Vani Commercials Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Companys main object is to conduct Non-banking Financial operations and the market for this activity offers high potential for growth. The Company is carrying on business of NBFC and is operating from its registered office situated at New Delhi.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Non-Banking Finance Companies (NBFCs) are an integral part of the countrys financial system because of their complementary as well as competitive role. They act as a critical link in the overall financial system catering to a large market of niche customers. Further, despite of strong competition faced by the NBFCs, the inner strength of NBFCs viz local knowledge, credit appraisal skill, well trained collection machinery, close monitoring of borrowers and personalized attention to each client, are catering to the needs of small and medium enterprises in the rural and semi urban areas. However, as a result of consolidation and restructuring in the financial sector and liberalization and globalization of markets only few strong NBFCs now remain in business.

On the regulatory front, NBFCs are regulated by the Reserve Bank of India (RBI) almost at par with banks. All the prudential norms for asset classification, income recognition, provisioning etc., are applicable to NBFCs in India. Given the continuously high levels of inflation throughout the year, the Reserve Bank of India (RBI) has no option but to tighten the monetary policies. This has resulted in an increase in the domestic interest rates which has negatively impacted the sentiments of industries. Measures of risk aversion have not arisen, even though the equity markets in most regions have posted significant gains and financial stresses in the markets have been limited.

Indias NBFC asset quality has improved steadily since FY22, but FY26 is shaping up to be a stress year. Rising unsecured lending, a slowdown in consumption, elevated interest rates, and tighter RBI norms have created a perfect storm of vulnerability for lenders, investors, risk teams, and policymakers. The India NBFC outlook for FY26 shows a cautiously stable growth environment, but the sector is expected to face heightened asset quality stress across key lending segments. Several factors are coming together, creating a challenging landscape for NBFC and shaping the broader narrative around NBFC asset quality FY26. One major driver of stress is the rapid expansion of unsecured lending, especially personal loans, consumer credit, and BNPL products. Over the last three years, unsecured loan books across NBFCs have grown significantly faster than secured segments. This exposes lenders to higher default risk, especially as household leverage rises and EMI-to-income ratios stretch. The RBIs recent decision to increase risk weights on unsecured loans underscores the regulators concern around overheating credit growth. Another factor contributing to asset quality pressures in FY26 is the uneven recovery in rural and semi-urban income levels.

Microfinance borrowers, small businesses, and self-employed individuals remain sensitive to inflation, volatile cash flows, and climate-linked issues. Additionally, the tightening regulatory environment is expected to impact NBFC asset quality FY26. Stricter provisioning norms, governance requirements, and liquidity rules will enhance long-term sector stability but may temporarily pressure profitability and capital adequacy for smaller NBFCs.

Source: https://www.wrightresearch.in/blog/nbfc-asset-quality-indian-economy-impact-fy26/

MACROECONOMIC OVERVIEW

Indias economic momentum remains strong, underpinned by resilient domestic demand and sustained macroeconomic stability. In FY 2025-26, Real GDP (GDP at Constant Prices) is estimated to reach Rs. 3,22,58,000 crore, rising from Rs. 2,99,89,000 crore in FY 2024-25, reflecting a robust growth of 7.6%. At current prices, Nominal GDP is projected to reach Rs. 3,45,47,000 crore (US$ 3.91 trillion) in FY 2025-26, from Rs. 3,18,07,000 crore (US$ 3.60 trillion) in the previous year, registering a growth of 8.6%. On the production side, Real Gross Value Added (GVA) is estimated at Rs. 2,94,40,000 crore, up from Rs. 2,73,36,000 crore in FY 2024-25, indicating a growth of 7.7%, while Nominal GVA is expected to expand to Rs. 3,13,61,000 crore (US$ 3.55 trillion) from Rs. 2,88,54,000 crore (US$ 3.26 trillion), marking a growth of 8.7%. In Q3 FY26, Real GDP is estimated at Rs. 84,54,000 crores against Rs. 78,41,000 crores in Q3 FY25, while Nominal GDP rose to Rs. 90,91,000 crores from Rs. 83,46,000 crores, showing continued quarterly momentum. Collectively, these trends highlight Indias position as one of the fastest-growing major economies, supported by broad-based expansion across sectors.

India is home to 126 unicorns, with six new startups achieving unicorn status in 2025.

