Nalin Lease Finance Ltd Management Discussions

(Pursuant to Regulation 34(2) (e) of SEBI (LODR) Regulations, 2015 and as per applicable provisions of the Companies Act, 2013)

The Non-Banking Financial Companies (NBFC) sector in India continues to be a pivotal segment of the nancial system, especially in facilitating credit to traditionally underserved sectors such as rural, semi-urban, and informal market segments. Regulatory bodies such as the Reserve Bank of India (RBI) have implemented numerous reforms over recent years, aiming to enhance governance, accountability, capital adequacy, and digital adoption.

Key developments include stricter implementation of risk-based supervision, push for digital lending guidelines, alignment of asset classi cation norms with banks, and emphasis on enhanced disclosures. These measures aim to strengthen the sectors resilience and build public trust.

? Rising demand for micro and small-ticket credit in semi-urban and rural regions.

? Governments continued push for nancial inclusion through schemes such as PMMY and Digital India.

? Increased reliance on digital lending and ntech collaboration o ers scalability.

? Regulatory recognition of NBFCs critical role in bridging credit gaps.

? Rising competition from FinTech companies and traditional banks with deeper capital.

? Asset quality pressures due to interest rate volatility and macroeconomic uncertainty.

? Regulatory tightening, such as scale-based regulations, may limit operational exibility.

? Risk of borrower defaults in economically stressed periods, leading to NPA build-up.

The Company operates under a single segment nancial services, primarily comprising vehicle loans, lease nancing, and hire purchase schemes.

During FY 2024-25, the Company has witnessed stable demand across its lending products. The two-wheeler nancing vertical and hire purchase facilities contributed signi cantly to disbursement volumes, especially in rural and tier-II regions.

The outlook for the NBFC sector remains cautiously optimistic. While external factors such as in ation, monetary tightening, and credit risk remain areas of concern, the long-term demand for credit remains intact, especially in informal markets.

Nalin Lease Finance Limited is strategically positioned to capitalize on this demand through:

? Deeper penetration in rural Gujarat,

? Continued focus on asset quality and customer-centricity,

? Digital operational enhancements, and

? Prudent nancial management.

The Company aims to strengthen its balance sheet, widen its customer base, and maintain disciplined growth aligned with regulatory expectations.

Risk management continues to be a focal point in Company strategy. Major risks include:

? Credit Risk: Potential defaults due to borrower stress in an uncertain economy.

? Interest Rate Risk: Rising borrowing costs may compress margins.

? Liquidity Risk: Ensuring timely fund access to meet obligations. ? Regulatory Risk: Adapting to evolving norms issued by RBI and SEBI.

To mitigate these, the Company has in place an internal risk control mechanism and a conservative lending policy.

The Company has a robust internal control framework covering nancial reporting, operational procedures, statutory compliance, and risk assessment.

Regular audits are carried out by the Internal Auditor and reviewed by the Audit Committee to ensure the adequacy and e ectiveness of controls. Any identi ed gaps are promptly addressed and monitored.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONALPERFORMANCE

? Revenue from operations grew steadily, driven by consistent disbursements and controlled delinquencies.

? Pro t before tax (PBT) and Pro t after tax (PAT) saw moderate improvement over the previous year, re ecting operational e ciency and improved loan recovery performance.

? Net Worth of the Company remains strong, underpinned by retained earnings and prudent provisioning.

? The Company maintained its focus on cost rationalization, leading to stable operating margins.

Human capital is a vital asset of the Company. During the year, the Company:

? Invested in training programs to upskill operational and credit personnel, ? Continued initiatives for employee welfare and engagement,

? Maintained a collaborative work culture with no instances of labour unrest.

The employee strength as on 31st March 2025 stood at 17.

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, or predictions may be "forward-looking statements" within the meaning of applicable laws and regulations. Actual results could di er materially from those expressed or implied. Important factors that could make a di erence include economic conditions, changes in government regulations, tax laws, and other incidental factors.