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Ashtasidhhi Industries Ltd Management Discussions

14
(4.63%)
Jul 12, 2024|12:00:00 AM

Ashtasidhhi Industries Ltd Share Price Management Discussions

Your Directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2023.

1. ABOUT GUJARAT INVESTA LTD

Gujarat Investa Limited ("GIL" or "Company"), registered with the Reserve Bank of India ("RBI") as a Systemically Important Non-Deposit taking Non-Banking Financial Company ("NBFC") mainly engaged in lending and offering a wide array of services/products in the financial services sector.

2. INDUSTRY AND ECONOMIC SCENARIO

While the post pandemic global economy continues to be affected by geopolitical tensions and inflationary pressures, India continues to remain a bright spot in the world economy. As per IMF, it will alone contribute 15% of the global growth in 2023 driven by its demographic dividend, pent-up demand growth, digital infrastructure and commitment to fiscal consolidation. Overall, India is expected to close FY 2022-23 with a GDP growth of 7%, which is the fastest amongst all the major economies. It is projected to further grow by 6.1% in FY 2023-24 - in contrast, the projected global growth rate for same period is only 2.9%.

It is also admirable to note that the Indian Financial sector was not affected due adverse effects of US and European banking sectors. This shows that Indian Financial sector and financial system is attributable to adequate capitalization & liquidity, healthy asset quality and proactive monitoring & timely interventions by the regulator.

India has a diversified financial sector consisting of commercial banks, insurance companies, non-banking financial companies, housing finance companies, cooperatives, pension funds, mutual funds, and other smaller financial entities. The financial services industry plays an important role in ensuring the efficiency of capital allocation and driving high-return investments. In addition, the industry plays an important role in enabling more people to have access to capital. Financial inclusion driven by RBI has expanded the target market to semi urban and rural areas. NBFCs especially those catering to the urban and rural poor namely NBFC-MFIs and Asset Finance Companies have a complementary role in the financial inclusion agenda of the country. As per ICRA, the NBFC-Retail AUM is projected to have grown at 16-18% in FY 2022-23 and expected to further grow at a healthy 12-14% in FY 2023-24.

NBFCs have become important constituents of the financial sector and have been recording higher credit growth than scheduled commercial banks (SCBs) over the past few years. NBFCs are leveraging their superior understanding of regional dynamics and customized products and services to expedite financial inclusion in India. Lower transaction costs, quick decision making, customer orientation and prompt service standards have typically differentiated NBFCs from banks. Considering the reach and expanse of NBFCs, they are well-suited to bridge the financing gap in a large country like India. Systemically Important NBFCs have demonstrated agility, innovation, and frugality to provide formal financial services to millions of Indians.

The overall outlook for industry remains positive as India treads on its growth trajectory leading to higher credit demand. The growth in credit is expected to be broad based across products and segments with key risks being elevated interest rates and inflation.

3. FINANCIAL PERFORMANCE

During the year under review, the Company has incurred Profit after tax of Rs. 4.03 Lakhs as compared to the profit after tax of Rs. 3.13 Lakh earned during the previous financial year 2021-22. The Directors are hopeful that company will do better during the current Financial Year. There is stiff competition amongst major NBFC companies as of today, the company has managed to maintain its profitability, which is due to timely adoption of prudent business strategies, measures taken to reduce cost of funds and cost of operations, improved fund management and effective steps taken to maintain the level of the company. The company has also strengthened its financial position.

4. CHANGE IN THE BUSINESS NATURE OF THE COMPANY

As you are aware, the basic nature of the company was registered as Non-Banking Financial Company under the provisions of Reserve Bank of India Act and but now the company has proposed to surrender the License of Non-Banking Financial Company as granted by Reserve Bank of India. Now the Company has change the business nature and have proposes to carry the business activity in textile, as the promoters of the Company have good experience in the field of Textile. The Board at its meeting held on July 07, 2022, has approved alteration of the MOA of the Company and also received the approval of the members of the company during the Extra Ordinary meeting held on 04th August, 2022.

5. CHANGE IN THE NAME OF THE COMPANY.

The Board of Directors of the company has approved the change of the name of the Company from "GUJARAT INVESTA LIMITED to ASHTASIDDHI INDUSTRIES LIMITED as on 12th August 2022 and received approval of its members through Postal ballot as on 08th November, 2022. But due to technical difficulties the company has not received approval of from Registrar of Companies Gujarat.

6. OPPORTUNITIES & THREATS:

The Government is committed to encourage the healthy growth of Capital Market for development of the Economy. While the government seems committed to reforms to address the challenges, political compromises and high populist spending in an election year will mean that tough decisions are more likely to be deferred. However, steps by RBI to stabilize the exchange rate by reducing liquidity support to the banking system will create a challenging environment for investments

7. RISK & CONCERNS

The Company aims to operate within an effective risk management framework to actively manage all the material risks faced by the organization and make it resilient to shocks in a rapidly changing environment. It aims to establish consistent approach in management of risks and strive to reach the efficient frontier of risk and return for the organization and its shareholders. Broad categories of risk faced by the company are Credit Risk, Market Risk, Operational Risk, Cyber Security and Reputation risk. The risk management policies are well defined for various risk categories supplemented by periodic monitoring through the sub committees of the Board.

8. INTERNAL CONTROL SYSTEMS & THEIR ADEQUEACY

The Company has designed its internal control system to ensure operational efficiency, protection and conservations of resources, accuracy and promptness in financial reporting and compliances with laws and regulations.Efficient maintenance of accounts is facilitated by the executives and employees of the Company. Thereafter, the same is audited periodically by the Internal Auditors. The scope of internal audit is well defined and is very exhaustive to take care of all crucial functions and business of the Company. Based on their report, steps are taken at regular intervals to further strengthen the existing systems and procedures. Their significant observations are discussed in the Audit Committee Meetings regularly. Besides, as mandated under Companies Act, 2013, the Statutory Auditors have certified as part of their Audit Report, the effectiveness of Internal Financial Control over financial reporting. The Directors have appointed M/s. Kamal M. Shah & Co, Chartered Accountants as the Internal Auditors of the Company for the Financial Year 2023-24.

9. HUMAN RESOURCE DEVELOPMENT

The Company firmly believes that Human Capital is its most important asset. A series of engagement interventions across identified key themes were undertaken to increase employee morale and the initiatives focused on key aspects such as physical and mental wellness, celebrations, leadership engagement sessions, fitness and sports, and family engagement activities. The Company believes that the human resources are vital in giving the Company a Competitive edge in the current business environment. The Companys philosophy is to provide congenial work environment, performance oriented work culture, knowledge acquisition / dissemination, creativity and responsibility. While selecting the training programme, the Company lays emphasis on development of skill and knowledge of its executives in the new vistas of Finance and Information Technology, besides developing the leadership and managerial skills for the future.

The Company continues to run an in-house training program held at regular intervals and aimed at updating their knowledge about issues.

ACCOUNTING TREATMENTS

During the under review, all the accounting treatments are done as per the prescribed sections and IND AS applicable to the company.

CAUTIONERY STATEMENT

Statements in the Management discussion and analysis describing the companys objectives, projections, estimates and expectations may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the companys operations include economic conditions affecting demand/supply and prices, conditions in the domestic and overseas markets in which the company operates/ going to operate, changes in government regulations, tax laws and other statutes and other incidental factors.

For and on behalf of the Board
of Gujarat Investa Limited
Place: Ahmedabad SD/-
Dated: 09.08.2023 [Purushottam R. Agarwal]
Chairman
(DIN: 00396869)

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