Indias current account deficit widened in Q3 FY 2025-26 (October-December), primarily due to a higher merchandise trade deficit. The deficit stood at Rs. 1.18 lakh crore (US$ 13.2 billion), compared with Rs. 0.95 lakh crore (US$ 11.3 billion) in the same quarter last year. The merchandise trade deficit increased to Rs. 8.34 lakh crore (US$ 93.6 billion) from Rs. 6.70 lakh crore (US$ 79.3 billion) in Q3 FY25, while the services surplus improved to Rs. 5.12 lakh crore (US$ 57.5 billion) from Rs. 4.32 lakh crore (US$ 51.2 billion) during the same period.

Source: https://www.ibef.org/economy/indian-economy-overview

The RBI, meanwhile, is likely to keep policy interest rates unchanged amid growing inflation risks.

The RBI believes that inflation will tend to climb up till the October-December quarter (Q3) of FY2027, and then start declining. It expects the CPI to fall from 5.9% in Q3 to 5.5% in Q4, and then to 5.3% in Q1 of the next financial year (FY2028). But the uncertainty on the external front and the impact of a subpar monsoon will be major negatives. Both kharif and rabi crops will be hit.

Clearly, the RBI is focusing on growth in these circumstances. It has raised its growth forecast to 6.7% for the whole year. Though agricultural output may be affected by the deficiency of the monsoon, overall growth may not be impacted. Merchandise exports grew 15.5% year-on-year in June, and other growth indicators are positive. RBI Governor Sanjay Malhotra said in June that the "Prolonged global supply chain disruptions, volatility in global financial markets, and weather-related shocks continue to pose downside risks to the domestic growth outlook." In the latest statement, he said that the "risks are evenly balanced."

Source: https://www.deccanherald.com/opinion/editorial/inflation-risks-rise-but-rbi-bets-on-growth- 4105160

Size of Indias economy fourth in the world

India, the worlds fourth-largest economy, has emerged as the fastest-growing major economy and is on track to become the worlds third-largest economy with a projected GDP of $7.3 trillion by 2030. India is projected to be worlds fastest growing major economy (6.3% to 6.8% in 2025-26). This transformation is the result of a decade of decisive governance, visionary reforms, and global engagement. Driven by robust domestic demand, a dynamic demographic profile, and sustained economic reforms, India is asserting its rising influence in global trade, investment, and innovation.

Source: https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=154660&ModuleId=3&reg=3&lang=2 0

OPPORTUNITIES AND THREATS

Opportunities

Our long-standing relationship with our major customers has been one of the most significant factors contributing to our growth. Our commitments to quality and customer service practices have been strong contributing factors to our robust customer relations. Over the years, we have steadily developed a robust base of customers for our products in national level.

To overcome the challenges and competition, we have taken various initiatives to reduce the operational costs, to develop new value added products, improve the performance and quality of existing value-added products as well as to explore new markets domestically and globally.

The digitization, unparalleled expertise and an excellent corporate strategy has resulted in an unprecedented growth of the company over the years. We have an experienced and dedicated team of professionals, catering to the needs of clients, delivering products at reasonable interest rates and timely.

Threats

• Change in Policy and Regulations.

• New entrants in the market and intense competition by existing players

• Technology may become obsolete due to Innovation in Technology

RECENT TREND AND FUTURE OUTLOOK

Non-Banking Financial Corporations (NBFCs) have emerged as the primary source of financing for a vast section of the population including small and medium-scale enterprises as well as the economically unserved and underserved individuals. They have been able to meet the diverse requirements of borrowers in the most efficient and timely approach considering their wide geographic reach, comprehension of the numerous financial needs of people, and extremely swift turnarounds. Therefore, non-bank lenders have contributed significantly to the cause of financial inclusion in this process and have also been a key component in fostering the expansion of millions of MSMEs and self-employed people. In addition to the growing role played by non-bank lenders in the consumer financing industry, the expansion of a few key economic sectors, including housing, consumer goods, and transportafion, has been boosted.

Non-Banking Financial Companies (NBFCs) have contributed towards the development of the countrys infrastructure. The availability of long-term funding by nonbank lenders has helped in the financial closure and growth of many large-scale infrastructural projects. Non-Banking Financial Companies (NBFCs) have played a crucial role in fostering credit expansion across a range of industries, including microfinance loans, personal loans, and auto finance loans.

