focus industrial resources ltd Management discussions

OVERVIEW

The Management Discussion and Analysis Report has been prepared in accordance with the provisions of Regulation 34(2)(e) of SEBI (LODR)Regulations, 2015 read with Schedule V(B) thereto, with a view to provide ananalysis of the business and Financial Statement of the Company for FY 2021-22and hence it should be read in conjunction with the respective Fin ancia IStatemei its and notes thereon.

Focus Industrial Resources limited is a Non-Banking Financial Company registered with Reserve Bank of India.

ECONOMIC OVERVIEW

After strong growth in 2019, global economic activity slowed notably in the second half of 2020 which continues in last year, reflecting a confluence of factors affecting major economies, Global growth is now projected to slow from 3.0 percent in 2020 to 3.0 percent in 2021, before returning to 3.3 percent in 2022.

India continues to be one of the fastest growing major economies in the world andis expected to be among the worlds top three economic powers in the next 10-15years. The Indian economy is expected to improve and close the year 2023 with aGDP growth of 7.35% (Source- IMF). Today, India is the worlds seventh largesteconomy in real terms, backed by strong demand, positive consumption pattemand rising disposable income.

INDUSTRY STRUCTURE AND DEVELOPMENT OVERVIEW

Indian economy is going through a period of rapid "financial liberalisation".Today, the "intermediation" is being conducted by a wide range of financialinstitutions through a plethora of customer friendly financial products. Thesegment consisting of NBFCs, such as equipment leasing/hire purchase finance,loan and investment companies, etc. have made great strides in recent years andare meeting the diverse financial needs of the economy. These NBFCs provide avariety of services including fund-based and fee basedactivities and cater to retailand nonretail markets and niche segments. They are being recognized ascomplementary to the banking sector due to their customer-oriented services,simplified procedures, attractive rates of return on deposits, flexibility andtimeliness in meeting the credit needs of specified sectors.

With virtually all finance company business lines coming under greatercompetitive pressure, defining strategic initiatives and backing each with thenecessary resources has become imperative for success. On the consumer side ofthe business, the ability to compete in various product offerings often is dictatedbv operational efficiencies and economies of scale. In this respect NBFCs faceproblems of high cost of funds because they lack the nationwide branch networkand have a comparatively lower Tier-I and Tier- II capital base.

We witness that NBFC sector, in India are facing stiff competition from differentbanks and Jinancial institutions. The cost of funds of banks is lower as comparedto NBFCs. Not only this, they have a very wide network and huge capital base which makes them more attractive than NBFC¹. However as the market is volatilein nature, the long term growth of capital market calls for a matter of concern.

OPPORTUNITIES, THREATS, RISKS AND CONCERNS

The intense competition in the NBFC Sector, high cost of funds, coupled with regulatory restrictions - are some of the challenges for the NBFC sector. However, the opportunity of being a well regulated participant in the financial system is likely to outweigh the costs associated with greater regulations in the long run. Moreover, opportunities arising from large untapped rural and urban markets and increasing digitization are expected to benefit the NBFC sector.

NBFCs are subjected to credit risks, which, your Company manages through stringent credit norms to verify the identity to whom it is provided and also determining their intent and ability⁷ to repay a loan. Further, NBFCs are also exposed to interest Rate Risk and liquidity risk which are managed through regular monitoring of maturity profile. Besides, operational risks in the form of risks of incurring losses due to manual errors, fraud or system failure, can be monitored through an effective internal control system management and its periodic assessment.

SEGMENT-WISE PERFORMANCE

The Company primarily operates in only one segment i.e.financial services during the year under review, hence the requirement of segment-wise reporting is considered irrelevant.

FUTURE OUTLOOK

Corporate Loan has been the focus of the Company since more than a decade. The Company intends to continue focusing on NBFC activities including financing, inter-corporate Investments & Capital Market activities. With a dedicated team of people, the Company expects to establish growth in the coming y⁷ears. It w^Tould definitely try to establish itself and become a strong player in the finance industry. With the Capital market expected to be in a better mode than the previous few years and with our efforts we can look forward to a prosperous year for the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an adequate system of internal controls to ensure accuracy of accounting records, compliance with all laws & regulations and compliance with all rules, procedures & guidelines prescribed by the management. An extensive internal audit is carried out during the year. Post audit reviews are also carried out to ensure follow up on the observations made

FINANCIAL AND OPERATIONAL PERFORMANCE

Please refer Directors Report for financial performance.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIALRELATIONS FRONT NUMBER OF PEOPLE EMPLOYED

The Company has been able to maintain its existing resources by keeping pace with the changing business environment and by ensuring staff continuity. The Company has a team of able and experienced industry professionals and employees. The Company believes that people are the key ingredient to the success of an organization. Looking after people makes good business sense because, if people are motivated, service excellence will follow. The relations remain cordial throughout the year between employees and the management.

CAUTIONARY STATEMENT

The Board of Directors have reviewed the Management Discussion and Analysis Report prepared by the Management. Statement in this report of the Companys objective, projections, estimates, exceptions, and predictions are forward looking statements subject to the applicable laws and regulations. The statements may be subjected to certain risks and uncertainties. Companys operations are affected by many external and internal factors which are beyond the control of the management, Thus the actual situation may differ from those expressed or implied. The Company assumes no responsibility in respect of forward looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.

SateiitfTapjratap Jaeswal	Rahul
Independent Director	Independent Director
DIN: 06864542	DIN: 06873911