Virat Leasing Ltd Management Discussions

INTRODUCTION

Management Discussion and Analysis mainly comprises of the statements which, inter-alia, involve predicons based on percepons and may, therefore, be prone to uncertaines. It is the sum total of the Companys expectaons, beliefs, esma tes and projecons which are forward looking within the meaning of applicable laws and regulaons. The actual results could differ materially from those expressed herein speci cally or impliedly.

In 2024, the global economy achieved a growth rate of 3.2%, re ecng a measured pace of expansion. Nonetheless, this gure fell short of the historical average of 3.7% recorded from 2000 to 2019. The deceleraon was aribut ed to a con uence of both structural and cyclical factors, including policy gh tening in major economies, geopolic al instability, and sector-specific challenges. Together, these elements exerted a profound impact on both advanced and emerging markets, leading to a more subdued global economic environment.

The economic performance of both advanced and emerging economies followed disnctly different trajectories throughout the year. Advanced economies struggled with weak manufacturing acvity , faltering consumer con dence, and persistent in aonar y pressures, all of which impeded broader economic growth. Rising energy costs, disrupons in global trade flows, and the connued impact of prior monetary gh tening further constrained demand. In contrast, emerging markets and developing economies encountered their own set of challenges, including subdued external demand, capital oulow s driven by rising interest rates in developed naons, and considerable policy uncertaines. Addionally , trade disrupons and geopolic al tensions significantly contributed to the moderaon of growth, parcularly in economies heavily reliant on exports. Despite these challenges, certain emerging markets showed strength, supported by strong domesc consumpon and targeted scal smuli.

While in aonar y trends varied across different economies, global headline in aon showed a significant decrease in 2024, falling from 5.7% in 2023 to 4.2%. This drop was primarily driven by the stabilisaon of energy prices and the gradual resoluon of ongoing supply chain challenges. T hroughout the year, central banks maintained a cauous approach, carefully balancing monetary policy to support economic recovery while ensuring in aon remained on a downward trajectory. Looking ahead, in aon is expected to connue its moderaon, potenally reaching 3.5% by 2026, provided geopolic al risks and supply-side shocks remain under control.

The global trade environment in 2024 remained precarious, marred by rising protec onism, geopolic al strife, and shiing trade alliances. Disputes between the United States and China, coupled with tari s and export restricons, severely disrupted global supply chains. Meanwhile, nearshoring and friend-shoring inia v es introduced new complexies and logisc al challenges. Geopolic al tensions, including the ongoing war in Ukraine and regional instability, further fuelled economic uncertainty and market volality . Oil prices were projected to dip by 2.6% in 2025, driven by weakening demand in China and an increase in non-OPEC+ supply, although geopolic al risks could upend this outlook. Commodity-exporng naons, in parcular , faced increased vulnerability as shis in trade pa erns and disrupons to supply chains undermined economic stability.

In 2024, financial markets displayed a range of mixed trajectories, with advanced economies experiencing rallies in equity markets, while emerging markets contended with heightened volality , primarily due to capital oulow s and the upward trajectory of the US dollar. Persistent in aonar y trends and shiing expectaons regarding interest rates remained central to investor senmen t, with protracted policy ghtening posing significant risks to both economic expansion and capital investment. Naons that embraced sound economic policies and fostered strong global collaboraon appeared be er posioned to weather the prevailing uncertaines and maintain economic vitality.

Indias economic performance in FY 2024-25 reflects a consistent and robust growth trajectory, with the naons Gross Domesc Product (GDP) growing by 6.5%, thereby solidifying its status as the fastest-growing major economy. This growth is primarily driven by substanal government investment in infrastructure, a resurgence in rural demand driven by a thriving Kharif crop, and the sustained expansion of the services sector, notably in nance and real estate. The Reserve Bank of Indias prudent, accommodav e monetary policy, which includes an interest rate reducon, has further spurred both investment and consumpon. In addion, a marked improvement in manufacturing output and resilient urban consumpon have further invigorated the economic momentum. While global trade uncertaines remain an external risk, Indias intrinsic economic strength, coupled with policy intervenons and robust private sector investments, is set to underpin connued growth.

In a significant development, Indias in aon slow ed to its lowest level in nearly six years, with retail in aon eased to 3.16% in April 2025, remaining below the RBIs 4% target for the third consecuv e month, as food prices rose at a slower pace. The easing in aon also signals improving supply-side dynamics, parcularly across food and core components, further reinforcing the outlook for sustained economic momentum

The Union Budget FY 2025 26 reinforced the governments commitment to sustainable growth while maintaining scal discipline. Capital expenditure was raised to an unprecedented INR 11.21 Lakh Crores (~3.1% of GDP), underscoring a strategic focus on infrastructure, rural uplimen t, and catalyzing private sector investment. The scal de cit target was further trimmed to 4.9%, demonstrang prudent budget management. A major boost came from the RBIs record dividend transfer of INR 2.69 Lakh Crores, substanally above the budgeted INR 2.56 Lakh Crores, which creates roughly INR 70,000 Crores of extra scal room. This contribuon alone could lower the de cit by 20 30 bps, potenally bringing it near 4.2% of GDP, or alternav ely, enabling enhanced capital spending on key priories, all while preserving scal prudence.

