Gujarat Investa Ltd Management Discussions.

Your Directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2021.


The Global economy has been severely disrupted by the COVID-19 pandemic. The Second wave of COVID-19 has affected the momentum of economic recovery. It has badly hit the economic activities across the countries. The COVID-19 pandemic has reached almost every corner of the world.

Global economy is gradually emerging from one of its deepest recessions, caused by the COVID-19 pandemic in FY20. The strength of economic recovery differs across countries and socio-economic groups, dictated by path of the pandemic, severity of lockdown restrictions and efficacy of the policy support. The International Monetary Fund (IMF) has estimated global economic growth to have contracted by 3.3% in FY20 despite better-than-expected actual performance by key economies in the second half of FY20.

Rising vaccine rollouts, sustained accommodative monetary policies, additional fiscal stimulus by a few large advanced economies (AEs), with positive spillovers expected for the rest of the world and relatively better adaptability of most countries to the recent waves of the virus, have infused optimism that the world will survive the new virulent visits of COVID-19. Emerging market and developing economies are projected to trace diverging recovery paths as it would largely hinge on the speed of vaccination, extent and effectiveness of policy support and country-specific structural factors.


Implementation of worlds tightest national lockdown brought economic activity to a halt, affecting both production and consumption and resulted into deepest GDP contraction for the country. Growth was negative in the first half of the year and only modestly positive in the second half. While agriculture sector benefited from favourable weather conditions, manufacturing and services sectors were hit hard by containment measures and uncertainty. The country is experiencing a lopsided economic recovery with some sectors performing better than others. However, the scars of the pandemic are deep and the economy is likely to witness stress even if there is a V-shaped recovery.

India adopted a four-pillar strategy of containment, fiscal, financial and long-term structural reforms. During the year, government announced various stimulus packages and production linked incentive schemes to generate job opportunities and also provide liquidity support to various sectors. In response to the COVID-19 shock, the government and RBI took several monetary and fiscal policy measures to support weak firms and households, expand service delivery (with increased spending on health and social protection) and headrest the impact of the crisis on the economy. As a result of these measures, the economy is expected to get a breathing it required. Growth during next year may be better, with a strong base effect materializing in FY22, and is expected to stabilize at around 6-6.5 percent thereafter. The second wave of the pandemic has however brought in another level of uncertainty.

Indias economy is likely to grow by 10-11 per cent in 2021 following a 7.1 per cent contraction last year. As per Economic Survey 2020-21, Indias real GDP growth for FY22 is projected at 11%. The January 2021 WEO update forecast a 11.5% increase in FY22 and a 6.8% rise in FY23. According to the IMF, in the next two years, India is also expected to emerge as the fastest-growing economy. However, the economy is still struggling to return to the activity levels prevailing before COVID-19 and available indicators send conflicting signals. Although confidence will return, the scars to the economy and society are lingering and it may take a couple of years for GDP to get back to pre-pandemic levels.

The path to recovery will depend on how long the pandemic lasts and how quickly the vaccine can be made available to a population of 1.3 billion people. Even if the health crisis is managed by mid-2021, the economic recovery may be slow and uneven with adverse consequences on output, employment, and financial stability. Both private consumption and investment demand may take a long time to recover.


During the year under review, the Company has incurred Profit after tax of Rs. 2.86 Lakhs as compared to the profit after tax of Rs. 34.93 Lakh earned during the previous financial year 2019-20. The Directors are hopeful that company will do better during the current Financial Year.


There is stiff competition amongst major NBFC companies as of today, the company has managed to maintain its profitability, which is due to timely adoption of prudent business strategies, measures taken to reduce cost of funds and cost of operations, improved fund management and effective steps taken to maintain the level of the company. The company has also strengthened its financial position.


The Government is committed to encourage the healthy growth of Capital Market for development of the Economy. While the government seems committed to reforms to address the challenges, political compromises and high populist spending in an election year will mean that tough decisions are more likely to be deferred. However, steps by RBI to stabilize the exchange rate by reducing liquidity support to the banking system will create a challenging environment for investments


The company has primary segments for revenue generation in finance.


The Company continues to explore the possibilities of expansion and will make the necessary investments when attractive opportunities arise. The company remains confident of the long term growth prospects & opportunities ahead of it in its business.


Effective risk management is central to ensuring arobust and healthy finance for the Company. The Company is exposed to specific risks that are particular to its business, including interest rate volatility, economic cycle, market risk and credit risk. The management continuously assesses the risks and monitors the business and risk management policies to minimize the risk.


The Company has in place, adequate internal control systems commensurate with the nature and volume of its business. Efficient maintenance of accounts is facilitated by the executives and employees of the Company. Thereafter, the same is audited periodically by the Internal Auditors. The scope of internal audit is well defined and is very exhaustive to take care of all crucial functions and business of the Company. Based on their report, steps are taken at regular intervals to further strengthen the existing systems and procedures. Their significant observations are discussed in the Audit Committee Meetings regularly. Besides, as mandated under Companies Act, 2013, the Statutory Auditors have certified as part of their Audit Report, the effectiveness of Internal Financial Control over financial reporting.

The Directors have appointed M/s. Kamal M. Shah & Co, Chartered Accountants as the Internal Auditors of the Company for the FY 2021-22.


Human resources have always remained one of the most important assets and a key variable in achieving operational performance. Company continues to provide them with a safe and comfortable working environment. During the difficult pandemic times, the company has taken numerous precautions to protect its staff and workers. The Company believes that the human resources are vital in giving the Company a Competitive edge in the current business environment. The Companys philosophy is to provide congenial work environment, performance oriented work culture, knowledge acquisition / dissemination, creativity and responsibility. While selecting the training programme, the Company lays emphasis on development of skill and knowledge of its executives in the new vistas of Finance and Information Technology, besides developing the leadership and managerial skills for the future.

The Company continues to run an in-house training program held at regular intervals and aimed at updating their knowledge about issues.


During the under review, all the accounting treatments are done as per the prescribed sections and IND AS applicable to the company.


Debtors Turnover Interest Coverage Ratio
2020-21 0.01 2020-21 1.15
2019-20 NIL 2019-20 100
Current Ratio Debt Equity Ratio
2020-21 38.57 2020-21 0.01
2019-20 57.46 2019-20 1.43
Return on Net Worth
2020-21 0.003
2019-20 0.04


Statements in the Management discussion and analysis describing the companys objectives, projections, estimates and expectations may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the companys operations include economic conditions affecting demand/supply and prices, conditions in the domestic and overseas markets in which the company operates/ going to operate, changes in government regulations, tax laws and other statutes and other incidental factors.

For and on behalf of the Board
Palce : Ahmedabad Purshottam R. Agarwal
Dated : 31st August, 2021 Chairman
DIN: 00396869