Kiran Vyapar Ltd Management Discussions

Industry Structure and Developments

The Company is a Non-Banking Financial Company (NBFC) (Non-Deposit Taking) categorized as Middle layer Company as per Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 and is registered with the Reserve Bank of India. The Company does not accept Public Deposits. It is mainly engaged in the business of making investments, trading and dealing in shares and securities, mutual funds, loan & financing and carrying on business in accordance with the regulatory framework mandated by the laws of land, including Reserve Bank of India. The Company has been following a disciplined approach to investing and lending for long term and creating value for its shareholders/other stakeholders. The business strategy and performance of the Company is also dependent on the economic and financial environment, state of Capital Markets and policies of the Government of India and Reserve Bank of India in this regard.

India continued to be one of the fastest-growing major economies, driven by strong domestic demand, structural reforms and supportive policies. In recent years, the countrys rapid economic expansion enabled it to surpass the UK, making it the worlds fifth-largest economy. However, in FY2025, global uncertainties, rising geopolitical tensions and persistent inflationary pressures contributed to a slowdown in overall economic growth. According to the second advance estimates from the Ministry of Statistics and Programme Implementation (MOSPI), Indias economy grew by 6.5% y-o- y in FY2025, compared to 9.2% in the previous year, thereby solidifying its status as the fastest growing major economy. Inflationary pressures remained a key concern in FY2025, driven by global supply chain disruptions and commodity price volatility. In response, the RBIs Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points in two successive cuts, bringing it down to 6% as of April 2025, while continuing with an accommodative stance.

India continued on a steady path of economic growth, driven by a strong manufacturing sector, an expanding services industry and increased investments in infrastructure. Various government-led initiatives, including digital transformation efforts and financial inclusion programs, played a crucial role in strengthening domestic manufacturing capabilities and attracting foreign direct investment (FDI) across key sectors. The availability of capital, evolving investment trends and access to credit remained essential factors in driving economic expansion, supporting business growth, facilitating infrastructure development and creating employment opportunities. Additionally, interest rates and government policy measures significantly contributed to maintaining economic stability, positively influencing various industries and boosting consumer demand. The steady rise in urbanisation, along with a rapidly growing middle class, further contributed to increased consumer spending across multiple sectors. With these strong economic drivers in place, Indias economy is projected to grow at a robust rate of 6.5% in FY2026.

However, risks stemming from geopolitical tensions, global commodity price fluctuations and financial market uncertainties persist. Looking ahead, Indias economic outlook remains positive, with growth projections exceeding the global average. India is well-positioned to sustain its growth momentum and establish itself as a leading economic powerhouse.

Opportunities and Threats

Non-Banking Financial Companies ("NBFCs") remain one of the most important pillars for ushering financial inclusion in India, reaching out to a hitherto under/unserved populace and in the process leading to "formalization" of the credit demand. NBFCs cater to the needs of both the retail as well as commercial sectors and, at times, have been able to develop strong niches with their specialized credit delivery models that even larger players including banks, have found hard to match. This has further provided a fillip to employment generation and wealth creation and in the process, bringing in the benefits of economic progress to the unserved / underserved sections of the business and society and is vital to the economic growth of the country.

The RBI has been continually strengthening the supervisory framework for NBFCs in order to ensure sound and healthy functioning and avoid excessive risk taking. It has issued several new guidelines in the recent past. India has made significant progress from being classified as a fragile economy in the 2010s to emerging as a key driver of global growth, even as the rest of the world faces economic uncertainties. Two key factors supporting this growth are the countrys demographic dividend and its expanding middle-income population. Currently, around 30% of Indias population falls within the middle-income category, contributing approximately 48% of total domestic consumption. This segment is expected to grow to 40% of the population, as per the PRICE-ICE 3600 Survey and will be dominated by the working age population with a high propensity to spend, including leveraged spending. Additionally, policy reforms focused on infrastructure development, manufacturing expansion and export growth are expected to create more employment opportunities, further increasing the size of the middle-income group and improving living standards.

Major threats is to access to capital for the NBFCs in India. NBFCs are forced to rely on bank loans or the issue of bonds/NCD/CP to raise money, as opposed to banks, which have access to low-cost deposits to support credit growth. . It may be challenging for NBFCs to compete with banks on interest rates. Ensuring smooth access to low- cost funding is essential for NBFCs to maintain the last-mile flow of credit across the economy. The uncertainties ANNUAL REPORT 2024-2025 93

KIRAN VYAPAR LIMITED

and volatility in the financial market are a continuing threat to the organizational performance. However, the twin features of foresightedness and focused analysis of the market have overcome the challenges posed.

