Sungold Capital Ltd Management Discussions

The Board of Directors of your Company are pleased to present the Management Discussion and Analysis Report for the year ended 31st March, 2026.

The management discussion and analysis have been included in consonance with the code of corporate governance as approved by the Securities and Exchange Board of India (SEBI).

The Management Discussion and Analysis (MD&A) report provides insights into the financial performance, industry trends, opportunities, risks, and strategic direction of the Company for the year ended March 31, 2026. This report should be read in conjunction with the audited financial statements and notes thereto.

This report contains forward-looking statements that involve risks and uncertainties, including those related to the Companys growth plans and strategic direction. Actual results may differ materially. The Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Introduction

Indias economy continues to grow at a steady and confident pace, standing out as the fastest growing major economy in the world. For Financial Year 2026-27, projected Indias GDP to grow at 6.4% in the next fiscal, the fastest pace among G-20 economies, driven by strong domestic consumption, policy measures, and a stable banking system. - Source: Moodys Ratings

The NBFC sector—particularly Base Layer entities—remained instrumental in serving underbanked and unbanked populations. The operating landscape has been influenced by growing digital adoption and enhanced regulatory emphasis on governance and risk- based supervision.

Over the years, the Non-Banking Financial Companies (NBFC) sector has undergone significant transformation in terms of scale, operational capabilities, technological adoption, and diversification into new financial services and products. Both the number of NBFCs and the overall size of the sector have seen substantial growth. The sector now operates within an increasingly interconnected financial ecosystem, with deep linkages to banks, capital markets, and other financial institutions across both assets and liabilities. Additionally, the emergence of non-traditional players leveraging digital platforms has led to the development of innovative, technology-driven business models.

NBFCs have consistently played a crucial role in advancing financial inclusion across India. By complementing and supplementing the efforts of the banking sector, they have helped extend credit access to traditionally unbanked and underserved segments. One of their most significant contributions has been in supporting Micro, Small, and Medium Enterprises (MSMEs)—the backbone of entrepreneurship and innovation in the country. NBFCs possess a unique ability to understand the nuanced needs of these businesses and tailor financial products accordingly, positioning them as effective and agile credit delivery channels for the MSME sector.

Economic and Industry Overview:

FY 2024-25 witnessed gradual economic stabilization following post-pandemic recovery cycles and geopolitical uncertainties. Indias GDP growth was estimated at ~6.8%, supported by resilient domestic demand, robust infrastructure spending, and sustained momentum in the services sector.

The NBFC sector, especially the Base Layer entities, continued to play a vital role in reaching underbanked and unbanked segments. Increased digital penetration and regulatory focus on governance and risk-based supervision have shaped the operating environment.

Regulatory Landscape

As NBFCs have become more significant, the RBI has enhanced its regulation of the sector to address the industry specific issues such as contagion risk in the financial system, oversimplified underwriting processes, concentration of credit risk, exposure towards technology related risks, etc.

Accordingly, the RBI, over last few years, has issued various guidelines on (i) vigil over asset-liability management practices, (ii) maintaining liquidity ratios, (iii) increased reporting requirements, and (iv) scale-based regulations. These have led to NBFCs adopting practices in line with banks. The regulatory vigil is based on four key cornerstones of: (i) responsible financial innovation, (ii) accountable conduct, (iii) responsible governance, and (iv) centrality of the customer.

The Company remains fully compliant with applicable regulations and has taken proactive steps to align with evolving guidelines.

Financial Performance Overview

The details of the financial performance of the Company is given below:

(Rs. In lakhs)

Particulars	For the year ended March 31, 2026	For the year ended March 31, 2025
Total Revenue	155.90	209.37
Total Expense (Excluding Depreciation)	139.98	203.82
Gross Profit before depreciation and tax	15.92	5.55
Net Profit After Tax	4.18	4.16
Balance of Profit brought forward	108.10	104.78
Balance available for appropriation	4.18	4.16
Earning Per Shares (EPS)
Basic	0.023	0.023
Diluted	0.023	0.023

During the year under review the Company has generated total revenue of Rs. 155.90 Lakhs as compared Rs. 209.37 Lakhs of the previous financial year. The Company achieved net profit of Rs. 4.18 Lakhs as compared to Rs 4.16 Lakhs in previous financial year. The directors are continuously looking for new avenues for future growth of the Company.

