Directors Report of Virat Leasing Ltd.

Mar 31, 2015

The directors have pleasure in presenting their Thirty First Annual Report on the business and operations of Virat Leasing Limited (the "Company") together with the audited statement of accounts for the year ended 31st March, 2015.

Financial Highlights (Standalone and Consolidated)

During the year under review, performance of your company as under :

(in Rs.)

Financial Result Year Ended 31.03.2015 Year Ended 31.03.2014

Total Revenue 9203894 5033941

Less: Total Expenditure 8892289 4679086

Profit before Tax 311605 354855

Less: Taxation 140289 67617

Profit After Tax 171316 287238

Transfer to Statutory Reserve 34263 57448

Transfer from/(to) Contingent provisions against Standard Assets 148563 (174155)

Balance brought forward from Previous Year 1136333 732388

The consolidated performance of the group as per consolidated financial statements is as under:

(in Rs.)

Financial Result Year Ended 31.03.2015 Year Ended 31.03.2014

Total Revenue 15768364 5520458

Less: Total Expenditure 15338497 4963716

Profit before Tax 429867 556742

Less: Taxation 180450 106087

Profit after Tax 249417 450655

Share of Profit/(Loss) transferred to Minority Interest 10830 36195

Profit for the year 238587 414460

Operating & Financial Performance

Gross revenues increased to Rs. 9203894/- a growth of around 82.84% against Rs. 5033941/- in the previous year. Profit before taxation was Rs. 311605/- against Rs. 354855/- in the previous year. The percentage of profit has decreased by 12.19% due to onetime exceptional expenditure towards Initial Listing Fees & Merchant Bankers Fees. After providing for taxation of Rs.140289/- & Rs. 67617/- respectively, the net profit of the Company for the year under review was placed at Rs. 171316/- as against Rs. 287238/- in the previous year.

Change in the nature of business, if any

There is no change in the nature of the business of the Company.

Statutory & Legal Matters

There has been no significant and/or material order(s) passed by any Regulators/Courts/Tribunals impacting the going concern status and the Company's operations in future.

Material Changes & Commitments occurring after the end of Financial Year

Your Company has received the trading approval from BSE Limited vide letter no. DCS/DL/AC/TP/269/2015-16 dated 29th May, 2015 and the shares of the Company will be listed and open for trade on the exchange w.e.f 2nd June, 2015. No other material changes and/or commitments affecting the financial position of the Company occurred between the end of the financial year to which the attached financial statements relate to and upto the date of this report.

Subsidiary / Joint Ventures / Associates

As on March 31, 2015, the Company had six Indian subsidiaries. There has been no change in the number of subsidiaries during the year under review. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and all its subsidiary companies, which is forming part of the Annual Report. A statement containing salient features of the financial statements of the subsidiary companies in the prescribed format, AOC 1 is also included in the Board Report as Annexure 1. In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company, www.vll.co.in. Further, as per fourth proviso of the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company at www.vll.co.in.

Internal Financial Control

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

Dividend

Your Directors do not recommend any dividend for the Financial Year ended on 31st March, 2015.

Share Capital

The paid up Equity Share Capital as on March 31, 2015 was Rs. 12,98,05,000. During the year under review the company has not issued any shares or any convertible instruments.

Risk Management

Although the company has long been following the principle of risk minimization as is the norm in every industry, it has now become a compulsion. The Board members were informed about risk assessment and after which the Board formally adopted and implemented the necessary steps for monitoring the risk management plan for the company.

Board of Directors

In accordance with the provisions of Companies Act, 2013 Ms. Pooja Agarwalla (DIN: 06961133), Director of the Company retires by rotation and being eligible offers herself for re-appointment.

At the 30th Annual General Meeting of the company held on 29th September, 2014 the Company had appointed Mr. Jitendra Kumar Goyal (DIN 00468744), Mr. Akash Shaw (DIN 06865152) and Mr. Pradeep Kumar Agarwal (DIN 00583450) as independent directors under the Companies Act, 2013 for 5 consecutive years for a term up to September, 2019.

All independent directors have given declaration that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and clause 49 of listing agreement.

Meetings of Board and Audit Committee

During the Financial Year 2014-15, ten (10) meetings of the Board of Directors of the Company and four (4) Audit Committee meetings were held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Company's Remuneration Policy is available on the Company's website at www.vll.co.in and forms a part of this Report of the Directors as Annexure 2.

