Gold Rock Investments Ltd Management Discussions

OVERVIEW

The financial statements for the year have been prepared in compliance with the requirements of the Companies Act, 2013, guidelines issued by the Securities and Exchange Board of India (SEBI), prudential norms issued by RBI, Ind AS, i.e. Indian Accounting Standards prescribed by the Institute of Chartered Accountants of India and the Generally Accepted Accounting Principles in India. Our Management accepts responsibility for the integrity and objectivity of these financial reported statements. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner and reasonably present our state of affairs, profits and cash flows for the year.

GLOBAL ECONOMIC OVERVIEW

Global economic momentum remains subdued due to continuing policy uncertainties, disrupted trade flows, and regional conflicts. World GDP growth for 2024 25 was approximately 3.0%, with inflation levels stabilizing but still above long-term averages. Advanced economies growth remained below trend, while emerging economies like India, Indonesia, and Vietnam powered global expansion. Policy normalization and supply chain diversification continue to shape international business climate.

Global inflation is forecast to decline to 5.9 percent by 2024 and 4.5 percent in 2025. Monetary policy should stay the course to restore price stability, and fiscal policy should aim to alleviate the cost-of-living pressures while maintaining a sufficiently tight stance aligned with monetary policy. Structural reforms can further support the fight against inflation by improving productivity and easing supply constraint, while multilateral cooperation is necessary for fast tracking the green energy transition and preventing fragmentation.

INDIAN ECONOMY

India remained a global growth leader, with real GDP expanding by 6.5% in FY 2024 25. This robust performance came amid global volatility, supported by strong private consumption, capital investments, easing inflation, and favourable rural demand.

Inflation moderated sharply: CPI fell to 2.82% in May 2025, the lowest since 2019. RBIs 100+ basis point rate cuts aided investment and consumption.

Foreign exchange reserves hit a record $697.9 billion.

FDI inflows increased 14% to $81.04 billion, led by the services and manufacturing sectors.

Exports crossed $824.9 billion, led by services up 13.6% year-on-year.

Risks going forward include global trade tensions, foreign policy uncertainty, and climate events, but overall prospects for 2025 26 remain upbeat with baseline GDP growth forecast at 6.4 6.7%.

The optimistic growth forecasts stem from a number of positives like the rebound of private consumption given a boost to production activity, higher Capital Expenditure (Capex), near-universal vaccination coverage enabling people to spend on contact-based services as well as the return of migrant workers to cities to work, the strengthening of the balance sheets of the Corporates, a well-capitalised public sector banks ready to increase the credit supply and the credit growth to the Micro, Small, and Medium Enterprises (MSME) sector to name the major ones.

OUTLOOK

Indias economic outlook for FY 2025 26 remains positive, driven by strong domestic demand, a resurging investment cycle, and a digitally skilled workforce. The governments continued policy reforms, robust infrastructure spending, and incentives for technology-driven sectors will underpin future growth. India is expected to outperform global peers, with inflation remaining around the medium-term target of 4% and healthy employment gains in key sectors. Ongoing global uncertainties, however, require close monitoring.

Entrenched inflation may prolong the tightening cycle, and therefore costs may stay ‘higher for longer. In such a scenario, global economy may be characterized by low growth in FY24. However, the scenario of subdued global growth presents two silver linings oil prices will stay low, and Indias CAD will be better than currently projected. The overall external situation will remain manageable.

INDIAN EQUITY MARKETS

Indias capital markets demonstrated remarkable resilience in FY 2024 25 despite global volatility and foreign portfolio outflows. The Nifty and Sensex rebounded sharply from March, buoyed by domestic investor participation and improved corporate performance.

Retail investor count rose from 4.9 crore (2019) to 13.2 crore (2024).

IPOs surged 32% year-on-year, with total capital raised nearly tripling.

Indias share of global IPO listings rose to 30%, the worlds highest.

Long-term market fundamentals remain strong, supported by robust domestic savings, policy reforms, and corporate earnings growth.

Indias financial service sector has grown from strength to strength, built on prudential lending practices, robust regulatory environment and sound technology base, and has competently met the aspirations of the vast population and enabled economic activities. The competitive landscape of financial services sector has witnessed rapid growth in the last couple of decades. The financial services industry has come a long way in its reach and resilience. Niche market players and product innovations are making a mark in the financial services space.

