businesses. Its service portfolio includes structured financing, debt syndication, corporate and commercial loan advisory, capital-raising solutions, financial restructuring and strategic business advisory. The Company also assists clients in raising funds through various stages of business growth, including seed funding, venture capital, private equity, growth capital and pre-IPO funding.

The Company continues to leverage its experienced management team and qualified professionals possessing extensive expertise in finance, investment advisory, corporate restructuring and regulatory compliance. This enables the Company to deliver integrated financial solutions tailored to the specific requirements of its clients, while maintaining high standards of governance and professional excellence.

During the financial year under review, the Company continued to strengthen its advisory capabilities and expand its business opportunities by focusing on sustainable growth, prudent risk management and operational efficiency. The management remains committed to identifying high- potential business opportunities, facilitating access to capital and creating long-term value for its stakeholders through disciplined execution and responsible business practices.

The Directors are of the opinion that the Companys strong business fundamentals, experienced leadership, diversified service offerings and customer-centric approach position it favourably to capitalize on emerging opportunities in the financial services sector. The Company remains focused on achieving sustainable growth while ensuring compliance with all applicable statutory and regulatory requirements.

OVERVIEW

The Indian economy continued to exhibit resilience during the financial year 2025-26, with real Gross Domestic Product (GDP) growth estimated at 7.7%, supported by stable macroeconomic fundamentals, robust domestic demand, sustained public infrastructure investment and continued policy reforms. Despite global uncertainties arising from geopolitical developments, inflationary pressures and volatility in international financial markets, India remained one of the fastest- growing major economies. The financial services sector, particularly the Non-Banking Financial Company (NBFC) segment, continued to play a significant role in supporting credit growth and financial inclusion. Government initiatives aimed at strengthening the MSME sector, promoting digital financial services, improving ease of doing business and expanding infrastructure continued to create favourable opportunities for the growth of the NBFC sector.

The NBFC industry continues to play a vital role in extending financial services to underserved and unbanked segments of the economy, particularly in semi-urban and rural areas where access to formal banking services remains comparatively limited. Over the years, NBFCs have become an integral part of Indias financial ecosystem by providing diversified financial solutions across various customer segments. The Reserve Bank of India (RBI) continued to strengthen the regulatory framework for NBFCs through the Scale-Based Regulation (SBR) framework and other prudential measures, with greater emphasis on governance standards, capital adequacy, risk management, liquidity management and regulatory compliance, thereby enhancing the resilience and stability of the sector.

The NBFC sector continues to offer significant growth opportunities driven by increasing demand for credit from retail customers, MSMEs and emerging businesses, expanding financial inclusion, digital transformation and technology-driven financial services. At the same time, the sector continues to face challenges arising from evolving regulatory requirements, interest rate movements, liquidity conditions, competitive pressures from banks and fintech companies, cybersecurity risks and changing macroeconomic conditions. The Company remains vigilant in identifying and managing these risks through a robust risk management framework, sound governance practices and the continuous strengthening of its internal control systems.

The Company has established adequate internal control systems commensurate with the size and nature of its business to ensure operational efficiency, reliability of financial reporting, safeguarding of assets and compliance with applicable laws and regulations. Internal financial controls are periodically reviewed through internal and external audits, and necessary corrective actions are undertaken wherever required. The Companys Human Resources function continues to focus on attracting, retaining and developing talent through employee engagement initiatives, continuous learning and leadership development programmes. The Company remains committed to fostering a work culture based on integrity, diversity, inclusion, accountability and ethical business practices.

Industrial relations remained cordial throughout the financial year, and there were no material disputes or disruptions affecting the Companys operations. The Company maintained effective communication and employee engagement initiatives to promote a positive and productive work environment. The outlook for the NBFC sector remains encouraging, supported by sustained economic growth, increasing formalization of the economy, rising credit demand and continued financial inclusion initiatives. The Company is well-positioned to leverage these opportunities

while maintaining a prudent approach towards governance, regulatory compliance, risk management and sustainable long-term growth.

