Mega Corporation Ltd Management Discussions.

of Financial Condition and Results of Operations

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the Company describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Company assumes no responsibility to publicly amend, modify or revise forward-looking statements, on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include determination of tariff and such other charges and levies by the regulatory authority, changes in government regulations, tax laws, economic developments within the country and such other factors globally.

The financial statements are prepared under historical cost convention, on accrual basis of accounting, and in accordance with the provisions of the Companies Act, 2013 (the "Act") and comply with the Accounting Standards notified under Section 133 of the Act. The management has used estimates and judgments relating to the financial statement on a prudent and reasonable basis, in order that the financial statement reflect in a true and fair manner, the state of affairs and profit for the year.


Financial Services Sector

In 2019, India became a $ 2.7 trillion economy, having added one trillion US dollars in the last five years. The Economic Survey of the government outlined the blueprint to achieve the vision of making Indian a USD 5 trillion economy by 2024-25. Following the path, Indias rank in the World Banks Ease of Doing Business 2020 survey has consistently improved over last three years and stands at 63, among 190 countries, making it the one of worlds top 10 most improved countries for the third consecutive time. Further, the Government has set a target to invest worth 111 trillion over 2020-2026 under National Infrastructure Pipeline (NIP). NIP is likely to help provide quality and adequate infrastructure across the nation and boost economic growth.

RBI has taken number of measures to ensure sufficient liquidity in the system since the beginning of 2019-20. We note that it has slashed policy rate (Repo rate) from 6.25% in the beginning of year to 4.4% at the closing of fiscal and at now at 4% in ongoing fiscal so far. We also note this time transmission of rate cuts has happened in a large way and helped across all industries and borrowers.

According to the World Bank, the global economy decelerated to an estimated 2.4 percent in 2019, the slowest pace since the global financial crisis. The Indian Economy was not immune to the slowdown. The Indian economy was affected across all four key growth engines of our economy faltered to stimulate any growth.

As per the Central Statistics Organization (CSO) second advance estimates, the GDP growth was retained at 5 per cent in 2019-20 and however final numbers are likely to be worse than expectations due to sharp contraction in economic activities in March due to COVID-19. As per Moodys (a global rating company), Indias GDP growth rate for 2020-21 is expected to be at Zero mainly led by steep deterioration in business activities and sharp contraction in consumption trend due to disruption led by COVID-19. However, on a positive note, it has forecasted Indias GDP growth rate to bounce back to 6.6 percent in 2021-22.

Central government has increased its borrowing target by over 50% in current fiscal to Rs. 12 trillion (US$ 160 billion) up from the previously budgeted Rs 7.8 lakh crore to cushion the blow from the new coronavirus pandemic. Given the borrowing target of Rs. 12 trillion, it is estimated that government is targeting a fiscal deficit of 5.5-6% for current fiscal.

The government rationalised the corporate tax rate to 22 per cent from 30 per cent, subject to the condition that companies will not avail of any exemption/ incentive. Further, in order to boost fresh investment, new companies incorporated on or after October 1,2019 and making fresh investment in manufacturing, the tax rate for them has been cut to 15 per cent from 25 per cent.

NBFCs in India

Non-Banking Finance Companies (NBFCs) are an integral part of the Indian financial system. Their importance has only grown over the years, with their innovative products, intelligent credit checks, quick tum-around times and ability to reach the last mile customer, who generally do not have banking habits.

The scope of NBFCs is expanding with the Government of India (GOI) focusing prominently on promoting entrepreneurship and innovation, especially in the micro, small and medium enterprises (MSMEs) segment. NBFCs enjoy the advantages of better product lines, lower cost, wider and effective reach, robust risk management capabilities to check and control bad debts and understanding of their customer segments vis-a-vis the traditional banks. Additionally, NBFCs credit growth is likely to remain healthy owing to improving macroeconomic conditions, higher credit penetration, increased consumption and disruptive digital trends.


The financial statements have been prepared in accordance with the requirement of the Companies Act, 2013 and applicable Accounting Standards issued by the Institute of Chartered Accountant of India.

Standalone Particulars

For the year ended March 31, 2020 For the year ended March 31,2019
Revenue from Operations 2,70,40,704 2,19,74,943
Other Income 5,11,383 28,08,249
Total Revenue 2,75,52,087 2,47,83,192
Loss From Future Option Trade - -
Employee Benefits Expense 26,23,289 48,33,810
Interest and Finance Costs 1,29,33,123 1,27,17,290
Depreciation and Amortization 35,38,455 36,76,974
Other Expenses 42,88,252 32,56,650
Total Expenses 2,33,83,119 2,44,84,724
Profit From Operation Before Exceptional Item & Tax : 41,68,968 2,98,468
Exceptional Item 40,91,446 -
Profit From Operation Before Tax :
Less: Tax Expenses:
- Earlier Year -
- Current Year 8,50,780 -
- Mat entitlement 8,50,780 -
- Deferred Tax Charge / (Credit) (7,80,786) (8,58,421)
Profit/(Loss) for the Year before adjustment of Minority Interest 8,58,308 11,56,889
Less: Minority Interest - -
Net Profit/(Loss) for the Year 8,58,308 11,56,889

