BFL Asset Finvest Ltd Management Discussions

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Pursuant to Schedule V to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations. 2015, a Management Discussion and Analysis Report covering business performance

and outlook is provided below:

BFL Asset Finvest Limited is a non-systematically important Non-Deposit-Taking Non-Banking Financial Company registered with the Reserve Bank of India (RBI) and is classified as a NBFC-Investment and Credit Company (NBFC-ICC)-Base Layer pursuant to Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023. The Companys main business is dealing in shares, Futures and Options. All other activities of the Company revolve around its main business.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian NBFC sector continues to play a critical role in delivering credit to underserved sectors of the economy. NBFCs that focus on capital markets, especially those engaged in trading and investment in shares, futures, and options (F&O), have experienced mixed trends during FY 2024-25.

The Indian stock market witnessed significant volatility driven by global macroeconomic factors, geopolitical tensions, fluctuating interest rates, and the RBIs monetary policy actions. Despite this, increased retail participation, expansion of digital trading platforms, and regulatory reforms contributed to continued growth in the securities and derivatives markets.

The Indian capital market in FY 2024-25 is experiencing significant growth and transformation, fueled by robust economic activity and government initiatives. The primary and secondary markets are playing a crucial role in mobilizing funds for growth, with a notable increase in resource mobilization from the primary market. Several factors, including technological advancements, regulatory changes, and investor confidence, are shaping the markets structure and development.

Global economic trends, technological advancements and geopolitical developments also exerted influence on the Indian capital market. Factors such as fluctuations in crude oil prices, trade tensions, and monetary policy decisions by major central banks impacted investor risk appetite and capital flows into emerging markets like India.

The governments policy reforms and initiatives had a substantial impact on investor sentiment and market dynamics. Key reforms aimed at bolstering infrastructure, promoting ease of doing business, and attracting foreign investments contributed positively to market confidence.

NBFCs aid economic development in the following ways:

> Mobilization of Resources - It converts savings into investments

> Capital Formation - Aids to increase capital stock of a company

> Aid in Employment Generation

> Help in development of Financial Markets

> Helps in Attracting Foreign Grants

> Helps in Breaking Vicious Circle of Poverty by serving as governments instrument

> Supporting Small and Medium Enterprises (SMEs)

> Boosting Consumption and Investment

> Providing Loans to the Underserved

> Reducing Pressure on Banks

Non-Banking Financial Companies expect the government to continue pumping in liquidity as it will boost the sectors employment, and direct disposable income and consumption.

NBFC Role in Revolutionizing the Economy

S Growth: Despite the slowdown in the economy and various setbacks faced in the last few years, the sector is still growing and enhancing operations.

S Profitability: NBFCs have been more profitable because of lower costs involved for its operations and serve customers from different segments.

S Enhancing the Financial Market: An NBFC caters to the urban and rural poor companies and plays a complementary role in financial inclusion. These financial companies bring much-needed diversity to the market by diversifying the risks, increasing liquidity in the markets thereby bringing efficiency and promoting financial stability to the financial sector.

S Promoting Inclusive Growth: NBFCs in India cater to a wide variety of customers - both in urban and rural areas. They finance projects of small-scale companies, which is important for the growth in rural areas. Microfinance provided by them plays an important role to attain stable financial inclusions.

S Upliftment in the Employment Sector: With the growth in operations of the small industries and businesses, the policies of NBFCs are uplifting the job situation. More opportunities for employment are arising with the influence of the NBFCs in the private as well as government sectors. The business activities in the private sector provide more employment opportunities and occupation practices. And NBFC plays a key role in their growth and stability.

S Mobilization of Asset: Due to their easier norms for investing, these companies create a balance between intra-regional income and asset distribution. Turning the savings into investments, these companies contribute to economic development. Proper organization of capital helps in the development of the trade and industry, leading to economic progress. They operate not intending to maximize their profit and are, therefore, engaged in activities that generate zero or very low revenue.