This Management Discussion and Analysis Report contains certain forward-looking statements based on current expectations, estimates, assumptions and projections regarding the Companys future performance. These statements are subject to various risks, uncertainties and other factors, including changes in economic conditions, regulatory developments and other external influences, which may cause actual results to differ materially from those expressed or implied. The Company undertakes no obligation to publicly update or revise any forward-looking statements, except as required under applicable laws and regulations.

GLOBAL ECONOMY

The global economy during FY 2025-26 remained resilient despite persistent geopolitical uncertainties, evolving trade dynamics and financial market volatility. Global growth was supported by easing inflationary pressures, improving labour market conditions in several advanced economies, and the gradual normalization of monetary policies. However, geopolitical conflicts, trade policy uncertainties, elevated sovereign debt levels and uneven economic recovery across regions continued to pose downside risks to the global outlook.

The International Monetary Fund (IMF) estimates that global economic growth remained moderate during the year, with advanced economies witnessing gradual improvement while emerging market and developing economies continued to contribute significantly to global growth. Although inflation moderated compared to the previous year, it remained above the long-term targets of several central banks, resulting in a cautious approach towards interest rate reductions and monetary policy normalization.

Global financial markets experienced periods of volatility driven by changing interest rate expectations, geopolitical developments, fluctuations in energy prices and movements in foreign exchange markets. While major central banks adopted a more balanced policy stance as inflation eased, borrowing costs remained relatively elevated, influencing global investment flows and financing conditions.

International trade showed gradual recovery, supported by improving supply chain efficiency and resilient demand for technology, digital services, renewable energy and infrastructure investments. Nevertheless, global trade continued to face challenges arising from protectionist measures, regional conflicts and uncertainties surrounding global supply chains.

Emerging economies, particularly in Asia, continued to outperform many advanced economies due to strong domestic demand, favourable demographics, increasing digital adoption and sustained public investment. India remained one of the fastest-growing major economies, supported by robust macroeconomic fundamentals, policy reforms, infrastructure development and resilient domestic consumption.

For the Indian NBFC sector, the direct impact of global economic developments remained relatively limited; however, fluctuations in global interest rates, foreign capital flows, exchange rate movements and liquidity conditions influenced the overall funding environment. Rising investor confidence in Indias economic prospects, coupled with a well-regulated financial system and improving credit demand, continued to create growth opportunities for NBFCs while necessitating prudent risk management and disciplined capital allocation.

Looking ahead, the global economy is expected to witness gradual improvement, supported by moderating inflation, easing financial conditions, continued technological innovation and increasing investments in sustainability and digital transformation. Despite ongoing geopolitical and macroeconomic risks, Indias strong economic fundamentals, stable financial sector and favourable long-term growth prospects are expected to position the country as a significant contributor to global economic growth, providing a positive operating environment for the NBFC industry in the coming years.

INDIAN ECONOMY

The Indian economy continued to demonstrate resilience during FY 2025-26 despite an uncertain global environment characterized by geopolitical conflicts, evolving trade policies, inflationary pressures in several advanced economies, and volatility in global commodity and financial markets. Supported by strong domestic consumption, sustained government capital expenditure, healthy corporate balance sheets and a stable financial system, India remained one of the fastest-growing major economies globally.

Indias Gross Domestic Product (GDP) is estimated to have grown by approximately 7.7% during FY 2025-26, driven by robust performance across the services, manufacturing, construction and infrastructure sectors. Continued public investment, improving private capital expenditure, rising urban demand and steady rural consumption, supported by a favourable agricultural season, contributed to the countrys economic momentum.

The Government of India continued to pursue structural reforms aimed at enhancing long-term economic competitiveness. Flagship initiatives such as PM Gati Shakti, the National Infrastructure Pipeline (NIP), the Production-Linked Incentive (PLI) Schemes, Digital India and Make in India continued to strengthen manufacturing capabilities, improve logistics infrastructure, encourage private investment and support employment generation. Increased digital adoption, formalization of the economy and ongoing improvements in the ease of doing business further reinforced investor confidence.

