Khoobsurat Ltd Management Discussions

ANNUAL OVERVIEW AND OUTLOOK

The global economy in CY 2025 held its ground, sustaining moderate growth through a period defined more by resilience. Technology-led investment and steady services demand provided the principal support, even as elevated borrowing costs and headwinds from geopolitical tensions continued to weigh on sentiment. Consequently, the tone shifted from stabilisation to caution in the latter part of the fiscal, as downside risks increasingly dominate the outlook.

The regional picture reveals a sharp divergence. Advanced economies, constrained by various factors, are expected to remain subdued. Emerging and developing economies, by contrast, have sustained stronger momentum, supported by domestic consumption, infrastructure development and favourable demographics. Asia continues to drive incremental global growth, spearheaded by robust momentum in India and steady performance in China.

Global inflation remains on a disinflationary path, although the pace of moderation has become uneven across regions. The easing in price pressures continues to be supported by the lagged impact of past monetary tightening, normalisation of supply chains and softer labour-market conditions in several economies. However, renewed geopolitical risks and the impact of the Middle East conflict on commodity markets have complicated the inflation outlook. In its April 2026, the IMF projected global headline inflation at 4.4% in 2026, before easing to 3.7% in 2027, noting that inflation is expected to rise modestly in 2026 before resuming its decline in 2027.

This divergence is increasingly visible in global trade flows. As demand patterns shift and policy priorities turn more inward-looking, world trade growth is expected to slow before a modest recovery. The deceleration is structurally driven by a rise in protectionist measures, which now impact over 11% of global imports. Intensifying tariff wars between major economies have disrupted trade flows, increased costs and added friction to global commerce. Ongoing tensions in the West Asia conflict have added severe supply-side uncertainties, particularly affecting energy markets and critical maritime choke points. Policy uncertainty has compounded this fragmentation further.

INDIAN ECONOMY: PERFORMANCE AND OUTLOOK

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

Looking ahead, India is positioned to transition from cyclical recovery to a phase of more durable, structurally anchored expansion. Domestic demand is likely to remain the principal growth driver, supported by improving income dispersion across urban and rural segments, sustained public investment in infrastructure and a gradual broadening of private capital formation. Economy-wide formalisation, deepening digital integration and policy emphasis on manufacturing competitiveness and MSME development are expected to strengthen productivity and supply-side capabilities. For financial services institutions operating in this environment, the combination of a growing credit-seeking population, improving asset quality and a supportive policy backdrop present a compelling medium-term opportunity.

INDUSTRY OVERVIEW

Indias capital market has, over the past few years, transitioned from a liquidity-driven expansion to a structurally deepening financial ecosystem. The evolution is no longer defined solely by index performance or episodic inflows, but by a sustained broadening of participation, increasing institutionalisation of savings, and a widening array of capital formation channels. FY2025-26 reflects this transition with greater clarity: market activity remained elevated, but more importantly, the underlying drivers?household financialization, domestic institutional flows, and diversified product penetration-continued to strengthen.

At the aggregate level, India remains among the largest equity markets globally by market capitalisation, supported by sustained economic growth, improving corporate balance sheets, and rising investor participation. Secondary market liquidity has remained robust even through phases of volatility, indicating that trading depth is now underpinned by structural domestic flows rather than transient global liquidity cycles. This marks a distinct shift from earlier periods when market direction and liquidity were disproportionately influenced by foreign portfolio investors.

SEGMENTWISE REPORTING

During the current financial year, the Company has operated in single segment wise, Finance & Investments and hence Segment Reporting is not applicable to the Company.

OPPORTUNITIES & CHALLANGES

The trajectory of Indias capital market is increasingly shaped by structural rather than cyclical factors. Financialization of savings, expansion of domestic institutional capital, and diversification of investment products are likely to remain the dominant themes over the medium term.

At the same time, the market is entering a phase of greater maturity. Valuations are likely to be more closely linked to earnings visibility and return metrics, while regulatory oversight and investor awareness are expected to curb excesses. The growing presence of long-term domestic capital should reduce volatility, but also impose greater discipline on both issuers and intermediaries.