Key Ratios

Key Ratios on a Consolidated Basis

Ratio	Formula	Numerator	Denominator	CY	PY	%Variation	Reason
Current Ratio	[Current Assets/Current Liabilities)	Current Asset	Current Liability	0.26	0.02	1134%	Due to decrease in ICD borrowings
Debt Equity Ratio	[Debt/Shareholders Equityl	Debt	Shareholders Equity	-	0.06	-100%	Due to decrease in ICD borrowings
Debt Service Coverage Ratio	[Net Operating Income/ Total Debt Service)*	Earning available for debt service*	Total Debt Service*	-	-	0%	NA
Return on Equity Ratio	[Profit after tax for the year/ Shareholders Equityl	Profit after tax	Average Shareholder s Equity	0.00	0.00	0%	NA
Inventories Turnover Ratio	[COGS/ (Average Inventories)l	COGS	Average Inventories	-	-	0%	NA
Trade Receivable s Turnover Ratio	[Revenue from Operations/ Average Trade Receivablesl	Revenue from Operations	Average Trade Receivables	-	-	0%	NA
Trade Payables Turnover Ratio	[Total Purchases/ Average Trade Payables)	Total Purchases	Average Trade Payables	-	-	-	NA
Net Capital Turnover Ratio	[Revenue from Operations/ Average Working Capitall	Revenue from Operations	Working Capital	(19.06)	(1.33)	1329%	Due to decrease in ICD borrowings
Net Profit Ratio	[Profit after Tax/ Revenue from Operations)	Profit after tax	Revenue from Operations	0.03	0.02	34%	Due to decrease in revenue
Return on Capital Employed	[EBIT/ Capital Employed*)	EBIT	Capital Employed*	0.004	0.022	-84%	Due to decrease in interest expenses
Return on Investment	[Profit after tax/ Capital Employed*)	Profit after tax	Capital Employed*	0.00	0.00	6%	NA

Risk Management

The Company follows a conservative and structured risk management approach. Key risks identified include:

• Credit Risk: Mitigated through stringent underwriting and early warning systems.

• Liquidity Risk: Adequate ALM planning; no mismatch in short-term buckets.

• Operational Risk: Periodic audits, IT security controls, and staff training in place.

As of FY 2026, the Company maintains a strong liquidity buffer and high-quality loan book.

Internal Control Systems

The Company has implemented internal controls commensurate with its scale and complexity. The Internal Audit team reports directly to the Audit Committee of the Board, ensuring independence and effective monitoring. No material weaknesses were observed during the year.

Key Components:

Board & Governance: Board-approved policies, delegation of authority, periodic review.

Risk Management: Credit, liquidity, operational, and market risk monitoring; ALM; stress testing.

Internal Audit: Independent audit function, risk-based audits, reporting to Board.

Compliance: Compliance officer, regulatory monitoring, reporting non-compliance.

Financial Controls: Proper accounting, segregation of duties, fraud prevention.

IT & Cybersecurity: Data protection, access controls, system audits.

Fraud Risk Management: Monitoring, whistleblower policy, early warning systems.

Human Resources

Human Resources (HR) departments play a crucial role in driving organizational success. The transformational journey of HR within an organization involves implementing best practices to ensure the development and growth of both the employees and the company. The total employee strength stood at 5 as of March 31, 2026. Emphasis was laid on staff upskilling, retention, and performance-linked incentives. The Company maintained a positive employee satisfaction index with low attrition levels.

Outlook

The NBFC sector is poised for sustained growth, driven by rural and semi-urban credit demand, digitization, and financial inclusion initiatives. The Company aims to:

• Steady growth in retail, SME, and structured finance.