The Reserve Bank of India (RBI) maintained a balanced monetary policy approach during the year, focusing on preserving price stability while supporting sustainable economic growth. Inflation remained largely within the RBIs tolerance band for most of the year, supported by prudent monetary management and easing supply-side pressures. Indias banking system remained well- capitalized, asset quality continued to improve, and credit growth remained healthy across key sectors, reflecting the resilience of the financial system.

In this favourable macroeconomic environment, the NBFC sector continued to play a vital role in expanding access to credit across the economy. NBFCs strengthened their position by catering to the financing needs of retail customers, Micro, Small and Medium Enterprises (MSMEs), self- employed individuals and underserved segments where traditional banking penetration remains limited. Continued digital transformation, wider adoption of technology-driven lending platforms and government initiatives promoting financial inclusion further enhanced the sectors growth prospects.

Looking ahead, while external risks such as geopolitical developments, global financial market volatility, inflationary pressures and changing trade dynamics continue to pose challenges, Indias medium- to long-term economic outlook remains positive. Supported by sound macroeconomic

fundamentals, ongoing policy reforms, infrastructure development, demographic advantages and increasing digitalization, the Indian economy is expected to maintain its growth momentum. The NBFC sector is well-positioned to capitalize on the expanding demand for credit, contribute to financial inclusion, and support Indias sustainable economic growth in the years ahead.

OPPORTUNITIES

The Indian NBFC sector continues to play a pivotal role in expanding credit access and supporting inclusive economic growth. Despite evolving regulatory requirements and a dynamic macroeconomic environment, the sector remains well-positioned to capitalize on structural growth drivers, digital innovation and the increasing formalization of the economy. The following opportunities are expected to support the Companys long-term growth strategy.

Sustained growth in credit demand

India continues to witness healthy demand for credit, supported by rising economic activity, increasing disposable incomes, urbanization and growing consumption. Demand across retail borrowers, MSMEs, self-employed individuals and emerging businesses presents significant opportunities for NBFCs to expand their lending portfolios through customized financial solutions.

Expanding financial inclusion

Government initiatives promoting financial inclusion, digital banking and the formalization of the economy continue to deepen financial penetration in rural and semi-urban areas. The increasing adoption of digital payment systems, Aadhaar-based authentication and account aggregation frameworks enables NBFCs to efficiently serve previously underserved customer segments through technology-enabled lending models.

Growing MSME financing opportunity

The Micro, Small and Medium Enterprises (MSME) sector remains a key driver of economic growth and employment generation. Continued government support through various credit guarantee schemes and policy initiatives is expected to increase financing requirements. NBFCs, with their faster turnaround time and flexible underwriting capabilities, are well-positioned to bridge the credit gap and strengthen their presence in this segment.

Digital transformation and technology-led growth

Rapid advancements in digital infrastructure, artificial intelligence, data analytics and alternative credit assessment models are transforming the lending landscape. Investments in digital platforms, automation, customer onboarding and data-driven decision-making can enhance operational efficiency, improve customer experience, reduce turnaround time and strengthen risk management. Strategic collaborations with fintech companies can further accelerate business growth.

Product diversification and cross-selling opportunities

Changing customer preferences and evolving financial needs provide opportunities to diversify product offerings across secured and unsecured lending segments. Expansion into consumer finance, SME loans, affordable housing finance, vehicle finance, loan against property, supply chain finance and other niche financing solutions can enhance portfolio

diversification and improve overall profitability.

Infrastructure development and government capital expenditure

The Governments continued emphasis on infrastructure development, manufacturing, logistics, renewable energy and affordable housing under various national development initiatives is expected to generate incremental financing requirements. NBFCs can leverage these opportunities by extending credit to eligible businesses and ancillary sectors supporting infrastructure growth.

Green and sustainable finance

Growing awareness of Environmental, Social and Governance (ESG) principles and Indias commitment towards sustainable development present new opportunities in green financing. Financing electric vehicles, renewable energy projects, energy-efficient equipment and environmentally sustainable businesses can create long-term growth avenues while supporting responsible finance initiatives.

