Winro Commercial India Ltd Management Discussions

Winro Commercial (India) Limited ("the Company") is an Investment and Credit Company (ICC), primarily engaged in the business of investment and trading in shares and securities. The Company is registered as a non-deposit taking NBFC pursuant to the Certificate of Registration dated 16^th July, 2007 issued by the Reserve Bank of India (RBI) under Section 45-IA of the Reserve Bank of India Act, 1934. Pursuant to the Scale Based Regulatory Framework for NBFCs notified by the RBI, the asset size of the Company on a standalone basis exceeds Rs. 1,000 Crores; hence, the Company falls under the category of Middle Layer NBFC (NBFC-ML).

The global economy was grappling with multiple challenges, primarily due to unresolved and ongoing geopolitical tensions—most notably between Russia and Ukraine, and between Israel and Iran. Several countries introduced tariffs on global trade in March 2025, followed by retaliatory actions that disrupted international trade, increased inflation, and slowed economic growth. Higher import costs are expected to raise consumer prices in many regions.

The global economy navigated a complex landscape influenced by geopolitical shifts, trade fluctuations and inflationary pressures in 2024. Despite persistent challenges, proactive policies and continued investments in key sectors strengthened stability and resilience. The Global Economy grew by 3.5% in 2023, with a slight slowdown to 3.3% in 2024. Advanced Economies grew at a steady 1.7% in 2023 and at 1.8% in 2024, constrained by high interest rates. Meanwhile, Emerging Markets and Developing Economies (EMDEs) expanded by 4.7% in 2023 and 4.3% in 2024. Heightened supply chain vulnerabilities prompted businesses and governments to re-evaluate trade dependencies and implement strategic measures to enhance economic stability.

Source: International Monetary fund April 2025 report.

The global economy is to grow steadily at 2.8% in 2025 and 3.0% in 2026, supported by stable performance in both advanced and emerging markets. Growth in advanced economies is likely to stay modest at 1.4% in 2025 and 1.5% in 2026, influenced by domestic demand and different policy approaches. Meanwhile, emerging markets such as China and India are expected to show stronger growth of 3.7% in 2025 and 3.9% in 2026, despite global uncertainties and recent trade tensions. Even so, economies are expected to stay resilient by adopting new technologies and implementing strategic policy measures. ^•

Indias GDP growth highest amongst major peers (In Percentage)

Source: IMF World economic outlook, April, 2025.

• Indian Economy

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 FY 2025, global uncertainties, rising geopolitical tensions and persistent inflationary pressures contributed to a slowdown in overall economic growth.

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. Consumer Price Index (CPI) inflation is expected to average 4.9% in FY2025, down from 5.4% in the previous year, and is projected to ease further to 4.0% in FY2026.

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 FY 2026.

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.

Real Gross Domestic Product (GDP) and Gross Value Added (GVA)

Source: Government of India, National Statistical Office (CSO). AE denotes advance estimate, FE denotes final estimate, and RE denotes revised estimate.

NBFCs are set to become key enablers of Indias economic progress by extending access to formal credit in traditionally underserved segments, aligning with the countrys goals.

In a landscape where customer demands are evolving and digital-first models are gaining ground, incumbent NBFCs must reimagine their operational frameworks, while new players need to carefully evaluate their entry strategies. As lending activities scale, it becomes imperative for these institutions to strengthen their risk management practices and governance structures.

According to ICRA Ratings, credit growth in the NBFC sector was about 17% in the financial year 2022-23 and the financial year 2023-24, but it is expected to moderate to 13-15% in the financial year 2024-25 and the financial year 2025-26. This deceleration is not a sign of weakening fundamentals; rather, it reflects a maturing sector where institutions are balancing risk and growth cautiously.

Additionally, the sector is likely to benefit from easing liquidity conditions and potential interest rate cuts, which could support net interest margins and return on assets of NBFCs. However, challenges such as asset quality concerns in microfinance and unsecured lending segments remain monitorable. Overall, NBFCs are anticipated to experience stable asset quality and sustained earnings growth, positioning them favourably in Indias evolving financial landscape.

