Dhanuka Commercial Ltd Management Discussions.


The Financial Year 2016-17 was a year of Global events like Brexit & US Elections coupled with domestic event like GST and demonetisation which obviously, more or less impacted our economy. The present government has taken a lot of measures towards improving the business sentiments and removing the hurdles in the economic growth likes Startup India, Standup India and Digital India in addition to its focus on Make in India and Ease of Doing Business. The banking system will benefit from a higher level of deposits due to demonetisation. Thus, market interest rates—deposits, lending, and yields on g-secs—should be lower in 2017-18 than 2016-17. These initiatives are expected to provide impetus to the Indian economy and improvement in the economy will also provide support to the Non-Banking & Financial Services industry especially to the NBFCs.

The Economic Survey describes the GST as "a bold new experiment in the governance of Indias cooperative federalism" that could push Indias GDP growth to between 8% and 10%. The GST will "create a common Indian market, improve tax compliance and governance, and boost investment and growth."


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 company has made its niche market in the unsecured funding sector thereby reduces competition to itself and wide experience of our directors and management in the finance and securities market can create opportunities for the company even in the conditions not favorable to the company. The company has in its loan portfolio small and medium enterprises which are the backbone of the country and the company as well. The market conditions of Indian economy were in improvement phase and coupled with innovative ideas and techniques the company can introduce several new instruments and products in the loan segment which can create opportunities to the company in future. From the above, the management is of the view that the company has enough opportunities to explore in the current year and in the years to come.


Competition from local and multinational players

Regulatory changes

Asset quality

Attraction and retention of human capital


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 Directors 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 Directors Report for internal control systems and their adequacy.


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 three 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. The company has focus to retain its manpower by providing good working conditions thereby reduce turnover ratio. Focus has also been extensively 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.

For and on behalf of the Board of Directors of

Dhanuka Commercial Ltd

Chairman Date: 29-05-2017
Sanjeev Mittal Place: Delhi