2. Opportunities and Risk

2.1 Growth Opportunities

> Low retail penetration of financial services/ products in India

> Extensive distribution reach and strong brand recognition

> Opening of financial sector in India along with introduction of innovative products ?Opportunity to cross sell services

2.2 Risk

The Company is exposed to specific risks that are particular to their respective businesses and the environments within which they operate, including market risk, competition risk, credit risk, liquidity and interest rate risk, human resource risk, operational risk, information security risks, regulatory risk and macro- economic risks. The level and degree of each risk varies depending upon the nature of activity undertaken by them.

3. Segment Wise performance

During the Year 2019-20, YourCompany operated in Finance & Investments and Air Chartered Segment:

S. No. Particulars Yearended 31.03.2020 Yearended 31.03.2019
(a) Finance / Investments 268.41 211.11
(b) Air Charter Services 2.00 6.00
Total 270.41 217.11


The significant changes in the key financial ratio of the Company, which are more than 25% as compared to the previous year are as given below

S. No Particulars FY 2019-20 FY 2018-19
(i) Interest Coverage Ratio 1.005 1.002
(ii) Operating Profit Margin (%) 0.63 0.52
(iii) Net profit Margin (%) 0.0317 0.0411
(iv) Return on Net Worth 0.00858 0.01157

4. Internal Control

The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, and compliance with applicable laws and regulations.

The Company has put in place adequate systems to ensure that assets are safeguarded against loss from unauthorised use or disposition and that transactions are authorised, recorded and reported. The Company also has an exhaustive budgetary control system to monitor all expenditures against approved budgets on an ongoing basis.

The Company has an independent internal audit function which continuously evaluates the adequacy of, and compliance with, policies, plans, regulatory and statutory requirements. Risk based approach is adopted while carrying out the audits. Internal audit also evaluates and suggests improvement in effectiveness of risk management, control and governance process. The Audit Committee of the Board provides necessary oversight and directions to the internal audit function and periodically reviews the findings and ensures corrective measures are taken.

5. As Health Safety and Pandemic Risk

In addition to serious implications for peoples health and the healthcare services, coronavirus (COVID-19) is having a significant impact on the world-wide economy including India in terms of business growth and business models. The disruption has pushed the financial sector to adopt digital model for sustenance and growth. The company and its subsidiaries have been proactive enough to switch over to fully digital mode since the Covid-19 ensuring employees the best health safety measures and uninterrupted service to the stakeholders. However, the performance of the company and its subsidiaries may be impacted in future because of the lasting effect of this disruption on the economy

6. Future Strategy

The Board has determined the following medium-term and long term strategies to achieve its corporate goals over a period of next 3-5 years:

? To focus on digital initiatives and customer awareness

? Effective use and implementation of data analytics in the process of loan disbursement and loan recovery process ?> Further strengthening the leadership position in financing Vehicles

? Furtherenhancing quality of loan portfolio

? Maintaining customer loyalty through winning relationship and customer satisfaction

7. Compliance

Mega Corporation Limited observes compliance practices of the highest standard. The Compliance team closely monitors RBI and other notifications on NBFCs with special attention to those relevant to the Company. The Company follows all prudential norms laid down for NBFCs and submits all mandatory returns and statements in time. The Company has put in place a robust framework of internal controls that include precise delegation of authority and Standard Operating Processes which are available in all business segments and functions. The Company follows a practice of monitoring various internal control functions in-house as well as through external auditors whenever required or mandated. The Company also reviews risk management processes on a regular basis and documents the results.

8. Human Resources

At Mega Corporation Limited we believe that our human capital is the major driver of our growth, efficiency and productivity. Mega Corporation Limited is a cross-cultural mosaic and our strength lies in our diversity everywhere, within teams and across businesses. This diversity makes us a stronger organization by bringing in fresh ideas, perspectives, experiences and fostering a truly collaborative workplace. One of the most important factors contributing to our success is the Mega Corporation Limited culture which is defined by attributes such as entrepreneurship, risk management, creating leaders, attributes which will hold us in good stead in our journey. Culture is, thus, the most important aspect on our mind as we move ahead.

For and on behalf of the Board of Directors Mega Corporation Limited

Sd/- Sd/- Sd/-
(Surendra Chhalani) (Kunal Lalani) (Aagat Singh)
Director and CFO Director Company Secretary
Place: New Delhi DIN: 00002747 DIN: 00002756 Mem No: A51268
Date: 28.08.2020