NBFCs have become increasingly important in recent years as they have played a crifical role in providing credit to individuals and businesses that are underserved by traditional banks. This is especially true in rural and semi-urban areas, where NBFCs have been able to fill the gap left by banks. One of the key advantages of NBFCs is their ability to be flexible in their lending practices.

Unlike banks, which have a rigid set of guidelines for lending, NBFCs can tailor their lending practices to meet the specific needs of their clients. This has made them an attractive option for those who are looking for more personalised financial services. They are financial institutions that provide a wide range of banking services like loans, credit facilities, investments, and other financial products.

NBFCs have played a significant role in the Indian economys growth story, especially in the rural and semi-urban areas. They cater to the financial needs of small and medium-sized businesses, entrepreneurs, farmers, and individuals who do not have access to tradifional banking services. In this article, we will explore the future of NBFCs in India.

Another advantage of NBFCs is their ability to provide loans quickly. Unlike banks, which have a lengthy approval process, NBFCs can approve loans much faster. This is because they have a smaller bureaucracy and can make decisions quickly. NBFCs have become increasingly important in India owing to the use of technology to reach wider audiences. Many NBFCs have developed digital platforms that allow customers to apply for loans online, making the process faster and more convenient. This has helped to attract a younger, tech-savvy customer base. The trend of consolidation has been beneficial for the NBFC space. The recent wave of mergers and acquisitions in this sector has been rising as larger NBFCs seek to expand their reach and smaller ones look to scale up their operations.

However, NBFCs also have their share of challenges. One of the biggest challenges facing NBFCs in India is access to funding. Unlike banks, which have access to low-cost deposits, NBFCs must rely on borrowing from banks or issuing bonds to raise funds. This can make it difficult for NBFCs to compete with banks on interest rates. Another challenge faced by NBFCs is the regulatory environment. While the RBI regulates NBFCs, there are also several other regulators that oversee different aspects of the financial services industry. This can create confusion for NBFCs, especially those that operate across multiple states or regions.

Source: https://www.ibef.org/research/case-study/nbfcs-building-the-future-of-india

INTERNAL FINANCIAL REPORTING AND CONTROL

Internal financial reporting and control are functional as, checks and controls are being exercised by us keeping in mind all the factors, whether financial or Non-Financial. The Company has adequate systems of internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business.

Supply chain

The Supply chain of the Company has improved as compared to the last financial year. New customers have been identified by the Company after making on-field visits at customers place for the collection of various documents; and various other measures in order to establish the creditworthiness and genuineness of the prospective borrower.

Demand for its products/services

Though the demand for availing loan products has not declined, yet, considering the present financial crunch in the economy, we are following a cautious approach in fresh financing to new customers.

The Company has been trying to reduce the probability of non-repayment of outstanding dues by the customers which had arisen due to financial crisis that was witnessed by many people on account of stagnant business activities across the globe caused by Civil wars outbreaking throughout the world in the previous years.

Existing contracts/agreements where non-fulfilment of the obligations by any party will have significant impact on the listed entitys business:

The Company endeavors to perform its duties as agreed to in various executed operational contracts / agreements. There has been no failure in performance by the Company of its obligations envisaged in contract / agreement entered into by it. Presently, there are no such existing contracts / agreements where non-fulfillment of the obligations by any party will have significant impact on the Companys business.

Other relevant material updates about the listed entitys business:

There are no other relevant material updates at present. The Companys opinion on various matters as envisaged above, are forward-looking statements which are based on certain assumptions, risks, uncertainties and expectations of future events. The actual results, performance or achievements can thus differ from those projected, depending on various factors over which, the Company does not have any direct control.

In todays complex business environment, almost every business decision requires executives and managers to balance risk and reward. Effective risk management is therefore critical to an organizations success. Globalization, with increasing integration of markets, newer and more complex products and transactions and an increasingly stringent regulatory framework has exposed organizations to newer risks. As a result, todays operating environment demands a rigorous and integrated approach to risk management. Timely and effective risk management is of prime importance to our continued success. Increased competition and market volatility has enhanced the importance of risk management. The sustainability of the business is derived from the following:

• Identification of the diverse risks faced by the company.