S Financing for Long-Term: NBFC plays a key role in providing firms with funds through equity participation. NBFCs supply long-run credit to the trade and commerce industry. They facilitate to fund large infrastructure projects and boost economic development. Long-term finance permits growth with stable and soft interest rates.

S Innovative Products: NBFCs, by being flexible in terms of lending and investment opportunities than banks, are more proactive in innovating financial products. This facilitates their growth in an exceedingly prudent manner. They fine-tune their selling campaigns in regard to their target customers. These corporations are the game changers within the developing economy. For instance, the factorization & bill payment service has been revolutionized.

Over the past few years, NBFCs have been at the forefront of catering to the financial needs and creating livelihood sources of the so-called un-bankable masses in the rural and semi-urban areas. Through strong linkage at the grassroots level, they have created a medium of reach and communication and are very effectively serving this segment. Thus, NBFCs have all the key characteristics to enable the government and regulator to achieve the mission of financial inclusion in the given time. Your Company is a NonBanking Financial Company dealing in shares & stock trading.

OUTLOOK ON OPPORTUNITIES

Investment opportunities for NBFCs in India are abundant, given the countrys dynamic economic landscape, demographic dividend, and evolving regulatory framework. The Capital market looks robust and resilient in long term. Reports of various agencies and leading economists reflect that there is an early sign of revival of economic growth with strong positive sentiments. Growth in GDP numbers and other economic parameters being positive overall economic scenario looks favorable for coming years.

Rising aspiration of stakeholders enabled by higher income is the largest opportunity for the Company. Your Directors expect that with the strong business model of the Company, innovative fund management techniques, continued confidence of investors, the Company should achieve better performance in the year 2024-25. The Board of Directors are hopeful to deliver good business in the current financial year.

Opportunities

1. Increased retail participation in capital markets;

2. Leverage advanced technology to enable best practices and processes;

3. Expansion of financial literacy and digital infrastructure supporting greater investor onboarding.

4. Diversifying portfolio through different and diversified products available in the Indian Capital Market e.g. commodity futures, currency derivatives, interest rate derivatives, and volatility derivatives, green finance etc.;

5. Effective use of futures and options to effectively hedge the Company against various types of risks e.g. risk of price volatility etc.

6. Development of new financial products and margin trading facilities.

7. Use of algorithmic and data-driven trading strategies.

OUTLOOK ON THREATS, RISKS AND CONCERNS

The Company is dealing in shares & stock trading which is quite unpredictable in terms of the economic scenario, GDP Growth of the Country, Government policies, political situation and global trends etc. Moreover, after the introduction of online trading in commodities, the attention of high net worth investors has also diverted into commodities futures. The overall economic environment will impact all our business but we expect that we will be able to overcome it easily. The performance of the Company largely depends on the Capital Markets.

Being a NBFC-Investment and Credit Company, our Company is exposed to specific risks that are particular to its business and the environment within which it operates, including:

1. Economic Uncertainty: Global economic uncertainty, geopolitical tensions, and domestic economic challenges can adversely impact investor sentiment and stock prices;

2. Regulatory Changes: Changes in regulatory policies or tax laws can affect investor behavior and market dynamics, leading to uncertainty and volatility;

3. Cyber security Risks: Growing reliance on technology exposes the stock market to cyber security threats such as hacking, data breaches, and ransomware attacks;

4. Natural Disasters and Pandemics: Events such as natural disasters or pandemics can disrupt economic activity, leading to market downturns and financial losses.

5. Market Risk: Exposure to price fluctuations in shares and derivatives.

6. Credit Risk: Inherent in margin and funding activities.

7. Liquidity Risk: Volatility in the market may affect liquidity positions

MITIGATION MEASURES TAKEN BY THE COMPANY

The Company is committed to best benchmarking in good corporate governance, which promotes the long-term interests of all stakeholders which help in building public trust in the Company.

