Optimus Finance Ltd Management Discussions

Noteworthy thing is that economies of world are now settled at a better level. Indian economy has advantageously poised, relative to peers and saw a strong recovery, having regained positive growth.

Our livelihoods are now showing better signs and restored normalcy in workplaces, education and incomes becomes an imperative. The Governments actions that are calibrated, sequenced and well-timed enables us to reach out to various sections of society and business and right down to the smallest.

GLOBAL ECONOMIC CONDITIONS

World economic activity has proven more resilient than expected causing us to raise our growth forecasts for 2022 - but the outlook for global growth in 2023 has deteriorated. This reflects the prospect of faster-than-anticipated monetary policy tightening and a darkening outlook for property sector. We expect global growth to fall to 1.4% next year which would, abstracting from the pandemic in 2020, be the weakest expansion since 2008.

Although most of the countries are coming out with better show, various downside risks cloud the outlook, including simultaneous Omicron-driven economic disruptions, further supply bottlenecks, a de-anchoring of inflation expectations, financial stress, climate- related disasters and a weakening of long-term growth drivers.

Now as far as domestic developments, aggregate supply conditions are underpinned by the resilience of the agricultural sector and that financial sector is also badly affected. The forecast of a normal monsoon by the India Meteorological Department (IMD) is expected to sustain rural demand and overall output in 2022, while also having a soothing impact on inflation pressures.

Global growth is projected to slow significantly amid high inflation, tight monetary policy, and more restrictive credit conditions. The possibility of more widespread bank turmoil and tighter monetary policy could result in even weaker global growth and lead to financial dislocations in the most vulnerable emerging market and developing economies (EMDEs). Comprehensive policy action is needed to foster macroeconomic and financial stability. Among many EMDEs, and especially in low-income countries, bolstering fiscal sustainability will require generating higher revenues, making spending more efficient, and improving debt management practices. Continued international cooperation is also necessary to tackle climate change, support populations affected by crises and hunger, and provide debt relief where needed.

Small businesses and financial entities at the grass root level are doing better. RBI is doing continuous assessment of the macroeconomic situation and financial market conditions and takes suitable measures.

Outlook

India will need a strong rebound in investments to attain sustainable growth. Global uncertainties will weigh on growth this year, but India is poised to grow by 6.5% in the medium term.

Policymakers the world over are currently facing a predicament. The last two years have seen the global economy struggling to deal with overlapping crises, the latest being the liquidity troubles after a series of global bank crises. While the impact appears to have been contained, these uncertainties continue to undermine the confidence among consumers and businesses to spend, therefore impacting economic growth.

# Reported by IMF/WB/Deloitte

NBFC-Present & Future

NBFCs have undergone a significant transformation and today they form an important component of Indias financial system. Playing a critical role in the development of infrastructure, transport and employment generation, NBFCs are changing the business loan landscape in the country. Most NBFCs, leverage alternative and tech-driven credit appraisal methodologies to assess the credit worthiness of prospective borrowers.

NBFCs are already offering the right financial products to consumers and small businesses in a customized manner. The use of technology to optimize business processes also keeps cost overheads to a minimum, enabling credit to be availed at highly competitive interest rates. The success of NBFCs can be clearly attributed to their better product lines, lower cost, wider and effective reach, strong risk management capabilities to check and control bad debts, with a better understanding of their customer segments.

Recent reforms have been on the lines of rationalization, i.e. stricter rules for NBFCs that have a significant impact on the economy to keep the negative effects of Shadow Banking in check, while providing certain easy passes to NBFCs that dont systematically impact the Indian economy, thereby allowing them to solve real problems without the possibility of any major threat to the economic operations.

FINANCE

REVIEW OF OPERATIONS

Your Company has earned total revenue of Rs 63.38 Lakhs with a net profit of Rs 10.65 Lakhs during the Financial Year 2022-23.

Your Companys performance during the Financial Year 2022-23 is as follows:

(Rs in Lakh)

Particulars	2022-23	2021-22
Revenue from Operations	63.38	106.36
Total Revenue From Operations	63.38	106.36
Other Income	0.06	0.65
Total Income	63.44	107.01
Finance Cost	LIGN=RIGHT>6.89	10.07
Fees and Commission Expense		0.28
Cost of Material Consumed
Purchase Of Stock in trade
Purchase Of Shares
Changes in inventories to finished goods, stock in trade and Work-in-progress		58.05
Employee benefits expenses	30.38	28.42
Depreciation, amortization and impairment		0.01
Other expenses	15.53	15.01
Total expenses	52.80	111.84
Profit /(Loss) before Tax	10.65	(4.83)
Less: Tax Expenses
Current Tax	1.93
Deferred Tax	(1.62)	(1.20)
Income Tax Earlier Years
Profit after tax for the Period	10.34	(3.63)
Total Other Comprehensive income
Total Comprehensive income / (loss) for the Period	10.34	(3.63)

OPPORTUNITIES & THREATS:

OPPORTUNITIES

Non-banking finance companies (NBFCs) play a significant role in the financial sector and they have tremendous opportunities in the retail sector.

Non-banking finance companies higher level of customer orientation, fewer pre- and post-sanction requirements, simple and speedy tailor-made services and higher rate of return on small savings have assured them a loyal clientele despite higher costs.

Non-banking finance companies have been instrumental in providing funds and small savings avenues to various sectors. These companies constitute an important link between banks and customers in look out for more services. They have become an accepted and integral part of the Indian financial services in view of their complementary as well as competitive role.

Tremendous opportunities are unfolding for NBFCs in the retail lending business consequent to a cultural change sweeping across the country.

THREATS

• Setback arisen by the COVID on the financial sector may have negative results in retail & wholesale needs of the consumers.

• NBFCs act as a perfect substitute for banks for facilitating the poor and underprivileged who could not get access to banks. Thus, banks could be termed as competitors.

• The unorganized money lenders have a strong presence in the rural markets. They pose a big threat to the NBFCs in the rural areas.

• The bargaining power of suppliers/depositors is quite high since they have many alternatives at their disposal to invest their money depending on their risk appetite.

• The service offerings by NBFCs are almost the same. Thus, there is a low level of service differentiation.

• Due to the increased rivalry among the NBFCs, there has been use of aggressive selling & intensive marketing strategies by the companies to gain the market share.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an adequate internal control system commensurate with its size and the nature of its business in order to achieve efficiency in operation and optimum utilization of resources. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information. Internal audits are conducted in the Company on regular basis.

RISKS AND CONCERNS

Every business has both Risk and Return and they are inseparable. As a responsible management, the Companys principal endeavor is to maximize returns. The Company continues to take all steps necessary to minimize its expenses through detailed studies and interaction with experts. Our senior management identifies and monitors the risk on regular basis and evolves process and system to control and minimize it. With regular check and evaluation business risk can be forecasted to the maximum extent and thus corrective measures can be taken in time.

HUMAN RESOURCES

Human resources are valuable assets for any organization. The employees of the Company have extended a very productive cooperation in the efforts of the management to carry the Company to greater heights. The Company is giving emphasis to upgrade the skills of its human resources and continuous training down the line is a normal feature in the Company to upgrade the skills and knowledge of the employees of the Company.

CAUTIONARY STATEMENT

Statement in this Report describing the Companies objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results may differ materially from those either expressed or implied.