Jindal Poly Investment & Finance Company Ltd Management Discussions.

The Management Discussion and Analysis (MDA) should be read in conjunction with the Audited Financial Statements of the Company, and the notes thereto for the year ended 31st March, 2022.

BUSINESS OVERVIEW

The Company is a Non Systematically important Core Investment Company under core Investment Compies(Reserse Bank) Directions, 2016 not required to get registered with RBI. As an unregistered CIC, the Company is required to invest at least 90% of its net assets in group companies, of which at least 60% should be in the form of equity investments. Investments outside the group can only be made in specified short-term securities like money market instruments. The Company continues to hold significant investments in equity shares of Jindal India Powertech Limited, Subsidiary of the Company besides certain other investments in other Group of Companies and Mutual Funds.

INDUSTRY STRUCTURE AND DEVELOPMENTS

India has a diversified Financial Sector undergoing rapid expansion with many new entities entering the market along with the existing financial services firms. The Sector comprises commercial banks, insurance companies, NBFCs, housing finance companies, cooperatives, pension funds, mutual funds and other smaller financial entities. The RBIs continued focus on financial inclusion has expanded the target market to semi-urban and rural areas. Investment Companies have a complementary role in the financial inclusion agenda of the country. As the COVID-19 impact gradually tapers off, the financial services sector is poised to grow eventually on the back of strong fundamentals, adequate liquidity in the economy, significant government and regulatory support, and the increasing pace of digital adoption. In fact, digital transactions will play a larger role in the financial ecosystem than hitherto witnessed.

OPPORTUNITIES AND THREATS

The Company depends on the dividends and capital appreciation from the equity it has invested into. Thus, better performance of the investee companies may be beneficial for the Company while on the other hand, any failure by any investee Company to earn profits or distribute dividends or provide capital appreciation can impact the revenue stream of the Company. As the Company holds major investment in Power Sector, any favorable policy of the Government in power Sector may prove boon to the Company.

PERFORMANCE

Financial Parameters of the Company are provided in the Board report under the head Financial Result and Operations in details. The Company continues to carry on the business as Core Investment Company and for that purpose it plans to invest in, acquire, subscribe for and hold shares, bonds, units, stocks, securities, debentures in group Companies and/or mutual funds.

OUTLOOK

According to CRISIL – the domestic rating agency, Indias real GDP will grow by 7.3% in FY23, with risks tilted to the downside. At the end of FY22, risks to Indias economic growth have shifted from Covid pandemic to geopolitics, elevated crude oil prices and interest rate hikes by the US Federal Reserve. Global think-tanks and rating agencies too are projecting around 7-7.5% growth for India during FY23, with downside risks. Domestic growth in FY23 will primarily be supported by a continued vaccination drive and supportive favourable fiscal and monetary policies. The Government of India announced a growth oriented and expansionary budget for the financial year 2022-23 (FY2023) with a big bet on investment push to lift economic growth. The inflation challenge needs to be tackled, but without resorting to sharp interest rate hikes, which will choke off the recovery.

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RISKS AND CONCERNS

Your Company, in pursuit of its business objectives, is exposed to certain risks such as credit risk, market risk, liquidity risk and operational risk. The market witnessed substantial turbulence in the previous year, stemming from multiple sources impacting the industry. However, as your Company fundamentally has been built on the principle of sound risk management practices, it has successfully weathered the market turbulence and continues to remain resilient. The Audit Committee of the Company reviews the probable risk that may affect the financial position of the Company from time to time.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

As per Section 134(5)(e) of the Companies Act, 2013, the Directors have an overall responsibility for ensuring that the Company has implemented a robust system and framework of internal financial controls. The Company had already developed and implemented a framework for ensuring internal controls over financial reporting. This framework includes entity-level policies and processes such as code of conduct, confidentiality and whistle blower policy and other polices such as organisation structure, insider trading policy, HR policy, etc. During the year, controls were tested and no reportable material weakness in design and effectiveness was observed.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE AND SIGNIFICANT CHNAGES IN KEY FINANCIAL RATIOS

Financial performance, which has been given in the Directors report, needs to be viewed in the above Backdrop. Details of key financial ratios as compared to the immediately previous financial year is given below:

Particulars For the year ended 31st March2022 For the year ended 31st March2021 %Change
Interest Coverage Ratio (59.38) - 100.00%
Current Ratio 4.47 23.75 (81.18)%
Debt-Equity Ratio 0.33 - 100.00%
Operating Profit Margin (%) (23.74) (20.86) 13.76%
Net Profit Margin (3.71) (2.13) 74.17%
Return on Investment 0.01 0.00 100.00%
Return on Net Worth 0.83 (0.02) (4809.43)%

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

There have been no material developments in Human Resource and Industrial Relations front during the F.Y. 2021-22. Given the nature of Business your Company is engaged in; it does not require Human Resources at a large level. Your Company continues to employ two employees to look after the business and administration of the Company.

CAUTIONARY STATEMENT

Statement in this MDA describing the Companys objectives, projections, estimates and expectations may be a forward-looking statement within the meaning of applicable laws and regulations. Actual results might differ materially from those expressed or implied.