The Companys main object is to conduct Non-banking Financial operations, and the
market for this activity offers high potential for growth. The Company is carrying on
business of NBFC and is operating from its registered office situated at New Delhi.
Recently, there have been a number of reasons that have resulted in the downfall of the
Indian economy in last couple of years due to the Outbreak of global pandemic Covid-19.
The world economy got adversely affected as due to lack in supply of required medications,
vaccinations and other crucial needs of the population across the globe. For this, a
number of research and development projects got initiated by the Indian Government which
eventually resulted in evolution of the vaccines to combat with COVID-19 due to which
significant amount of foreign direct investments were made in India. Indias merchandise
exports and imports rebounded strongly and surpassed pre-COVID levels during the current
financial year. There was significant pickup in net services with both receipts and
payments crossing the pre-pandemic levels, despite weak tourism revenues. Net capital
flows were higher at US$ 65.6 billion in the first half of 2021-22, on account of
continued inflow of foreign investment, revival in net external commercial borrowings,
higher banking capital and additional special drawing rights (SDR) allocation. Flow ever,
Indias external debt rose to US $ 593.1 billion at end-September 2021, from US $ 556.8
billion a year earlier, reflecting additional SDR allocation by IMF, coupled with higher
commercial borrowings. As of end-November 2021, India was the fourth largest forex
reserves holder in the world after China, Japan and Switzerland.
During the first quarter of FY 2021-22 the GDP of India stands at Rs. 32.38 lakh crore,
as against Rs 26.95 lakh crore in Q1 of 2020-21, showing an increase of 20.1%. The second
quarter started with the GDP growing by 17.5% in July- September 2021. Thereafter, we have
seen a rebound —thanks to the resilience of our citizens, our entrepreneurs and of
our economy. In the third quarter (October- December 2021), the GDP increased to Rs
38,22,159 crore whereas it was Rs 36,26,220 crore in the third quarter of FY 2020-21, i.e.
it saw a small positive growth of 5.4% compared to the same period in the previous year.
Flow ever, due to the outbreak of Russia-Ukraine War, the International Monetary Fund
(IMF) has slashed the growth forecast for India for the FY 2022-23 by 80 basis points to
8.2 % which may result in the development cycle running at a slower pace, which may
further affect the Indian economy significantly.
• INDUSTRY STRUCTURE AND DEVELOPMENTS
Non-Banking Finance Companies (NBFCs) are an integral part of the countrys financial
system because of their complementary as well as competitive role. They act as a critical
link in the overall financial system catering to a large market of niche customers.
Further, despite of strong competition faced by the NBFCs, the inner strength of NBFCs viz
local knowledge, credit appraisal skill, well trained collection machinery, close
monitoring of borrowers and personalized attention to each client, are catering to the
needs of small and medium enterprises in the rural and semi urban areas. However, as a
result of consolidation and restructuring in the financial sector and liberalization and
globalization of markets only few strong NBFCs now remain in business.
On the regulatory front, NBFCs are regulated by the Reserve Bank of India (RBI) almost
at par with banks. All the prudential norms for asset classification, income recognition,
provisioning etc., are applicable to NBFCs in India. Given the continuously high levels of
inflation throughout the year, the Reserve Bank of India (RBI) has no option but to
tighten the monetary policies. This has resulted in an increase in the domestic interest
rates which has negatively impacted the sentiments of industries. Measures of risk
aversion have not arised, even though the equity markets in most regions have posted
significant gains and financial stresses in the markets have been limited.
The NBFC sector continued to grow its share in the financial services industry. Credit
growth of scheduled commercial banks (SCBs) continued to be moderate throughout FY
2021-2022. In fact, the de-growth in GDP was much larger than expected.
MACROECONOMIC OVERVIEW
A brief summary of FY 2021-22 are discussed below:
The global economy recovered strongly in Current Year 2021 even as new variants of the
COVID-19 virus fueled additional waves of the pandemic. Robust policy support in advanced
economies, availability of vaccines, and relaxation of pandemic restrictions helped
economies bounce back, which helped in collectively expanding the world output by an
estimated 6.1%.
Home loans business witnessed a faster revival in volumes on the back of supportive
property prices, stamp duty reductions by some state Governments and favourable interest
rate environment as lenders thronged to lower risk assets.
On 27 March, 2020, the RBI had announced a moratorium for EMIs / payments falling due
from 1st March, 2020 till 31st May, 2020. This moratorium was
further extended till 31st August 2020 for all EMIs / payments falling due up to 31st
August, 2020. Approximately 40.4% of total outstanding loans of financial
institutions as on 31 August 2020 were under moratorium covering approximately 45.6% of
customers (Source: RBI Report on Trend and Progress of Banking in India).
