Naysaa Securi. Management Discussions


<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS REPORT</dhhead>

 

 

  1. Industry structure
  2. Indian securities market has considerably broadened due to various financial market reforms introduced by the regulators. Broking and investment advisory Service Industry in India has significantly grown in the previous few years. While the market provides much greater opportunities, it brings with it greater exposure to more varied types of risks. A proper understanding and planning for risk-return profiles of different projects become even more important for the success of financial intermediaries like Naysaa Securities Limited (Naysaa) that operate in this domain. As a company, Naysaa has always focused on this aspect of its business. Broking and investment advisory in securities are the core business of our Company. The Company continuously invests in developing its intellectual capital and promotes a business model that leverages the competitive strength of its internal domain knowledge. The emphasis is on growing the business by providing appropriate solutions to its diverse customer base.

     

  3. Business Developments
  4. Your Company has set up adequate infrastructure along with a team of professionals for carrying on the business of the company efficiently.

     

  5. COVID-19 impact on Broking and investment advisory Services Industry
  6. Global economic activity is at a standstill as the world takes an aggressive stance to slow the spread of COVID-19 and that is having broad implications for the investment management industry. Aggressive fiscal and monetary policy responses combined with critical containment actions around the world have made a major economic impact, yet liquidity remains scarce and the outlook for earnings is soft.

     

    Meanwhile fresh inflows have deteriorated, while redemptions from existing retail investors have increased due to market fluctuations and "credit events".

     

    Brokerages are buckling up to face income distribution pressure as economic slowdown and the coronavirus pandemic drag equity scheme inflows. The situation has eroded asset values, leading to market corrections.

     

  7. Opportunities and threats
  8. Immense opportunities exist in the Broking and investment advisory Services Industry depending upon the growth of the country. The Major threat to your company’s fortune would be on account of adverse capital market trends and sentiments affected by domestic and global factors.

  9. Segment-wise or product-wise performance
  10. Your Company is registered with SEBI as BSE main broker and is also involved in the activities of investment advisory in shares and securities and derivatives. The company operates in a single reportable segment as such reporting is done on single segment basis.

     

  11. Outlook
  12. The Company continues to explore the possibilities of expansion in its present activities and will also make the necessary investments when attractive opportunities arise. Your Company is well placed to seize the long-term opportunity in financial market in India.

  13. Risks and Concerns
  14. Your Company is exposed to the fluctuations of economy and industry cycles. The company manages these risks by remaining very conservative and following other risk management practices. The management believes that efficient business planning risk management and product diversification would help mitigate such risks.

     

  15. Internal Control Systems and their adequacy
  16. As a part of the effort to evaluate the effectiveness of the internal control systems, your Company’s internal audit system reviews all the control measures on a periodic basis and recommends improvements, wherever appropriate. The Company has in place adequate internal control systems and procedures commensurate with the size and nature of its business. These systems and procedures provide reasonable assurance of maintenance of proper accounting records, reliability of financial information, protection of resources and safeguarding of assets against unauthorized use. The management regularly reviews the internal control systems and procedures.

     

  17. Discussions on Financial Performance with respect to Operational Performance:

(Rs. in Lacs)

 

Highlights

2022-2023

2021-2022

Revenue from Operations & other Income

1324.37

1114.72

Profit before Finance Cost, Depreciation and Tax

1575.68

1098.52

Finance Cost

47.69

17.77

Depreciation

10.04

13.79

Provision for Taxation (Including Deferred Tax & Fringe benefit tax)

3.06

8.75

Net Profit after Tax

-196.64

40.64

Earnings per Share (in Rs.)
  • Basic
  • Diluted

-1.93

0.71

 

 

  1. Human Resource Development
  2. The human capital today is one of the most decisive factors in the success of a company and thus we strive for excellence in the entire employee life cycle. Your Company continuously recruits skilled professionals from various streams and undertake several initiatives to retain the talent pool. Your Company also places emphasis on development and enhancement of skills and capabilities of employees to prepare them for future challenges. As in the past, the company enjoyed cordial relations with the employees at all levels. The Company focuses on improved Employee Engagement through several enterprise level initiatives. The Rewards and Recognition Programs here appreciate outstanding performers for their professionalism, dedication and outstanding contributions.