The Company believes that managing risks helps in maximizing returns. The risk management framework is reviewed periodically by the Board and the Audit Committee.

The Company considers activities at all levels of the organization and its Risk Management with focus on three key elements, viz.;

S Risk Assessment- Study of threats and vulnerability and resultant exposure to various risks.

S Risk Management and Monitoring- The probability of risk assumption is estimated with available data and information.

S Risk Mitigation- Measures adopted to mitigate risk by the Company.

Company mitigate market risks by tracking microeconomic and macroeconomic level data, market trends and forecasts by expert agencies, internal review by team of experts. The Company shall only undertake those transactions which are permitted by the applicable laws including the RBI guidelines.

The Company is committed to best benchmarking in good corporate governance, which promotes the long-term interests of all stakeholders which help in building public trust in the Company.

The Company believes that managing risks helps in maximizing returns.

Threats

1. Unfavorable economic conditions;

2. Intense competition from local and global players;

3. 3. High market volatility and global uncertainty impacting investor sentiment Instances of market manipulation;

4. Restrictions on foreign investments etc.

PRODUCT WISE PERFORMANCE

As per the results of the Company as on March 31, 2025, the Company is working in only one segment, viz. shares and securities, interest income, and futures and options and other finances. Snapshot of the Companys financial performance during FY 2024-25 and 2023-24 are as follows:-

		(Amount in Lakh)
Particulars	2024-25	2023-24
Revenue from shares and securities	1,747.24/-	2,296.54/-
Dividend Income	11.24/-	7.54/-
Revenue from Interest Income	60.28/-	102.72/-
Revenue from F&O	283.06/-	333.73/-
Revenue from other finances	40.16/-	0.00/-

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a well-established internal financial control and risk management framework, with appropriate policies and procedures, to ensure the highest standards of integrity and transparency in its operations and a strong corporate governance structure, while maintaining excellence in services to all its stakeholders. Appropriate controls are in place to ensure:

(a) The orderly and efficient conduct of business, including adherence to policies

(b) Safeguarding of assets and ensure operational excellence

(c) Prevention and detection of frauds/errors

(d) Accuracy and completeness of the accounting records and

(e) Timely preparation of reliable financial information.

The Company has instituted the three lines of defense model, viz. (i) management and internal control measures, (ii) financial controls, risk management practices, security measures and compliance oversight, and (iii) a robust internal checks and balances providing the third level of defense.

The Companys internal controls and risk management practices are validated periodically with suitable review mechanisms in place. The Internal Control over Financial Reporting is the bedrock for the risk and control framework for the Company. The Companies Act, 2013 requires the Board of Directors and statutory auditors of the Company to comment on sufficiency and effectiveness of internal controls.

The Company has appointed M/s. Shiv Shankar Khandelwal & Co., Chartered Accountants (Firm Registration No. 006852C) as an internal auditors to conduct internal audit and to ensure that all transactions are correctly authorized and reported. The reports are reviewed by the Audit Committee of the Board to internal controls.

Further the audit committee has concluded that, as of March 31, 2025, the companys internal controls were adequate and operating effectively.

Furthermore, the Company has constituted the Risk Management Committee w.e.f. February 10, 2023 pursuant to RBI Circular No. RBI/2021-22/112 DOR.CRE.REC.NO.60/03.10.001/2021-22 dated October 22, 2021 and it will overview the risk bearing capacity of the Company and will review and assess risk strategies.