• OPPORTUNITIES AND THREATS
The performance of capital market in India has a direct correlation with the prospect
of economic growth and political stability. In FY 2021-22, Indian GDP was expected to grow
at 8.9% for as it continues to be the fastest growing amongst the large economies in the
world according to IMF. Amongst other macro-economic indicators, inflation (CPI) continued
to remain stable for the entire FY 2021-22.
Accommodative monetary policies in advanced economies, coupled with better growth
prospects in Emerging Markets ("Ems") including India, are expected to trigger
large capital inflows in EMs which in turn could lead to inflationary pressures and asset
price bubble. Our business performance may also be impacted by increased competition from
local and global players operating in India, regulatory changes and attrition of
employees. With growing presence of players offering advisory service coupled with
provision of funds for the clients needs, we would face competition of unequal
proportion. We continuously tackle this situation by providing increasingly superior
customized services.
In financial services business, effective risk management has become very crucial. As
an NBFC, the Company is exposed to credit risk, liquidity risk and interest rate risks and
has in place suitable mechanisms to effectively reduce such risks. All these risks are
continuously analyzed and reviewed at various levels of management through an effective
information system. The Company is having excellent Board of Directors who is Expert in
financial sector, and is helping the Company in making good Investment. The company is
also facing risk of heavy ups and down in stock market which have been minimized due to
risk management system of our company.
• OUTLOOK AND FUTURE PROSPECTS
Competition continues to be intense, as the Indian and foreign banks have entered the
retail lending business in a big way, thereby exerting pressure on margins. The erstwhile
providers of funds have now become competitors. NBFCs can sustain in this competitive
environment only through optimization of funding costs, identification of potential
business areas, widening geographical reach, and use of technology, cost efficiencies,
strict credit monitoring and raising the level of customer service.
Our Company has also taken various cost cutting measures to sustain the operations and
to optimize the use of its financial resources. Also, we are providing moratorium support
to our customers/borrowers on specific requests raised by them after assessing the merit
of their requests and their loan repayment track record and in line with the RBI
directives.
Our liquidity position has improved, as, our Revenue from operations has been enhanced
primarily on account of high collections from customers with reference to the loans
advanced. We are however hopeful that it will lead our Company towards new prospects of
growth and expansion.
Ability to service debt and other financing arrangements:
Our ability to service debts and other financial debt commitment has not been affected
as our financial leveraging is low. Thus, at present, the Company has sufficient liquidity
to meet the same.
Assets
There is some reduction in the number of Non-Performing Assets (i.e. "NPAs"
in the form of decrease in number of customers who are unable to pay their debts) in the
1st quarter of 2021-22 due to better financial results of the Company. However, the level
of the same cannot be ascertained at present and will depend on recovery time taken by the
economy to bounce back.
Internal financial reporting and control
Internal financial reporting and control are functional as, checks and controls are
being exercised by us keeping in mind all the factors, whether financial or Non-Financial.
Supply chain
The Supply chain of the Company has improved as compared to the last financial year.
New customers have been identified by the Company after making on-field visits at
customers place for the collection of various documents; and various other measures in
order to establish the credit worthiness and genuineness of the prospective borrower.
Demand for its products/services
Though the demand for availing loan products has not declined, yet, considering the
present financial crunch in the economy, we are following a cautious approach in fresh
financing to new customers, as, the probability of non-repayment of outstanding dues by
the customers has risen due to financial crisis that was witnessed by many people on
account of stagnant business activities across the globe caused by lockdown restriction
due to the COVID-19 phenomenon.
Existing contracts/agreements where non-fulfilment the obligations by any party will
have significant impact on the listed entitys business:
The Company endeavors to perform its duties as agreed to in various executed
operational contracts / agreements. There has been no failure in performance by the
Company of its obligations envisaged in contract / agreement entered into by it.
Presently, there are no such existing contracts / agreements where non-fulfilment of the
obligations by any party will have significant impact on the Companys business.
Other relevant material updates about the listed entitys business:
There are no other relevant material updates at present. The Companys opinion on
various matters as envisaged above, are forward-looking statements which are based on
certain assumptions, risks, uncertainties and expectations of future events. The actual
results, performance or achievements can thus differ from those projected, depending on
various factors over which, the Company does not have any direct control.
In todays complex business environment, almost every business decision requires
executives and managers to balance risk and reward. Effective risk management is therefore
critical to an organizations success. Globalization, with increasing integration of
markets, newer and more complex products & transactions and an increasingly stringent
regulatory framework has exposed organisations to newer risks. As a result, todays
operating environment demands a rigorous and integrated approach to risk management.
Timely and effective risk management is of prime importance to our continued success.
Increased competition and market volatility has enhanced the importance of risk
management. The sustainability of the business is derived from the following:
• Identification of the diverse risks faced by the company.
• The evolution of appropriate systems and processes to measure and monitor them.
• Risk management through appropriate mitigation strategies within the policy
framework.