Formalization of the economy

Increasing tax compliance, digital payments, GST implementation and greater financial transparency continue to bring more businesses into the formal economy. This expanding formal credit ecosystem enables NBFCs to leverage digital financial data for improved credit underwriting and customer acquisition, particularly among small businesses and first-time borrowers.

Supportive long-term economic outlook

India continues to remain one of the fastest-growing major economies globally, supported by strong domestic demand, policy reforms, rising private investment and demographic advantages. This favourable macroeconomic environment is expected to sustain long-term credit demand and create significant opportunities for well-governed and adequately capitalized NBFCs.

The Company remains committed to leveraging these opportunities through prudent risk management, technology adoption, operational efficiency, customer-centric product offerings and adherence to applicable regulatory requirements, thereby creating sustainable value for all stakeholders.

THREATS

While the Indian NBFC sector continues to benefit from strong structural growth drivers, the operating environment remains subject to several external and internal risks that could impact business performance. During FY 2025-26, the sector continued to face evolving regulatory requirements, changing macroeconomic conditions, heightened competition and technological advancements. The key threats that may influence the Companys future performance are outlined below.

Macroeconomic and geopolitical uncertainties

Although the Indian economy remained one of the fastest-growing major economies during FY 2025-26, persistent geopolitical tensions, global trade uncertainties, fluctuations in crude oil prices, inflationary pressures and volatility in financial markets continue to pose risks. Any adverse macroeconomic developments could affect credit demand, borrower repayment capacity and overall business sentiment, thereby impacting the Companys financial performance.

Interest rate and funding cost risks

Changes in the Reserve Bank of Indias monetary policy and movements in market interest rates may influence the Companys borrowing costs and lending yields. A sustained high interest rate environment or increased cost of funds could compress net interest margins and affect profitability, particularly in a competitive lending environment.

Evolving regulatory framework

The regulatory landscape for NBFCs continues to evolve with enhanced governance standards, risk management requirements, prudential norms, digital lending guidelines and supervisory expectations issued by the Reserve Bank of India. While these measures strengthen the stability of the financial system, they may increase compliance obligations, operational costs and reporting requirements for the Company.

Credit risk and asset quality

Maintaining asset quality remains a key priority for the NBFC sector. Economic disruptions, sector-specific challenges, stress in MSMEs or retail borrowers, and changes in customer repayment behaviour may result in higher delinquencies or non-performing assets (NPAs). The Company continues to strengthen its credit appraisal, monitoring and recovery mechanisms to mitigate such risks.

Liquidity and funding risks

NBFCs primarily depend on bank borrowings, financial institutions and capital markets for funding. Any tightening of liquidity conditions, reduced market confidence or disruptions in financial markets may affect the availability or cost of funds, thereby impacting business expansion and operational flexibility.

Intensifying competition

The financial services industry is becoming increasingly competitive, with the growing presence of banks, small finance banks, fintech companies, digital lending platforms and other financial institutions. Competitive pricing, rapid product innovation and technology-driven customer acquisition strategies may exert pressure on margins and market share.

Technology and cybersecurity risks

The increasing adoption of digital platforms and technology-driven financial services has enhanced operational efficiency but has also increased exposure to cyber threats, data privacy risks, system failures and technology disruptions. Any cybersecurity incident could result in financial losses, regulatory actions and reputational damage.

Operational and compliance risks

The Company operates in a highly regulated environment requiring robust internal controls and effective governance. Any deficiencies in operational processes, internal controls, regulatory compliance or risk management systems could expose the Company to financial losses, legal liabilities and reputational risks.

ESG and sustainability expectations

Stakeholders, regulators and investors are increasingly focusing on Environmental, Social and Governance (ESG) practices. Failure to adapt to evolving sustainability expectations, governance

standards or responsible lending practices may impact stakeholder confidence, access to capital and long-term business sustainability.

Reputational risk

The Companys reputation is one of its most valuable assets. Any adverse publicity arising from customer grievances, regulatory actions, compliance failures, cybersecurity incidents or operational lapses could adversely affect stakeholder confidence, customer relationships and future business opportunities.

