G K Consultants Ltd Management Discussions

1. Economic and Industry Overview

FY 2024-25 witnessed continued global economic uncertainty marked by geopolitical tensions, inflationary pressures, and shifting monetary policies across major economies. Despite these challenges, the Indian economy remained relatively resilient, with GDP growth projected at approximately 7.2%. This growth has positively impacted the financial services sector, particularly the NBF C segment, which continued its recovery post-COVID.

NBFCs have played a crucial role in meeting the credit needs of underserved and unbanked segments. Digital transformation, regulatory oversight by the RBI, and increased investor confidence have further strengthened the sector. However, heightened competition from fintech players and rising interest rates remain key concerns.

2. Company Overview

M/s G.K. Consultants Limited is an NBFC and is engaged mainly in the business of providing loans and advances to various Corporates. The main objective of the Company is to finance Industrial Enterprises by way of making loans and advances to industrial enterprises in India and to carry out all such activities as may be ancillary to the achievement of main objectives of the Company. The industry structure relevant to the Companys operations is mainly concerned with the capital market.

Indian economy is going through a period of rapid financial liberalization. The NBFC sector is undergoing a significant transformation at present and has come to be recognized as an important element of the financial system. Today, the intermediation is being conducted by a wide range of financial institutions through a plethora of customer friendly financial products. RBI has been setting right its regulatory and supervising policies from time to time to keep pace with the changes in the economic environment. The segment consisting of NBFCs providing loans and investment to other companies, etc. have made great strides in recent years and are meeting the diverse financial needs of the economy.

They are being recognized as complementary to the banking sector due to their customer-oriented services, simplified procedures, attractive rates of return on deposits, flexibility and timeliness in meeting the credit needs of specified sector.

Your Companys performance for the year 2024-25 has to be viewed in the context of aforesaid economic and market environment.

3. Opportunities

The financial sector continues to witness significant demand for credit, especially from micro and small businesses engaged in diverse economic activities. Traditional banking institutions often face challenges in effectively assessing the unique credit needs of these enterprises, particularly where collateral-backed lending is concerned. This gap in credit delivery creates a robust opportunity for Non- Banking Financial Companies (NBFCs) like ours.

Given our focused approach and agility, the Company is well-positioned to address this unmet demand by offering tailored financial solutions to small businesses and industrial borrowers. As the formal credit penetration remains limited in this segment, the Company sees immense potential to expand its presence and contribute meaningfully to the economic empowerment of underserved sectors. This presents a strong foundation for sustainable growth and value creation in the years to come.

4. Segment-wise performance:

The Company is engaged in a single segment i.e., lending. Details of performance have been provided in this report.

5. Outlook:

M/s G.K. Consultants Limited expects to improve its performance in financial year 2024-25 and hopes to grow at rate faster than the growth of bank credit. The approach would be to continue with the growth momentum while balancing risk. The Company will continue to invest in strengthening risk management practices; and in maintaining its investment in human resources to consolidate its position as a potentially big NBFC in India.

6. Risk management:

Risk Management is an integral part of our Companys business strategy. A dedicated team is a part of the management processes governed by the senior management team. This team reviews compliance with risk policies, monitors risk tolerance limits, reviews and analyzes risk exposure related to specific issues and provides oversight of risk across the organization. The team nurtures a healthy and independent risk management function to avoid any kind of misappropriations in the Company. As part of the Risk Management framework, the management of Credit Risk, Market Risk, Operational Risk and Fraud Risk are placed under the Head - Risk. The Credit Risk management structure includes separate credit policies and procedures for various businesses. The risk policies define prudential limits, portfolio criteria, exceptional approval metrics, etc. and cover risk assessment for new product offerings. Concentration Risk is managed by analyzing counter-party, industry sector, geographical region, single borrower and borrower group. Retail Finance credit approval is based on product/ programs and monitoring is primarily done at the portfolio level across products and programs. Casual analysis is carried out and corrective actions are implemented on key risk indicators. A Senior Management oversight committee meets periodically to review the operational risk profile of the organization. Fraud risks are mitigated through a fraud risk management team.

7. Internal control systems and their adequacy:

The Companys internal control system is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance with laws and regulations. The internal control system is supported by an internal audit process for reviewing the adequacy and efficiency of the Companys internal controls, including its systems and processes and compliance with regulations and procedures. Internal Audit Reports are discussed with the Management and are reviewed by the Audit Committee of the Board which also reviews the adequacy and effectiveness of the internal controls in the Company. The Companys internal control system is commensurate with the size, nature and operations of the Company.

8. Discussion On Financial Performance with Respect to Operational Performance

The financial performance of the Company during the year under reference was reasonably good. For detailed information, please refer to Directors Report, which forms part of this Annual Report.

9. Material Developments In Human Resources/ Industrial Relations Front, Including Number Of People Employed:

We recognize people as our most valuable asset and we have built an open, transparent and meritocratic culture to nurture this asset. Talent Management is a key people planning tool that provides an integrated means of identifying, selecting, developing and retaining top talent within our organization. Attrition has been managed well and has been below industry benchmarks. GKCL has kept a sharp focus on Employee Engagement. We follow 360-degree feedback to ensure the satisfaction of our people. We have a strong system of grievance handling too. No concern of our people goes without addressing. We strive for excellence by thriving on GKCLs positivity. As on March 31, 2025, total number of employees on the payroll of the Company is four (4).