Oracle Credit Ltd Management Discussions.



The business of the Company is that of a Non-Banking Finance Company (NBFC). NBFCs have innovated over time and found ways to address the debt requirements of every segment of the society. The sector has evolved from being fragmented and informally governed to being well regulated and in many instances adopted best practices in innovation, governance and risk management. NBFCs provides a variety of services including fund -based and fee-based activities and cater to retail and non- retail markets and niche segments. NBFCs are generally regarded to be complementary to banks and are often able to offer better services and products to their customers. Observing the importance of NBFCs in India, Reserve Bank of India has issued regulatory framework with the objective to harmonize it with Banks and Financial Institutions.

NBFCs have always played an important role in promoting financial inclusion in India. They have been complementing and supplementing the banking sector in reaching out credit and fill the gaps in availability of financial services to the un-banked segments and underserved area of the society. The biggest contribution of NBFCs is their ability to cater to the needs of the Micro, Small & medium Enterprises (MSMEs) which form the cradle of Entrepreneurship and innovation in India. NBFCs innate ability to understand their customers needs and accordingly innovate to offer customized products make them the perfect conduit for credit delivery to MSMEs.


Non- Banking Finance Companies have always given tough competition to the public sector banks which traditionally held large share in the market but are now facing problem of their soaring Non- Performing Assets (NPAs). It is estimated that over 50% of micro, small and medium enterprises (MSMEs) does not have access to formal credit. With private banks deemed to be expensive and public banks struggling with bad loans, opportunities for NBFCs to grab the credit market are higher than ever because NBFCs have the ability to move fast and tap into specific customer segments and meet the non- corporate needs of the economy that is those of Small and Medium Enterprises and retail customers.

NBFCs continued to grow their shares in the financial services industry and have outperformed schedule commercial banks on growth in advances, assets quality and profitability and this growth momentum of NBFCs should results in their shares in the financial services sector increasing in the near future. The Company closely monitors the threats which comprise of: High cost of funds Stiff competition with NBFCs as well as with banking sector Significant slowdown in the economy affecting the various segments of NBFC. Slow industrial growth High inflation


The Company operates in only single segment; hence segment wise or product wise performance is not applicable.


The overall outlook of the industry has improved during the financial year 2018-19 and is an upcoming market to get better opportunities for the Company. Reserve Bank of India with an objective to bring NBFCs into the ambit of well regulated finance industry, have issued a number of circulars and regulatory clarity after the public discussion. These regulations are framed to address the regulatory gaps and arbitrage. The industry has also responded positively towards these regulations in order to understand and address the associated risk better. Also regulated environment boosts the confidence of customer and increases credibility of the industry.

Revised regulatory framework and various schemes of Government concentrating on finance sector will bring greater opportunities in the coming years.

The future outlook of the company remains positive as the Company is actively working on both the strategic front and the operations front to take advantage of the turning trends which improving operational performances, focus on quality, broaden the customer base etc.


The Company is exposed to risks such as financial, operational, strategic, compliances, reporting and political risks. Being an NBFC, risks that are particular to its business and environment includes interest rate volatility, economic cycle, credit risk and market risk. The Company in order to identify and mitigate risks to minimize its impact on business, ensures that prudent risk management practices are followed during the decision making process.

Risk is managed by using a set of credit norms and policies, as approved by the Board. The Company does have comprehensive/appropriate risk management control system in place which includes internal controls which are commensurate to the size and nature of the inherent risks of companys businesses. These Risk Management system and processes enable the company in identifying and managing the risks appropriately. Sustained efforts to strengthen the risk framework and portfolio quality have yielded consistently better outcomes for the Company.


The internal control system of the Company is effective and adequate for business processes commensurate with the size and nature of the operations, compliance requirements with the applicable laws and regulation, financial reporting etc.

The Internal Auditors periodically review and evaluates the adequacy of the control system and processes including in particular, internal financial controls as required under the Companies Act, 2013, ensure strict adherence to processes and procedures as well as to prescribed regulatory and legal framework and suggest improvements. The internal auditors have expressed their satisfaction about the adequacy of the control systems and the manner in which the Company is updating and strengthened its internal audit systems and procedures to meet the challenging requirements of the business.

Significant audit observations and follow-up action thereon are reported by the Internal Auditors to the Audit Committee. The Audit Committee & Board of Directors reviews the internal audit reports and the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations.


The Companys operations continue to be mainly focused in the area of NBFC activities- financing and Inter- Corporate Investments. The relevant significant financial highlights of the Company are mentioned below:

(in Rs. Lakhs)
Particulars 2018-19 2017-18
Revenue from operations 26.87 24.91
Total Revenue 26.87 25.15
Profit Before Tax 14.17 5.53
Profit after Tax 10.49 3.71

The increase in profits of the company is majorly due to decrease in employee benefit expenses and as a result there has been the following changes in key financial ratios:

Particulars 2018-19 2017-18
Current Ratio 38.02 52.54
Operating Profit Margin 53% 22%
Net Profit Margin 39% 15%
Return on Net worth 2% 1%


The Company always regards human resources as its most valuable asset and ensures friendly work environment for its employees to excel. In an increasingly competitive market for talent, Oracle Credit limited continues to focus on attracting and retaining right talent. It is committed to provide right opportunities to employees to realise their potential. The company had 3 employees as on 31st March, 2019.


Certain Statements in the Management Discussion and Analysis Report describing the Companys view about the industry, expectations, objectives, etc may be ‘forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied. Internal & External Factors like changes in government regulations, tax laws and other factors such as industrial relations and economic developments, etc. may further influence the Companys operations which are beyond the control of the management. The Company is not under any obligation to publicly amend, modify or revise any forward- looking statement on the basis of any subsequent developments, information or events.

For and on behalf of Board of Directors of
Oracle Credit Limited
Ashok Kumar Jain Meena Jain
Date: 27.08.2019 Managing Director Non-Executive Director
Place: New Delhi DIN: 00091646 DIN: 00209017