The Company continues to strengthen its enterprise risk management framework, internal controls, governance practices and compliance systems to proactively identify, assess and mitigate these risks. It remains committed to maintaining prudent lending practices, adequate liquidity, a strong capital position and robust technology infrastructure to support sustainable longterm growth.

CHALLENGES

The NBFC sector continues to play a pivotal role in supporting financial inclusion and credit delivery across retail, MSME, rural and underserved customer segments. While the sector has demonstrated resilience and adaptability during FY 2025-26, it continues to face a number of operational, regulatory and macroeconomic challenges that require prudent risk management and strategic planning. The key challenges impacting the sector, including the Company, are as follows.

Strengthening regulatory framework

The Reserve Bank of India (RBI) continues to strengthen the regulatory framework governing NBFCs through the Scale-Based Regulation (SBR) framework, enhanced governance standards, stricter compliance requirements and strengthened risk management norms. While these measures promote financial stability and transparency, they also increase compliance costs and necessitate continuous investment in governance, internal controls, technology and reporting systems.

Asset quality and credit risk management

Maintaining asset quality remains a key priority for NBFCs. Although the overall credit environment remained stable during FY 2025-26, economic uncertainties, sector-specific stress and fluctuating cash flows of MSMEs, self-employed borrowers and retail customers may adversely affect repayment behaviour. Continuous monitoring of loan portfolios, prudent underwriting standards and robust recovery mechanisms remain essential for controlling delinquencies and preserving portfolio quality.

Funding and liquidity management

NBFCs continue to depend on diversified funding sources, including bank borrowings, capital market instruments and securitisation. Fluctuations in market liquidity, changing interest rate cycles and evolving investor sentiment may increase the cost of funds and impact borrowing capacity. Maintaining adequate liquidity buffers, diversified funding sources and effective asset- liability management remains a significant challenge.

Intensifying competitive landscape

The Company operates in a highly competitive environment characterised by the presence of commercial banks, small finance banks, housing finance companies, fintech platforms and digital lending institutions. Increasing competition exerts pressure on lending yields, customer acquisition costs and market share, requiring continuous innovation, customer-centric products and enhanced service delivery.

Interest rate and inflation risks

Variations in interest rates and inflation continue to influence borrowing costs, lending margins and customer demand for credit. Elevated funding costs may impact profitability, while inflationary pressures can affect borrowers repayment capacity, particularly in the retail, MSME and rural segments. Efficient pricing strategies and prudent balance sheet management remain critical to mitigating these risks.

Digital transformation and cybersecurity

The rapid digitalisation of financial services has increased customer expectations while exposing NBFCs to cybersecurity threats, data privacy risks and technology-related operational challenges. Strengthening cybersecurity infrastructure, safeguarding customer information, ensuring regulatory compliance and continuously upgrading digital capabilities require sustained investment.

Credit assessment and financial inclusion challenges

Serving customers with limited formal credit history, irregular income patterns or low financial literacy continues to pose underwriting and collection challenges. Enhancing data-driven credit assessment models, leveraging alternative data sources and promoting financial literacy remain important for improving credit quality while supporting financial inclusion.

Macroeconomic and geopolitical uncertainties

Global geopolitical developments, trade disruptions, commodity price volatility and fluctuations in international financial markets continue to create uncertainty in the overall economic environment. Such external factors may influence investor sentiment, capital flows, funding availability and business confidence, thereby impacting credit demand and portfolio performance. The Company continues to closely monitor these developments and adopt appropriate risk mitigation strategies to safeguard its operations.

The Company remains committed to strengthening its governance framework, enhancing risk management practices, investing in technology, maintaining prudent capital and liquidity positions, and pursuing sustainable growth while effectively managing emerging challenges in the evolving financial services landscape.

RISKS AND CONCERNS

The NBFC sector continues to play a pivotal role in supporting Indias financial ecosystem by extending credit to retail customers, MSMEs and underserved segments. However, the operating environment during FY 2025-26 remained influenced by evolving regulatory requirements, changing macroeconomic conditions, technological disruptions and heightened competition. The Company remains committed to maintaining a prudent risk management framework, strong governance practices and robust internal controls to identify, assess, monitor and mitigate risks that may affect its business operations and long-term sustainability.