Importantly, Indias capital market still operates below its full potential. Household participation remains low relative to population and income levels, mutual fund penetration lags global benchmarks, and alternative investment pools are still evolving. These gaps, however, represent opportunities rather than constraints. Overall, Indias capital market is transitioning into a more balanced and resilient system?where scale is complemented by depth, participation by discipline, and growth by sustainability.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Your Company has an Internal Audit team that is responsible for independently evaluating the adequacy and effectiveness of all internal control designs and implementation, risk management, systems and processes. Internal Audit team is manned by appropriately skilled, experienced and qualified personnel. The Internal Audit plan is also aligned with the business objectives of the Company which is reviewed and approved by the Audit Committee.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year under review, the Company earned revenue from operations of Rs. 33.98 lakh, along with other income of Rs. 232.27 lakh, taking the total income for the year to Rs. 266.26 lakh. While the Companys total expenses were more than its total income, resulting in a net loss for the year, the revenue generated from operations played a meaningful role in meeting the day-to-day operational and financial requirements of the Company. This, in turn, helped reduce the Companys dependence on additional borrowings from the Directors and from banks/financial institutions to fund its working capital and other requirements.

The management remains focused on improving operational efficiency, expanding revenue streams and exercising tighter control over costs, with the objective of strengthening the Companys overall financial performance in the coming years. These efforts are also aimed at progressively reducing the Companys reliance on external sources of finance and building a more self-sustaining operational and financial structure going forward.

RISKS AND CONCERNS

Khoobsurat Ltd. (KL) has exposures in various line of business. KL are exposed to specific risks that are particular to their respective businesses and the environments within which they operate, including market risk, competition risk, credit risk, liquidity and interest rate risk, human resource risk, operational risk, information security risks, regulatory risk and macro- economic risks. The level and degree of each risk varies depending upon the nature of activity undertaken by them.

MARKET RISK

The Company has quoted investments which are exposed to fluctuations in stock prices. KL continuously monitors market exposure in equity and, in appropriate cases, also uses various derivative instruments as a hedging mechanism to limit volatility.

LIQUIDITY AND INTEREST RATE RISK

The Company is exposed to liquidity risk principally, because of lending and investment for periods which may differ from those of its funding sources. Management team actively manages asset liability positions in accordance with the overall guidelines laid down by various regulators. The Company may be impacted by volatility in interest rates in India which could cause its margins to decline and profitability to shrink. The success of the Companys business depends significantly on interest income from its operations. It is exposed to interest rate risk, both as a result of lending at fixed interest rates and for reset periods which may differ from those of its funding sources. Interest rates are highly sensitive to many factors beyond the Companys control, including the monetary policies of the RBI, deregulation of the financial sector in India, domestic and international economic and political conditions and, inflation. As a result, interest rates in India have historically experienced a relatively high degree of volatility.

The Company seeks to match its interest rate positions of assets and liabilities to minimize interest rate risk. However, there can be no assurance that significant interest rate movements will not have an adverse effect on its financial position.

HUMAN RESOURCE DEVELOPMENT

The Company recognizes that its success is deeply embedded in the success of its human capital. During 2025-26, the Company continued to strengthen its HR processes in line with its objective of creating an inspired workforce. The employee engagement initiatives included placing greater emphasis on learning and development, launching leadership development programme, introducing internal communication, providing opportunities to staff to seek inspirational roles through internal job postings, streamlining the Performance Management System, making the compensation structure more competitive and streamlining the performance-link rewards and incentives.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

There is no material development in Human Resources, Industrial Relations front etc. during the year under review.

OTHER DISCLOSURES IN TERM OF SCHEDULE V OF SEBI LODR REGULATIONS, 2015

Disclosures in regard to following aspects, have been provided in Notes to Account, forming part of Annual Report -

a. Debtors Turnover

b. Inventory Turnover

c. Interest Coverage Ratio

d. Current Ratio

e. Debt Equity Ratio

f. Operating Profit Margin (%)

g. Net Profit Margin (%) or sector-specific equivalent ratios, as applicable.

h. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.]

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The provision of the Companies Act, 2013 relating to CSR Initiatives are not applicable to the Company.

COMPLIANCE

The Compliance function of the Company is responsible for independently ensuring that operating and business units comply with regulatory and internal guidelines. The Compliance Department of the Company continues to play a pivotal role in ensuring implementation of compliance functions in accordance with the directives issued by regulators, the Companys Board of Directors and the Companys Compliance Policy. The Audit Committee of the Board reviews the performance of the Compliance Department and the status of compliance with regulatory/internal guidelines on a periodic basis.

Members are be informed that the Company has not taken approval from CSE for its Right Issue and now the Company has filed Listing Application with CSE. Outcome/penalty for delayed filing is yet to be considered by CSE.

No penalty has been imposed by any of SEBI, BSE during the year under review. However, the amount of penalty is yet to ascertained on the part of CSE.

Kolkata, September 3, 2026	By order of the Board
	For KHOOBSURAT LIMITED
	S/d-
Registered Office:	Sanjay Mishra
7A, Bentinck Street, 3rd Floor, Room No. 310	DIN:09048557
Kolkata-700 001	Managing Director