Dhruva Capital Services Ltd Management Discussions

INDUSTRY STRUCTURE & DEVELOPMENT

NBFCs have increasingly been playing a significant role in financial intermediation by complementing and competing with banks, and by bringing efficiency and diversity into the financial ecosystem. NBFCs enjoy greater operational flexibility to take up a wider scale of activities, enter new geographies and sectors and thus grow their operations.

Fluctuations in the interest rate in economy has created uncertainty in the business of finance. The biggest threat for Non-Banking Finance Companies arise from the vast gap existing between demand and supply. Another threat for Non-Banking Finance Companies comes from increased competition from banking industry, which is in a position to lend at competitive rates due to availability of huge funds at a cheaper cost. The Company expect stable interest rates in the coming period and is confident of meeting the challenges by increasing volume of business at nominal margin.

Like any other industry, the Companys business is also exposed to various business risks.

Continuous efforts are made to reduce the cost of funds, increase the volume of the business and to control the NPAs within a bearable limit to minimize the impact of declining spread.

The financial performance of the Company for the year has been discussed in the Directors Report and cash-flow statements annexed with the Annual Accounts.

The relation between the Company and its employees remained cordial through-out the year and the management expects the same to continue and receive full support and cooperation from its employees in future also.