Consumpon revival remained a key policy focus, with higher allocaons to rural agship schemes, enhanced Direct Benefit Transfers (DBTs), and tax relief under the new income tax regime effected to achieve intended outcome. T hese steps are expected to strengthen disposable income and boost consumpon recovery, parcularly among rural and middle-income households.

The Non-Banking Financial Companies (NBFC) sector connues to serve as an indispensable pillar in Indias financial framework, playing a pivotal role in enhancing financial inclusion and broadening access to credit. As of FY 2024-25, the sector has expanded to approximately USD 350 Billion, marking a consistent increase from the previous years USD 326 Billion. However, the growth of the sectors Assets Under Management (AUM) is forecasted to moderate, with year-on-year growth projecons for FY 2024-25 and FY 2025-26 ranging between 15-17%, a decline from the robust 23% recorded in FY 2023-24. This decelera on is a ributed to moun ng challenges such as rising delinquencies, intensi ed regulatory frameworks, and gh ter funding condions.

The Companys present business operaons are preponderantly that of an investment company, future of which largely depends upon financial and capital markets. Your Company has investments in equity/debt instruments (including through mutual funds), nancially sound companies and immovable properes. The income from interest and dividends will connue to contribute to the income of the Company. The management is opmis c about the future outlook of the Company. The Company will expand its acvies, consistent with its status as a NBFC.

Virat Leasing Limited was founded in 1984 and is a registered Non-Banking Finance Company (NBFC) regulated by the Reserve Bank of India (RBI). The Company operates in the state of West Bengal and specialises in providing financial services. The mainstay of your Companys operaons connued to be investments in various companies, under which steady interest income flows into the Company coupled with sustained appreciaon in capital. During the year under review, your Company has earned income in the form of interest.

VLL constantly monitors the external environments and internal situaon so that it is aware of the opportunies and threats that emerge. This enables the Company to tap into the posiv e prospects that come its way while overcoming or bypassing the challenge of threats.

E cient Business Model helps to minimise risk and operang cost

Adequate capitalisaon to support medium-term growth plans

Operates in "B2B" business segment with huge growth potenal

Expanding revenue streams through strategic partnerships in non-lending financial services and co-lending arrangements

A strengthening economy, increasing levels of formalisaon, and rapid digital adopon, opening new avenues for innovaon and scale

A growing middle class with evolving and diverse financial needs, creang demand for customised soluons

Growing investor acvity is driving demand for loans against securies, creang a strong lending opportunity

Global polic al uncertaines that may impact capital flows and investor senmen t

Heightened compeon from banks, which are expanding into tradional NBFC segments.

A potenal slowdown in the automov e sector, a ecng vehicle financing demand.

The Company has only one line of business, i.e., Financing and Investment Acvies during the year under review, hence no segment wise informaon is required. The Company has no acvity outside India. Therefore, there is no geographical segment.

The Reserve Bank of India (RBI) has been connually strengthening the supervisory framework from NBFCs in order to ensure sound and healthy funconing and avoid excessive risk taking. In furtherance of these objecv es, RBI issued new guidelines during past years.

1. Know your customer guidance An money laundering Standards 2. Guidance on classi caon, monitoring and reporng of frauds 3. Guidance on Securisa on of Standards Assets

Human resources remain central to achieving the Companys goals. Guided by the ac ve involvement of the promoters and supported by the strategic insights of a diverse and capable Board, the Company connues to build a strong foundaon for sustainable growth.

We also remain commi ed to the health, safety, and well-being of all employees and business associates, ensuring a secure and healthy work environment that supports producvity and engagement.

The Company has a strong and well-de ned internal control framework, built on structured policies and procedures that are periodically reviewed and tested across all key processes and funcons. Oversight is further strengthened by dedicated commie es such as the Risk Management Commi ee and the Asset and Liability Commi ee, which monitor and evaluate cric al aspects of operaons. Moreover, the Company has appointed M/s Srimal Jain & Co., Chartered Accountants, an outside agency as its Internal Auditors, who conduct internal audit for various acvies

Robust systems and processes ensure e ecv e control mechanisms are in place. The Internal Audit and Compliance teams regularly assess adherence to internal policies, regulatory requirements, and legal obligaons, providing mely feedback to the management for necessary correcv e acons, including minimising any design risks.

The Audit Commi ee of the Board oversees the funconing of the audit and compliance processes, reviews the adequacy of controls, and ensures alignment with regulatory guidelines.

Statements in this Management Discussion and Analysis describing the Companys objecv es, projecons, esma tes and expectaons may be forward looking within the meaning of applicable laws and regulaons. Actual results may differ from those expressed or implied. Important factors that could make a difference to the Companys operao ns include changes in Government regulaons 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, informaon or events. The financial statements are prepared in accordance with the Indian Accounng Standards (Ind AS) no ed under Secon 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The Management of the Company has used esma tes and judgments relang 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 a airs and pro t/loss for the year. The narrav e on our financial condion and result of operaons should be read together with our audited consolidated financial statements and the notes to these statements included in the Annual Report.