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 notified under the Companies (Indian Accounting Standards) Rules, 2015 and the Generally Accepted Accounting Principles in India.

Our Management accepts responsibility for the integrity and objectivity of these financial 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

The global economy entered 2026 demonstrating a tenuous resilience amid persistent macro-economic uncertainties, escalating trade frictions, and shifting tariff policies. According to the International Monetary Fund (IMF), global economic growth for 2025 stabilized at approximately 3.2% and is projected to expand moderately at 3% in 2026. While global headline inflation has shown signs of moderation due to earlier monetary tightening, underlying core inflation pressures remain a key focus for central banks. Growth in advanced economies remained subdued and uneven, whereas emerging market and developing economies, predominantly driven by India and Southeast Asian nations, continued to act as the primary engines of global expansion. Supply chain diversification and the realignment of international trade routes continue to reshape the corporate landscape. Looking forward, the global outlook remains subject to downside risks, including potential tariff-driven cost pressures, elevated debt burdens, and geopolitical conflicts. Managing these risks will require continued vigilance in monetary policies alongside structural reforms to foster sustainable, long-term productivity.

INDIAN ECONOMY

India firmly sustained its position as the fastest-growing major economy globally, with real GDP expanding by an impressive 7.7% in FY 2025-26, up from 7.1% in the previous fiscal year. This stellar economic performance was anchored by broad-based sectoral growth, resilient manufacturing activity, robust service sector performance, and accelerated public capital expenditure (Capex).

Inflation Anchored Successfully: Headline CPI inflation was effectively managed throughout the year via coordinated fiscal and monetary measures, navigating well within the Reserve Bank of Indias (RBI) comfort band despite persistent global food price pressures.

Robust External Buffers: Indias macroeconomic stability was further reinforced by its foreign exchange reserves, which demonstrated formidable strength, scaling an all-time record high of $728.49 billion in February 2026.

Fiscal and Financial Resilience: The systemic health of the corporate landscape remained exemplary, characterized by highly strengthened corporate balance sheets and a well-capitalized banking ecosystem boasting record-low non-performing assets (NPAs). Continued transaction momentum under GST further propelled formalization and domestic consumption.

While downside risks going forward persist in the form of shifting global tariff dynamics, international trade frictions, and volatile climate cycles, the baseline outlook for the Indian economy remains exceptionally upbeat. Growth continues to be driven by structural reforms, simplified compliance frameworks, and a steady revival in private consumption across both urban and rural markets.

INDUSTRY STRUCTURE AND DEVELOPMENTS

i. INDIAN EQUITY MARKETS & FINANCIAL SERVICES SCENARIO

Indias capital markets demonstrated measured yet resilient performance in FY 2025 26, navigating through continuous shifts in global trade policies and heightened geopolitical uncertainties. Despite periodic volatility and mixed foreign portfolio flows, the benchmark indices, BSE Sensex and NSE Nifty 50, exhibited strong structural backing from sustained domestic institutional and retail participation.

Sustained Retail Expansion: The structural shift in domestic savings towards financial assets continued in 2025 26, with retail investor participation holding firm and continuing its multi-year upward trajectory, adding stability against global headwinds.

Measured IPO Activity: Following the historic surge in previous years, the primary market (IPOs) in FY 2025 26 reflected a more calculated and strategic approach by corporations, aligning with changing global economic environments.

Resilient Investment Foundation: Long-term market fundamentals remained robust, anchored by domestic investment inflows, corporate balance sheet resilience, and timely policy interventions.

Indias financial services sector, particularly Non-Banking Financial Companies (NBFCs), continues to grow from strength to strength. As an NBFC-ND-NSI operating within the regulatory Base Layer (NBFC-BL) framework of the Reserve Bank of India (RBI), the Company operates in a secure, prudential, and technologically sound lending and investment environment. The competitive landscape has evolved, with niche investment players leveraging tailored portfolios to manage risk and market volatility effectively.

On the macroeconomic front, the Government of India has maintained its steady path of fiscal consolidation while prioritizing public capital expenditure to catalyze economic momentum. Progress in systemic economic legislative reforms has further stabilized business operations:

GST 2.0 Framework: The ongoing consolidation and operational optimization of the Goods & Services Tax (GST) have expanded the formal tax base and smoothed supply-chain operations for corporate India.

Insolvency & Bankruptcy Code (IBC) Progress: The maturing infrastructure of the IBC continues to ensure faster resolution cycles, improving the credit climate and asset recovery channels across the financial sector.

