Everlon Financials Ltd Management Discussions

Overview:

Our Company is a Non Deposit-taking Non-Banking Financial Company (NBFC) with a record of consistent growth and profitability. This Management Discussion and Analysis Report has to be read in conjunction with the Companys financial statements, which follows this section. The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 and as per Indian Accounting Standards (Ind AS) and as per the directions issued by Reserve Bank of India for Non Banking Financial Companies from time to time, wherever applicable. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present the Companys state of affairs and profits for the year. The following discussion may include forward looking statements which may involve risks and uncertainties, including but not limited to the risks inherent to Companys growth strategy, change in regulatory norms, economic conditions and other incidental factors. Actual results could differ materially.

A. Industry Outlook:-

The global economy is exhibiting resilience and fortitude. There are, however, multiple challenges emanating from still elevated inflation, tight monetary and financial conditions, escalating geopolitical tensions, rising geo-economics fragmentation, disruptions in key global shipping routes, high public debt burdens and financial stability risks. Global financial markets are on edge, with recurrent bouts of volatility as every incoming data increases uncertainty around monetary policy trajectories of major central banks.

Amidst global challenges, The Indian economy exhibited robust growth in 2023-24, underpinned by strong investment activity, amidst subdued external demand. Manufacturing and services sectors were the key drivers on the supply side. The growth outlook remains buoyant, given the governments sustained focus on capital expenditure while maintaining fiscal consolidation. The Indian economy boasted an impressive growth rate of about 7.5% in the 2023-24 fiscal year and exceeded the average G20 rate of 3.4 %.

NBFCs will play a larger role in supporting the socio economic structure of the Indian economy. The opportunity for credit penetration remains very high in India. The NBFCs can set a new benchmark by tying up with fintechs and introducing new business models with personalized offerings. NBFCs are the players in the lending space which categorically focus on those at the lower end of the pyramid and are the backbone of any developing economy. They cater to a variety of sectors including renewable energy, vehicles, home, and MSMEs etc.

B. Opportunities:-

RBI has been continually strengthening the supervisory framework for NBFCs in order to ensure sound and healthy functioning and avoid excessive risk taking.

The uncertainties and volatility in the financial market are a continuing threat to the organizations performance. However, the twin features of fore- sightedness and focused analysis of the market have challenged the threat of adverse performance

The future of NBFCs in India looks promising. with expected growth driven by various factors like digital transformation, innovative products, and a robust regulatory framework. The sector is expected to grow at a CAGR of about 15 % every year.

C. Segment:-

The company is a non deposit-taking Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India. EFL is engaged in the business of funding Solar plants, investment activities, and now proposes to provide loans or advances to the MSME sector.

D. Risk and Concerns:-

NBFC and its efficient working is not as easy as it seems. Despite the opportunities provided to the NBFCs, they face a lot of challenges. NBFC have been facing a lot of problems such as Refinancing / NBFC Funding, non flexibility in classification of Loans NPA, absence of statutory tools for recovery of loans, lack of capacity of building, lack of education among people, rising interest rates and intense competition from banks etc.

E. Internal Control Systems:-

The Company believes in the system of internal controls and has provided for proper checks and control at various operational levels.

Internal checks and controls covering operations of the Company are in place and are constantly being improved upon. The company has well defined procedures to execute financial transactions. Internal audit is being conducted by an independent firm of Chartered Accountants. The internal auditor monitors and evaluates the efficiency and adequacy of internal control systems in the organization, its compliance with operating systems, accounting procedures and policies of the Company. Significant audit observations and corrective actions thereupon are presented to the Audit Committee The management reviews the control systems and procedures periodically to upgrade them. Presently the Internal Control System is commensurate to the size and operations of the company.

F. Performance:-

During the year, the Revenue from operations sales was Rs. 1010.99 lakhs as compared to Rs.514.78 lakhs of the previous year.

G. Industrial and Human Relations:-

There has been positive working relationship between the Company and the employees of the Company during the year.

The Company strives to provide a conducive working environment to its employees and to maintain the pace with the economic situations, Company has always focused on enhancing the efficiency of the employees including restructuring their compensation, working conditions etc.

H Details of Key Financial Ratios and Significant Changes :

I. Cautionary Statement:-

The statements in the "Management Discussion and Analysis Report" section describe the Companys objectives, projections, estimates, expectations and predictions, which may be forward looking statements" within the meaning of the applicable laws and regulations. The annual results can differ materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.