Gujarat Investa Ltd Management Discussions.

Your Directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2020.

ECONOMIC OVERVIEW

Indian Economy: Indias Gross Domestic Product (GDP) grew by 4.2% in FY 2019-20, compared to 6.1% growth clocked in FY 2018-19. Primary factors responsible for the deceleration in growth include global economic slowdown, subdued consumption and private investment, and liquidity constraints aggravated by the non-banking financial (NBFC) crisis. To give a boost to the economy, the Reserve Bank of India (RBI), in the year 2019, slashed the benchmark repo rate by 135 basis points (bps) to 5.15% in five successive rate cuts from February to October 2019, with significant easing of monetary policy.

COVID-19 Impact : The outbreak of novel coronavirus (COVID-19) in the first quarter of 2020 posed fresh challenges for global activities and economies. The severe spread of the virus plunged the world economy into a recession, worse than the financial crisis a decade ago. As a result of the pandemic, global economy is expected to contract by 3% in 2020. A series of stimulus packages have been announced by major developed economies and financial institutions to limit the economic damage and stabilise markets

1. BRIEF:

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.

2. OPPORTUNITIES & THREATS:

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.

3. SEGMENT-WISE PERFORMANCE:

The company has primary segments for revenue generation in finance.

4. OUTLOOK:

The Company continues to explore the possibilities of expansion and will make the necessary investments when attractive opportunities arise.

5. RISK & CONCERNS:

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.

6. INTERNAL CONTROL SYSTEMS & THEIR ADEQUEACY:

The company has a proper independent and adequate system of internal controls to ensure that all the assets are protected against loss from unauthorized use or unauthorized disposal and such transactions are properly authorized, recorded and reported correctly. The internal controls systems are designed in such a way to ensure that financial and other records are reliable for reporting financial statements and other data and for safeguarding assets.

The Audit Committee periodically reviews the internal controls systems and reports their observations to the Board of Directors.

The Directors have appointed M/s. N.K. Shrishrimal & Co, Chartered Accountants as the Internal Auditors of the Company for the FY 20-21.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During the year, the Company has recorded a turnover of Rs 4245075 as compared to Rs. 1853402 in the previous year. The Company has made net profit of Rs. 3134785 as compared to Rs. 395744 in the previous year after providing depreciation, tax, etc. for the year ended 31st March, 2020

8. HUMAN RESOURCE DEVELOPMENT:

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. As in the past, the Company has enjoyed cordial relations with the employees at all levels.

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

9. CAUTIONERY STATEMENT:

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

10. COVID-IMPACT AND SUPPORT MEASURES

The COVID-19 outbreak and subsequent nationwide lockdown has severely impacted the disbursements, asset quality, and liquidity of NBFCs due to disruption in business activities. A recovery is likely in the second half of FY 2020-21; however, this depends on the overall economic turnaround. Meanwhile, the central bank and government have announced numerous liquidity-boosting measures to help banks, NBFCs, and other financial intermediaries to deal with the liquidity challenges caused by the pandemic.

11. ACCOUNTING TREATMENTS:

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

12. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Debtors Turnover
2019-20 0.00
2018-19 0.00
Current Ratio
2019-20 9.95
2018-19 3.85
Return on Net Worth
2019-20 0.04
2018-19 0.01
Interest Coverage Ratio
2019-20 100.00
2018-19 3.19
Debt Equity Ratio
2019-20 1.43
2018-19 1.41
For and on behalf of the Board
For, GUAJRAT INVESTA LIMITED
Place : AHMEDABAD [PURSHOTTAM R. AGARWAL]
Dated : 12th NOVEMBER, 2020 DIN: 00396869
DIRECTOR