Mehta Integrated Finance Ltd Management Discussions

To,

The Members/Shareholders,

Global Economy

The global economy has sustained remarkable resilience in 2025, maintaining robust activity amid significant policy shifts and ongoing uncertainty. Key contributors to this steady growth remain increased government spending, resilient household consumption, and unexpectedly strong labour force participation.

According to the IMFs July 2025 World Economic Outlook, global growth is projected at 3.0% for 2025 and 3.1% in 2026, slightly lower than previous forecasts but still reflecting the economys adaptability. Advanced economies are expected to grow modestly, while emerging markets, despite slower growth than prior years, continue to outperform the global average. India retains its position as the worlds fastest-growing major economy, with a revised forecast of 6.4% for 2025

The world economy enters FY2026 with notable strength and adaptability, marked by modest but stable growth and uneven progress on inflation. The outlook remains clouded by policy uncertainty, trade frictions, and geopolitical risks, requiring vigilant, responsive policymaking to maintain momentum

Indian Economy

The Indian economy demonstrated remarkable resilience and sustained robust growth during the financial year 2024-25, supported by prudent macroeconomic policies orchestrated by the Reserve Bank of India (RBI). The RBIs proactive monetary policy management, with calibrated interest rate adjustments and liquidity measures, effectively balanced inflationary pressures alongside encouraging sustainable economic expansion. These policies ensured continued financial sector stability, reinforcing Indias economic foundations amid a dynamic global environment.

Indias economic momentum is reflected in its stock market performance, which reached record highs in 2024-25. This surge encapsulates strong investor confidence anchored on structural reforms, a favorable demographic dividend, and rapid technological advancements across key sectors. The equity markets historic peaks underscore Indias long-term growth narrative, attracting both domestic and international investors committed to its growth story.

The International Monetary Fund (IMF) has revised Indias GDP growth forecast upward to 7.0% for the fiscal year 2024-25, acknowledging improved private consumption, particularly in rural regions, and sustained domestic demand. This upward revision follows an impressive GDP expansion rate of 8.2% in 2023-24, surpassing the previous fiscal year growth of 7.0%, bolstered by an unexpectedly strong performance in the final quarter of 2023-24. For the year 2025-26, the IMF projects a growth rate of approximately 6.5%, highlighting the continued strength from a rising working-age population and robust internal market dynamics.

India remains the fastest-growing major economy among emerging and developing nations, steering global growth trends. The combination of government reforms, demographic advantages, and expanding technological infrastructure continues to position India as a pivotal player in the international economic arena, with sustained prospects for stable and inclusive growth.

Company Overview

Mehta Integrated Financial Limited (hereinafter referred as "MIFL" the Company) is an Ahmedabad based-diversified Merchant Banking Company (MB) registered with Securities Exchange Board of India (SEBI). Incorporated in 1985, the Company engaged in providing Merchant banking services to Corporates. The Company offers a wide range of financial services such as lead manager services, valuation report of corporates, banker to an issue, underwriting services for the purpose of Initial public offering & further Public offering to the Corporates.

Industry Structure and Developments

India has a diversified financial sector undergoing rapid expansion both in terms of strong growth of existing financial services firms and new entities entering the market. The sector comprises commercial banks, insurance companies, non- banking financial companies, co-operatives, pension funds, mutual funds and other smaller financial entities. The banking regulator has allowed new entities such as payment banks to be created recently, thereby adding to the type of entities operating in the sector. However, the financial sector in India is predominantly a banking sector with commercial banks accounting for more than 64% of the total assets held by the financial system.

The Government of India has introduced several reforms to liberalise, regulate and enhance this industry. The Government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small and Medium Enterprises (MSMEs). These measures include launching Credit Guarantee Fund Scheme for MSMEs, issuing guidelines to banks regarding collateral requirements and setting up a Micro Units Development and Refinance Agency (MUDRA). With a combined push by Government and private sector, India is undoubtedly one of the worlds most vibrant capital markets.

Opportunity:

• Facilitated creation and allocation of credit and liquidity

• Playing a vital role in economic development of a country. Financial services are serving as intermediaries for mobilisation of savings.

• Encouraging both savings and investment.

• Helps in capital formation.

• Helps in allocation of risk.

• Facilitating expansion of financial markets.

• Assist the process of balanced economic growth.

Threats:

• Regulatory or legislative changes

• Non-Performing Assets (NPAs) and Bad Loans

• Economic slowdown

• Cybersecurity and Data Privacy

• Asset price volatility

• Interest rate fluctuation

• Tech or system failure

Segment wise Performance

The Company primarily operates in Capital Market Investments and Consulting. The capital raising activity gathered momentum during the year under review. Foreign investors are very positive in India and its policies. The recovery proceedings are going on in a lawful manner. The capital market consulting activity continued at slow pace and the investments have fared better in line with growth of the economy.