Credit risk

Credit risk remains one of the most significant risks for the Company, arising from the possibility of borrowers failing to meet their repayment obligations. Factors such as an economic slowdown, sector-specific stress, inflationary pressures, adverse weather conditions affecting rural income, or unexpected global developments may impact borrowers repayment capacity, leading to higher delinquencies and non-performing assets (NPAs). The Company continues to strengthen its credit underwriting standards, portfolio monitoring mechanisms, early warning systems and recovery processes to effectively manage credit quality.

Liquidity and funding risk

NBFCs continue to depend on diversified funding sources, including bank borrowings, capital market instruments, securitisation and other financial institutions. Any tightening in liquidity conditions, changes in market sentiment or increase in funding costs could affect the Companys ability to raise resources at competitive rates. The Company maintains a prudent Asset Liability Management (ALM) framework, adequate liquidity buffers and diversified borrowing relationships to effectively manage liquidity and refinancing risks.

Interest rate risk

Changes in interest rates have a direct impact on borrowing costs, lending yields and overall net interest margins. Although monetary policy conditions remained relatively stable during FY 2025- 26, future changes in policy rates or market interest rates could influence the Companys profitability and borrowers repayment capacity. The Company continuously monitors interest rate movements and adopts appropriate pricing and treasury strategies to mitigate such risks.

Regulatory and compliance risk

The regulatory landscape for NBFCs continues to evolve with increased supervisory oversight by the Reserve Bank of India (RBI). Enhanced governance standards, Scale-Based Regulation (SBR), stricter prudential norms, compliance requirements, digital lending guidelines, cybersecurity expectations and evolving disclosure standards require continuous monitoring and timely implementation. The Company remains committed to maintaining full regulatory compliance through robust governance practices, effective compliance systems and periodic internal reviews.

Operational and cybersecurity risk

The increasing adoption of digital technologies and automation has enhanced operational efficiency while also exposing financial institutions to cybersecurity threats, fraud attempts, system disruptions and data privacy risks. Operational failures arising from process gaps, human error, third-party service providers or technology failures may adversely affect business continuity. The Company has implemented comprehensive internal controls, cybersecurity measures, business continuity planning, disaster recovery mechanisms and regular technology audits to strengthen operational resilience.

Competitive risk

The financial services industry continues to witness intense competition from banks, small finance banks, fintech companies, digital lending platforms and other regulated financial institutions. Rapid technological innovation, evolving customer expectations and competitive pricing may impact market share and profitability. The Company continues to focus on customer-centric

products, operational efficiency, technology adoption and prudent risk management to remain competitive in the evolving marketplace.

Macroeconomic and geopolitical risk

Global geopolitical developments, trade uncertainties, inflationary pressures, volatility in commodity prices, fluctuations in financial markets and changes in domestic economic conditions may influence credit demand, borrower behaviour, investment sentiment and funding availability. While Indias economic outlook remains resilient, any adverse macroeconomic developments could impact the overall business environment. The Company closely monitors economic indicators and adopts appropriate business strategies to manage such uncertainties.

Reputational risk

The Companys reputation is one of its most valuable assets. Any instance of regulatory non-compliance, customer grievances, operational failures, cybersecurity incidents, ethical misconduct or adverse publicity may adversely impact stakeholder confidence and business prospects. The Company remains committed to maintaining high standards of corporate governance, transparency, ethical business practices, customer service and regulatory compliance to safeguard its reputation.

Technology and digital transformation risk

The financial services sector is undergoing rapid digital transformation. While technology enhances customer experience and operational efficiency, it also requires continuous investment in infrastructure, cybersecurity, digital capabilities and skilled resources. Delays in technology adoption or failures in digital systems may impact operational effectiveness. The Company continues to invest in modern technology platforms and digital initiatives to enhance business resilience and customer service.

