Brilliant Port. Management Discussions


Background

Brilliant Portfolios Limited ( Your Company ) is a Non-Banking Financial Company (NBFC). Your Company was incorporated in 1994. Your Company is listed on Bombay Stock Exchange. Registered office of your company is in Delhi. Your company is a Non-Systematically Important Non-Deposit taking NBFC.

Business Overview & Trends

The global economy was stifled in 2022 because of inflationary pressures, the Russian-Ukrainian war and the resurgence of COVID-19 in China. Despite these headwinds, strong growth was witnessed in the third quarter in numerous economies, including the United States, Euro area and major emerging markets and developing economies. However, growth has declined across many major economies.

The easing of global inflationary pressure led by falling international commodity prices and strong government measures are expected to aid economic growth in India. India s private non-financial sector debt has witnessed a steady decline since mid-2021, along with an improvement in the quality of debt. In FY 2023-24, the Indian economy is expected to continue to be the fastest-growing economy in the World. The Indian GDP growth is estimated at 6.9% in FY 2022-23 and 6.6% in FY 2023-24 by the World Bank.

Nature of Industry

NBFCs play a significant role in financial inclusion in India by providing tailored solutions to various individuals/groups needs who are excluded from banking services. According to Crisil research, in FY2023, the assets under management (AUM) of NBFCs was expected to grow between 8-10% aided by improvement in economic activity and strengthened balance sheet buffers. The sector saw a slowdown between FY2020 and FY2022 with a modest 2-4% AUM growth due to the Covid-19 pandemic. NBFCs will continue to face competition from banks and higher interest rates will weigh on their growth leading them to focus on higher yield segments. The wholesale finance segment, which has seen multiple players exiting the market over the past few years, will continue to lag with declining AUM. Higher-than-expected interest rates and inflation are factors that will play a vital role in altering the dynamics of the industry

Risks & Concerns

Credit Risk

Due to a range of issues including serious liquidity problems, bankruptcy, economic decline, fraud, or other factors, customers might fail to fulfill their financial commitments. This could result in an increase in our Non-Performing Assets (NPAs), which in turn could negatively affect our financial situation, particularly in the areas of asset quality and capital sufficiency.

Operational Risk

Operational risks may result from inadequate controls on internal processes, people, and systems. External factors also pose threat to business operations.

Strategic and Business Risk

Adverse shifts in the macroeconomic or business landscape could negatively affect our decisions and profitability if not properly addressed. Increased competition, higher funding costs leading to tighter spreads, and decreased demand in specific customer segments also present potential risks.

Interest rate risk

As the Company is in the lending business, it is exposed to interest rate risk arising due to a plausible mismatch between the maturity of the assets and the liabilities. The interest rates are sensitive to several factors including RBI s monetary policies, domestic and global economic factors, geopolitical situations, inflation etc.

Internal Control Systems and Their Adequacy

Our strong internal control system enables the safeguarding of assets and the highest level of productivity at all levels. We have set up an internal control framework in line with the size and industry in which we operate. The internal control system, comprising policies, procedures and well-defined risk and control matrices is automated.

Human Resources and Industrial Relations

We recognize the paramount importance of our skilled workforce in our goal towards sustainable growth. In this regard, we diligently endeavour to attract, retain, cultivate and acknowledge talent within our organization. Our primary objective is to establish a secure, supportive, cooperative and salubrious work setting, which fosters both personal and professional development for our employees. Furthermore, we undertake numerous programmes and initiatives to instil a robust sense of business ethics and social responsibility within our workforce. Our ongoing efforts to synchronize employee objectives with the Company s overarching goals foster a productive work culture. In this manner, we integrate our employees into the broader vision of generating positive social impact, further solidifying our commitment to sustainable growth.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Company s plan and objectives, financial conditions, business prospects, estimates and expectations may be forward looking statements which are based on the current belief, assumptions and projections of the Directors and the management of the Company. These statements do not guarantee the future performance and are subject to known and unknown risks, uncertainties and other factors some of which may be beyond the control of the Company. Actual results may differ substantially or materially from those expressed or implied. Important developments that could affect the Company s operations include unavailability of finance at competitive rates, significant changes in political and economic environment in India or key markets abroad, tax laws, litigations, interest and other costs.

For and on behalf of the Board of Directors of Brilliant Portfolios Limited
Place: New Delhi Ravi Jain Raghu Nandan Arora
Date: 31/08/2023 (Managing Director) (Director)
DIN: 02682612 DIN: 00503731