Nonetheless, your Company with its strong parentage, brand recognition, liquidity, strong networth and strong client network, is poised to capitalize on this opportunity and foresees several profitable opportunities and tapping deeper markets. Further, the Companys robust risk management framework with a deep understanding of risk evolution mitigation, underwriting and credit controls shall help to arrest the risk of deterioration in asset quality.

Segment wise performance

The Company being a non-banking financial company operates under a single segment viz providing loans and investments in shares and securities.

Outlook

Looking ahead, global growth is expected to moderate further to 2.8% in CY2025, shaped by new unilateral or bilateral tariff regimes and rising geopolitical and policy uncertainties.

India is expected to remain relatively shielded from global headwinds, maintaining its strong growth trajectory. The countrys long-term structural growth drivers remain intact, supported by favourable demographics, stable governance, and ongoing infrastructure development. As per the IMFs World Economic Outlook Report, India will continue to lead as the fastest- growing major economy, with growth underpinned by an expanding services sector, a strengthening manufacturing base, and supportive government policies aimed at improving infrastructure and rationalising tax regimes. The IMF projects Indias nominal gross domestic product (GDP) to reach USD 4.187 trillion in 2025, surpassing Japans estimated USD 4.186 trillion.

Indias growth forecast has been slightly revised down from 6.5% to 6.2% for 2025, it remains the fastest-growing major economy among its global counterparts.

Risks and Concerns:

The Company being a Non-Banking Financial Company is mainly engaged in the business of providing Loans and making Investment in Shares and Securities and therefore it is exposed to various financial risks such as credit, market, interest rate and liquidity risks associated with financials products.

However, the Company has a robust financial risk management system in place to identify, evaluate, manage and mitigate various risks associated with financial products and ensure that the Company accomplishes its desired financial objectives. The Company has a Risk Management Policy in accordance with the provisions of the Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 issued by Reserve Bank of India. It establishes various levels and types of risks with its varying levels of probability, the likely impact on the business and its mitigation measures. The Management evaluates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting from time to time.

The risk management framework is based on assessment of risks through proper analysis and understanding of the underlying risks before undertaking any transactions and changing or implementing processes and systems. This risk management and mitigation mechanism is supported by regular review, control, self-assessment and monitoring of key risk indicators.

Hence, the Management regularly monitors and reviews the continuous changing economic and market conditions in order to take timely and prudent investment and lending decisions.

Internal Control system and their adequacy:

The Company has a proper and adequate internal control system to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorised, recorded and reported correctly. The internal control is exercised through laid out policies, guidelines and procedures. It is supplemented by an extensive program of internal audits conducted by the Internal Auditors and tested by the Statutory Auditors of the Company. The audit observations and corrective action taken thereon are periodically reviewed by the audit committee to ensure effectiveness of the internal control system. The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of persons.

Financial and operational performance:

The financial statements have been prepared in accordance with Indian Accounting Standards notified under section 133 of the Companies Act 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015 (as amended) together read with the MCA notification dated 11 October 2018 which states the mandate for adoption of these standards by the NBFC Companies, as defined under the Companies (Indian Accounting Standards) 94 ANNUAL REPORT 2024-2025

(Amendment) Rules, 2016. Detailed highlighted of financials and operational performance is provided in the Directors Report which forms part of the Annual Report.

Material developments in Human Resources:

Human resources remain central to achieving the Companys goals. The Company continues with the philosophy of thrust and focus on human resources for its continued success. In order to strengthen our human resources for meeting the future challenges and expansion plans, we have focused on hiring the best resources available and retaining and developing our existing talent pool.

The total employee strength as on 31st March, 2025 was 13.

Details of Significant Changes in the Key Financial Ratios:

Pursuant to amendment made in Regulation 34(3) read with Part B of Schedule V, SEBI has notified SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, details of Significant Changes (i.e. Changes of 25% or more as compared to the immediately previous Financial year) in the Key Financial Ratios and Return on Net Worth of the Company (on standalone basis) including explanation thereof are given below:

Note : Profits of the Company in any given year are linked to performance of Capital Markets in respect of its Investment portfolio.

Cautionary statement

Statements in this management discussion and analysis describing the Companys objectives, projections and expectations may be forward looking statements within the meaning of applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied. Important developments that could affect the Companys operations include a downtrend in the industry- global or domestic or both, significant changes in political and economic environment in India, applicable statutes, litigations etc.