SIL Investments Ltd Management Discussions

The management of the Company is pleased to present the Management Discussion and Analysis Report (to the extent applicable to the Company) covering overall performance and outlook of its activities.

Economic Scenario and Outlook Global Economy

According to the International Monetary Fund (IMF), the global economic environment during FY 2025-26 remained challenging, shaped by heightened trade barriers, persistent policy uncertainty, and the escalation of geopolitical tensions, including the conflict in the Middle East. These developments have weighed on global economic sentiment and increased volatility across financial markets. Looking ahead, global growth is projected to moderate to around 3.1% in 2026 marginally lower than the growth in 2025 which was 3.4%. Fiscal policy remained generally measured across major economies, with governments balancing consolidation with targeted support to sustain investment and long-term competitiveness. Monetary conditions gradually eased as inflation moderated, although the pace of disinflation continued to vary across regions, prompting central banks to normalize rates cautiously. The outlook remains subject to significant downside risks. A prolonged or broader geopolitical conflict, renewed trade tensions, financial market instability, and elevated public debt levels could further weaken growth prospects. At the same time, potential upside risks include faster-than-expected productivity gains driven by technological advancements, including artificial intelligence, and any sustained easing of global trade frictions.

The Reserve Bank of India (RBI), in its April 2026 Monetary Policy Statement, observed that the global economic outlook remains uncertain amid heightened geopolitical tensions, particularly the conflict in West Asia, along with ongoing trade frictions. These factors have led to volatility in global energy and commodity prices and disruptions in supply chains, posing risks to global growth and inflation. While services trade remains relatively resilient, merchandise trade faces headwinds, and the evolving global environment continues to exert pressure on emerging market economies.

Indian Economy

Indias economic growth remained resilient during FY 2025–26 despite global uncertainties and geopolitical tensions. India reaffirmed its position as one of the worlds fastest-growing major economies, delivering real GDP growth of around 7.4%. The year was marked by strengthening domestic demand, robust public investment, and resilient macroeconomic fundamentals, which supported economic growth even as the global economy continued to face persistent uncertainties and geopolitical challenges.

As per RBI Monetary Policy Statement, the GDP growth for FY 2026-27 is projected to be lower at 6.9% with inflation at 4.6%. The RBI maintained the policy repo rate at 5.25% with a ‘neutral stance to balance growth and inflation considerations. CPI inflation remained within the target range, with manageable pressures from food and energy prices. Overall, the Indian economy continued to demonstrate stability, supported by policy measures, infrastructure spending, and resilient consumption trends.

NBFC

As per RBI reports, Non-Banking Financial Companies (NBFC) sector remained resilient during FY 2025-26, supported by strong capital buffers, healthy profitability and improving asset quality. The sector remains well-capitalised, with Capital to Risk-Weighted Assets Ratio (CRAR) comfortably above regulatory requirements, reflecting strong financial resilience. Asset quality continued to improve, with Gross Non-Performing Assets (GNPA) levels remaining on a declining trend, while certain segments, particularly microfinance and unsecured lending, continued to warrant close monitoring. Profitability remained healthy, supported by robust net interest margins, while return indicators stayed at comfortable levels. Credit growth steadied during FY 2025-26, supported by improved funding conditions and increased lending activity.

Investment and Credit Companies (NBFC-ICCs) continued to constitute one of the largest segment of the NBFC sector by credit exposure and remained an important component of the financial systems credit intermediation framework.

Your Company

Your Company is a NBFC registered with RBI since 22^nd May, 2009. The mainstay of your Companys operations continued to be investments in various companies, under which steady dividend income flows into the Company coupled with sustained appreciation in capital. During the year under review, your Company has earned income in the form of dividends, interest on Loan, interest on bonds and fixed deposits, and profit on sale of investments.

Financial Performance

Your Companys standalone and consolidated financial performance for F.Y. 2025 - 2026 vis–?–vis the previous year is given below:

(Rs. in lakhs)

	Standalone		Consolidated
Particulars	F.Y. 2025 - 26	F.Y. 2024 - 25	F.Y. 2025 - 26	F.Y. 2024 - 25
Total Income	5,300.49	4,583.40	6,461.61	5,634.06
Finance Costs	-	-	-	0.87
Net Income	5,300.49	4,583.40	6,461.61	5,633.19
Operating Expenses	983.91	1,158.44	1,345.09	1,443.97
Profit before Tax	4,316.58	3,424.96	5,116.52	4,189.22
Profit after Tax	3,289.08	2,649.39	3,820.91	3,129.43

Profits after tax on a consolidated basis over the last five years and movement of net worth are plotted on Charts A and B respectively:

Segment-wise or product-wise performance

The main business of the Company is investment and financing activity. As such there are no separate reportable segments or product wise performance reports applicable to the Company.

Human resources

The Company considers its employees as its key strength and remains committed to providing a respectful, inclusive, and performance-driven work environment. There were no employee-related concerns during the year. As on 31^st March, 2026, the Company had 7 permanent employees.

Details of significant changes in key financial ratios

Ratio	2025 - 26	2024 - 25	% Change
Current Ratio	122.91	174.19	-29.44%
Operating Profit Margin (%)	83.01	75.65	9.73%
Net Profit Margin (%)	63.25	58.52	8.08%
Return on Net Worth (%)	1.62	1.02	58.82%
Interest Coverage Ratio	NA	NA	NA
Debtors Turnover	NA	NA	NA
Inventory Turnover	NA	NA	NA
Debt Equity Ratio	NA	NA	NA

Notes:

• Above ratios are based on standalone financials of the Company.

