Virat Leasing Ltd Management Discussions

INTRODUCTION

Management Discussion and Analysis mainly comprise of the statements which, inter-alia, involve predictions based on perceptions and may, therefore, be prone to uncertainties. It is the sum total of the Companys expectations, beliefs, estimates and projections which are forward looking within the meaning of applicable laws and regulations. The actual results could differ materially from those expressed herein specifically or impliedly.

The global economy in 2025 operated in an environment characterized by shifting trade dynamics, geopolitical uncertainties and divergent growth trajectories among major economies. The implementation of higher tariff rates across several jurisdictions disrupted global trade flows and prompted businesses to accelerate imports during the early part of the year. Consequently, global economic growth moderated to approximately 2.8% - 3.0% during 2025 as compared to 3.3% in 2024.

The United States experienced slower growth amid policy uncertainties and rising input costs, while Chinas economic expansion remained constrained by challenges in the property sector and external trade barriers. Growth across the Eurozone remained subdued owing to structural industrial challenges and fluctuating energy prices. Monetary policy actions also diverged among major economies as central banks responded differently to inflationary pressures and economic growth concerns.

Despite these challenges, global financial markets remained broadly resilient, supported by easing inflationary trends and selective policy support measures. However, geopolitical tensions and supply chain disruptions continued to pose risks to global growth prospects.

India continued to demonstrate remarkable economic resilience during FY 2025-26 and retained its position as the fastest-growing major economy in the world. Strong domestic consumption, sustained public capital expenditure, robust manufacturing activity and continued digital transformation supported economic growth despite global uncertainties.

According to advance estimates, Indias real GDP growth for FY 2025-26 is estimated at approximately 7.6%. Growth was driven by strong manufacturing performance, resilient domestic demand, expanding services activity and continued government investment in infrastructure development. The services sector recorded robust growth led by financial services, real estate, professional services, trade, transportation and hospitality sectors.

Inflationary pressures moderated significantly during the year supported by favourable agricultural output, stable commodity prices and prudent monetary policy measures. The Reserve Bank of India maintained a supportive policy stance to sustain economic growth while ensuring price stability.

The Government of India continued its focus on fiscal consolidation while simultaneously promoting economic growth through infrastructure development, tax reforms and policy initiatives aimed at improving ease of doing business. Foreign direct investment inflows remained healthy, reflecting investor confidence in Indias long-term growth prospects.

Indias financial services sector continued to expand steadily during FY 2025-26, supported by increasing formalization of the economy, rising digital adoption and improving financial inclusion across urban and rural markets.

The banking sector remained resilient with historically low levels of non-performing assets and strong capital adequacy. The NBFC sector also demonstrated stability, supported by adequate capitalization, healthy profitability and improving asset quality.

Digital lending, fintech innovation and technology-driven customer acquisition models continued to reshape the lending landscape. Increasing penetration of smartphones, digital payment infrastructure and account aggregator frameworks have enhanced access to credit, particularly in underserved and semi-urban markets.

Retail credit demand remained strong during the year, although regulators maintained close oversight of unsecured lending segments to ensure sustainable growth and prudent risk management. Secured lending products, including gold loans, vehicle finance and business loans, witnessed healthy demand supported by economic expansion and increasing credit awareness.

India remains well positioned to maintain strong economic growth supported by favourable demographics, increasing formalization, rapid digital adoption and sustained policy reforms. Continued investments in infrastructure, financial inclusion and technology are expected to create significant opportunities for financial institutions and fintech-driven NBFCs.

The Company believes that the long-term growth potential of the Indian lending and financial services sector remains strong. Increasing demand for accessible and technology-enabled credit solutions, expanding digital ecosystems and supportive regulatory initiatives are expected to drive sustainable growth opportunities for the Company in the coming years.

The Company will continue to focus on responsible lending practices, technology-led innovation, prudent risk management and customer-centric solutions to capitalize on emerging opportunities while maintaining long-term financial sustainability.

Viral 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 operations continued to be investments in various companies, under which steady interest income flows into the Company coupled with sustained appreciation 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 situation so that it is aware of the opportunities and threats that emerge. This enables the Company to tap into the positive prospects that come its way while overcoming or bypassing the challenge of threats.

• Efficient Business Model helps to minimise risk and operating cost
• Adequate capitalisation to support medium-term growth plans
• Operates in "B2B" business segment with huge growth potential
• Expanding revenue streams through strategic partnerships in non-lending financial services and co-lending arrangements
• A strengthening economy, increasing levels of formalisation, and rapid digital adoption, opening new avenues for innovation and scale
• A growing middle class with evolving and diverse financial needs, creating demand for customised solutions
• Growing investor activity is driving demand for loans against securities, creating a strong lending opportunity

• Global political uncertainties that may impact capital flows and investor sentiment
• Heightened competition from banks, which are expanding into traditional NBFC segments.
• A potential slowdown in the automotive sector, affecting vehicle financing demand.

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

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

1. Know your customer guidance - Anti money laundering Standards
2. Guidance on classification, monitoring and reporting of frauds
3. Guidance on Securitisation of Standards Assets

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

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

The Company has a strong and well-defined internal control framework, built on structured policies and procedures that are periodically reviewed and tested across all key processes and functions. Oversight is further strengthened by dedicated committees such as the Risk Management Committee and the Asset and Liability Committee, which monitor and evaluate critical aspects of operations. 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 activities

Robust systems and processes ensure effective control mechanisms are in place. The Internal Audit and Compliance teams regularly assess adherence to internal policies, regulatory requirements, and legal obligations, providing timely feedback to the management for necessary corrective actions, including minimising any design risks.

The Audit Committee of the Board oversees the functioning 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 objectives, projections, estimates and expectations may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied. Important factors that could make a difference to the Companys operations include changes in Government regulations 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, information or events. The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The Management of the Company has used estimates and judgments relating 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 affairs and profit/loss for the year. The narrative on our financial condition and result of operations should be read together with our audited consolidated financial statements and the notes to these statements included in the Annual Report.