The deletion of archaic laws combined with progressive economic legislations continues to enhance Indias image for the ease of doing business. This stable, regulated domestic ecosystem is expected to drive steady long-term capital formation, directly supporting and safeguarding the business opportunities, strategic investments, and financial operations of your Company.

ii. NBFC SECTOR

Non-Banking Financial Companies (NBFCs) continue to play an institutional role from both a macro-economic perspective and within the core architecture of the Indian financial system. Serving as preferred structural alternatives to conventional commercial banks, NBFCs act as agile financial intermediaries capable of providing customized, hassle-free credit to meet the diverse operational requirements of corporate and commercial enterprises. Given their strategic penetration and operational speed, NBFCs continue to drive credit delivery across consumer retail segments as well as commercial and industrial business ecosystems.

During FY 2025 26, Non-Banking Financial Companies sustained their pivotal contribution to credit intermediation across the domestic economy, adapting resiliently to an evolving regulatory climate:

Regulated Credit Expansion: In FY 2025 26, NBFC sector credit registered a stable year-on-year growth of approximately 16% to 17%. While the breakneck pace of previous years normalized due to calibrated macroprudential measures, expansion remained highly resilient, driven primarily by asset-backed retail categories, small business financing, and infrastructure segments.

Calibrated Asset Quality: Asset quality across the broader sector remained structurally healthy and stable, backed by disciplined and institutionalized underwriting standards. Select unsecured and low-ticket retail segments experienced minor localized stress, prompts for which were met with proactive monitoring and tightened internal risk filters.

Dynamic Funding Profiles: Funding strategies shifted toward enhanced diversification. Amid stricter bank credit lines and heightened risk weights on select segments, NBFCs increasingly relied on capital market borrowings, commercial papers, and alternative domestic financing channels to balance aggregate funding costs.

The total Assets Under Management (AUM) of the NBFC sector systematically sustained its multi-trillion mark, securely marching toward the landmark 50 lakh crore ( 50 trillion) threshold as credit penetration continued to deepen.

Furthermore, the implementation of the Reserve Bank of Indias (RBI) Scale Based Regulation (SBR) framework, combined with accelerate digital risk assessment tools, has deeply reinforced systemic resilience across all operational tiers. For your Company, which operates as an NBFC-ND-NSI within the regulatory Base Layer (NBFC-BL), this environment of structural stability and robust regulatory oversight provides a healthy ecosystem to maintain a balanced, risk-mitigated investment portfolio and prudently evaluate strategic financing opportunities.

iii. INDUSTRY OVERVIEW: BFSI SECTOR

According to the Reserve Bank of India (RBI), Indias banking and financial services sector remains sufficiently capitalized, resilient, and well-regulated. Despite global headwinds, the countrys macroeconomic stability stands out, with comprehensive stress tests proving that Indian financial institutions possess strong shock-absorbing capacity.

Indias Banking, Financial Services, and Insurance (BFSI) sector has securely consolidated its position among the top three financial ecosystems globally. The industry systematically maintains robust capital adequacy, healthy provision coverage, and strong liquidity buffers, ensuring steady credit expansion.

Key drivers fueling this structural and digital momentum include:

Advanced Digital Infrastructure: Widespread adoption of digital payments, credit rails, and the Account Aggregator framework.

Niche Financial Players: Expanding footprint of tech-enabled NBFCs, Small Finance Banks, and Fintechs driving the credit cycle.

Financial Inclusion: A sustained policy focus by the Government and RBI across Banks, NBFCs, and Mutual Funds.

For your Company, operating as an NBFC-ND-NSI within the regulatory Base Layer (NBFC-BL), this secure and predictable financial environment provides a strong systemic foundation to prudently manage investments and navigate credit exposures.

BUSINESS AND INDUSTRY REVIEW

The Company, as an RBI-registered Non-Banking Financial Company (NBFC-ND-NSI) operating within the Base Layer (NBFC-BL) framework, continues to focus on the prudent deployment of capital through investments in a diversified portfolio of financial assets. The investment portfolio primarily comprises investments in listed and unlisted equity shares, preference shares, mutual funds and other financial instruments, in line with the

Companys investment objectives and prevailing market conditions.

During FY 2025 26, the Company continued to focus on its core investment activities, with revenue was primarily generated from profit on sale of investments, interest income, dividend income and returns from the investment portfolio. The Company maintained a diversified investment portfolio comprising listed and unlisted equity investments, preference shares, mutual funds and other financial assets. During the year under review, the Company continued to adopt a disciplined investment approach, focusing on portfolio diversification, prudent risk management and long-term value creation while responding to changing market conditions.

