Devki Leasing & Finance Ltd Management Discussions.

INDUSTRY STRUCTURE AND DEVELOPMENTS

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships.

With the improvement in the economic scenario, there have been various investments in various sectors of the economy. The M & A activity in India reached record US$ 129.4 billion in 2018 while private equity (PE) and venture capital (VC) investments reached US$ 20.5 billion.

Indias economic structure and growth make it an attractive market for any business opportunities that can cater to the growing needs of both the Company as well as the stakeholders of the Company.

The outlook for Financial Year 2020 remains uncertain owing to softening of domestic consumption and the slowdown in the PMI, automotive sales, tourist arrivals and rail freight. However, with a clear mandate, the focus shifts on the improvement of rural demand through various schemes coupled with a stable monsoon outlook. The Centre fiscal deficit target of 3.4% remains an uphill task. The recent positive developments are the decline in oil prices, RBIs favorable policy stance and softening bond yields.

With the new government having been re-elected with a strong mandate, continuity in policy reforms will continue. Therefore, renewed focus on infrastructure, manufacturing and rural development will be at the forefront going forward. Centres Fiscal deficit was contained at 3.4% (slightly above the budgeted target of 3.3%), despite significantly lower than estimated GST collection, due to curtailed expenditure by the Government in Q4 Financial 2019.

The liquidity in the banking system, which was impacted after the NBFC fallout, is likely to see gradual improvement. The Centres tax revenues for Financial 2019 were 1.1tn lower than projections in the interim budget. States are likely to step-up spending, as there is fiscal room available to increase fiscal deficit from 2.6% as budgeted in Financial Year 2020.

OPPORTUNITIES & THREATS

OPPORTUNITIES

Increasing Financial Services industrys share of wallet for disposable income.

Leadership in sophisticated solutions that enable our clients to optimize the efficiency of their business.

Leveraging technology to enable best practices and processes.

Corporates looking at consolidation / acquisitions / restructuring opens out opportunities for the corporate advisory business.

THREATS

Execution risk

Short term economic slowdown impacting investor sentiments and business activities

Slowdown in global liquidity flows

Increased intensity of competition from local and global players

Market trends making other assets relatively attractive as investment avenues

SEGMENT-WISE & PRODUCT-WISE PERFORMANCE

As the company has surrendered its NBFC Registration Certificate, Therefore, Company is not having any business activities. During the Financial Year Company has not done any business activity due to lack of financial resource which resulted in to the week financial performance of the Company. During this year your Company has generated only interest income to the tune of Rs. 0.35 Lacs against the turnover of Rs. 1.86 Lacs in the Previous Financial Year, registering a fall of 81.82%.

FUTURE OUTLOOK

The Company is looking for the new Business opportunities to give the best to stakeholders of the Company.

RISKS AND CONCERNS

Every Company is prone to internal and external risks, including risks around compliance, operational, strategic and many others. Many of these risks are inherent in the enterprise structure of any organization and may interfere with an organizations operations and objectives. Further as our Company is looking for the new Business opportunities the Following Risk associate for doing any business:

Market Risk

Reputation Risk

Competition Risk

Technological Risk

Changes in the policies of the Government of India or political instability may adversely affect economic conditions in India generally, which could impact our business and prospects.

New and changing regulatory compliance, corporate governance and public disclosure requirements add uncertainty to our compliance policies and increase our costs of compliance.

The board of directors also reviewed the key risks associated with the business of the Company, the procedures adopted to assess the risks, efficacy and mitigation measures.

INTERNAL CONTROL SYSTEMS

The Company has adequate internal control systems for the business processes in respect of all operations, financial reporting, compliance, with laws and regulations etc. The management information system forms an effective and sound tool for monitoring and controlling all operating parameters. Internal check is conducted on a periodical basis to ascertain the adequacy and effectiveness of internal control systems. The system also helps management to have timely data on various operational parameters for effective review. It also ensures proper safeguarding of assets across the Company and its economical use.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the Financial Year Company has not done any business activity due to lack of financial resource which resulted in to the week financial performance of the Company. During this year your Company has generated only interest income to the tune of Rs. 0.35 Lacs against the turnover of Rs.1.86 Lacs in the Previous Financial Year, registering a fall of 81.82%. The overall expense of the Company has also increased from Rs. 18.64 Lacs to Rs. 26.13 Lacs.

During this year the Company has write off its investment amount of Rs. 105 lacs which are no longer recoverable. In which Rs. 85 lacs has been adjusted from Provision made earlier years for permanent dimunsion in the value of investment and balance amount charged to exceptional items head under Profit & Loss A/c. Further company has sold some unquoted investment and the profit of Rs. 33.65 lacs on the same shown under exceptional item in Profit & Loss A/c.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company is presently working with four Directors (including one Managing Director), One CFO and one CS. There are no other employees in the company.

Your Company follows a strategy of attracting and retaining the best talent and keep employees engaged, motivated and innovative. The Company continues to have cordial relations with its employees and provide personnel development opportunities for all round exposure to them.

a. Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore

Ratio Ration in Year 2018 Ration in Year 2019 % of Change Reason for Change
Inventory Turnover 8.74 0.77 Decrease by 91.19% Current year revenue is decreased as compared to previous year and also inventory value is changed due to change in market value.
Interest Coverage Ratio NIL 13.49 Increase by 100% Previous year company does not have any borrowings on which interest has to be recognized
Current Ratio 28.35 0.01 Decrease by 99.96% Current Ratio is changed due to company has settled the full and final amount of loan including interest for a sum of Rs. 1,67,87,000/- with bank.
The difference amount of Rs. 94,97,879/- charged to other income in profit and loss account.

Declaration by the Managing Director under Para D of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, I Sudhir Bindal, Managing Director of the Company hereby confirm that , all Board Members and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct, as applicable to them, for the Financial Year ended March 31, 2019.

The Code of Conduct of the Company is available on its website at www.devkileasing.com .

Sudhir Bindal

Managing Director

(DIN- 00108548)