• Stronger risk management: 90-day NPA norm, provisioning, co-lending & investment limits.

• Better governance & controls: Internal controls, HR, and compliance strengthened.

• Technology adoption: Digital lending and fintech integration, with IT/cybersecurity focus.

• Proportionate regulation: Scale-Based Regulation ensures rules fit size and risk.

• Diversified funding: Managing liquidity and ALM risks.

The management is confident of delivering stable and sustainable growth, aligned with its vision of inclusive financial empowerment.

Cautionary Statement

Statements in this MD&A report describing the Companys objectives, projections, estimates, expectations, or predictions may be "forward-looking statements” within the meaning of applicable laws and regulations. Actual results may differ materially due to economic conditions, regulatory changes, and other factors.

Global Market Landscape

The global Non-Banking Financial Company (NBFC) sector, encompassing institutions that provide loans, leasing, asset management, and other financial services without holding full banking licenses, was valued at approximately USD 218.88trillion in 2024 and is projected to reach USD 259.48 trillion by 2034, growing at a CAGR of around 2.15%. Source: Zion Market Research Within this, the retail NBFC segment is forecasted to increase revenue from USD 288.4 billion in 2024 to USD 492.5 billion by 2033, representing a CAGR of ~6.2%. Source: Grand View Research

In India, NBFCs have emerged as a critical pillar of financial inclusion and credit provision. Their aggregate balance sheet expanded from ^51.39 lakh crore in March 2024 to ^61.09 lakh crore in March 2025, further increasing to ^65.51 lakh crore by September 2025, with upper-layer NBFCs reporting a net profit of ^48,873 crore in FY25. Source: Economic Times/RBI.

The sectors growth is fueled by financial inclusion initiatives, digital lending platforms, fintech partnerships, and increasing access to market-based funding such as non-convertible debentures and commercial paper, with total NBFC borrowings in India projected to reach $750 billion by FY27. Source: Global Consultants Review.

Growth Drivers for NBFC Industry

1. Expanding Financial Inclusion: NBFCs have been playing a pivotal role in deepening financial inclusion by reaching segments traditionally underserved by the formal banking sector. Their agile operating models, localised reach, and flexible underwriting practices have enabled them to serve small businesses, first-time borrowers, rural populations, and informal income groups - effectively bridging the credit divide. Source: Article from SMFG India Credit updated November 04,2025

2. Credit Demand from the MSME Sector

The Micro, Small and Medium Enterprises (MSME) sector, which contributes nearly 30% to Indias GDP and employs over 25 crore people, continues to face a significant credit gap. With a credit addressable market estimated at 92 lakh crore, NBFCs have a vital role to play in meeting this growing and underpenetrated demand. Their ability to offer tailored financing solutions positions them as preferred partners for MSME growth. Source: Understanding the Indian MSME Sector, SIDBI, May 2025

3. Green and Sustainable Financing

With a global emphasis on sustainability, NBFCs are increasingly funding environmentally friendly projects, including renewable energy initiatives and electric vehicle financing, aligning with both regulatory requirements and market demand.

4. Technological Advancements

NBFCs have been early adopters of digital technology, which has enhanced both reach and efficiency. Digital loan origination platforms, eKYC, automated credit scoring, and real-time disbursals have significantly improved customer experience and reduced operational costs. Technology has also enabled NBFCs to serve remote geographies with minimal physical infrastructure. Digital channels like online lending platforms, mobile apps, and digital wallets have become popular among customers, especially the younger generation. NBFCs have been quick to adopt these digital channels, enabling them to offer a more personalised and convenient service to their customers. Further, NBFCs have also started using data analytics to gain insights into customer behaviour and preferences. This has enabled them to offer more personalised products and services to their customers. Source: Article by Faster Capital dated April 02, 2025

Challenges Facing the NBFC Sector

While NBFCs have undoubtedly achieved significant growth, they also face challenges that could affect their operational and growth potential.

