RSD Finance Management Discussions


The Management Discussion and Analysis Report (MDA) is an integrated part of Companys annual financial statements. The purpose of the MDA is to provide a narrative explanation, through the eyes of management, of how the Company has performed in the past, its financial condition, and its future prospects. This report contains a description of the year gone by and some of the key factors that influenced the business of the Company during the year, as well as a fair and unbiased overview of the Companys past, present, and future. There are forward looking statements mentioned in this report which may involve risks and uncertainties, including but not limited to the risk inherent to the Companys growth strategy, change in regulatory norms, economic conditions and other incidental factors. Actual results could differ materially from those expressed or implied.


A more significant than anticipated decline in global economic activity is currently taking place, and inflation is at its highest level in many years. From 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023, global growth is anticipated to decline. Except for the global financial crisis and the severe phase of the COVID-19 epidemic, this is the worst growth profile since 2001. Forecasts predict that the rate of global inflation would increase from 4.7 percent in 2021 to 8.8 percent in 2022 before falling to 6.5 percent in 2023 and 4.1 percent by 2024.

Retail inflation in February 2022 was 6.07 percent, marginally above the RBI target band, amid headwinds of rising input costs in trade and industry. The respite comes in the form of lower crude prices, as the US moved to release reserves to contain rising costs. Crude prices dropped 12 percent in the week ending March, to around US $105 per barrel, despite the ongoing armed conflict in Russia and Ukraine. The steady revival impulses in the economy are such that international rating agencies have projected 8 percent growth in the economy in 2022-23.

Growth in the baseline scenario is projected to decline from 3.4% in 2022, to 2.8% in 2023, and to settle at 3.0% in 2024. Advanced economies are projected to experience a particularly sharp slowdown, falling from 2.7% in 2022 to -1.3% in 2023. In a plausible alternative scenario, with further financial-sector stress, global growth is projected to decline to around 2.5% in 2023 and advanced economy growth is projected to fall below 1%. In the baseline scenario, global headline inflation is projected to decline year-on- year to 8.7% in 2023 from 7.0% in 2022, driven by lower commodity prices, while core inflation is expected to decline more modestly. In most cases, inflation is unlikely to return to target before 2025.

With the economy now fully operational, we anticipate growth to pick up this year to 5.2 percent as activity and mobility increase .India is still a shining example. This year, it will contribute jointly with China to half of global growth, compared to barely a tenth from the US and the euro region. Although it is predicted that global headline and core inflation will drop this year, by 2024 they will still be higher than pre-pandemic levels in more than 80% of nations.


Indias gross domestic product (GDP) growth rate in the January-March 2023 quarter increased by 6.1%, according to the National Statistics Offices (NSOs) provisional national income figures. This implies that the economys growth rate in the fiscal year 2022-23 will be 7.2%, up from the previous estimate of 7%. IMF observed that investment and consumption are building on better performance of the financial sector.

Services are Indias largest and fastest-growing economic sector. Services comprise Trade, Hotels, Transport and Communication; Financing, Insurance, Real Estate and Business Services and Community, Social and Personal Services. Services account for over 60% of Indias GDP. Agriculture, Forestry and Fisheries account for around 12% of the total output but employ more than 50% of the countrys workforce. Manufacturing accounts for 15% of GDP with construction accounting for the remaining 8%. Mining, Quarrying, Electricity, Gas and Water supply account for 5% of GDP.

India is also expected to contribute to the global economic recovery this year. According to the International Monetary Fund, emerging economies will contribute four-fifths of global growth in 2022. India is expected to be a global growth driver this year, contributing more than 15 percent of global growth. The steady growth in the Indian economy can be attributed to sustained government capital spending, corporate deleveraging, lower gross NPAs in the banking system, and a softening in commodity prices.

As the economy enters a new year, its clear that the path ahead isnt going to be easy and there are a lot of risks out there, mainly due to a weak global economy. In a world thats becoming more and more global, the outlook for Indias future growth is set against a tough global macroeconomic environment, which adds to the challenges for domestic growth.


Non-banking financial companies (NBFCs), public and private banks, and financial institutions form the four broad constituents of the credit ecosystem of the Indian financial sector, with NBFCs being a key pillar therein. Over the past few decades, NBFCs have navigated several storms, some of them unprecedented.

