Mukesh Babu Financial Services Ltd Management Discussions.

The management is pleased to present its Analysis Report.

A. FINANCIAL REVIEW:

Your Company earned a net profit of Rs.381.91 Lakh for the financial year ended 31st March 2020 as compared to previous years net profit of Rs.364.23 Lakh (Increase of 4.85%). Provision for taxation for the year is Rs.73.95 Lakh (including Deferred Tax Provision) as compared to Rs.16.71 Lakh in the previous financial year. Details of Changes in key financial ratio are as follows:

Particulars 31-03-2020 31-03-2019 % change
a Interest Coverage Ratio 1.506 1.602 -5.95
b Current Ratio 1.556 2.742 -43.25
c Debt Equity Ratio 1.685 1.187 41.91
d Operating Profit Margin 16.282 33.750 -51.76
e Net Profit Margin (%) 19.36 4.59 321.98

B. MACRO ECONOMY - REVIEW AND OUTLOOK:

Macro-economic instability on account of fallout of COVID-19, global politics and trade tensions and Government actions in the aftermath have created an extremely volatile macroeconomic environment.

For India, Financial Year 2019-20 started on a good note.However, the countries world over got hit with corona virus COVID-19 pandemic since January 2020 which has since then caused a lot of disruption. It has not been limited to retail or large giants but businesses & lives of people globally.

The biggest challenges for India in 2020-21is to bring the Economy, which is expected to contract by over 5% in the Current year, back to track in the face ofincreasing COVID spread and severe panic caused and financial repercussions of restrictions of lockdown norms, inflationary pressures, coupled with a higher fiscal deficit as well as an increasing debt burden.

Although the borrowing rates have fallen in the Markets due to reduction in the repo rates, lending Institutions (including NBFCs) continue to face uncertainty caused by Reserve Bank of Indias Policies relating to deferment of repayment of loans/ installments.

C. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The internal control systems and their adequacy have been discussed in detail in the Directors Report.

D. OPPORTUNITIES AND THREATS IN THE CURRENT MARKET ENVIRONMENT AND FUTURE PROSPECTS:

The silver lining for the Company was that the Stock Markets being declared as the “essential services” by the Government enabled it to continue functioningeven during these months of Lockdown, causing less disruption as compared to the other sectors. However, with the continuing uncertainty luring around the economy & Markets world over its difficult to fathom as to what the months to come have in store for the sector.