India Lease Development Ltd Management Discussions.
NBFC- INDUSTRY STRUCTURE AND BUSINESS DEVELOPMENTS
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. Inspite of 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.
Outlook on opportunities, threats, risks and concerns:
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.
Internal control System and adequacy
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 preparation of financial statements and other financial information. Besides, the management has put in place system for review and monitoring of non performing assets of the company for effecting recoveries.
The Financial performance of the Company are given as under:-
|(Rs. in lacs)|
|Financial Results||Year ended March 31, 2019||Year ended March 31, 2018|
|Gross Profit/ Loss before depreciation, finance cost and provisioning||(14.95)||1.62|
|Less: Depreciation including impairment||0.21||0.22|
|Profit /(Loss) before provisions, exceptional items and tax||(15.16)||1.40|
|Less: Income Tax for Earlier year w/o||(22.88)||0.00|
|Less: Provision for diminution in value of investments||0.00||0.20|
|Net Profit(/Loss) for the year||(38.04)||1.20|
|Losses carried forward to Balance Sheet||(2155.03)||(2116.99)|
Risk and Concern
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 a competency based performance and potential appraisal systems for identifying and developing managerial talents and is reviewed on an on going basis. Emphasis is laid on providing adequate training to its employees, to meet the attitudinal and cultural values of the organization 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.