BUSINESS OUTLOOK

The macroeconomic outlook for the financial sector remains favourable, supported by resilient domestic economic growth, stable financial markets, and continued policy support. The Company intends to strengthen its investment portfolio by pursuing prudent and well-evaluated opportunities across listed and unlisted securities, while maintaining a disciplined approach to capital allocation in line with prevailing market conditions.

The Company views market volatility as an opportunity to identify fundamentally strong investment opportunities at attractive valuations. During FY 2025 26, the capital markets continued to demonstrate resilience, supported by sustained domestic investor participation and healthy resource mobilization through primary market issuances. Going forward, the Company expects investment opportunities to emerge across both equity and fixed-income markets, driven by evolving macroeconomic conditions and changing monetary policy cycles.

The Company maintains a positive long-term outlook on the Indian capital markets, supported by:

Strong Macroeconomic Fundamentals: Continued domestic economic growth, improving corporate earnings and sustained investor confidence.

Stable Economic Environment: Moderating inflation, prudent fiscal management and a supportive regulatory framework.

Prudent Investment Strategy: A disciplined approach to capital deployment, portfolio diversification and effective risk management with emphasis on capital preservation and sustainable long-term returns.

As an RBI-registered NBFC-ND-NSI operating under the Base Layer (NBFC-BL) framework, the Company remains well-positioned to capitalize on suitable investment opportunities while maintaining adequate liquidity, a balanced investment portfolio and a strong risk management framework.

RISKS AND CONCERNS

The Company is exposed to specific inherent risks associated with its financial business model and the macroeconomic environment within which it operates. Management actively addresses these exposures by maintaining a balanced, risk-calibrated profile, combining strategic agility with prudent business practices and robust risk management frameworks.

The Companys business operations, revenue streams, and investment portfolios could potentially be impacted by the following critical risk factors:

Market and Volatility Risk: Financial performance is directly linked to capital market movements. Fluctuations in equity and debt markets directly affect the valuation of the Companys listed and unlisted investment portfolios, impacting overall revenue sustainability across economic cycles.

Interest Rate Risk: Sharp and unexpected movements in prevailing market interest rates can impact the companys cost of funds, yields on credit offerings, and the valuation of fixed-income instruments.

Settlement and Counterparty Risk: The risk that a client or market counterparty will fail to deliver securities or cash as per contractual terms at the time of settlement, or uncertainty regarding a counterpartys long-term capacity to meet its ongoing financial obligations.

Credit and Default Risk: The risk of default, non-repayment, or delayed repayment of principal and interest by borrowers. This may be driven by localized liquidity crises, broader economic downturns, industry-specific stress, or bankruptcy.

Asset Liability Management (ALM) Risk: Potential mismatches between the maturity profiles of financial assets and liabilities, which could arise due to inadequate liquidity buffers, tight credit conditions, or structural changes in interest rate environments.

Operational and Process Risk: Failures in internal processes, technological infrastructure, human error, or fraud that could disrupt business continuity, harm the

Companys reputation, or lead to financial leakage.

Regulatory and Compliance Risk: As an NBFC-ND-NSI subject to the RBIs Scale Based Regulation (Base Layer), any unanticipated changes in the regulatory framework, compliance mandates, tax laws, or SEBI listing rules could alter operational dynamics or increase compliance costs.

OPPORTUNITIES AND THREATS

The structural resilience of the Indian economy, supported by consistent policy execution, robust public sector capital expenditure, and a stable domestic consumption base, presents a healthy landscape for financial intermediaries. The continuing formalization of the economy, combined with deepening financial inclusion via digital infrastructure, opens specific operational pathways for the Company.

These macroeconomic tailwinds present your Company with strategic opportunities in the following core areas:

Growth in Domestic Capital Markets: Continued growth in the Indian capital markets is expected to create attractive investment opportunities across listed securities and mutual fund investments.

Favourable Macroeconomic Environment: Stable economic growth, improving corporate earnings and supportive regulatory policies are expected to strengthen long-term investment prospects.

Portfolio Diversification: The Company intends to continue diversifying its investment portfolio across suitable financial assets to optimize risk-adjusted returns.

Digital Transformation in Financial Markets: Increasing digitalization and technology-driven investment platforms are expected to improve operational efficiency and market accessibility.

