Tokyo Finance Limited is an Indian **Non-Banking Financial Company (NBFC)** registered under the **Reserve Bank of India (RBI) Act, 1934**. Classified as a **Non-Deposit taking, Non-Systemically Important (ND-NSI)** entity, the company specializes in core financial activities, primarily lending and interest-based income generation. Following a significant internal restructuring, the company is currently focused on capital preservation, governance stability, and strategic expansion into niche credit markets. --- ### **Corporate Governance & The Family Settlement Agreement (FSA)** The company’s current management structure is the result of a formal **Family Settlement Agreement (FSA)** executed on **December 27, 2021**. This agreement resolved historical promoter complexities and established a clear path for executive control. * **Centralization of Control:** Management and control have been consolidated under the **Velji Group**, led by **Mr. Velji Lakhadhir Shah** and **Mr. Haresh Velji Shah**. * **Promoter Reclassification:** Other former promoter factions (the **Rayshi**, **Jagshi**, and **Malshi** groups) have irrevocably surrendered all rights, claims, and interests. The **Velji Group** now holds exclusive authority over day-to-day operations, assets, liabilities, and intellectual property. * **Leadership Continuity:** To ensure long-term stability, the board has secured the following key appointments: * **Mr. Velji Lakhadhir Shah (Managing Director):** Re-appointed for a **3-year term** effective **February 7, 2026**, with a monthly remuneration of **₹1,00,000**. * **Mr. Haresh Velji Shah (Executive Director):** Continues in a leadership role with a revised monthly remuneration of **₹75,000**. * **Ms. Ruchika Nazare:** Recently appointed as **Company Secretary** to strengthen compliance. **Board Oversight & Independence:** The company has refreshed its board with a focus on independent oversight to meet evolving regulatory standards: | Director Name | Designation | Term Duration | Effective Date | | :--- | :--- | :--- | :--- | | **Viraj Devang Vora** | Independent Director | **5 Years** (2nd Term) | **Sept 29, 2025** | | **Jinali Rushin Modi** | Independent Director | **5 Years** | **Sept 27, 2025** | | **Kinnari Sunny Charla** | Independent Director | **5 Years** | **Sept 30, 2024** | --- ### **Operational Model & Revenue Concentration** Tokyo Finance operates a conservative credit model focused on **liquidity and operational efficiency**. It functions within a **single reportable segment: Financial Activity**, with all operations and customers located within **India**. * **Revenue Streams:** Primary income is derived from **lendings, recovery, and interest earned**. * **Lending Characteristics:** Loans and advances are granted with stipulated interest payments. Notably, the company does not typically stipulate a fixed schedule for the **repayment of principal**, though it actively monitors recovery. * **Customer Concentration:** A significant portion of revenue is concentrated among a limited number of borrowers. In **FY 2024-25**, revenue from major customers (those contributing >10%) accounted for **₹76.56 Lakhs** out of a total turnover of **₹82.56 Lakhs**. * **Related Party Synergy:** The company maintains a strategic relationship with **Tokyo Plast International Limited**, an entity influenced by the company’s Key Management Personnel (KMP). --- ### **Financial Trajectory & Capital Adequacy** The company has demonstrated a trend of strengthening its balance sheet and improving profitability metrics over the last three fiscal cycles. **Comparative Financial Performance:** | Metric (₹ in Lakhs) | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | :--- | | **Total Turnover / Revenue** | **82.56** | **77.96** | **69.84** | | **Net Profit (PAT)** | **22.83** | **108.76** | **12.36** | | **Profit Before Tax (PBT)** | **-** | **113.08** | **14.64** | | **Surplus Carried to B/S** | **-** | **110.44** | **13.43** | **Key Performance Indicators:** * **Capital Strength:** The **Capital to Risk-Weighted Assets Ratio (CRAR)** is a primary strength, improving from **26.6%** in March 2024 to **27.1%** in March 2025, significantly above the regulatory minimum. * **Profitability Trends:** While FY24 saw a massive surge in net profit to **₹1.09 Crore** (up from **₹12.36 Lakhs** in FY23), FY25 normalized to **₹22.83 Lakhs**. * **Efficiency:** The **Return on Assets (RoA)** has shown long-term improvement, supported by a **declining cost-to-income ratio** and digital adoption. * **Dividend Policy:** The company currently prioritizes capital retention; no dividend was declared for the most recent audited cycle to ensure the strengthening of the balance sheet. --- ### **Risk Management & Asset Quality** Tokyo Finance employs a risk-averse framework to mitigate **Credit, Liquidity, and Market risks**. * **Credit Risk Mitigation:** The portfolio is comprised of **large corporate customers** and **business entrepreneurs**. Credit quality is assessed via financial positioning and historical performance. * **Expected Credit Loss (ECL):** The company complies with **Ind AS 109**, proactively managing potential defaults. * **Gross Loan Portfolio (FY 2024-25):** **₹11.6 Crore** (up from **₹9.91 Crore** in FY24). * **Loss Allowance:** The company significantly reduced its loss allowance from **₹97.63 Lakhs** in FY24 to **₹2.48 Lakhs** in FY25, reflecting improved asset quality or recoveries. * **Liquidity & Funding:** The company **does not accept public deposits**. It maintains cash and deposits only with institutions holding **high investment grade ratings**. * **Regulatory Compliance:** There are **no significant material orders** from regulators or courts impacting the company’s "Going Concern" status as of September 2025. --- ### **Strategic Outlook & Future Growth Drivers** The management’s primary objective is the **separate management and smooth operation** of the business following the promoter reclassification. Future growth is targeted through: * **Market Expansion:** Exploring **last-mile financial access** and partnerships in the **MSME and rural segments**. * **Digital Transformation:** Leveraging **digital lending platforms** to reduce operational costs and improve the **Net Interest Margin (NIM)**. * **Regulatory Adaptation:** Proactive alignment with evolving **RBI prudential norms**, **ESG mandates**, and **cybersecurity protocols**. * **Systemic Risk Monitoring:** Management is closely watching the **10.9%** bank-to-NBFC credit exposure level to manage the risks of financial interconnectedness and potential NPAs in unsecured retail lending.