Outlook

In recent months, several multilateral agencies have revised their projections for global economic growth in 2025. The International Monetary Fund (IMF) has updated its forecast for world economic growth to 3.0% for 2025, a slight upward revision from earlier estimates. For India, the IMF projects GDP growth at approximately 6.4% for the fiscal year 2025-26, reaffirming Indias status as the fastest-growing major economy globally. On the inflation front, the Reserve Bank of India (RBI) projects headline Consumer Price Index (CPI) inflation to moderate to around 3.1% for FY26, assuming normal monsoon conditions. The persistent inflation targeting framework, supported by a contractionary fiscal policy, is expected to help contain inflationary pressures on a sustained basis

The Central Government has successfully reduced its fiscal deficit to 4.8% of GDP in FY25 from 5.8% in FY24, thus surpassing its earlier target of 5.1%. For FY26, the government aims to further bring down the fiscal deficit to 4.4% of GDP. Moreover, the government has budgeted lower gross market borrowings for FY26 at Rs. 14.82 lakh crore compared to FY25, with Rs. 8 lakh crore planned in the first half of the year. This calibrated borrowing plan is likely to ease supply pressure in the market, positively influencing interest rates. the fiscal consolidation combined with robust capex and strategic easing of funding costs for NBFCs is set to support growth in infrastructure while also stabilizing financial market conditions in 2025-26

The Company is exposed to specific risk that are particular to their respective business and the environments within which they operate, including market risk, competition risk, credit risk, liquidity and interest rate risk, human resource risk, operational risk, information security risk, regulatory risk, and macro-economic risks. The level and degree of each risk varies depending upon the nature of activity undertaken by them. The Company follows conservative approach to overcome the risks of the market and the economy to get early stress signals as capital markets are uncertain to predict for medium to long term. The capital market industry is mainly dependent on economic growth of Country and capital market is also further affected by number of issues arising out of International policies of foreign government as well any change in international business environment. The industrial growth is very sensitive which is dependent on many factors which may be social, financial, economic or political and also natural climatic conditions in the country.

Internal Control Systems And Their Adequacy

Being in the Merchant banking business, your company realizes that adequate internal controls and standardizing operational processes is the key to protect assets and business efficiency. The Company has established strong and well embedded internal control procedures commensurate with its size and operations. The internal financial controls have been developed and implemented at each business process across the Company ensuring strict adherence and compliance with statutes and laws. Checks & balances and control systems have been established to ensure that assets are safeguarded, utilized with proper authorization and recorded in the books of account.

The Companys Audit Committee reviews the internal control system and looks into the observations of the statutory and internal auditors. This includes review of policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business and fixing responsibility against all the controls. The design assessment was followed up by the management testing of the controls across processes and redressed of any deviations in business operations. The Audit function provides reasonable assurance regarding the effectiveness and efficiency of operations. Safeguarding of assets, reliability of financial records and reports and compliance with applicable laws and regulations. The company has implemented proper system for safeguarding the operations/business of the Company, through which the assets are verified that avoid frauds and errors are reduced and accounts, information connected to it are maintained such, so as to timely completion of the statements.

The Company believe that efficacy and adequacy of internal controls and their execution are driven by the ethos of striving for constant improvement. These controls ensure safeguarding of assets, detection of fraud, reduction of error, adequacy and completeness of the accounting records and timely preparation of reliable financial information. The Company has internal audit and verification at regular intervals. The requirement of having internal auditor compulsory by statue in case of listed and other classes of Companies as prescribed shall further strengthen the internal control measures of Company. It evaluates the adequacy of all internal controls and processes, and ensures strict adherence to clearly laid down processes and procedures as well as to the prescribed regulatory and legal framework.

Discussion On Financial Performance With Respect To Operational Performance

The financial performance of the Company for the financial year2024-25 is described in the Directors Report under the head "Financial Performance".

The Company believes that human resources are the most important assets responsible for the growth of the Company. Its HR policies provide a work atmosphere that the constraints in the sector and paved way for the return of market confidence. However, access to adequate funding remains critical to the sectors revival as Merchant bankers continue to be impacted by moderate growth, increased competition and high credit costs.

The Company is well placed for sustainable due to its diversified financial services, adequate capital, highly competent and experienced management and continual focus on asset quality and profitability.

Cautionary Statement

Statement in this management discussion and analysis report, describing the companys objectives, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws or regulations. Actual results may differ materially from those either expressed or implied.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Disclosure Of Accounting Treatment

During preparation of financial statements during the period under review, no accounting treatment which was different from that prescribed in the Accounting Standards was followed.