Directors' Responsibility Statement

The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of section 134(3)(c) read with section 134(5) of the Companies Act, 2013 and Clause 49(III)(D)(4)(a) of the listing agreement with Stock Exchanges in the preparation of the annual accounts for the year ended on 31.03.2015 and state that :

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the directors have prepared the annual accounts on a going concern basis;

(v) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(vi) the directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Contracts and Arrangements with Related Party

All Related party transactions that were entered into during the financial year were on an arms length basis and in the ordinary course of business. There are no material significant related party transactions made by the Company during the year that would have required shareholder approval under Clause 49 of the Listing Agreement. All related party transactions are reported to the Audit Committee. Prior approval of the Audit Committee is obtained on a yearly basis for the transactions which are planned and/ or repetitive in nature and omnibus approvals are taken within limits laid down for unforeseen transactions. The disclosure under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is not applicable. The Policy on Related Party transactions as approved by the Board has been uploaded on the Company's Website and may be accessed at the link http://vll.co.in/related-party-policy.

The details of the transactions with related parties during 2014-15 are provided in the accompanying financial statements.

None of the Directors had any pecuniary relationship or transactions with the Company during the year under review.

Key Managerial Personnel

Mr. Rajeev Kothari, Managing Director & Ms. Sangita Agarwal, Company Secretary were formally appointed as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013.

Board Evaluation

Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement the Board has carried out annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees.

Corporate Governance

Report on Corporate Governance along with the certificate thereon as obtained from M/s. S. K. Rungta & Co., Chartered Accountants is separately attached here and forms a part of the Directors' Report.

Vigil Mechanism

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior the company has adopted a vigil mechanism policy which is available on the Company's website www.vll.co.in

Corporate Social Responsibility

The provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not applicable to the Company.

Listing

The shares of the Company are listed on the BSE Limited (w.e.f 30.05.2015) & Delhi Stock Exchange Limited. The ISIN allotted is INE347L01014.

Statutory Audit

M/s. S. K. Rungta & Co., Chartered Accountants (FRN: 308081E), Kolkata, were appointed as Statutory Auditors of the Company from the conclusion of the Annual General Meeting held on 29.09.2014 until the conclusion of 33rd Annual General Meeting to be held in the year 2017. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting. The Independent Auditors Report does not contain any qualifications, reservation or adverse remark or disclaimer.

Secretarial Audit

Mr. Anand Khandelia, Practicing Company Secretary was appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules there under. The Secretarial Audit Report for Financial Year 2014-15 forms a part of the Director Report as Annexure 3. The Report submitted by the auditor contains a reverse remark regarding not appointing any Chief Financial Officer (CFO) u/s 203 of the Companies Act, 2013 during the said financial year.

Internal Control Systems and Their Adequacy

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Director.

Deposits

The Company being a Non Deposit Accepting NBFC, has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

Loans, guarantees and investments

The Company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013 as it is exempted from the applicability of the provision of Section 186 of the Companies Act, 2013 read with Rule 11 of the Companies (Meeting of Board and its Powers) Amendment Rules, 2015 as your Company is NBFC registered with RBI whose principal business inter alia includes financing of companies. The details of the investments made by the Company are given in the notes to the financial statements.

Conservation of Energy, Technology Absorption

Since the Company does not own any manufacturing facility, being an Investment Company, the particulars relating to conservation of energy and technology absorption stipulated in the Companies (Accounts) Rules, 2014 are not applicable.

Foreign Exchange Earning and Outgo

There is no foreign exchange earnings and outgo during the year under review.

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure 4 and forms a part of the Directors' Report.

Managerial Remuneration

The information required pursuant to Section 197(12) read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached here as Annexure 5 and forms a part of the Directors' Report.

There are no employees who are in receipt of remuneration in excess of the limit specified under section 134(3) (q) read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

RBI Guidelines for Non-Banking Financial Companies

The Company has observed all the prudential norms prescribed by the Reserve Bank of India. The Schedule as required in terms of Paragraph 13 of Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 2015 is annexed herewith.

Acknowledgement

Your Directors take the opportunity of placing their sincere appreciation to the Central Government, State Government, Banks, Financial Institutions, employees, associates, consultants and members of the company for their valuable guidance and support.

For and on behalf of the Board of Directors

Rajeev Kothari Jitendra Kumar Goyal

Place: Kolkata Managing Director Director

Date : 30/05/2015 (DIN 00147196) (DIN 00468744)