• Monitoring the progress of the implementation of such strategies and subjecting
them to periodical audit and review.
• Reporting these risk mitigation results to the appropriate managerial levels.
RISKS & CONCERNS
In todays complex business environment, almost every business decision requires
executives and managers to balance risk and reward. Effective risk management is therefore
critical to an organizations success. Globalization, with increasing integration of
markets, newer and more complex products & transactions and an increasingly stringent
regulatory framework has exposed organisations to newer risks. As a result, todays
operating environment demands a rigorous and integrated approach to risk management.
Timely and effective risk management is of prime importance to our continued success.
Increased competition and market volatility has enhanced the importance of risk
management. The sustainability of the business is derived from the following:
• Identification of the diverse risks faced by the company.
• The evolution of appropriate systems and processes to measure and monitor them.
• Risk management through appropriate mitigation strategies within the policy
framework.
• Monitoring the progress of the implementation of such strategies and subjecting
them to periodical audit and review.
• Reporting these risk mitigation results to the appropriate managerial levels.
• DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The brief on Financial Performance of the Company is already provided in the Boards
Report of the Company.
• MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING
NUMBER OF PEOPLE EMPLOYED.
The Companys relations with the employees continued to be cordial. It emphasised
engagements with employees by providing an enriched workplace, challenging job profile and
regular dialogues with the management.
During the year, four employees, including two Key Managerial Personnel were employed
by the Company.
• KEY FINANCIAL RATIOS:
(i) Debtors Turnover Ratio
= Total Credit Sales/Average Debtors
| Total Credit Sales |
10,571,100 |
| Average Debtors |
- |
(ii) Inventory Turnover
Cost of Goods Sold/Average Inventory
| Cost of Goods Sold |
- |
| Average Inventory |
2,064,144 |
(iii) Interest Coverage Ratio
EBITDA/Interest Expenses
| EBITDA |
1,150,660 |
| Interest Expenses |
6,025,874 |
|
0.19 |
(iii) Current Ratio
Current Assets/ Current Liabilities
| Current Assets |
3,203,705 |
| Current Liabilities |
1,801,517 |
|
1.78 |
(v) Debt Equity Ratio
Total Liabilities/ Total Shareholder Fund
| Total Liabilities |
137,299,322 |
| Total Shareholder Fund |
42,342,114 |
|
3.24 |
(vi) Operating Profit Margin (%)
Operating Profit /Total Revenue
| Operating Profit |
1,150,660 |
| Total Revenue |
10,639,318 |
|
10.82% |
(vii) Net Profit Margin (%)
| Net Profit/ Total Revenue |
|
| Net Profit |
462,538 |
| Total Revenue |
10,639,318 |
|
4.35% |
• DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY
PREVIOUS FINANCIAL YEAR
The Return on Net Worth for the Financial year 2021-22 is 0.01 as compared to that of
financial year 2020-21 which was 0.007. There is a slight increase in the Return on Net
Worth due to increase in Net Profits of the Company which were Rs. 2,99,706 in financial
year 2020-21 and increased to Rs. 4,62,538 in financial year 2021-22.
• SEGMENT-WISE OR PRODUCT WISE PERFORMANCE
The company operates in only single segment. Hence segment wise performance is not
applicable.
• INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has strong internal control procedures in place that are commensurate with
its size and operations. The Board of Directors, responsible for the internal control
system, sets the guidelines and verifies its adequacy, effectiveness and application. The
Companys internal control system is designed to ensure management efficiency,
measurability and verifiability, reliability of accounting and management information,
compliance with all applicable laws and regulations, and the protection of the Companys
assets. This is to timely identify and manage the Companys risks (operational,
compliance-related, economic and financial).
• CAUTIONARY STATEMENT
This report describing the companys activities, projections about future estimates,
assumptions with regard to global economic conditions, government policies, etc. may
contain "forward looking statements" based on the information available with the
company. Forward-looking statements are based on certain assumptions and expectations of
future events. These statements are subject to certain risks and uncertainties. The
company cannot guarantee that these assumptions and expectations are accurate or will be
realized. The actual results may be different from those expressed or implied since the
companys operations are affected by many external and internal factors, which are beyond
the control of the management. Hence the company assumes no responsibility in respect of
forward-looking statements that may be amended or modified in future on the basis of
subsequent developments, information or events.
• DISCLOSURE ON ACCOUNTING TREATMENT
Company follows all Mandatory Accounting Standards and the financial statements of the
Company have been prepared in compliance with the requirements of the Companies Act, 2013,
Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Our Management accepts responsibility for the integrity and objectivity of these financial
statements, as well as for the various estimates and judgments used therein. The estimates
and judgments relating to the financial statements have been made on a prudent and
reasonable basis, so that the financial statements reflect in a true and fair manner the
form and substance of transactions, and reasonably present our state of afFairs, profits
and cash flows for the year.
+91-9892691696