• Rising Funding Costs: Increased capital requirements and higher interest rates are elevating borrowing costs for NBFCs, potentially impacting profitability

• Intensified Competition: The NBFC sector in India is highly competitive. While larger ones maintain their positions, smaller NBFCs often struggle to compete against well- established companies due to limited resources and challenges in scaling operations effectively. Source: Article from SMFG India Credit updated November 04,2025.

• Technological Disruptions: While technology has been a key driver of NBFC growth, keeping pace with rapid advancements and cybersecurity threats is crucial. Smaller NBFCs may struggle to invest in sophisticated digital solution, putting them at a disadvantage compared to larger, tech savvy competitors. : Article from SMFG India Credit updated November 04, 2025.

• Regulatory Compliance: Stricter regulations necessitate significant investments in compliance infrastructure and processes.

• Asset Quality Management: Maintaining asset quality amidst economic fluctuations and evolving credit landscapes remains a critical concern.

Strategic Outlook

To navigate these challenges and capitalize on growth opportunities, NBFCs are focusing on:

• Diversifying Funding Sources: Exploring international markets and alternative financing options to mitigate funding risks.

• Enhancing Digital Capabilities: Investing in technology to improve customer engagement, operational efficiency, and data analytics.

• Expanding into Underserved Markets: Targeting rural and semi-urban areas with tailored financial products to drive inclusion.

• Fostering Strategic Partnerships: Collaborating with fintech firms and other stakeholders to innovate and expand service offerings.

The NBFC sector is poised for continued growth, underpinned by technological advancements, strategic partnerships, and a focus on underserved markets. However, addressing challenges related to funding costs, regulatory compliance, and asset quality will be crucial for sustaining long-term profitability and stability.

Opportunities

According to the World Bank, Non-Banking Financial Institutions (NBFIs) serve as vital components of a resilient financial system, contributing to macroeconomic stability and long-term economic growth. Their ability to offer cost-effective financing to both individuals and businesses, diversify funding sources, and provide alternative investment avenues helps reduce systemic volatility while fostering competition through a broad range of financial products. This role has been well-demonstrated in mature financial markets. In India, Non-Banking Financial Companies (NBFCs) continue to be instrumental in expanding access to financial services, particularly among underserved and remote populations. They are increasingly establishing themselves as key players in the retail finance space. Looking ahead, NBFCs are expected to further solidify their position in retail lending and maintain a steady growth trajectory.

Threats

In FY 2025, NBFCs continue to grapple with mounting competition from banks and other financial institutions, primarily due to their access to low-cost funding, which allows them to offer credit at more competitive rates. Additionally, the Reserve Bank of Indias enhanced capital adequacy requirements for NBFCs have further constrained their ability to extend lower-cost financing, putting additional pressure on their margins and lending capabilities.

The challenges are compounded by the growing dominance of commercial players with a higher risk-absorption capacity, rising counterparty risks, and ongoing regulatory developments aimed at expanding the supervisory scope over NBFCs. While these measures aim to strengthen systemic stability, there is a growing concern that they may dilute the unique positioning of NBFCs— entities originally structured to serve niche segments and underbanked populations with customized, flexible financial solutions.

Key Investments and developments in Indias hanking industry include:

The commercial banking market size has grown rapidly in recent years. It will grow from $4.39 trillion in 2025 to $5.03 trillion in 2026 at a compound annual growth rate (CAGR) of 14.5%. The growth in the historic period can be attributed to expansion of business banking needs, growth of corporate lending activities, increasing international trade financing, reliance on relationship- based banking models, development of diversified banking products. Source: Commercial Banking Market Report 2026.