RECENT TRENDS AND FUTURE OUTLOOK

During FY 2025-26, the Indian NBFC sector continued to demonstrate resilience, supported by stable economic growth, increasing digital adoption and sustained credit demand across the retail, MSME and rural segments. NBFCs continued to leverage digital technologies, automation, artificial intelligence and data analytics to improve customer experience, strengthen credit assessment and enhance operational efficiency, while fintech collaborations further expanded market reach and financial inclusion.

The regulatory environment remained focused on strengthening governance, risk management and compliance through the Reserve Bank of Indias Scale-Based Regulation (SBR) framework and other prudential measures. The industry continued to prioritize robust internal controls, asset quality monitoring, cybersecurity and prudent lending practices to maintain financial stability and address evolving regulatory expectations.

Looking ahead, the outlook for the NBFC sector remains positive, driven by Indias strong economic fundamentals, the growing formalization of the economy, rising digital penetration and increasing demand for credit. Emerging opportunities in MSME financing, green finance, electric vehicle financing, education loans and healthcare finance, coupled with continued technological advancements, are expected to support sustainable long-term growth.

The Company remains committed to strengthening its business through disciplined growth, prudent risk management, digital transformation and a customer-centric approach. By maintaining strong governance standards, regulatory compliance and operational excellence, the Company is well-positioned to capitalize on emerging opportunities and create sustainable value for all its stakeholders.

SEGMENT-WISE PERFORMANCE

The Company operates in only one segment, i.e. Financial Services.

RESEARCH AND DEVELOPMENT

The Company recognizes the importance of continuous innovation, process improvement and technology adoption in strengthening its business operations and enhancing customer experience. During FY 2025-26, the Company continued to focus on developing and upgrading its digital capabilities, strengthening risk management frameworks, improving operational efficiency and enhancing customer service delivery. The Company regularly evaluates emerging technologies, evolving regulatory requirements and changing customer expectations to improve its products, processes and internal systems. Efforts are also directed towards strengthening information security, data analytics, the automation of business processes and compliance management to support sustainable business growth. While the nature of the Companys business does not involve conventional research and development activities as undertaken by manufacturing enterprises, it continues to invest in technology-driven initiatives, operational excellence and digital transformation to enhance productivity, improve risk management practices and create long-term value for all stakeholders.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an adequate internal control system commensurate with the nature, size and complexity of its business operations. The internal control framework is designed to ensure the accuracy and reliability of financial reporting, the safeguarding of assets, compliance with applicable laws and regulations, and the efficient and orderly conduct of business activities. The Company has implemented well-defined policies, procedures and standard operating practices covering key operational areas, including loan appraisal, sanction and disbursement, recovery and collections, treasury operations, accounting, financial reporting and regulatory compliance. These controls are regularly reviewed and updated in line with applicable regulatory requirements, including the guidelines issued by the Reserve Bank of India (RBI), and evolving business practices. The Audit Committee of the Board periodically reviews the effectiveness and adequacy of the internal control systems based on reports submitted by the internal auditors, the statutory auditors and the management. The internal audit function evaluates the effectiveness of internal controls, risk management processes and compliance with established policies, and its observations and recommendations are reviewed for timely implementation. Based on the reviews carried out during the year, the Board is satisfied that the Companys internal financial controls are adequate and operating effectively.

CAUTIONARY STATEMENT

The statements contained in this Management Discussion and Analysis Report describing the Companys objectives, outlook, estimates, expectations, projections or forecasts may constitute

"forward-looking statements" within the meaning of applicable laws and regulations. These statements are based on managements current assumptions, expectations and assessment of the prevailing economic and business environment, and are subject to various risks and uncertainties, many of which are beyond the Companys control. Actual results may differ materially from those expressed or implied, due to factors such as changes in economic conditions, regulatory and policy developments, interest rate movements, inflation, competitive pressures, geopolitical events, technological changes and other risks affecting the financial services sector. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable laws. Readers are advised not to place undue reliance on these statements, and are encouraged to read this Management Discussion and Analysis Report in conjunction with the Boards Report, the audited financial statements and the notes to accounts forming part of the Annual Report for the financial year ended March 31, 2026, to obtain a comprehensive understanding of the Companys business, financial performance and future outlook.