integrated financial services ltd share price Management discussions

ECONOMIC OVERVIEW: The Indian economy started FY20 on a dull note due to the ongoing liquidity crisis. In order to achieve the governments vision of making India a USD 5 trillion economy by 2025, the finance ministry slashed domestic corporate tax rates to 25.17% midyear. The Current Account Deficit narrowed primarily on account of lower non-oil, non-gold imports and robust services exports supported by software, travel and financial services. Indias crude oil import bill fell by 9% Y-o-Y to $102 billion in 2019-20 on account of price crash; though volumes remained fairly unchanged. Foreign fund outflows and the Feds grim prognosis for the US economy further weighed on the rupee as it touched 77 against US dollar in April 2020. The CPI inflation stood at 5.84% YoY in March 2020 higher from 2.86% in March 2019. According to the Indian Budget 2020, the real GDP growth was estimated at 5.0% in the financial year 2019- 20 but due to the recent COV1D-19 crisis has ensured that FY2021 will be a challenging one for India and the world. As per Fitch ratings, Indias GDP growth is likely to slip to 0.8% for FY21.

INDUSTRY OVERVIEW:

Your company is an NBFC (Non Banking Finance Company] Company. This sector has evolved considerably in terms of its size, operations and entry into new areas of financial services and products. The regulatory framework has also undergone change. The revised RBI regulations for NBFCs have been formed with the purpose of strengthening the financial system. However, being a financial entity, your company is exposed to various risk arising out of interest rate movement and risks pertaining to liquidity, as any other financial sector player.

OPPORTUNITIES AND THREATS:

Your Company as an NBFC is engaged predominantly in the business of investment. The future business prospects are closely linked and influenced by global events and hence there is an amount of uncertainty in the near term outlook of the stock market. The Company is mainly exposed to market risk (including liquidity risk], interest risk and credit risk. Your company is conscious of the same and the risk management practices followed by the Company over the years helped it to mitigate the normal industry risk factors, which inter-alia include economic/business cycle, fluctuation in the stock prices in the market, besides the interest rate volatility and credit risk. Improved sentiments in the secondary markets will also enhance the participation of investors across segments thereby helping the prospects of equity brokerage business.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

Your Company is mainly engaged in investment activities, which is the only business segment. Segment-wise reporting is not applicable to your company.

OUTLOOK:

NBFCs have steadily expanded their share of total credit in the country. They have developed innovative and customized financial products and solutions that are delivered efficiently to fulfill customer needs. With its inherent strength in terms of innovative products to meet consumer requirements, faster turnaround, nimble operations, reach and strong relationships, the sector is expected to grow, though more selectively than before, but due to the recent COVID-19 crisis has ensured that FY2021 will be a challenging one for India.

RISK AND CONCERNS:

The Companys operation involves inbuilt risk due to uncertain economic condition and unforeseen events beyond the Companys control. The company appreciates the varied forms of risk inherent in our industry and we continue to scrutinize our risk management system.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. Clearly defined roles and responsibility for managerial positions gives strength to the internal control system of the organization. The Company believes that transparency of policies and operation and systems and control are keys to the success of any organization. Additionally, we have set up adequate internal controls and systems to ensure that the Company is functioning in a balanced way and that any conflicting occurrences are taken care of. The management duly considers and takes appropriate action on the recommendations made by the statutory auditors. Key issues are specifically brought to the attention of the Audit Committee and deliberated and in details along with the action plan.

HUMAN RESOURCES:

The Companys success depends largely upon the quantity and competence of its management team and key personnel. We lay a strong emphasis on integrity, teamwork, innovation, performance and partnership. The Company has adequate and experiences professionals having varied experience related to the Industry to carry out its various operation. Attracting and retaining talented professionals is the key element of the Companys strategy. Skills of employees are finetuned and knowledge is enhanced by providing them incentives from time to time. All employees are encouraged and incentivized to get them certified in relevant industry standard certifications such as NCFM, BCDE, NISM, AMFI etc. Total Employees in the company are 7.