Here are some key developments shaping the sector:

1. Strategic Investments and Stake Acquisitions

SMBCs Interest in Yes Bank: Japans Sumitomo Mitsui Banking Corporation (SMBC) is in advanced negotiations to acquire a stake in Yes Bank, potentially leading to an open offer for an additional 26% stake. This move signifies increased foreign interest in Indias banking sector. Reuters

2. Monetary Policy Adjustments

Interest Rate Cuts: The Reserve Bank of India (RBI) has reduced the key repo rate to 6% in April 2025, adopting an "accommodative" stance to support economic growth amidst declining inflation. Reuters

3. Digital Payment Infrastructure Enhancements

Merchant Discount Rate (MDR) Proposal: Indian authorities are considering implementing a Merchant Discount Rate of 0.2% to 0.3% on digital payments via the Unified Payments Interface (UPI). This initiative aims to bolster investments in payment infrastructure and sustain the growth of digital transactions. Reuters

4. Introduction of Residential Mortgage-Backed Securities (RMBS)

First RMBS Listing: India has launched its inaugural listing of residential mortgage-backed securities, with LIC Housing Finance raising ^10 billion through 20-year securities. This development is expected to attract long-term investors and deepen the capital markets. Reuters

5. Central Bank Digital Currency (CBDC) Initiatives

Digital Rupee Expansion: The RBI continues to pilot the Digital Rupee (^), with plans to introduce offline transaction capabilities. This initiative aims to enhance financial inclusion and reduce reliance on physical currency. Wikipedia

These developments underscore Indias commitment to modernizing its banking sector, fostering financial inclusion, and integrating advanced technologies to meet the evolving needs of its economy.

Reserve Bank of India (RBI) Policy Measures

The RBI, along with the government, continues to focus on bolstering MSME finance through various policy measures. Key initiatives include the expansion of credit guarantee schemes like MCGS-MSME, the growth of MUDRA Yojana, revised MSME classifications, and other support measures like no collateral for loans up to ^10 lakh and the development of new platforms like Udyam Assist.

Elaboration:

• Credit Guarantee Schemes:The MCGS-MSME scheme provides a 60% guarantee on equipment loans up to 100 crore, effective January 27, 2025. The Union Budget 2025 also increased the CGTMSE cover to ^10 crore, according to the PIB.

• MUDRA Yojana:This scheme has seen significant disbursement with over 52 crore loans worth 32.61 lakh crore sanctioned as of April 2025. A new Tarun Plus category, for loans up to 20 lakh, was introduced in October 2024, with women comprising 68% of the beneficiaries.

• MSME Classification:The classification for MSMEs was revised, with increased investment and turnover limits for Micro, Small, and Medium enterprises, effective April 1, 2025.

• Micro: Investment up to 2.5 crore, Turnover up to 10 crore.

• Small: Investment up to 25 crore, Turnover up to 100 crore.

• Medium: Investment up to 125 crore, Turnover up to 500 crore.

• Other Measures:Other measures include no collateral for MSE loans up to 10 lakh, the implementation of TReDS, external benchmark linking for MSME loans, and the development of new platforms like Udyam Assist.

Budget 2026 proposals affecting NBFCs

• High-level panel & broad reforms

The Finance Minister announced a high-level committee for banking, NBFC restructuring, and market reforms to strengthen regulatory and operational frameworks for NBFCs. This aims at stability, better inclusion and efficiency in the NBFC ecosystem.

• Credit growth and technology emphasis

The Budget outlined a strategic roadmap under "Viksit Bharat with emphasis on expanding credit access, use of technology, and digital lending platforms for NBFCs.

• Broader Financial Sector Priorities Affecting NBFCs

Financial stability & market reforms, which can improve investor confidence and funding access for NBFCs.

Technology push and credit growth objectives in the financial ecosystem.

Financial Services -NBFC Sector

NBFCs have become a key component of Indias financial sector, outpacing scheduled commercial banks (SCBs) in credit growth in recent years. With their deep regional knowledge, efficient collection systems, and customer-focused services, NBFCs have been instrumental in driving financial inclusion. Their low transaction costs, quick decision-making, and personalized offerings differentiate them from banks, positioning them well to bridge the financing gap in India.