Indias financial sector is highly diversified and continues to expand rapidly, with new entrants joining established players across banking, insurance, NBFCs, housing finance companies, co-operatives, pension funds, mutual funds, and other financial intermediaries. As the effects of the COVID-19 pandemic gradually fade, the sector is well-positioned to sustain growth, supported by strong fundamentals, adequate liquidity, robust government and regulatory backing, and the accelerating pace of digital adoption. Digitalisation, in particular, is set to play a far greater role in shaping the financial ecosystem than ever before, driving efficiency, customer outreach, and financial inclusion.

The NBFC sector plays a vital role in Indias financial system by extending credit to a broad range of economic segments, including those underserved by traditional banks. At the same time, NBFCs maintain strong linkages with commercial banks, mutual funds, and insurance companies, enabling financial stability and ensuring a diversified funding base. Assets under management (AUM) growth is projected to remain healthy at 15-17% over FY2025 and FY2026.

While this represents a moderation from the strong 23% growth recorded in FY2024, it remains above the decade-long average of 14% per annum (FY2014-2024), underscoring the sectors structural strength.

The NBFC industry has weathered successive challenges since FY2019—ranging from the failure of a large NBFC and subsequent liquidity stress, to the COVID-19 pandemic, and more recently, monetary policy tightening amid elevated inflation. These pressures, however, have eased over the past two years. According to the RBIs Financial Stability Report (December 2024), the sector remains resilient, supported by robust capital buffers (Capital to Risk-Weighted Assets Ratio at 26.1% as of September 2024), healthy profitability (Net Interest Margin at 5.1% and Return on Assets at 2.9%), and improving asset quality (Gross Non-Performing Assets at 3.4% of gross loans).

Despite these challenges, NBFCs have maintained adequate provisioning for non-performing assets, reflecting sound loan resolution mechanisms and improving asset quality. Looking ahead, regulatory recalibration—with a sharper emphasis on customer protection, operational compliance, and transparent pricing disclosures—is expected to shape lending practices and strengthen the sectors long-term resilience.

NBFCs are strengthening their position by diversifying funding sources, tapping both domestic capital markets and offshore avenues, while also leveraging strategic partnerships with banks to expand their financial reach. Policy interventions that ease regulatory constraints and improve funding access could further enhance sectoral stability. Despite the banking sectors dominance, NBFCs continue to attract investor interest owing to their resilience and growth potential. With a strong capital base and evolving strategies, the sector is well-positioned to navigate challenges effectively, ensuring a stable outlook for FY2026 and contributing to financial inclusion.

Looking ahead, the NBFC sector is poised for stronger growth in FY 2025-26, aided by the Reserve Bank of Indias recent repo rate cuts and changes in income tax slabs designed to boost consumer spending. According to a CRISIL report, AUM growth is projected to recover to 16-18% in FY 2026-27, following a moderation in FY 2025-26. The report also expects asset quality to remain stable during the current fiscal, further reinforcing the sectors outlook.

The Indian stock market closed FY 2024-25 with modest gains, demonstrating resilience despite significant foreign portfolio investor (FPI) outflows in the latter half of the year.

The Nifty index delivered positive returns, outperforming several Asian peers such as Japans Nikkei 225 and South Koreas KOSPI. However, Hong Kongs Hang Seng Index led the regional markets with a remarkable 39.8% return.

India is the fourth-largest market by market capitalization. Indias domestic equity markets continue to rank fourth globally with a market cap of over USD 4.0 trillion.

Source: https://companiesmarketcap.com/all-countries/ (as on 26^th May 2025).

(f) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Management has laid down a set of standards, processes and structure which enables it to implement internal financial controls across the organization with reference to financial statements and such controls are adequate and are operating effectively. Internal Finance control framework has been established in line with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the Guidance Note).

As a part of the effort to evaluate the effectiveness of the internal control systems, your Companys internal audit system reviews all the control measures on a periodic basis and recommends improvements, wherever appropriate. The Company has in place adequate internal control systems and procedures commensurate with the size, scale, complexity and nature of its business. These systems and procedures provide reasonable assurance of adherence to the accounting procedures and policies, maintenance of proper accounting records, reliability of financial information, compliance with regulatory directives, efficacy of its operating systems, protection of resources and safeguarding of assets against unauthorized use. The management regularly reviews the internal control systems and procedures, undertake corrective actions, in their respective areas and thereby strengthen the controls.

The internal financial control is supplemented by extensive internal audits, regular reviews by the Management and standard policies and guidelines to ensure reliability of financial and all other records to prepare financial statements, its reporting and other data. The Audit Committee of the Board reviews internal audit reports given along with management responses. The Audit Committee also monitors the implemented suggestions. The Company has, in all material respects, adequate internal financial control over financial reporting and such controls are operating effectively.

