Home
    MDAR Report(2009)  

 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT
(2009-2010)
Business review
The business of the company is that of Non Banking Finance Company
Non Banking Financial Companies(NBFCs) have become an intergral part India's financial system. In recent times, NBFC's have emerged as lenders to both companies and individuals. When it comes to lending, NBFCs are generally regarded to be complementary to banks and are often able to offer better services and products to their customers.
Inspite 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. NBFC's are playing significant role in financing the road transport and infrastructure and have reached the gross root level through Micro finance.
The main activity of the company is financing and investment/ trading in shares.
OPPORTUNITIES & THREATS, RISKS & CONCERNS, PERFORMANCE AND OUTLOOK

The Company bears the normal risk in terms of inherent business risk in the kind of business the company is into. The Board of the company has taken a balanced approach for investing in these activities.
 After the bad experience in the past, the Board is adopting a cautious approach and not an aggressive one. After stabilization of existing business, the company will foray into other related areas to have a good growth in future.
 
FINANCIAL
The financial performance of the Company for the financial year ended March 31, 2010 is given as under:-
PERFORMANCE
Year ended 
31-3-2010
( `in Lacs)
Year ended 
31-3-2009
(` in Lacs)
Gross Income
14.28
5.51
Expenditure
15.83
23.26
Profit/ (Loss) for the year
(1.55)
(17.75)
Depreciation
0.83
0.56
Provision for Tax
Nil
Nil
Profit/(Loss) for the year
(2.38)
(18.31)
Balance brought forward from the Prev. Year
(72.94)
(92.26)
 
 
RISK & CONCERNS
Over the years, your Company has achieved an appropriate balance between risk and returns by setting up an efficient risk mitigation system to meet various forms of financial and other risks. The primary risks that the company is exposed to are, credit risk, market risk and operational risk. Deriving from the long years of experience in financing and trading in securities. Your Company’s credit policy framework is designed to provide the right balance between business growth and portfolio quality. The Company’s philosophy of not outsourcing the credit appraisal process has ensured that credit filters are uniformly applied by experienced and well-trained employees.  The Asset Liability Management Committee (ALCO), functioning under the supervision of the Audit Committee, lays down policies and tolerance levels that involve assessing of various types of risks and altering the asset-liability portfolio in a dynamic way, in order to manage such risks. Liquidity and interestrate risks, within the limits laid down by the board, are constantly monitored by the ALCO. The Risk Management framework is dynamic and will continue to evolve in line with the emerging risk perceptions.
 
During the year, your Company has constituted a Risk Management. Committee, in accordance with the Guidelines on Corporate Governance issued by the Reserve Bank of India, to monitor the risk management framework on an ongoing basis with a view to ensuring that risk parameters are within defined limits. Consequently, the scope of the ALCO has been appropriately redefined.
 
INFORMATION TECNOLOGY
Our company constantly upgrades its technology both in terms of hardware and software. This also helped installing a good management information system for the management to get timely information for decision making.
 
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
Internal Control measures and systems are established to ensure the correctness of the transactions and safe guarding of the assets. The control systems set on place are checked and further supplemented by MIS which provided for planned expenditure and information on disposal and acquisition of assets.
 
HUMAN RESOURCES
 
Your Company continues to lay great stress on its most valuable resource - people. Continuous training, both on the job and in an academic setting, is a critical input to ensure that employees at all levels are fully equipped to deliver a wide variety of products and services to the customer of the company.
 
CAUTIONARY STATEMENT
 
Statements in the Management Discussion and Analysis Report describing our Company’s objectives, expectations or predictions may be forward looking within the meaning of applicable regulations and other legislations. Actual results may differ materially from those expressed in the statement. Important factors that could influence Company’s operations include global and domestic financial market conditions affecting the interest rates, availability of resources for the financial sector, market for lending, changes in regulatory directions issued by the Government, tax laws, economic situation and other relevant factors.
 
For and on behalf of the Board
 
 
 
Narender K Arora               Durga Prasad Sharma
    (Director)                              (Director)