Minolta Finance Ltd Management Discussions

COMPANY OVERVIEW

Minolta Finance Limited, incorporated in 1993, operates as a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India as a Non-Deposit taking institution. The company has been listed on the Bombay Stock Exchange since 1996 and provides diverse financial services including loans and advances, capital market investments, inter-corporate deposits, and other allied financial activities.

Headquartered in Kolkata, West Bengal, the company operates under RBIs regulatory framework and serves various customer segments through its comprehensive range of financial products and services.

BACKGROUND

The Company is registered with the Reserve Bank of India as a Non-Banking Financial Institution.

Non-Banking Finance Companies (NBFCs) continued to play a critical role in making financial services accessible to more of Indias population. Given their unique business models and, for many, their focus on operational excellence, NBFCs should continue to strengthen their position in the financial services space in India.

FINANCIAL PERFORMANCE

(Rs.in Lac)

Particulars	2024-25	2023-24	Change	%
Revenue from Operation	101.88	138.26	-36.38	(26.31)
Profit /(Loss) before Tax & Extraordinary Item	1.48	6.97	-5.49	(78.77)
Less : Provision for Tax	0.27	1.81	-1.54	(85.08)
Profit / (Loss) after Tax	1.22	5.16	-3.94	(76.36)
Less : Extra-Ordinary Items	0	0	0	0
Add: Profit/(Loss) brought forward from Previous Year	72.69	67.53	5.16	7.64
Balance of Profit / (Loss) carried forward	73.9	72.69	1.21	1.66

KEY FINANCIAL RATIOS

As required pursuant to Schedule V(B) to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Key Financial Ratios for the financial year 2024-2025 vis-a-vis 2023-2024 along with changes therein are reproduced herein below:

Sl. No.	Ratio	2024-25	2024-25
1	Debtors Turnover	Nil	Nil
2	Inventory Turnover	Nil	Nil
3	Interest Coverage Ratio	Nil	Nil
4	Current Ratio	1.23	9.42
5	Operating Profit Margin	1.96	5.04
6	Debt Equity Ratio	4.43	1.22
7	Net Profit Margin (%)	1.19	3.73
8	Return on Net Worth (%)	0.11	3.73

BUSINESS SEGMENT

Being one of the Non-Banking Finance Company (NBFC), the Company was into the business of lending loans and investment in Capital Market during the year.

FUTURE OUTLOOK DETAILED RATIO ANALYSIS Current Ratio

• The current ratio decreased sharply to 1.23 in FY2024-25 from 9.42 in FY2023-24. This significant reduction indicates a tightening of the companys short-term liquidity position, driven by a relative increase in shortterm liabilities due to higher borrowings and expansion in loan book, while current assets did not rise commensurately. Although a ratio above 1 indicates that short-term assets are still adequate to cover shortterm obligations, the declining trend merits close monitoring and improved liquidity management.

Operating Profit Margin

• The operating profit margin stood at 1.96% compared to 5.04% in the previous year. The compression reflects elevated operational costs or lower revenue realization, pointing to challenges in cost control and/or pricing power. The company should focus on operational efficiencies and optimizing its cost structure amid a competitive NBFC landscape.

Debt Equity Ratio

• The debt equity ratio increased markedly to 4.43 from 1.22 in the earlier year. The jump is the outcome of a substantial increase in short-term borrowings (over 3,400%), indicating a leveraged expansion strategy to support aggressive credit growth. While higher leverage can magnify returns in a growing phase, it also increases financial risk and interest obligations, making prudent debt management essential.

Net Profit Margin

• Net profit margin declined to 1.19% (from 3.73%), in line with the decline in both profit before tax and aftertax numbers. This trend underscores squeezed profitability amidst higher leverage and possibly greater provisioning or overheads.

Return on Net Worth (RoNW)

• The RoNW fell significantly to 0.11% in 2024-25 from 3.73% in 2023-24. The sharp fall reflects lower profitability on a relatively stable equity base and highlights the urgent need to arrest margin compression and improve returns for shareholders.

Other Ratios

• Debtors and Inventory Turnover ratios remain not applicable, consistent with the companys business model which does not involve inventory or trade debtors.

• The Interest Coverage Ratio remains Nil. This may reflect either low (possibly capitalized or unrecognized) finance costs due to the nature or tenure of borrowings or timing mismatches in profit and loss recognition.

