Bharat Bhushan Finance & Commodity Brokers Ltd Management Discussions

A. ECONOMIC OVeRVIeW

1. Global economy

Indias economic outlook during Financial Year 2025-26 remained strong, supported by resilient domestic demand, continued government focus on infrastructure development and capital expenditure. Growth projections by leading institutions remained encouraging, reflecting confidence in India s macroeconomic fundamentals and long-term growth prospects despite periodic volatility in financial markets arising from global developments, the

Indian economy continued to demonstrate resilience, supported by strong domestic consumption and structural reforms, thereby sustaining investor confidence and economic momentum.

2. Domestic economy

Indias economic outlook for FY 2026 remained strong, with growth projections ranging between 6.5% and 7.0%, supported by resilient domestic demand, infrastructure development and policy stability. However, Indian capital markets witnessed volatility during the financial year due to global economic uncertainties, geopolitical tensions, elevated crude oil prices, fluctuations in foreign investment flows, valuation pressures and concerns surrounding AIled disruptions in the information technology sector. Nevertheless, the Indian economy continued to demonstrate resilience, supported by strong domestic consumption, government capital expenditure and structural reforms, which are expected to sustain investor confidence and long-term economic growth.

B. INDUSTRY STRUCTURe AND DeVeLOPMeNTS - CAPITAL MARKeT

The Indian capital market witnessed mixed trends during Financial Year

2025 26. The first half of the year remained relatively strong, supported by robust domestic liquidity, sustained retail participation and optimism regarding economic growth, resulting in benchmark indices trading at healthy levels. Mid-cap and small-cap stocks continued to attract investor interest and outperformed broader benchmarks during the initial part of the financial year.

However, market sentiment weakened during the second half of the financial year amid sustained Foreign Institutional Investor (FII) outflows, valuation concerns, geopolitical uncertainties, rising crude oil prices and weakening of the Indian Rupee. Additionally, apprehensions regarding AI-led disruption in the information technology sector, driven by rapid advancements in generative AI technologies by global companies, impacted investor sentiment towards major Indian technology stocks amid concerns over evolving outsourcing and technology service models.

Further, investor preference shifted towards safe-haven assets such as gold and silver, which delivered exceptional returns during the financial year. Consequently, benchmark indices such as the BSE Sensex and NSE Nifty witnessed increased volatility and remained under pressure for a significant part of the latter half of the financial year. While large-cap stocks remained relatively resilient owing to strong fundamentals and institutional support, mid-cap and small-cap stocks experienced heightened volatility and selective corrections due to profit booking, liquidity concerns and weakening investor sentiment. Market conditions remained adverse at the close of the financial year.

Key Reasons for Downturn in share market

The correction in the Indian equity market during the latter half of Financial

Year 2025 26 was primarily driven by sustained FII outflows, geopolitical tensions, elevated crude oil prices, valuation pressures and uncertainties surrounding global trade policies, including U.S. tariff-related developments. Further, rapid advancements in Artificial Intelligence (AI) and concerns regarding potential disruptions in traditional information technology service models impacted sentiment towards IT stocks. Fluctuations in global commodity markets, including a rally in gold and silver as preferred safe-haven assets during periods of uncertainty, also influencedcapital allocation and investor behaviour, resulting in heightened market volatility and selective corrections across broader market segments.

IPO & Mutual Fund Activity:

While the first half of FY 2025-26 saw vibrant IPO activity and strong mutual fund inflows, momentum slowed in the second half. Uncertainty from geopolitical developments and broader market correction led to reduced retail participation in new fund offers and a decline in systematic investment plans.

A. FINANCIAL PeRFORMANCe

During the current year, the Company incurred a small unrealised valuation loss of 21.89 lakhs on its investment portfolio as the market fallen drastically at the end of the financial year due to Brent crude surged above US $100 per barrel, increasing concerns about Indias import bill, inflation and current account deficit. The loss was primarily attributable to heightened market volatility arising from U.S. tariff hikes, escalating geopolitical tensions and concerns relating to global economic uncertainty. The combination of protectionist trade measures, rising crude oil prices and sustained Foreign Institutional Investor (FII) outflows resulted in significant as the BSE Sensex and NSE Nifty. Further, weakness in information technology (IT) stocks, driven by concerns over global technology spending, developments in the artificial intelligence (AI) sector, including rapid advancements by companies such as Anthropic AI, and uncertainty in global demand conditions, also adversely impacted market sentiment during the year.

