ABOUT CONSOLIDATED FINVEST & HOLDINGS LIMITED
Consolidated Finvest & Holdings Limited ("CFHL" or "Company"),
registered with the Reserve Bank of India ("RBI") as a Systemically Important
Non-Deposit taking Non-Banking Financial Company ("NBFC") is mainly engaged in
lending and Investment in group Companies.
GLOBAL ECONOMY
The global economy demonstrated growth driven by the resilience of labour markets,
robust household consumption, business investment, and a better-than-expected response to
the energy crisis in Europe. However, central banks globally were forced to raise interest
rates abruptly to curb the persistently high infl ation. The higher interest rate, and
other global headwinds like the Russia-Ukraine confl ict, and the resurgence of the
COVID-19 situation in China had an impact on economic growth during the year. Although
many of these factors are still relevant, the recent re-opening of China brings some
respite and could trigger a rapid rebound in activity.
OUTLOOK
According to the International Monetary Fund (IMF), global growth is predicted to
bottom out at 2.8% in 2023, and then grow to 3.0% in 2024. Along with improvement in
growth rate, infl ation is expected to moderate from 8.7% in 2022 to 7.0% in 2023, before
reaching 4.9% in 2024. IMF identifi es that infl ation, though moderating, has mostly been
sticky. The reduction refl ects severe reversal in energy and food prices, but core infl
ation (excluding food and energy prices) may not have peaked yet. In summary, global
growth continues to be uncertain due to a multitude of economic and geopolitical factors.
The sharp policy tightening over the last year has had some impact on the global fi
nancial sector and the ability of authorities to take swift action may be tested again
INDIAN ECONOMY AND OUTLOOK
After the COVID-19 pandemic, India was quick to get back on the pre-pandemic growth
trajectory, surpassing the UK to become the fi fth-largest economy in the world. As per
the National Statistical Offi ce, the Indian economy grew at 7.2% in FY2023, compared to
9.1% in FY2022. Although this is still a slowdown from the previous year due to the
current global scenario, the economy remained resilient due to solid domestic demand and
an uptick in private consumption. The economy underwent a gamut of wide-ranging structural
and governance reforms, including ECLGS extension, PMEGP extension, changes in the union
budget, among others that strengthened its fundamentals and fi nancial markets. Capex by
the central government increased by 63.4% in the fi rst eight months of FY2023 since the
fi rst quarter of FY2022, providing an impetus to the economys growth.
The enduring factors that fuel the long-term growth of the economy are still intact,
with a sizeable and rapidly expanding middle-class leading the way in consumer spending.
Indias domestic consumer market is experiencing rapid growth, alongside its signifi cant
industrial sector, establishing itself as an attractive investment hub for MNCs operating
in manufacturing, infrastructure, and services. Moreover, India is also emerging to be a
global hub for startups, attracting substantial foreign investments due to its youthful
population which includes a large GenX demographic, and its technological advancements.
INDUSTRY STRUCTURE AND DEVELOPMENTS
Indias fi nancial services sector plays a critical role in driving the countrys
economic growth by providing a wide spectrum of fi nancial and allied services to a large
consumer cross-section. The Sector comprises commercial banks, insurance companies, NBFCs,
housing fi nance companies, co-operatives, pension funds, mutual funds and other smaller
fi nancial entities. In India, the market for fi nancial services sector is still largely
untapped. After the COVID-19 impact gradually tapers off, the fi nancial services sector
is poised to grow eventually on the back of strong fundamentals, adequate liquidity in the
economy, signifi cant government and regulatory support, and the increasing pace of
digital adoption. Digital technology, which has transformed the way business is conducted
across the world, is projected to be one of the major drivers for the growth of this
sector in India as well. Greater use of digital technology is helping the sector to lower
transaction cost, generate higher productivity and reach unexplored markets in the fi
nancial ecosystem.
STRENGTH
Non-Banking Financial Companies ("NBFCs") remain one of the most important
pillars for ushering fi nancial inclusion in India, reaching out to a hitherto under/
unserved populace and in the process leading to "formalization" of the credit
demand. NBFCs cater to the needs of both the retail as well as commercial sectors and, at
times, have been able to develop strong niches with their specialized credit delivery
models that even larger players including banks, have found hard to match. This has
further provided a fi llip to employment generation and wealth creation and in the
process, bringing in the benefi ts of economic progress to the weaker sections of the
society. NBFC play a key role in providing fi rms with funds through equity participation.
As against traditional banks, NBFCs supply long-run credit to trade and commerce industry.
They facilitate to fund large infrastructure projects and boost economic development.
NBFCs cater to a wide variety of customers – both in urban and rural areas. They fi
nance projects of small-scale companies, which is important for the growth in rural areas.
They also provide small-ticket loans for affordable housing projects. All these helps
promote inclusive growth in the country.
WEEKNESS, RISKS, THREATS & OPPORTUNITIES
Company is a NBFC, having investment in group companies, which are strategic
investments and exposed to risk associated with the performance of the group companies and
also have investments in mutual funds. The Company will continue to focus on making long
term strategic investments in various new ventures promoted by Group, besides
consolidating the existing investments through further investments in the existing
companies. The company is confi dent to improve its performance on the strength of its
long experience and its strong emphasis on the fundamentals.