The government has continued on the steady path of fiscal consolidation, without compromising on the public investment requirements of the company. There has considerable progress being made in building consensus for the Goods & Services Tax (GST) since the date of roll out i.e. 1st July, 2017. Passing of the Insolvency & Bankruptcy Code (IBC), 2016 and the creation of infrastructure for its effective implementation was another major achievement which should further improve the ease of doing business and quicker resolution of financial restructuring and recovery of dues by the lenders.

All the above reforms measures supported by economic legislation as also deletion from the statute large number of archaic legislation should go a long way in improving the image of the Country for ease of doing business and attract higher level of Foreign Direct Investment and capital formation in the economy which should help in the growth of business opportunities for the Company

NBFC SECTOR

NBFCs have been playing a very important role both from the macro-economic perspective and the structure of the Indian financial system. NBFCs are the preferred alternatives to the conventional banks as a financial intermediary for meeting various financial requirements of a business enterprise, as they provide a hassle free credit. From the point of significance of presence and performance, Non-Banking Finance Companies (NBFCs) continue to make a major impact on the lending side both in consumer/retail lending and commercial/business lending. Non-Banking Financial Companies (NBFCs) continued to play a pivotal role in credit intermediation during FY 2024 25.

NBFC credit growth outpaced banks, rising by nearly 20% for the year, led by MSME lending and retail credit expansion.

Asset quality remained largely stable aided by prudent underwriting, although select microfinance segments saw some stress.

Funding profiles diversified, with greater reliance on public deposits and capital market borrowings amid tightening bank lines.

The NBFC sectors total AUM topped 50 trillion, with broad-based growth across lending verticals. Regulatory oversight and digital adoption increased systemic resilience.

INDUSTRY OVERVIEW

As per the Reserve Bank of India (RBI) Indias banking sector is sufficiently capitalized and well-regulated. The financial and economic conditions in the country are far superior to any other country in the world. Credit, Market and liquidity risk studies suggest that Indian banks are generally resilient and have withstood the global downturn well. BFSI sector in the India is likely to become third largest sector in the world by the year 2025.

Indias banking and financial services industry maintained healthy capital adequacy and robust liquidity buffers, enabling strong credit expansion and enhanced resilience. The BFSI sector is projected to become the worlds third largest by 2025. Innovative products, digital infrastructure, and regulatory reforms (like DIGIT payments and credit infrastructure) continued to drive financial inclusion and deepen market penetration. The Indian banking industry has recently witnessed the rollout of innovative banking mobile like payments and small finance banks. Schemes like these coupled with major banking sector reforms like digital payments, neo-banking, a rise of Indian NBFCs and fintech have significantly enhanced Indias financial inclusion and helped fuel the credit cycle in country.

Financial Inclusion remains one of the most important agenda of Government of India and also will be area of focus for different players in the BFSI Sector players viz Banks, NBFCs, Mutual Funds, Insurance etc.

BUSINESS AND INDUSTRY REVIEW

The Company, as an RBI-registered NBFC, remains focused on investing and trading in listed and unlisted securities including equity, debt, and hybrid instruments. FY 2024 25 witnessed a resurgence in primary capital markets and healthy opportunities in secondary investments.

Focus sectors: Real estate-backed securities, MSME lending, allied financial products.

The Company reinforced its credit and investment appraisal frameworks to ensure sustainable, risk-aligned returns.

BUSINESS OUTLOOK

The outlook remains favourable with targeted expansion of the product base, especially within high-growth segments like real estate credit, MSME lending, and select listed equity and debt. Volatility in public markets will continue to create tactical investment opportunities. The primary securities market seems to have come out of its lull during the financial year 2024 25. Both the total number of issues and the resources mobilized from the primary securities market have gone up. IPOs and public debt issues have contributed to this performance more than rights issues. Volatility in the equity markets would continue to present the investors with good opportunities to further invest. Your Company continue to remain positive on the long-term outlook on the Indian equity markets on the back of strong macro parameters, improving growth outlook and benign inflation and believes to invest in equities in line with their risk profile.