Overall, the ratio trends for FY2024-25 suggest:

• Increased leverage and risk with a focus on loan book expansion and balance sheet growth

• Squeeze on operational efficiency and profitability requiring sharper managerial attention

• A significant decline in liquidity buffer, making active and prudent treasury management crucial in the coming year

• Strategic focus must be on margin improvement, risk diversification, and strengthening the companys financial resilience

BUSINESS SEGMENT

Global Economic Landscape:

Chinas economic recovery continues to influence global growth, but uncertainties remain. While China has taken steps to overcome post-pandemic challenges, its recovery pace is tempered by both domestic and international factors.

Resilient Consumer Demand: Global labour markets have shown resilience, with sustained wage growth supporting consumer spending. This, in turn, could bolster demand across various sectors, partially offsetting the adverse effects of inflation and tighter monetary policies.

Regional Insights:

Asias Contribution to Global Growth: As per recent IMF projections, India and China are expected to continue driving global economic growth, contributing significantly to the worlds economic expansion. In CY25, India is anticipated to lead with strong domestic demand and continued policy support, while China, despite its uncertainties, remains a major growth engine.

Indias Growth Momentum: Indias economy is poised for robust growth, driven by factors such as strong domestic consumption, infrastructure investments, and government initiatives aimed at enhancing economic resilience. The country is expected to remain a bright spot, contributing significantly to global economic stability.

Emerging Markets: Other emerging markets, particularly in Asia, are projected to contribute nearly 25% to global growth, reflecting a shift in economic dynamics favoring these regions. As these economies continue to recover and adapt, they are expected to play an increasingly pivotal role in the global landscape.

INDUSTRY VIEW AND MACRO ECONOMIC VIEW Macro-Economic Overview:

The financial year 2024-25 (FY2025) started with a cautiously optimistic outlook for the Indian economy, despite ongoing global uncertainties. Key global factors influencing the macroeconomic environment include persistent geopolitical tensions, inflationary pressures, and the mixed pace of recovery in major economies. However, the Indian economy continues to demonstrate resilience, driven by strong domestic demand, policy support, and robust fundamentals.

Inflation and Monetary Policy:

FY2025 saw persistent but moderating inflation. The RBI maintained a cautious approach with calibrated rate changes to balance inflation control and growth support. Easing global supply chain disruptions and lower crude prices somewhat alleviated inflationary pressures.

Growth Trajectory:

India has continued to maintain its position as one of the fastest growing major economies globally. Strong domestic consumption, increased public and private sector investments, and targeted government initiatives have supported economic growth. Key sectors such as manufacturing, services, and agriculture have shown resilience, with digital transformation and infrastructure development playing pivotal roles in driving economic activity.

External Sector:

The external environment remains challenging, with global trade facing headwinds due to geopolitical tensions and protectionist policies. However, Indias export performance has been relatively robust, supported by demand for services and select manufacturing goods. The Indian rupee has experienced periods of volatility against the US dollar, influenced by global monetary policy dynamics and capital flows. Nevertheless, the countrys foreign exchange reserves remain adequate, providing a cushion against external shocks.

Fiscal Policy and Reforms:

Indias government prioritized growth and fiscal discipline with reforms in tax, ease of doing business, and infrastructure. An ongoing focus on digital and green initiatives is expected to enhance financial sector growth and align with global sustainability standards.

SECTORAL INSIGHTS:

Financial Services: The financial services sector, including banking, insurance, and NBFCs, has shown resilience in FY2025. The sector continues to benefit from regulatory support, technological advancements, and increased financial inclusion efforts. Credit growth has picked up, driven by demand from retail and MSME segments.

Infrastructure and Real Estate: The infrastructure sector is poised for growth, backed by government investments in roads, railways, and urban development projects. The real estate sector is also witnessing a revival, supported by favourable interest rates and increasing demand for residential properties.

Manufacturing: The Make in India initiative, coupled with production-linked incentive (PLI) schemes, continues to boost the manufacturing sector. Key industries such as automotive, electronics, and pharmaceuticals are expected to drive growth, supported by domestic demand and export opportunities.

CHALLENGES AND OPPORTUNITIES:

Global Risks: Geopolitical tensions, particularly the Russia-Ukraine conflict, continue to pose risks to global stability, impacting commodity prices and supply chains. Additionally, uncertainties around global economic recovery, particularly in China and other major economies, remain a concern.

Digital and Green Transformation: The push towards digitalization and green initiatives presents significant growth opportunities. Companies that can adapt to these trends, enhance operational efficiencies, and integrate sustainable practices are likely to benefit in the long term.

Consumer Demand and Employment: Robust consumer demand, supported by improving labour market conditions and wage growth, is expected to sustain economic activity. However, continued focus on job creation and skill development remains crucial for long-term growth and economic stability.

OPPORTUNITY AND THREATS

India is an attractive investment destination with the innovative marketing strategies, the company is able to add new customers and retain existing clientele.

