Anupam Finserv Ltd Management Discussions.

Impact of the CoVID-19 Pandemic on business in general

The Company is engaged in the business of Non-Banking Finance more specifically granting of short and long term finance and credit and allied services. The unexpected outbreak of COVID-19 pandemic led to a pause in growth and smooth operations of the Company.

During the lockdown period, the Company made adequate arrangements for employees to effectively work from the safety of their homes.

Presently, the Company has resumed complete operations from the registered office rotating the staff and ensuring strict compliance towards safety. The measures such as physical distancing, sanitization, compulsory wearing of masks at workplace has been taken to protect the health and safety of the workforce.

The current situation has severely affected the Finance industry as a whole. In the present situation, it is difficult to ascertain the overall impact of the outbreak on the Company. If the slowdown continues there may be delayed EMI payments and interest payments which may increase NPA levels over time. Moratorium Periods may have to be granted to various borrowers and the Company is fairly uncertain about the period of repayments which might have an impact on the operations, profitability, liquidity and future growth plans of the Company.

Presently the Company has liquidity to fund the fixed costs and expects the same to continue till normalcy of returns. Net NPA rate is under control. lnternal financial reporting and control are fully functional. No other material matters can be identified at present.

Industry Structure and Development:

The Company is registered as a Non Deposit taking Non Systematically Important Non Banking Finance Company. As the NBFC Industry continued to grow its share in the Financial markets, on a whole it remained stressed out in FY2019-2020 due to domestic economic slowdown, concerns on fiscal front and geopolitical tensions. Weaknesses in overall economic activity also put pressure on business growth of lenders including NBFCs. The spread of COVID-19 in March 2020, further heightened uncertainties and liquidities for Q4FY20. Nevertheless, on overall analysis of the NBFC sector, and the liquidity position of the Company and its quality of assets, the management is very optimistic of the future growth and prospectus of the Company.

Opportunity and Threats:

Being a Loan NBFC, fluctuating interest rates, nonperforming assets and the current Pandemic pose a threat to the business of the Company. However the same can be converted into opportunities by focusing on proper planning and implementation, conservative liquidity management, strengthening collections, operating expenses management.

Segment Wise/ Product Wise Performance:

As the Company is in only one line of business, product wise and/or segment wise disclosure of performance is not required to be made.

Business Outlook:

The Management of the Company is looking for steady growth of the Company and aims at maximizing the shareholders wealth by earning maximum profits at low costs. Due to the willingness of the management of the Company to keep on exploring various opportunities, the future of the Company is promising and growth centered.

Risk/ Concerns and Mitigation:

1. With Non-Banking Finance Sector becoming increasingly competitive, the Companys growth will depend on its ability to maintain a low effective cost of funds; and minimization of nonperforming assets. Inability to do so could have a material adverse effect on its business, financial condition and results of operations.

2. The Companys interest income and profitability is dependent on the continued growth of its asset portfolio. Any decline in its net interest margins in the future can have a material adverse effect on its business, financial condition and results of operations.

3. As an NBFC, the Company is required to adhere to certain exposure limits and prudential norms as approved by the Board and the regulatory authorities. Any change in the regulatory regime viz Net owned funds, provisioning norms, prudential norms on asset classification, income recognition, provisioning etc. may adversely affect its business, financial condition and results of operations.

4. The Company may make equity investments in various sectors in the future and such investments may erode/ depreciate.

5. As the Company adopts IT, the risk exists for the possibilities of IT frauds.

The Company has a dynamic Risk Management framework to identify, evaluate business risks and opportunities. The framework helps in identifying risks, exposure and potential impact analysis for the Company level.

Internal Control System and their adequacy:

The Company has an in-house internal audit department which examines and ensures adequate internal checks and control procedures. It also ensures proper accounting, records authorization, control of operations and compliance with law.

Further, the Internal Auditor and Audit committee periodically reviews the effectiveness of the Internal Financial control and makes suggestions for constant improvements. The company also believes in the importance of technology and systems in improving controls at various levels and strives to enhance them on a continuous basis. Further the Company is continuously working to improve and strengthen internal check and control system to align with the expected growth in operations.

Discussion on Financial Performance with respect to Operational performance:

At Anupam Finserv Limited, our constant endeavor is to grow. The company has accelerated its operations and is progressing.

Human Resources and Industrial Relations:

The Company considers human resource as a valuable ingredient of the Company. The Company has appropriate policies in place for recruitment, training, skill development and compensation for its workmen, employees and staff. The Company makes an effort to keep on building good relationship with its associates, competitors and all the stakeholders in the various industries wherein it operates.

Disclosure of Accounting Treatment

In Preparation of Financial Statements, a treatment as prescribed in Accounting Standard has been followed and hence no disclosures required with respect to the same.

By Order of the Board of Directors
For Anupam Finserv Limited
Nirmala Gala
Managing Director
DIN: 00894497
Mumbai, 19th August, 2020