India Lease Development Ltd Management Discussions

NBFC- INDUSTRY STRUCTURE AND BUSINESS DEVELOPMENTS

Industry Overview:

The business of the Company is that of a Non-Banking Finance Company (NBFC). Non-Banking Financial Companies (NBFCs) play a crucial role in broadening access to financial services, enhancing competition, and diversification of the financial sector.

NBFCs have an advantage over banks as the business model is relationship-oriented, requires a good geographical spread, and survives on thin margins. Banks and NBFCs compete for some similar kinds of business. In spite of the strong competition faced by the NBFCs, the inner strength of NBFCs viz local knowledge, credit appraisal, skill, well-trained collection machinery, close monitoring of borrowers, and personalized attention to each client are catering to the needs of small and medium enterprises in the rural and semi-urban area.

The company is consolidating its position and making its best efforts to realize the maximum from the customers by taking recourse of legal remedies where warranted.

Your company has an adequate system of Internal control, designed to provide reasonable assurance that assets are safeguarded, transactions are executed in accordance with managements authorization, and properly recorded. Accounting records are adequate for the preparation of financial statements and other financial information. Besides, the management has put in place a system for review and monitoring of non-performing assets of the company for effecting recoveries.

The Financial performance of the Company is given as under:-

( in lakhs)

In view of no fresh business exposure, the existing clients sometimes lead to default in repayment which has a cascading effect on other customers for which suitable measures to control this trend are taken.

Your company considers human resources a key element. The company has competency-based performance and potential appraisal systems for identifying and developing managerial talents and is reviewed on an ongoing basis. Emphasis is laid on providing adequate training to its employees, to meet the attitudinal and cultural values of the organizations ethos to achieve customer satisfaction.

Certain Statements in the Management Discussion and Analysis describing the companys views about the industry, expectations, objectives, etc may be understood within the meaning of applicable laws and regulations. Factors like changes in Government regulations, tax laws, and other factors as such industrial relations and economic developments, etc. may further influence the companys operations or performance.