Moneyboxx Finance Ltd Management Discussions.


India has emerged as the fastest growing major economy in the world and it 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. Indias GDP increased by 6.6 per cent in 2017-18 (Economic Survey Report) and is expected to grow 7.3 per cent in 2018-19.

Market size

Indias gross domestic product (GDP) at constant prices grew by 7.2 per cent in September-December 2017 quarter as per the Central Statistics Organisation (CSO). Corporate earnings in India are expected to grow by 15-20 percent in FY 2018-19 supported by recovery in capital expenditure, according to JM Financial.

The Direct tax collection figures between April 2017- March 2018 at a net of Rs. 9.95 Lakh crores show an increase in net direct taxes by 17.1 per cent year-on-year, growth rate for net collections for Corporate Income Tax (CIT) was 17.1% & for personal Income tax was 18.9%.

India has retained its position as the third largest startup base in the world with over 4,750 technology startups, with about 1,400 new start-ups being founded in 2016, according to a report by NASSCOM. Further Wal-Mart deal for acquisition of FLIPKART start up (Founded in 2007) enthused everyone as it valued the Company at approx US$ 21 billion.

Indias labour force is expected to touch 160-170 million by 2020, based on rate of population growth, increased labour force participation, and higher education enrolment, among other factors, according to a study by ASSOCHAM and Arbitrage Research Institute.

Indias foreign exchange reserves were US$ 424.36 billion in the week up to March 30, 2018, according to data from the RBI.

Government Initiatives

The Union Budget for 2018-19 was announced by Mr Arun Jaitley, Union Minister for Finance, Government of India, in Parliament on February 1, 2018. This years budget will focus on uplifting the rural economy and strengthening of the agriculture sector, healthcare for the economically less privileged, infrastructure creation and improvement in the quality of education of the country. As per the budget, the government is committed towards doubling the farmers income by 2022.

A total of Rs. 14.34 lakh crore (US$ 225.43 billion) will be spent for creation of livelihood and infrastructure in rural areas. Budgetary allocation for infrastructure is set at Rs. 5.97 Lakh Crore (US$ 93.85 billion) for 2018-19. All-time high allocations have been made to the rail and road sectors.

Road Ahead

India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behaviour and expenditure pattern, according to a Boston Consulting Group (BCG) report; and is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by the year 2040, according to a report by PricewaterhouseCoopers.


Commercial Credit Markets

Indian banking sector growth slowed during FY18 (non-food credit at ~5%), as capex cycle is yet to pick up and incrementally financing is shifting from banks to financial markets - commercial paper, corporate bond markets etc., which will keep corporate credit growth subdued. Additionally, asset quality pressure continues unabated. While large part of NPA recognition seems to have been done, the resolution is still a missing link. Hence, the profitability of PSU banks continued to be under strain and will recover only gradually over the medium term.

NBFC Industry

While commercial banks continued to remain dominant source of credit in India, NBFCs are gaining significant ground. While the banking sector was beset with worsening asset quality in FY17, NBFCs could restrict the impact in their portfolios due to their ability to respond quickly as well as availability of a higher collateral cover. The growing relevance and interconnectedness of the NBFC sector also highlights the importance of risk management in the sector. Going ahead, comfortable capitalisation levels and conservative liquidity management will continue to support the credit profile of NBFCs.

India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth of existing financial services firms and new entities entering the market. The sector comprises commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and other smaller financial entities.

NBFCs would continue to expand in small ticket loans, where banks are clearly less efficient because of their high operating cost structures and somewhat rigid processes would find it difficult to significantly penetrate these segments. Additionally, NBFCs flexibility of loan structuring provides an advantage to them in this segment. The Government of India has introduced several reforms to liberalise, regulate and enhance this industry. The Government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small and Medium Enterprises (MSMEs). The governments drive to integrate informal economy into the formal segment and reduce unaccounted income, and digital push, if followed through, can significantly change operating dynamics for NBFCs. Recently, both the regulator and Government have been maintaining a favorable stance towards the sector; starting with the latest announcement where SME loans up to INR20 million by NBFCs will be covered under the CGTMSE guarantee and the government notification, covering systemically important NBFCs under the SARFAESI Act. These measures would strengthen the NBFCs ability to lend and mitigate loss given default while speeding up recovery timelines.


The roll out of GST shortly and the performance of the BJP in recent polls will place the agenda of economic reforms on a firm footing. The global economy is also showing signs of recovery. These developments augur well for growth of financial services in India for firms like Edelweiss. We thus see immense opportunities coming our way in FY18 and beyond as under:

• India is already the fastest growing economy globally and various projections for growth by World Bank or IMF etc. indicate that India will continue to outperform other economies. This would open up vast opportunities for us to grow our various diversified businesses.

• We believe the policy liberalization and regulatory changes for enhancing the ease of doing business will help create all round opportunities for growth, thus helping providers of financial services grow their business.


While the opportunities landscape is promising, the following threats could dampen the growth of financial services sector in India:

• Slower than expected recovery of macro-economy, domestically as well as globally, or delay in revival of capex cycle can impede the growth.

• While the monsoon is predicted to be normal this year, any unforeseen failure of the monsoon or return of the dreaded El Nino can hinder the recovery in rural economy.


The Company has inbuilt risk of "default in unsecured loans provided to the customers" and "risk in dealing in securities market" due to its nature of business apart from other common risks which includes change in management/personnel and policies, lapses / inadequacy in existing infrastructure facilities, delinquencies on the part of employees, staff attrition, misfeasance, change in interest rates, government regulations, competition from others operating in similar business, etc.

The Company is taking proactive steps in implementing management principles well adapted to the demands of the changing environment. The Company has the policy of assess the risk and manage the business. The Company is operating on a well defined plan and strategy; hence we are equipped to face any change in regulatory risk.


Please refer Boards Report for financial performance of the Company. Segment/product wise performance is not applicable to the Company.


The Company has satisfactory internal control system. Please refer Boards Report for internal control systems and their adequacy.


The DCL philosophy on people is deep rooted in building and nurturing talent and leadership within the organisation. We believe that our people have always been the drivers of innovation, efficiency and productivity leading to our phenomenal track record of growth.

For an NBFC like ours, financial capital and human resources capital form the most critical resources for growth. At DCL we believe that our human capital is our greatest strength and is the driver of growth, efficiency and productivity.

Highlights of our HR initiatives in FY18 are as under:

• The Company has required number of employees on its roll and whenever there is need for any recruitment the same has done as per the policy & procedures of the Company.

• The Company has recruited Two persons to the various positions and one person has resigned from the Company during the year and there were no other changes in the human resources of the Company

• Amongst our much strength, we must count our performance appraisal system, which has helped to instil fairness and development orientation in the organisation. The process of Performance Appraisal is based on evaluations against pre-set and clearly documented goals and has stood the test of time.

• The Company has been focussed on retaining its manpower by providing good working conditions thereby reduce turnover ratio. Focus has also been extensively laid on internal training, complemented by external training and development programs for improving the competency and self development of employees.


Statements in the Management discussion and analysis, describing the Companys objectives, outlook, opportunities and expectations may constitute "Forward Looking Statements" within the meaning of applicable laws and regulations. The actual result may vary materially from those expressed or implied in the statement. Several factors make a significant difference to the Companys operations including the government regulations, taxation and economic scenario affecting demand and supply condition and other such factors over which the Company does not have any direct control.

By order and on behalf of the Board
Dhanuka Commercial Limited
Sanjeev Mittal
Chairman (ED & CFO)
Place: Delhi DIN: 00078563
Date: 17th May, 2018