Consolidated Finvest & Holdings Ltd Management Discussions.

Global Economy

World growth strengthened in 2017 to 3.8%, with a notable rebound in global trade. It was driven by an investment recovery in advanced economies, continued strong growth in emerging Asia, a notable upswing in emerging Europe, and signs of recovery in several commodity exporters. At 3.8%, global growth in 2017 was the fastest since 2011. The US economy grew at 2.3%, accelerating from 1.5% in the preceding year. Labour market conditions improved further with the unemployment rate falling to a low of 4.1%. Industrial production also registered a robust growth driven largely by mining activity.

Indian Economy

The Indian economy seems to have started on the road to recovery as it reclaimed the position of the fastest growing economy. According to data released by the Central Statistics Office (CSO), Indias Gross Domestic Product (GDP) grew by 7.7 per cent in the fourth quarter of fiscal year 2017-18. Courtesy to the rise in the GDP growth during three months of March, India surpassed Chinas GDP growth of 6.8 per cent reported for the quarter ended March. The overall GDP growth seen by the Indian economy during the financial year that ended on March 31, 2018, stood at 6.7 per cent, according to the government data. The Indian economy had posted the GDP growth of 7.1 per cent for the previous financial year.


Indias diversified financial sector is undergoing rapid expansion. The sector comprises of commercial banks, non-banking financial companies, co-operatives, pension funds, insurance companies, mutual funds and other financial entities. A fast-growing economy, rising income levels, higher financial savings, greater propensity to spend and improving life expectancy rates are some of the encouraging factors that are likely to boost growth in the sector in the coming years. Over the past few years, the Reserve Bank of India (the RBI) has been steadily implementing technology to deepen and broaden financial services in India. Innovative steps like introduction of small finance banks and specialised payment banks have been implemented.

NBFC Industry

Non-Banking Financial Companies (NBFC) are an integral part of the Indian Financial system, augmenting competition and diversification in the financial sector and complementing the banking system. The Indian NBFC sector has been providing credit to customers in the underserved and unbanked areas. Their channelling the savings and investments of customers and the subsequent capital formation is necessary for Indias economic growth and development. Their ability to innovate products in conformity with the needs of their clients is well established.

Stock Market

During the financial year 2017-18 the flagship Sensex has gained 3,348.18 points, or 11.30 per cent, during fiscal 2017-18. The index had gained 16.88 per cent in the previous fiscal. The broader Nifty closed the fiscal with gains of 939.95 points, or 10.25 per cent. During the previous fiscal, it scored gains of 1,435.55 points, or 18.55 per cent.


Indias financial services sector plays a critical role in driving the countrys economic growth by providing a wide spectrum of financial and allied services to a large consumer cross-section. In India, the market for financial services sector is still largely untapped. 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. An extensive range of financial products are increasingly being sold and delivered using the electronic platform to millions of customers in India. Greater use of digital technology is helping the sector to lower transaction cost, generate higher productivity and reach unexplored markets in the financial ecosystem.

In the current situation where the Government seeks to reduce the economys dependence on cash, the increased focus on technology acceptance promises to take the sector on a path of rapid growth. The Governments monetary policy initiatives to rationalise interest rates, licence to foreign reinsurance, monetization alternatives in infra and realty sectors through Real Estate Investment Trusts/Infrastructure Investment Trusts and focus on micro and SME finance in rural markets are likely to have a positive impact for the sector.

The Non-Banking Financial Companies (NBFCs) sector is integral to the Indian Financial landscape. It aids in boosting financial inclusion initiative by lending services to the unbanked population in rural/semi urban and urban areas.

India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth. The Management continues to carry the vision of the Company forward by imbibing the values of Integrity and transparency in its operations. Being an investment company, greater emphasis is being given on effective corporate governance and ensuring that the commitment of the management is transformed into higher stakeholder value. The company is keeping up its efforts to improve transparency in its operations and disclosure practices.


Company is a holding Company, having investment in group companies, which are strategic investments and exposed to risk associated with the performance of the group companies. Company, at present not having investment in equity shares, other than investment in group companies. However, the company hopes 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 confident of managing these risks by observing a conservative approach in lending and investments.

The sheer unpredictable nature of the markets makes investments a risky proposition. Hence, Company had shifted its investments to debt based mutual funds in place of equity investments.


During the year, the company has earned total income of Rs.499 lakhs mainly from Interest earned and dividend received. But due to higher provision on diminution in the value of investments, the company suffered net loss of Rs.878.98 Lakhs as compared to Loss of Rs.293.12 Lakhs in the previous year.


Indian economy is projected to grow 7.6 per cent in the fiscal 2018-19, remaining the fastest growing economy in the word as robust private consumptions and benefits from the past reforms help the Country GDP gain momentum but sustained recovery in private investment remain a crucial challenge. This is substantial recovery from the 6.7 per cent growth rate registered in the fiscal 2017-18.

The RBI has been tightening regulations to manage the risk in the sector and has been proposing higher capital and provisioning requirements. It has also been stressing on higher disclosures to safeguard public money and prevent systemic shocks. In addition, the RBI has taken rapid preventive actions in addressing specific issues to manage systemic risk. It has issued an ombudsman scheme for NBFCs, offering a grievance redressal mechanism for their customers.

Outlook of the Sector

NBFCs continue to be an integral part of the countrys financial service ecosystem. The expected reforms and drive towards various core sectors will provide more opportunities to the NBFCs to create significant financial inclusion and employment opportunities across the country. In line with the governments vision to achieve inclusive growth, the next key step is to include the unbanked population in the formal financial system. This will empower them and result in a significant increase in the average per capita income. Government policies, combined with the financial services industrys efforts to look for growth, will augment financial inclusion.

Outlook of the Company

Outlook of the Company is coming years will better as the Company has already made provision in diminution in the value of investment in the group companies. Future outlook/performance of the group companies is relatively better. Due to revision in interest rate, it is expected that return in debt based mutual funds will be better in the current fiscal.


The Company has an adequate and effective system of internal controls for its various business processes, with regard to operations, financial reporting, compliance with applicable laws and regulations, etc. Clearly defined 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 significant 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 findings are reported on a quarterly basis to the Audit committee of the Board headed by a non-executive independent Director.


The company is having sufficient 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 significant 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.


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
Place : New Delhi
Dated : 14th August, 2018