The Statutory Auditors of the Company have also certified the existence and operating effectiveness of the internal financial controls relating to financial reporting as of 31^st March, 2025. During the year under review, no material or serious observation has been observed for inefficiency or inadequacy of such controls.

(g) SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

The Company is engaged in the business of investment, trading in shares and securities, Lending Activities and generation of renewable energy. As per Ind AS 108 "Operating Segments", specified under Section 133 of the Companies Act, 2013, there are no reportable operating or geographical segments applicable to the Company.

The gross revenue from Financing and Investment activities considered in profit & loss account (including unrealised gain) for the financial year 2024-2025 is Rs. 44,803.51 Lakhs and considered in other comprehensive income (including unrealised gain) is Rs. 36,891.79 Lakhs. The gross revenue from generation of renewable energy for the financial year 2024-2025 is Rs. 45 lakhs. For detailed information, please refer to Note No. 40 of the Standalone and Consolidated Financial Statements of the Company for the financial year ended 31^st March 2025.

(h) DISCUSSIONS ON STANDALONE & CONSOLIDATED FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

(Rs. in Lakhs)

The Company is mainly engaged in the business of investment and trading in shares and securities hence its profitability is directly link to and impacted by equity market volatility. Ratios where there has been significant change (i.e. change of 25% or more as compared to the immediately previous financial year. All the figures mentioned hereunder are Rs. in Lakhs.

On a standalone basis and consolidated basis, Interest coverage ratio as on 31^st March, 2025 stood at 44.94 as against 67.79 as on 31st March, 2024. The decrease in Interest Coverage ratio is primarily due to increase in the finance cost as compared to previous year. Interest expenses stood at Rs. 1,140.04 as on 31st March, 2025 vis a vis Rs. 684.58 as on 31st March, 2024. The Earning before interest and taxes stood at Rs. 51,236.61 as on 31st March, 2025 vis a vis Rs. 46,410.12 as on 31st March, 2024.

On both a standalone and consolidated basis, the Current Ratio stood at 12.39 as of 31st March, 2025, compared to 3.61 as of 31st March, 2024. The increase in the Current Ratio is primarily due to a higher balance of stock-in-trade and deposits as of 31st March, 2025, along with a decline in current liabilities compared to the previous year.

"On a standalone basis, the Debt-Equity Ratio as of 31^st March, 2025 stood at 0.01, compared to 0.03 as of 31^st March 2024. The decrease in the Debt-Equity Ratio is primarily due to a reduction in borrowings. On a consolidated basis, the Debt-Equity Ratio as of 31st March, 2025 stood at 0.01, compared to 0.02 as of 31st March, 2024. The decrease is primarily attributable to a reduction in borrowings."

On a consolidated basis, the Return on Net Worth as of 31st March, 2025 stood at 25.56%, compared to 37.45% as of 31st March, 2024. The decrease in Return on Net Worth is primarily due to an increase in total equity, while the Net Profit after Tax has not increased proportionately.

The Companys success is fundamentally driven by its human capital. Understanding that the motivated and skilled workforce is essential for long-term growth, the Company places a strong emphasis on creating a supportive environment that fosters both safety and productivity. The HR team plays a key role in nurturing a workplace founded on the principles of integrity, transparency, and continuous learning. Through its focus on equality and strict enforcement of zero tolerance towards harassment.

Being in the financial services sector, we recognize that our Companys growth is closely tied to the development of our employees. We are dedicated to fostering talent, recognizing each individuals unique strengths. The Human Resource Management Department (HRMD) undertook several initiatives during the financial year 2024-25 to strengthen human resources along with building a conducive working environment through new recruitments, skill enhancement through in-house and external training programmes and conducting regular meetings for employees, besides undertaking leadership development programme for senior management. Regular employee engagement initiatives and tailored development programmes ensure our team members reach their full potential. During the year 2024-25, there were 9 employees in the Company.

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied due to risk and uncertainties. These risks and uncertainties include significant changes in political and economic conditions in India and internationally, volatility in interest rates and in the securities market, new regulations and Government policies that may impact the companys business as well as the ability to implement strategies. The Company assumes no responsibility nor is under any obligation to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.