• The decrease in the current ratio is primarily attributable to the disbursement of a loan of Rs. 50 crore during the year, which has been classified as a non-current asset, resulting in a reduction in bank balances, current investments, and overall current assets.

• Higher Return on Net Worth is due to higher profitability in current year compared to the previous year.

Asset Liability Management (ALM)

The Companys Asset-Liability Committee (ALCO), set up in line with the guidelines issued by the RBI, monitors asset-liability mismatches to ensure that there is no imbalance or excessive concentration on either side of the Balance Sheet. The Company continues to closely monitor liquidity in the market and as part of its ALCO strategy, maintains a liquidity management desk to reduce its liquidity risk.

Fulfilment of RBIs Norms and Standards

Your Company fulfils the standards laid down by RBI relating to recognition and provisioning of non-performing assets, capital adequacy, statutory liquidity ratio, etc. The capital adequacy ratio of the Company is well above the RBI norm of 15%.

Investments

The portfolio of the Company in quoted investments as on 31^st March, 2026 was Rs. 1,68,619.57 lakhs, at market value.

Opportunities, Threats, Risks and Concerns

Your Company holds investments through a diversified portfolio. The growth momentum of the Indian economy bodes well for the growth of the Company due to several measures that have been introduced by the government which are aimed at stimulating domestic demand, including tax incentives and increased expenditure in infrastructure and innovation sectors.

The business prospects of your Company is closely linked to the performance and growth of the companies forming part of its portfolio. Any positive development in these businesses or sectors present opportunities, while adverse movements or uncertainties in the financial markets or in the operations of the investee companies may pose risks to the Companys performance.

Your Company is exposed to specific risks that are peculiar to its business and the environment in which it operates, which includes market risk, interest rate volatility, execution risk and economic cycle.

• The Company has significant quoted investments which are exposed to fluctuations in stock prices. These investments represent a substantial portion of the Companys core capital and are vulnerable to fluctuations in the stock markets. Any decline in these quoted investments may severely impact its financial position and results of operations.

• Liquidity Risk: Asset / Liability Management: The Company is exposed to Liquidity risk if its assets cannot be readily converted into cash to meet operational or strategic needs. Financial firms are now increasingly focused on asset-liability risk. Asset-liability risk is a leveraged form of risk. The capital of most financial institutions is small relative to the firms assets or liabilities, hence small percentage changes in assets or liabilities can translate into large percentage changes in capital. The risk is that the value of assets might fall or that the value of liabilities might rise. The Company is cognizant of the dynamics of this risk and has in place a control structure for closely monitoring incipient signs of risk in this area and to take necessary corrective measures, if needed. The Companys treasury actively manages asset liability positions in accordance with the overall guidelines laid down by the management in the Asset Liability Management (ALM) framework. The Company is exposed to interest rate risk due to fluctuations in market interest rates, which can impact the returns on its interest-earning investments and the valuation of fixed-income securities. Changes in interest rates may affect the yield on new investments, as well as the market value of existing holdings. The Company actively monitors interest rate movements and adjusts its investment strategy as needed to manage this risk.

• While the Indian economy has shown sustained growth over the last several years, a slowdown could cause the business of the Company to suffer. The Company manages such risks by maintaining a conservative financial profile and following prudent business and risk management practices.

• The risk appetite is determined by the Board from time to time. The Company has in place specially mandated Committees such as ALCO, Risk Management Committee, besides Nomination and Remuneration Committee and Audit Committee.

Internal Control Systems

The Company has an independent internal control system which is commensurate with the size and scale of the Company. It evaluates the adequacy of all internal controls and processes and ensures strict adherence to clearly laid down processes and procedures as well as to prescribed regulatory and legal framework. Conforming to the requirements of regulatory authorities such as the RBI and SEBI and consistent with the requirements of the Listing Regulations of the Stock Exchanges, the Company has institutionalized an elaborate system of control processes designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, reliability of financial controls and compliance with applicable laws and regulations. The Internal Auditors are mandated to carry out periodical audit and report on areas of non-compliances / weaknesses. Corrective actions in case of reported deficiencies, if any, are taken actively to further strengthen the internal control systems. These reports are reviewed by the Audit Committee of the Board of Directors for follow-up action and instructions are issued for taking necessary measures.

Outlook

The Companys present business operations are primarily that of an investment company, future of which largely depends upon financial and capital markets. Your Company has investments in debt instruments (including through mutual funds), financially sound companies and immovable properties. The income from dividends, interest earnings and lending business activities will continue to contribute to the income of the Company. The management is optimistic about the future outlook of the Company. The Company will expand its activities, consistent with its status as a NBFC.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be ‘forward looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied. Important factors that could make a difference to the Companys operations include changes in Government regulations and tax regime, economic developments within India and abroad, financial markets, etc. The Company assumes no responsibility in respect of forward-looking statements that may be revised or modified in future on the basis of subsequent developments, information or events. The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The management of the Company has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner, the state of affairs and profit / loss for the year. The narrative on our financial condition and result of operations should be read together with our audited consolidated financial statements and the notes to these statements included in the Annual Report.