Over the past decade, NBFCs have grown significantly, now representing over a quarter of the balance sheet size of banks. This growth has prompted the RBI to increase regulatory oversight of larger NBFCs, as outlined in its 2021 framework aimed at addressing potential systemic risks while fostering further development in the sector.

The COVID-19 pandemic tested the resilience of NBFCs, particularly due to the lack of relief on liabilities, unlike banks. However, those that maintained strong liquidity were able to navigate the crisis successfully. Despite previous challenges like demonetization, GST implementation, and the failure of a major NBFC, the sector has demonstrated its resilience. With stronger capital adequacy, improved margins, and lower NPAs, the NBFC sector is poised for growth in the post-pandemic period, with the RBIs revised framework further enhancing its resilience.

Human Resources:

The Company has a group of able and experienced employees. The Company believes that the quality of its employees is the key to its success in the long run. The Company continues to have cordial relations with its employees and provides personal development opportunities for all round exposure to them. The Directors wish to place on record their appreciation and acknowledgment of the efforts and dedication and contributions made by employees at all levels during the year under review.

Segment-wise performance:

The Company has done well in all segments as we can see from the financial statements above.

The Financial and Operational Performance

The financial statements for FY 2026 have been prepared in accordance with the provisions of the Companies Act, 2013 and the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India (ICAI). They reflect the Companys commitment to transparency, with estimates and judgments made on a prudent and reasonable basis to present a true and fair view of its financial position and performance

Internal control systems and their adequacy:

In FY 2026, the Company continued to reinforce its governance framework through the adoption of the Three Lines of Defence model, comprising: (i) management oversight and internal control mechanisms, (ii) robust financial controls, risk management practices, security protocols, and compliance monitoring, and (iii) an independent internal audit function serving as the third line of defence. The Companys Internal Management Assurance function, aligned with its size and operational complexity, plays a critical role in evaluating the adequacy and effectiveness of internal controls and ensuring strict adherence to established policies, procedures, and regulatory requirements.

To further enhance the scope and impact of internal audits, the Company has invested in domain experts, strengthening its ability to proactively identify and mitigate control risks. Internal controls and risk management practices are periodically validated through structured review mechanisms to ensure their continued relevance and effectiveness. The Internal Control over Financial Reporting (ICOFR) remains the foundation of the Companys risk and control environment. As mandated by the Companies Act, 2013, both the Board of Directors and the statutory auditors assess and report on the sufficiency and operational effectiveness of the Companys internal control systems.

Our strategy:

• Expansion of existing activities.

• Financial Management/Advisory Services.

• Brand recognition Retention of customer base with a holistic association approach.

• Constant strengthening of risk framework.

Compliance

In FY 2026, the Companys Compliance function continued to operate as an independent and integral part of the governance framework, ensuring that all business and operational activities align with applicable regulatory requirements and internal policies. The Compliance Department has remained central to the effective execution of compliance responsibilities, acting in accordance with directives from regulatory authorities, the Board of Directors, and the Companys established Compliance Policy.

Regular oversight is maintained through periodic reviews by the Audit Committee of the Board, which evaluates the effectiveness of the Compliance Department and monitors adherence to both regulatory mandates and internal standards. This structured approach supports a culture of accountability and reinforces the Companys commitment to ethical and responsible conduct across all functions.

Cautionary:

The Board of Directors have reviewed the Management Discussion and Analysis prepared by the Management, and the Independent Auditors have noted its contents. Statement in this report of the Companys objective, projections, estimates, exceptions, and predictions are forward lookings tatements subject to the applicable laws and regulations. The statements may be subjected to certain risks and uncertainties.

Disclaimer:

All the data used in the initial sections of this report has been taken from publicly available resources and discrepancies, if any, are incidental and unintentional.

Place: Rajpipla	For and on behalf of the Board of Directors
Date: 02.06.2026	Sd/-
	Rajiv Kotia
	Chairman & Managing Director
	DIN:00135912