Stable Regulatory Framework: A well-regulated financial environment under the RBI and SEBI is expected to provide a stable platform for the Companys investment activities.

Threats

Operating within a dynamic financial ecosystem also exposes the Company to specific external headwinds and systemic challenges that require ongoing management oversight:

Macroeconomic and Geopolitical Uncertainty: Global economic slowdown, geopolitical tensions, inflationary pressures and changing monetary policies may adversely affect financial markets and investment returns.

Persistent Capital Market Volatility: Prolonged uncertainty or two-way movement in domestic and global equity markets, which can temporarily impact short-term investment valuations and trading revenues.

Intensifying Institutional Competition: Escalating market competition from tech-heavy fintech platforms, aggressive private lenders, and conventional banking systems expanding into niche financial spaces.

Evolving Regulatory Landscape: Managing operational and structural transitions caused by regulatory updates or compliance tightening within the RBIs Scale Based Regulation framework.

Dynamic Funding and Liquidity Conditions: Navigating tightening liquidity or changing credit availability in the wholesale funding markets, which can influence overall resource costs.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year under review, the Company reported Total Income of 940.84 Lakhs as against 2,522.51 Lakhs in the previous financial year. The decline in total income was primarily attributable to a lower Net Gain on Sale of Investments, which stood at 363.17 Lakhs during FY 2025 26 compared with 2,041.03 Lakhs in the previous year. However, Interest Income increased to 559.65 Lakhs from 434.37 Lakhs, reflecting improved returns from the Companys investment and lending activities. Dividend Income stood at 18.02 Lakhs as against 47.11 Lakhs in the previous year.

Total expenses increased to 279.25 Lakhs during FY 2025 26 from 173.00 Lakhs in FY 2024 25, mainly due to higher employee benefit expenses, administrative expenses and CSR expenditure incurred during the year. Finance costs remained low at 6.06 Lakhs, reflecting the Companys conservative borrowing profile.

Consequently, the Profit Before Tax (PBT) stood at 661.59 Lakhs as against 2,349.50 Lakhs in the previous year. After providing for current and deferred tax, the Company reported a Profit After Tax (PAT) of 550.14 Lakhs, compared with 2,124.38 Lakhs in FY 2024 25. The decline in profitability was primarily on account of lower realised gains from sale of investments during the year.

The Companys financial position continued to remain strong, with Total Equity of

13,707.03 Lakhs as at March 31, 2026. The investment portfolio stood at 11,392.45 Lakhs, reflecting the Companys continued focus on prudent capital allocation and long-term value creation through a diversified portfolio of financial assets. The Company maintained adequate liquidity and a balanced financial position to support its investment strategy and future growth opportunities.

SEGMENT-WISE / PRODUCT-WISE PERFORMANCE

The Company operates in a single reportable business segment, namely Investment Activities. Accordingly, separate segment-wise disclosures are not required under Indian Accounting Standard (Ind AS) 108 Operating Segments.

During FY 2025 26, the Company continued to derive its revenue primarily from investment-related activities, including profit on sale of investments, interest income, dividend income and income from investments. The investment portfolio continued to comprise listed and unlisted equity investments, mutual funds, preference shares and other financial assets. Despite a moderation in realised gains on sale of investments compared to the previous year, the Company maintained a diversified investment portfolio and continued to adopt a prudent investment strategy focused on long-term value creation and effective risk management.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

The key financial ratios of the Company are as under:

Particulars	FY 2025- 26	FY 2024- 25	Remarks
Current Ratio	45.72	31.36	Increased by 45.79% primarily due to a reduction in current financial liabilities coupled with a stronger liquidity position arising from higher cash and other financial assets. Debt Equity Ratio remained at a negligible level during the year, reflecting the Companys conservative capital structure and low dependence on external borrowings.
Debt Equity Ratio	0.004	0.005	There was no significant change as compared to the previous financial year.
Debt Service Coverage Ratio*	11.28	30.27	The Debt Service Coverage Ratio decreased by 62.74% primarily due to a significant reduction in realized gains on sale of investments during the year, which resulted in lower earnings available for servicing debt. However, the Company continued to maintain a comfortable debt servicing position owing to its low level of borrowings.
Return on Equity Ratio	0.04	0.15	The Return on Equity Ratio declined by 73.33% during the year, primarily due to a significant reduction in Profit After Tax. The decline in profitability was mainly attributable to lower realised gains on sale of investments as compared to the previous financial year.
Net Capital Turnover Ratio	0.07	0.17	Declined by 58.82% during the year, primarily due to a significant reduction in total income as compared to the previous financial year.
Net Profit Ratio	0.58	0.84	Declined by 30.95% primarily due to a significant reduction in net profit during the year. The decline in profitability was mainly attributable to lower realised gains on sale of investments as compared to the previous financial year
Return on Capital Employed	0.05	0.16	Declined by 68.75% primarily due to lower earnings before finance costs and taxes during the year. The decline was mainly attributable to lower realised gains on sale of investments as compared to the previous financial year.
			Declined by 68.75% primarily due to lower returns generated from the Companys asset base during the year.
Return on Investment	0.05	0.16	The decline was mainly attributable to a significant reduction in realised gains on sale of investments, which adversely impacted the earnings before interest and taxes (EBIT) as compared to the previous financial year.