     

  3. Key Financial Ratios:

 

 

 

Ratio

2022-2023

2021-2022

Inventory Turnover Ratio

1.27

0.29

Net Capital Turnover Ratio

0.78

0.38

Debt Equity Ratio

0

0.04

Debt Services Coverage Ratio

--

2.55

Net Profit Ratio

(0.13)

0.03

Return on Capital Employed

(0.16)

0.07

 

 

 

Ratios where there has been significant change (i.e. change of 25% or more as compared to the immediately previous financial year): All the figures mentioned hereunder are Rs. in Lakhs.

 

Inventory Turnover Ratio:

Inventory turnover is computed as cost of goods sold divided by average inventory. The ratio moves from 0.29 in FY 21-22 to 1.27 in FY 22-23 mainly due to costs incurred during the year ended March 31, 2023 on account of stock in Trade.

 

Net Capital Turnover Ratio:

Sales divided by Net Working Capital. The Ratio changes from 0.38 in FY 21-22 to 0.78 inFY 22-23, mainly on account of revenue and its corresponding impact in net working capital.

 

Debt Equity Ratio:

Debt equity ratio is computed as long-term Debts divided by shareholders’ fund. The ratio decreases from 0.04 in FY 21-22 to 0 in FY 22-23 mainly on account of increase in shareholder fund on account of revenue recognized for payment of Bonus share during theyear ended March 31, 2022.

 

Debt Services Coverage Ratio:

Earnings available for debt services divided by total interest and principal repayment. The ratio increases from 2.55in FY 22-23 to Nil in FY 22-23 mainly on account of increase in profit on account of revenue during the year ended 31st March, 2022.

 

 

Net Profit Ratio:

 

 

Net profit before tax divided by Sales. This ratio is not comparable as previous year profit includes no expenses related to offer of securities on right basis and issue of Bonus Share under Revenue from operations.

 

 

 

Return on Capital Employed:

 

 

EBIT / Capital Employed.The ratio decreases from 0.07 in FY 2021-22 to nil in FY 2022-23 on account of reduction in revenue during the year ended 31st March, 2023.

 

 

 

THE DETAILS OF RETURN ON NET WORTH ARE GIVEN BELOW:

 

 

Particular

Year ended March 31, 2023

Year ended March 31, 2022

Return on Net Worth

(0.18)

0.12

 

 

Return on net worth is computed as net profit by average net worth. The ratio improves from 0.12 in FY 21-22 to (0.18) in FY 22-23 mainly on account of revenue recognized on issue of Bonus Share during the year ended March 31, 2023.

 

CEO/CFO CERTIFICATION

To,

 

The Board of Directors

 

 

Naysaa Securities Limited

 

 

I, Jayantilal Hansraj Lodha, Chief Financial Officer of Naysaa Securities Limited hereby certify to the Board that:

 

  1. I have reviewed financial statements and the cash flow statement for the year ended 31st March, 2023 and that to the best of their knowledge and belief:
    1. These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
    2. These statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
  2. There are, to the best of their knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or volatile of the company’s code of conduct.
  3. I accept responsibility for establishing and maintaining internal controls for financial reporting and that I have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and I have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which I am aware and the steps I have taken or propose to take to rectify these deficiencies.
  4. I have indicated to the auditors and the Audit committee
    1. Significant changes in internal control over financial reporting during the year;
    2. Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and
    3. Instances of significant fraud of which I have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company’s internal control system over financial reporting.

 

 

 

Place: Mumbai Jayantilal Hansraj Lodha

Date: 1st September, 2023 Chairman & Director DIN: 01804241