INFORMATION TECHNOLOGY

Our Company has taken further steps in its technology roadmap toward future readiness and digitalization. The Company has been using the best possible information technology as a management tool for internal control. The Company continues to invest reasonable into information technology for monitoring operation.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Snapshot of the Companys financial performance for the last three years is as follows:-

Year	Total Revenue (in Lakh)	Revenue growth %	Profit after Tax (PAT) (in Lakh)	PAT change %	EPS (in Rs.)	EPS change %
2024-2025	2,141.98	-21.84	123.62/-	-46.23	1.21	-46.23
2023-2024	2,740.53/-	1,730.70	229.94/-	527.13	2.25	525
2022-2023	149.70/-	-51.84	36.66/-	-46.53	0.36	-46.27

HUMAN RESOURCE MANAGEMENT

Human resources are a valuable asset for any organization. We ensure a workplace that is fair, equitable, enabling and responsive to the needs and aspirations of our employees so that they can realize their full potential and contribute their best to the organization. The Company is committed to create an environment of constant learning and development, drive an effective and transparent performance culture and build a culture of appreciation & transparent communication. We constantly strive to upgrade the skills of employees and give them the edge to compete in the dynamic market and become future ready. The Company is giving emphasis to upgrade the skills of its human resources. This is in keeping with its policy of enhancing the individuals growth potential within the framework of corporate goals. Our employee-friendly and inclusive policies, health and fitness benefits ensure safe and secured environment for employees at workplace. Total number of employees as on March 31, 2025 stood at 4.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

There were significant changes in the key financial ratios as compared to the immediately previous financial year, details of the same are as follows:

	F.Y. 2024-25	F.Y. 2023-24	Change in %	Reason (if more than 25% change)
(i) Debtors Turnover	0	0
(ii) Inventory Turnover	1.88	6.87	(72.62)	The Companys main business is dealing in Shares, Securities, Futures and Options. Hence, ratios are not comparable.
(iii) Interest Coverage Ratio	14.63	9.35	56.47	The Companys main business is dealing in Shares, Securities, Futures and Options. Hence profit is fluctuating.
(iv) Current Ratio	44.12	15.44	185.74	Company is not having consistent business operations and was mainly dealing in shares, securities etc. Hence, not comparable.
(v) Debt Equity Ratio	0.18	0.29	(39.11)	The increase in ratio was due to decrease in borrowing, while equity remained unchanged.
(vi) Operating Profit Margin (%)	5.95	11.21	(46.94)	The Companys main business is dealing in Shares, Securities, Futures and Options. Hence profit/loss is fluctuating.
(vii) Net Profit Margin (%)	5.88	8.39	(29.90)	The Companys main business is dealing in Shares, Securities, Futures and Options. Hence profit/loss is fluctuating and not comparable.

DETAILS OF ANY CHANGE IN RETURN ON NETWORTH

The following changes occurred in the return and net worth of the Company as compared to the immediately previous financial year:

		(Amount in Lakh)
Particulars	FY 2024-2025	FY 2023-2024
Net Worth
Share Capital	1,020.35/-	1,020.35/-
Special Reserve	2.85/-	2.85/-
Statutory Reserve	115.81/-	91.08/-
Capital Redemption Reserve	37.87/-	37.87/-
Securities Premium	176.74/-	176.74/-
Surplus in P&L	246.52/-	127.30/-
Total Net worth	1600.14/-	1,456.19/-
PAT	123.62/-	229.94/-
Return on Net Worth	7.73%	15.79%

CAUTIONARY STATEMENT

Statements in this 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. This report contains statements extracted from reports of Government Authorities/Bodies, Industry Associations etc. available on the public domain which may involve risks and uncertainties including, but not limited to, economic conditions, government policies, dependence on certain businesses and other factors. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements.

This report should be read in conjunction with the financial statements included herein and the notes thereto. The Company does not undertake to update these statements.

Date: July 29, 2025	For and on behalf of the Board of Directors
Place: Jaipur	For BFL Asset Finvest Limited
	Sd/-	Sd/-
Registered Office: 1 Tara Nagar,	Mahendra Kumar Baid	Aditya Baid
Ajmer Road, Jaipur - 302006	Managing Director	Director
(Rajasthan)	DIN:00009828	DIN:03100584