Neil Industries Ltd Management Discussions.

ECONOMIC CONDITION

According to the International Monetary Fund (IMF) the Indian economy has emerged itself as the fastest growing economies with a growth rate of 7.4 percent that will rise to 7.8 percent in the year 2019. The report also suggested that India is gradually recovering from the effects of demonetization and the introduction of Goods and Service Tax (GST) and the recovery is expected to be underpinned by a rebound from transitory shocks as well as robust private consumption. Medium term Consumer price index inflation is forecast to remain within but closer to upper bound of the Reserve Bank of Indias inflation targeting limit of four percent. Significant domestic reforms are being gradually implemented by the Government. The Implementation of Goods and Service Tax also had a huge impact over the Indian Economy. The Government of India along with Reserve Bank of India have taken various measures to facilitate easy access to finance for micro, small and medium Enterprises. NBFCs are expected to play the role of a key financial intermediary, once they are integrated in the financial system with full policy support. Factors like better understanding of customer profile / need, better product lines, wide network; quick turnaround time and robust risk management capabilities will contribute to the growth of NBFCs. The Major growth factors of NBFC are burden on Public Sector banks, Heavy Credit Demand and decline in the lending capacity of the Public Sector Banks. The main reasons for the success of NBFCs are lower cost, wider reach, and strong risk management capabilities with a better understanding of customer segments. Credit demand of our country can be fulfilled with the help of NBFCs as traditional banks are not able to serve all.

BUSINESS OVERVIEW

The Company continues to believe in the potential of Indian financial Market and rising income level. The Company wants to expand its presence, thereby strengthening its area of operations into the MSME markets across the Country. The Non Banking Financial Company sector saw a largely stable outlook for major NBFCs. From the perspective of the larger financial system, scheduled commercial banks continued to be the dominant players accounting for nearly 47% of the bilateral exposure followed by Asset Management Company, Non Banking Finance Company and mutual funds. NBFCs are considered as very important financial intermediary mainly for small-scale sectors. In Indian financial system, there is a great importance of NBFC segment. In India, for NBFC, there is stringent regulation as prescribed by Reserve Bank of India (RBI). Now they are giving tough competition to private sector banks. According to sources in upcoming years, for NBFCs and banks, MSME will be the main growth drivers. In NBFCs, there is a simpler procedure of sanctioning the credit. There are more flexible terms of repayment. From past ten years, NBFCs have shown phenomenal growth.

PERFORMANCE

During the financial year 2017-2018 Company earned profit of 112.55 (Rs in ‘00000) as compared to last financial years profit of 55.10 (Rs in ‘00000). The profit of the Company has variably increased as is depicted in the figures of audited Balance Sheet. The Company during the year has been indulged in trading of agro and organic products which has resulted in increase in the turnover and has eventually increased in the net profit of the Company. The Company is determined to perform better during the current year by expanding its area of operations.

OUTLOOK

Company offers a huge opportunity for credit intermediation and expansion owing to the economic policies in the country. We are focusing on maintaining stringent follow ups for recovery installments of principal and interest amounts. In addition to this dealing in various other organic and non organic products and trading in medical foods and agro products will enable the Company to deliver increasingly stable returns for its stakeholders, irrespective of monetary cycles. Further NBFCs are considered as very important financial intermediary mainly for small-scale sectors. In Indian financial system, there is a great importance of NBFC segment.

RISK AND CONCERNS

Risk is an integral part of the business and cannot be avoided however it can be minimized.In the financial services sector, it becomes imperative to ensure that profitability does not come at the cost of asset quality. The Company has put in place adequate risk identification, risk management and mitigation processes to keep any such trade-off at bay. The Company has built sound systems and processes for both its verticals i.e. MSME and Wholesale Lending, to take care of the respective risks associated with them. It is also constantly gauging the external conditions, and government policies to ensure that the business is one step ahead of the industry and monetary cycles, thereby insulating the Company from downtrends and enabling it to ride uptrends. For Credit Risk Assessment, a set of questions are used to evaluate the ability and willingness of borrower. There are some tests which are used to evaluate credibility. The biggest opportunity and risk to our business today is technology disruption but we must build an organization that is agile.

INTERNAL CONTROL SYSTEM

The Company has employed appropriate internal control system comprises of various monitoring techniques. Audit committee of the Company oversees the internal audit function and the internal control system. These internal control systems are devised as part of the principles of good governance and are accordingly implemented within the framework of proper check and balances .All Applicable laws and regulation are strictly complied with.

HUMAN RESOURCE CAPITAL

Company is committed in sharing value with its employees and deals them as partners of the Company. We employ best talent and train them to meet all challenges so that growth is organic and contributed by everyone. The Company believes that its success depends on the high level of skills and professionalism of its people and makes continuous endeavor to improve their efficiency through training and reward programs. The focus during last year was primarily on motivating the employees to realize their potential to the fullest. We basically focus on Simplicity, Self- Drive and passion for work as the core values of the company.

DISCLAIMER

The statements and projections made in this report may vary depending on the economic conditions, government policies, and other factors beyond the control of the Company. Company is not under any obligation to amend, modify or revise any statement.