Goenka Business & Finance Ltd Management Discussions

(Annexure - I to the Boards Report for FY 2024-25)

• Global Economic Overview

During FY 2024-25, the global economy experienced gradual recovery amid persistent inflationary pressures, tightening monetary policies, and ongoing geopolitical uncertainties. According to the International Monetary Fund (IMF), global growth is estimated to moderate around 3.2%, with advanced economies facing slower expansion, while emerging markets exhibited resilience backed by domestic demand and improving commodity prices.

Monetary policy tightening by central banks, particularly in the United States and Europe, led to a cautious investment climate. However, a relatively stable global financial system, easing supply chain bottlenecks, and digital acceleration in financial services contributed to improved investor confidence in the second half of the fiscal year.

India remained one of the fastest-growing major economies, with GDP growth projected at 7.3% for FY 2024-25. The domestic economy benefited from strong consumption demand, infrastructure push, GST revenue buoyancy, and continued government support for MSMEs and the financial services sector. Inflation remained within the Reserve Bank of Indias (RBI) tolerance band, aided by calibrated monetary policy and a favourable monsoon.

Indias digital financial ecosystem and fintech innovation contributed significantly to formal credit expansion, further positioning NBFCs as vital enablers of inclusive economic growth.

NBFCs continue to play a pivotal role in Indias credit delivery architecture, particularly for underbanked segments and MSMEs. The sector showed steady growth in FY 2024-25, supported by favourable economic conditions, strong retail credit demand, and regulatory stability.

The RBIs Scale-Based Regulation (SBR) framework continued to guide differentiated supervision based on size, risk, and systemic importance. The sector also witnessed improved asset quality, increased adoption of digital lending platforms, and enhanced governance practices.

Despite challenges such as rising cost of funds and intensified competition from banks and fintechs, NBFCs with strong risk management and liquidity positions outperformed the market average.

Goenka Business & Finance Ltd., a Reserve Bank of India-registered NBFC, is engaged in the business of:

- Providing secured and unsecured loans, and

- Investing in equity, debt, and other financial instruments.

The Companys business strategy is anchored in its core competencies of prudent credit evaluation, operational efficiency, regulatory compliance, and investment discipline.

In FY 2024-25, the Company remained focused on improving its loan book quality, optimizing return on investment, and maintaining conservative risk exposure. It continued to comply with all applicable regulations issued by RBI, SEBI, and other statutory authorities.

(Rs. in Lakhs)

Note: For further details, refer to the standalone financial statements forming part of the Annual Report.

The Company has a robust Risk Management Policy that identifies and addresses key business risks, including credit, market, liquidity, interest rate, compliance, and operational risks. The Audit Committee and the Board periodically review and monitor the effectiveness of the risk mitigation framework to ensure alignment with the Companys strategic objectives and regulatory landscape.

The Company has established an effective system of Internal Financial Controls (IFC) commensurate with its size and operations. These controls ensure the integrity of financial reporting, safeguard assets, and ensure compliance with applicable laws and regulations. The internal audit function operates independently and reports to the Audit Committee.

The Company believes that its success lies in the capabilities and commitment of its employees. Various employee development initiatives, including training and upskilling programs, were undertaken during the year. The Company ensures a safe and inclusive work environment. An Internal Complaints Committee (ICC), as per the Sexual Harassment of Women at Workplace Act, 2013, is in place. No complaints were received during the financial year 2024-25.

The outlook for NBFCs remains cautiously optimistic for FY 2025-26, supported by stable macroeconomic indicators, rising demand for credit from retail and MSME segments, and increased digital penetration. Goenka Business & Finance Ltd. aims to leverage technology, improve operational efficiency, and maintain prudent underwriting to drive sustainable and profitable growth.

With a focus on regulatory compliance, strong governance, and stakeholder value creation, the Company is well-positioned to navigate emerging opportunities and challenges in the financial services sector.

Certain statements in this report concerning the Companys future prospects may be "forward-looking statements," within the meaning of applicable laws and regulations. The actual performance may differ materially from such expectations or projections due to economic conditions, regulatory changes, and other external factors.