The company has always maintained sufficient liquid funds so that their operations are not affected. Constantly, sticking on to the traditional values and ethics and with the support of efficient and dedicated resources, we are able to phase out any difficulties in our area of operation.

In terms of threats, we believe that the impact of elevated interest rates on funding costs could be visible and lead to slowdown of credit off take as well as increase in credit costs. Growing competitive intensity from banking sector can also affect the growth of NBFCs like ours.

RISKS AND CONCERNS

The Company aims to operate within an effective risk management framework to actively manage all the material risks faced by the organization and make it resilient to shocks in a rapidly changing environment. It aims to establish consistent approach in management of risks and strive to reach the efficient frontier of risk and return for the organization and its shareholders Further, the Company is exposed to specific risks that are particular to its businesses and the environment within which it operates, which include market risk, interest rate volatility, economic cycle and risk of competition from others operating in similar business.

The company can be adversely affected by volatility in interest rates in India, which could cause its margins to decline and profitability to shrink. Earnings from interest income are one of the important businesses of the Company. It is therefore exposed to interest rate risk principally as a result of lending to its customers at interest rates, in amounts, and for periods which may differ from those of its funding sources. The company is hedged to some extent against this risk through the reset clause in its advances portfolio.

The Company reviews its risk factors annually in order to keep it aligned with the changing global risks.

The Company manages such risks by maintaining a conservative financial profile and following prudent business and risk management practices.

The company is operating on a well defined plan and strategy; hence we are equipped to face any change in regulatory risk.

The risk appetite is enunciated by the Board from time to time.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has effective internal control systems, which have been found to be adequate by the Management of the Company. The Internal Auditors periodically bring to the attention of the Audit Committee any deficiencies and weaknesses in the internal control systems, if any. The Audit Committee reviews and monitors the remedial actions to ensure its overall adequacy and effectiveness.

HUMAN RESOURCES

The Company firmly believes that intellectual capital and human resources is the backbone of the Companys success. The Company always treats human resources as its most valuable assets and continuously evolves policies and process to attract and retain its substantial pool of managerial resources through friendly work environment. The Company has always aimed to create a work place where every person can achieve his optimum potential. In view of this, the Company encourages its people to balance their professional and personal responsibilities leading to a more productive tenure of its employees. As on March 31, 2025, the number of permanent employees on the rolls of Company was 3.

CORPORATE SUSTAINABILITY AND SOCIAL RESPONSIBILITY

The Company constantly strives to meet and exceed expectations in terms of the quality of its business and services. The Company commits itself to ethical and sustainable operation and development of all business activities according to responsible care and its own code of conduct. Corporate Social Responsibility is an integral part of the Companys philosophy and participates in activities in the area of education and health.

CAUTIONARY STATEMENT

The statement in the Managements Discussion and Analysis Report detailing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. These statements being based on certain assumptions and expectation of future events, actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include changes in Government regulations and tax regime, economic developments within India and abroad, financial markets etc. The Company assumes no responsibility in respect of forward-looking statements that may be revised or modified in future on the basis of subsequent developments, information or events. The management of the Company has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements reflect true and fair picture, the state of affairs and profit for the year. The following discussions on our financial condition and result of operations should be read together with our audited financial statements and the notes to these statements included in the Annual Report.

COMPLIANCE

The Compliance function of the Company is responsible for independently ensuring that operating and business units comply with regulatory and internal Guidelines. The Compliance Department of the Company is continued to play a pivotal role in ensuring implementation of compliance functions in accordance with the directives issued by regulators, the Companys Board of Directors and the Companys Compliance Policy. The Audit Committee of the Board reviews the performance of the Compliance Department and the status of compliance with regulatory/ internal guidelines on a periodic basis. New Instructions/guidelines issued by the regulatory authorities were disseminated across the Company to ensure that the business and functional units operate within the boundaries set by regulators and that compliance risks are suitably monitored and mitigated in course of their activities and processes. The key areas where the Company needs to introduce new policies or modify the existing policies to remain compliant are identified and acted upon. The Company has complied with all the regulations and guidelines of RBI applicable to a Non-Banking Finance Company.

FOR MINOLTA FINANCE LIMITED	FOR MINOLTA FINANCE LIMITED
Sd/-	Sd/-
ARVIND JETHALAL GALA	KUNJAL ARVIND GALA
DIRECTOR	DIRECTOR
DIN:02392119	DIN: 02413184
Place: Kolkata Date: August 12, 2025 Registered Office: Unique Pearl, BL-A, Hatiara, Roy Para, Kolkata, Kolkata, West Bengal, India, 700157