B. SeGMeNT WISe OR PRODUCT WISe PeRFORMANCe

The Company is engaged primarily in the business of investment, and accordingly, there are no separate reportable segments.

C. FUTURe PROSPeCTS AND OUTLOOK

The outlook for the Indian equity markets in Financial Year 2026-27 remains cautiously optimistic, supported by resilient macroeconomic fundamentals, improving corporate earnings and growth opportunities across key sectors such as banking, healthcare, infrastructure and financial services. Increased domestic participation and continued focus on capital expenditure are expected to support market sentiments, however, elevated market valuations, geopolitical tensions including conflicts involving Iran, Israel and the United States, inflationary pressures, foreign institutional investor (FII) outflows, tariff-related developments and uncertainties in global economic conditions may continue to contribute to market volatility. Nevertheless, despite potential near-term fluctuations, the long-term growth prospects of the Indian economy and capital markets remain encouraging, supported by strong domestic demand, policy reforms and structural economic growth.

D. OPPORTUNITIeS & THReATS Opportunities:

L Strong economic growth prospects of India.

L Increased financial inclusion and growing penetration of financial products and services.

L Rising retail investor participation in the capital markets supported by digital platforms and greater financial awareness

L Opportunities arising from corporate actions such as rights issues, bonus issues, mergers, acquisitions and restructuring activities. L Continued growth in domestic institutional participation and expanding investment opportunities in Indian capital markets. Threats L Geopolitical uncertainties and ongoing conflicts, including the continuing war between Russia and Ukraine and heightened tensions involving Iran, the United States and Israel, which may adversely impact global economic stability and crude oil prices.

L Inflationary pressures and economic slowdown L Fiscal deficit and current account deficit

L Foreign Institutional Investor (FII) outflows and increased volatility in domestic capital markets.

L Protectionist policies by developed economies.

L Continued weakness in the Indian Rupee vis-à-vis US Dollar & other currencies

e. RISK MANAGeMeNT

Risk Management is an ongoing process and an integral part of the

Company s business strategy. Effective risk management is critical to the success and sustainability of any organization. In an increasingly dynamic business environment characterized by globalization, greater market integration, evolving and complex financial products and transactions, and an increasingly stringent regulatory framework, Organizations are exposed to diverse risks requiring an integrated approach to risk mitigation of risks management. Timely identification, are of prime importance to the continued growth and success of the Company. The sustainability of the Companys business is derived from the following: a) Identification of the diverse risks faced by the Company. b) Evolution of appropriate systems and processes to measure, monitor and manage such risks. c) Risk management through appropriate mitigation strategies within the established policy framework. d) Reporting and monitoring of risk mitigation measures at appropriate managerial levels.

The Company is exposed to various risks, including market risk, operational risk, credit risk and regulatory risk. There may be risks arising from market volatility, credit defaults, system failures, process deficiencies or human errors, particularly considering the increasing use of technology and changing business environment. The Company has implemented suitable internal control mechanisms and risk mitigation measures to effectively manage such risks. These risks are continuously monitored, analysed and reviewed at various levels of management to ensure effective risk governance and business continuity.

F. INTeRNAL CONTROL SYSTeMS AND THeIR ADeQUACY

The Company has robust internal controls systems (including Internal Financial Controls) that ensure that transactions are properly authorised, recorded and reported, apart from safeguarding its assets and timely preparation of reliable financial and management information. The internal control system ensures compliance with all applicable laws and regulations facilitates optimum utilization of resources and protect the Companys assets and investors interests.

The Company has a vigil mechanism/ whistle blower policy to address fraud risk. The Audit Committee of the Board regularly reviews significant audit findings of the Internal Audit system covering operational, financial and other areas.

G. HUMAN ReSOURCeS

The Company continues to give priority to its human assets. The Company is also continuously working to create and nurture an atmosphere which is highly motivated and result oriented.

CAUTIONARY STATeMeNT

The statements made in the Management Discussion & Analysis describing the Companys objectives, projections, estimates, expectations are forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company s operation include economic conditions affecting demand/supply and price movements in the domestic and overseas share markets in which the Company invests, changes in government regulations, tax, corporate and other laws.

For and on Behalf of the Board of Directors For Bharat Bhushan Finance & Commodity Brokers Limited Sd/- Sd/- Nisha Ahuja Vijay Bhushan Place : New Delhi Director Director Date : 23 rd July, 2026 (DIN : 00001875) (DIN : 00002421)