The Company is also exposed to interest risk and credit risk. However prudent business
and risk management practices followed by a company over the years helps it to manage the
normal industry risk factors, which inter-alia includes economic / business cycle, besides
the interest rate volatility and credit risk.
The Company is confi dent of managing these risks by observing a conservative approach
in lending and investments.
FUTURE PROSPECTS AND OUTLOOK
OUTLOOK OF THE SECTOR
India has a huge proportion of un-banked and underbanked consumers and businesses.
Hence, there is a lot of potential for NBFCs, which can still be tapped for future growth.
The NBFCs are being recognised as being vital for the growth of Indian economy. NBFCs are
here to stay and play an important role in economic growth and fi nancial inclusion. As
Indias economy grows, the requirement for credit will rise more than proportionately. We
need both banks and NBFCs to rise to the occasion and power the economy with free fl owing
credit lines. NBFCs with robust business models, strong liquidity mechanisms and
governance & risk management standards are poised to reap the benefi t of the market
opportunity.
The NBFC-Retail asset under management (AUM), estimated at around 14 lakh crore as of
March 2023. The growth outlook for F.Y. 2023-24 has been revised upward, and the ratings
agencys estimates suggest that the NBFCs retail assets under management is likely to
expand by about 18–20% in fi scal 2024 in comparison to the previous estimate of
12–14% as growth in the unsecured loans segment, consisting of personal &
consumption loans, unsecured small enterprise.
OUTLOOK OF THE COMPANY
Outlook of the Company is coming years will better as the Company is having investments
in group companies. Future outlook/ performance of the group companies is relatively
better.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has an adequate and effective system of internal controls for its various
business processes, with regard to operations, fi nancial reporting, compliance with
applicable laws and regulations, etc. Clearly defi ned roles and responsibility for all
managerial positions gives strength to the internal control system of the organisation.
Internal audits are done at regular intervals to ensure that responsibilities are executed
effectively. Audit Committee of the Board of Directors on quarterly basis reviews the
adequacy and effectiveness of internal control systems and suggests measures for
improvement of the existing control system and strengthen the control in view of changing
business needs and safe guarding the assets of the Company against signifi cant misuse or
Loss from time to time.
The company regularly conducts internal audits and checks to ensure that the
responsibilities are executed effectively and that adequate systems are in place. The
audit fi ndings are reported on a quarterly basis to the Audit committee of the Board
headed by a non-executive independent Director.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER
OF PEOPLE EMPLOYED.
The company is having suffi cient industry professionals to carry out its operations
and follows good management practices. These are basically its human resources assets and
integral to the Companys ongoing success. They have played a signifi cant role and
enabled the Company to deliver superior performance year after year. Board of Directors of
the Company is also actively involved in the day-to-day functions of the Company.
OPERATIONAL AND FINANCIAL PERFORMANCE
Details of Financial Results and Operations of the Company are given as under:
|
Year ended |
|
31-03-2023 |
31-03-2022 |
| Total Income |
41,732.44 |
345.94 |
| Profi t before Tax, |
41,077.45 |
266.21 |
| Exceptional Items and |
|
|
| share of Profi t from |
|
|
| Associates |
|
|
| Profi t before Tax and |
41,077.45 |
266.21 |
| Exceptional Items |
|
|
| Less: |
|
|
| i) Exceptional items |
- |
- |
| ii) Provision for Taxation |
9,783.05 |
203.88 |
| Profi t/(Loss) for the Year |
31,294.40 |
62.33 |
| after tax |
|
|
| Less: (Loss) from |
(0.82) |
(1.27) |
| Discounting operations |
|
|
| Add: Other Comprehensive |
(7171.38) |
13558.42 |
| Income/(Loss) |
|
|
| Total Comprehensive |
24,122.21 |
13619.48 |
| Income |
|
|
| EPS (Basic and Diluted) |
96.81 |
0.19 |
DETAILS OF SIGNIFICANT CHANGE IN KEY FINANCIAL RATIOS (Standalone):
There is a signifi cant change (more than 25%) as compared to immediately previous fi
nancial year in some of the fi nancial ratios. Details of the same is as under:
| Interest Coverage Ratio |
0 |
2070.47% |
100% |
EBIT/ INREREST |
| Operating Profi t Margin |
98.43% |
76.95% |
27.91 % |
Gross Profi t / Total Income |
| Net Profi t Margin |
74.99% |
17.65% |
324.87% |
Net Profi t/ Total Income |
| Return on Net worth |
42.10% |
0.12% |
34,983.33% |
Net Profi t/ Net worth |
Explanation:
Change of more than 25% in the above key fi nancial ratios has occurred as the Company
earned exceptionally high income mainly due to net gain on fair value changes as compared
to F.Y. ended 31.03.2022.
CAUTIONARY STATEMENT
Statement in this Management Discussion and Analysis describing the Companys
objectives, projections, estimates and expectations may be a forward looking statement
within the meaning of applicable laws and regulations. Actual results might differ
materially from those either expressed or implied.
| For and on behalf of the Board |
| (Sanjiv Kumar Agarwal) |
(Radhey Shyam) |
| Managing Director |
Director |
| (DIN: - 01623575) |
(DIN: - 00649458) |
| Dated : 31.08. 2023 |
|
| Place : New Delhi |
|
+91-9892691696