• The evolution of appropriate systems and processes to measure and monitor them.

• Risk management through appropriate mitigation strategies within the policy framework.

• Monitoring the progress of the implementation of such strategies and subjecting them to periodical audit and review.

• Reporting these risk mitigation results to the appropriate managerial levels.

RISKS AND CONCERNS

In todays complex business environment, almost every business decision requires executives and managers to balance risk and reward. Effective risk management is therefore critical to an organizations success. Globalization, with increasing integration of markets, newer and more complex products & transactions and an increasingly stringent regulatory framework has exposed organizations to newer risks. As a result, todays operating environment demands a rigorous and integrated approach to risk management. Timely and effective risk management is of prime importance to our continued success. Increased competition and market volatility has enhanced the importance of risk management. The sustainability of the business is derived from the following:

• Identification of the diverse risks faced by the company.

• The evolution of appropriate systems and processes to measure and monitor them.

• Risk management through appropriate mitigation strategies within the policy framework.

• Monitoring the progress of the implementation of such strategies and subjecting them to periodical audit and review.

• Reporting these risk mitigation results to the appropriate managerial levels.

• DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The brief on Financial Performance of the Company is already provided in the Boards Report of the Company.

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

The Companys relations with the employees continued to be cordial. It emphasized engagements with employees by providing an enriched workplace, challenging job profile and regular dialogues with the management.

0 KEY FINANCIAL RATIOS:

(i) Interest Coverage Ratio
EBITDA/Interest Expenses
EBITDA	48.13 Lacs
Interest Expenses	65.82 Lacs
	0.73:1

(ii) Current Ratio

Current Assets/ Current Liabilities

Current Assets	43.42 Lacs
Current Liabilities	76.65 Lac
	0.57:1
(iii) Debt Equity Ratio
Total Liabilities/ Total Shareholder Fund
Total Liabilities	3212 Lacs
Total Shareholder Fund	1375 Lacs
	2.33:1
(iv) Operating Profit Margin (%)
Operating Profit /Total Revenue
Operating Profit	48.12 Lacs
Total Revenue	340.96 Lacs
	14.11 %
(v) Net Profit Margin (%)
Net Profit/ Total Revenue
Net Profit	25.99 Lacs
Total Revenue	340.96 Lacs
	7.6%
(vi) Return on Net Worth
Total Net Profit	25.99 Lacs
Total Shareholders Equity	3557.87 Lacs 0.73%

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR

The Net Worth for the Financial year 2025-26 is 3557.87 Lacs as compared to that of financial year 2024-25 which was INR 1376 Lacs. There is a slight Decrease in the Return on Net Worth of the Company which was 2.4% in financial year 2024-25.

SEGMENT-WISE OR PRODUCT WISE PERFORMANCE

The company operates in only single segment. Hence segment wise performance is not applicable.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has strong internal control procedures in place that are commensurate with its size and operations. The Board of Directors, responsible for the internal control system, sets the guidelines and verifies its adequacy, effectiveness and application. The Companys internal control system is designed to ensure management efficiency, measurability and verifiability, reliability of accounting and management information, compliance with all applicable laws and regulations, and the protection of the Companys assets. This is to family identify and manage the Companys risks (operational, compliance-related, economic and financial).

CAUTIONARY STATEMENT

This report describing the companys activities, projections about future estimates, assumptions with regard to global economic conditions, government policies, etc. may contain "forward looking statements" based on the information available with the company. Forward-looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results may be different from those expressed or implied since the companys operations are affected by many external and internal factors, which are beyond the control of the management. Hence the company assumes no responsibility in respect of forwardlooking statements that may be amended or modified in future on the basis of subsequent developments, information or events.

0 DISCLOSURE ON ACCOUNTING TREATMENT

Company follows all Mandatory Accounting Standards and the financial statements of the Company have been prepared in compliance with the requirements of the Companies Act, 2013, Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Our Management accepts responsibility for the integrity and objectivity of these financial statements, as well as for the various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs, profits and cash flows for the year.

For & on behalf of Board of Directors	Sd/-	Sd/-
Vani Commercials Limited	Vishal Abrol	Pranay Kumar Tayal
	Managing Director	Director
	DIN: 06938389	DIN: 10649067
Date: 02nd September, 2026
Place: New Delhi