RISKS AND CONCERNS

The Company is exposed to specific risks that are inherent to its business model and the environment within which it operates. The Company manages these risks by maintaining a conservative yet aggressive profile and by following prudent business and risk practices. The companys business could potentially be affected by the following factors: -

- Impact of markets on our revenues and investments, sustainability of the business across cycles.

- Sharp movement in prevailing interest rates in the market.

- Risk that a client will fail to deliver as per the terms of a contract with us or another party at the time of settlement.

- Risk due to uncertainty of a counterpartys ability to meet its financial obligations to us.

- Risk of default or non-repayment of loan by a borrower due to liquidity crisis, economic downturns, bankruptcy or other reasons

- Risk due to mismatch between assets and liabilities on account of inadequate liquidity, changes in interest rates, etc.

- Failure of processes and controls with respect to the operations can have adverse impact on the business continuity, reputation and profitability of the Company.

- Risk due to changes in Regulatory framework.

OPPORTUNITIES AND THREATS Opportunities:

With the macroeconomic improvement in the outlook of the Indian economy and growth prospects with an improved and normal monsoon forecast rural growth is expected to get a boost further investment in the infrastructure & road projects, aided by easing of crude oil prices the Auto industry is expected to grow, with larger income in the city due to the implementation of OROP and seventh pay Commission leaving a larger income in the hands of both the rural and urban consumers, consumer durable industry is expected to get a fillip and an opportunity for NBFC to meet the bridging finance thro ties up This should present your Company with more opportunities in the area of: ? leveraging Corporate Relationship

? Margin Funding to Consumers, traders and manufacturing units

? Investing in equity of growing concerns

? Expansion into new-age assets (fintech, digital lending, ESG-focused investments).

? Participation in capital market deals (IPOs, public debt, structured products).

? Growth in MSME and consumer finance supported by policy reforms.

Threats:

? Retention of human capital as also attraction of fresh talent will be a challenge.

? Regulatory changes

? Persistent global market volatility.

? Competition from both banking and digital fintech entities.

? Regulatory tightening or disruptions in funding markets.

ADEQUACY OF INTERNAL CONTROLS

The Companys internal control environment has been further strengthened during FY 2024 25 through integrated digital systems, enhanced audit trails, and independent risk reviews. Controls over financial reporting, compliance, and operational processes are periodically reviewed by the Internal Audit function and found adequate and effective.

The Company has in place, an adequate internal control and internal audit system managed by qualified and experienced people. Main objective of the system is to safeguard the Companys assets against loss through unauthorized use and pilferage, to ensure that all transactions are authorized, recorded and reported correctly and timely, to ensure various compliances under statutory regulations and corporate policies are made on time and to figure out the weaknesses persisting in the system and suggest remedial measure for the same. The Company has continued its efforts to align all its processes and controls with best practices in these areas. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companys internal financial controls were adequate and effective during FY 2024-25.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The Company continues to emphasize talent development and employee engagement. Key initiatives in FY 2024 25 included digital training, skill upgrades, and performance-linked incentives. Diversity in hiring, especially for technical and analytical roles, was prioritized to support business growth and product innovation. It is our endeavour to create an environment where people can use all of their capabilities in support of the business. Therefore, your Company encourages its employees to balance their work and personal responsibilities. The Company is actively working on developing a culture driven by the collective spirit of experience and companywide ownership. Assignment, empowerment and accountability will be the cornerstone of the people lead processes. The Company has senior qualified professionals in the areas of operations and is looking at fresh recruitment to support the growth and diversification of business i.e. planned, getting fresh talent is a critical input to ensure and equip the organization to deliver a wide variety of products and services to growing customer base of your Company. It is our endeavor to create an environment where people can use all of their capabilities in support of the business. Therefore, your Company encourages its employees to balance their work and personal responsibilities.

CAUTIONARY STATEMENT

This report may contain forward-looking statements based on reasonable assumptions and prevailing economic trends. Actual results may differ due to risks and uncertainties, including but not limited to economic conditions, market volatility, and regulatory changes. Stakeholders are encouraged to exercise discretion and seek professional advice in decision-making.