Note:

Inventory Turnover Ratio and DebtorsTurnover Ratio are not applicable considering the nature of the Companys business.

Interest Coverage Ratio and Operating Profit Margin are not considered meaningful for the Company considering its nature as an investment-focused NBFC, where income is primarily derived from investment activities rather than manufacturing or trading operations.

CHANGE IN RETURN ON NET WORTH

The Return on Net Worth declined from 14.91% in FY 2024 25 to 3.83% in FY 2025 26. The decrease was primarily due to a significant decline in Profit After Tax during the year, mainly resulting from lower realised gains on sale of investments as compared to the previous financial year.

ADEQUACY OF INTERNAL CONTROLS

The Companys internal control environment has been systematically maintained and further consolidated during FY 2025 26 through integrated digital workflows, robust digital audit trails, and periodic independent risk reviews. Controls governing financial reporting, regulatory compliances, and core operational processes are structurally and periodically evaluated by the Internal Audit function and have been found to be fully adequate and operating effectively.

The Company has in place a comprehensive internal control and internal audit system managed by qualified, experienced, and competent professionals. The primary objectives of this institutionalized framework are:

Asset Protection: To safeguard the Companys financial assets, investments, and physical infrastructure against any potential loss, unauthorized deployment, or pilferage.

Transaction Integrity: To ensure that all investment and credit transactions are strictly authorized, seamlessly recorded, and reported accurately and within prescribed timelines.

Regulatory Compliance: To ensure continuous, seamless compliance with all applicable statutory regulations, RBI mandates, SEBI guidelines, and internal corporate policies.

Proactive Remediation: To continuously identify operational or process weaknesses persisting in the workflows and suggest prompt, structured remedial measures for the same.

The Company has steadily continued its organizational efforts to align all its internal processes, risk matrices, and control environments with contemporary best practices in the financial services sector.

Based on the broader framework of internal financial controls and compliance systems established and maintained by the Company, the qualitative work performed by the internal, statutory, and secretarial auditors including the comprehensive audit of internal financial controls over financial reporting (IFCoFR) executed by the statutory auditors and the structured reviews performed by the management and relevant board committees, including the Audit Committee, the Board of Directors is of the opinion that the Companys internal financial controls were robust, adequate, and operating with optimum effectiveness during FY 2025 26.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company continues to place significant emphasis on strategic talent development, employee engagement, and building a resilient organizational culture. Key human resource initiatives sustained during FY 2025 26 focused on targeted digital training, professional skill upgrades, and the optimization of performance-linked incentives designed to align individual goals with corporate objectives.

Diversity in recruitment, particularly across technical, compliance, and analytical roles, remained a priority to support the Companys business growth, investment analytics, and operational innovations.

The core highlights of the Companys people-led processes include:

Empowerment and Accountability: Developing an institutional culture driven by a collective spirit of experience and companywide ownership, where assignment, empowerment, and strict accountability form the cornerstone of all operations.

Work-Life Integration: Actively cultivating an environment that encourages employees to balance their professional and personal responsibilities, ensuring long-term talent retention and mental well-being.

Strategic Fresh Recruitment: Retaining senior, highly qualified professionals in core operational roles while selectively onboarding fresh talent to support the planned growth, risk management, and diversification of the business.

This ongoing talent acquisition strategy serves as a critical input to equip the organization to deliver a wide and sophisticated variety of investment and credit products to our growing client base.

Industrial Relations & Headcount:

Industrial relations across all levels of the organization remained exceptionally cordial and harmonious throughout the year under review. As of March 31, 2026, the total number of permanent individuals employed on the rolls of the Company stood at 11 (Eleven).

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