Indian NBFCs have recovered effectively from a recent period of sluggish years marked by liquidity stress, the failure of key companies, and a pandemic hit, with improved capital levels, decent stability in delinquency accounts, and larger balance sheets. They have been able to overcome these obstacles and pursue creative methods to take advantage of changing opportunities thanks to stronger risk assessment processes, government assistance including loan moratoriums and liquidity improvement measures, and a broader economic recovery. By the end of this decade, they will have a significant impact on financing Indias move from the fifth to the third largest economy in the world.

COVID-19 has had a huge impact on global economies and financial sectors around the world, including the financial sector in India. The global coronavirus pandemic has spread like wildfire across the globe, resulting in lockdowns, travel advisories, and severe cash flow challenges for various business sectors in the country, including the NBFC sector. The effects of the pandemic on the Indian NBFC sector have created numerous challenges for the private creditors and other non -banking institutions in India.

The Reserve Bank of India (RBI) and Government of India have adopted a variety of measures in an effort to increase liquidity and address the consequences of the COVID-19 pandemic on the non-banking financial companies (NBFCs). These measures include, but are not limited to, a reduction in the repo rate, the relaxation of regulatory requirements, the implementation of a targeted long-term repurchase operation (TLTRO), and much more.

The strong recovery of business activity in various Sectors after COVID 19 has helped NBFCs and banks simultaneously improve their recoverability and asset quality. This created confidence and capacity among banks and the NBFC to focus on growing their loan portfolio. As Indias GDP growth rate is expected to outpace most other countries in fiscal year 2023 (around 6.9%), there is likely to be a greater demand for credit across all sectors in 2023.

The paradigm shift in the lending landscape, from traditional balance sheet lending to cash flow based lending in the small business segment, and from income based lending to behavior based lending in the retail lending segment. NBFCs approach to focus on specific segment and developing a robust underwriting model based on data and technology has helped develop strong internal control over client selection and asset quality. Over the past 4-5 years, major public sector banks and NBFCs have focused on cleaning up their stressed books, improving collections and asset quality. After a major clean up and strengthening of balance sheet, they are eyeing growth.

The Covid-19 created lockdown and social distancing has been an obstacle in many sectors in our current socio-economic setup and it effected normal livelihood of individuals causing it a global crisis. Based on the extensive analysis, it was observed that the nationwide NBFCs got effected in the pandemic causing it a serious liquidity and financial crisis in the economy as the NBFC sector were facing severe liquidity problems. Because of these serious crises, "Atma Nirbhar Bharat Abhiyan Prakalpa" came as a booster dose to revive the sector and the economy as a whole such that liquidity will flow in the ecosystem and positive systematic changes will take place. The Government of our country has initiated several string measures to improve liquidity in the market which will set our economy rolling to a consequent boost in demand which will help the NBFCs to get them back in their feet and will respond to the crisis. The partial credit guarantee scheme taken on the edge of the pandemic will motivate lenders to look at the NBFC sector favorably and a large section of enterprises can reap the advantages of the financing options and improved credit lines. Support given to the NBFCs will certainly play a major role in giving credit to the rural corners and remote areas of our economy which will in turn restore good credit channels.


NBFCs (Non-Banking Financial Companies) are an integral part of Indias financial system. They are private sector entities and have existed since the 1940s, although they were not officially recognized by the RBI until 1964. Over the years, the sector has expanded significantly, with assets amounting to nearly 13% of the countrys GDP.

NBFCs act as a bridge between the banking system and the private sector. They make it possible to get into places where formal banks dont exist, and they complement the banking system by providing financial intermediation. They have an edge over banks in terms of cost, proximity, and even a bit of regulatory arbitrage. They focus on niche areas like car financing, gold loans, and agricultural loans. The success of the small and medium-sized financial institutions (SMEs) in India is due to their diverse product lines, low costs, wide reach, low bad debt, and good risk management. They fill the gaps in financial services that the banking sector isnt providing, and theyre following the trend around the world.

NBFCs are seen as having the ability to make quick decisions, be flexible depending on what customers need, and take on more risk, which means they dont have to stick to the same structure as banks. It was further stated that Non-Banking Financial Companies (NBFCs) are expected to maintain a loan growth rate of approximately 14 per cent in the upcoming fiscal year, with a 7-8 per cent increase in the current financial year.

In 2023, non-bank lenders will concentrate on restoring growth by improving asset quality supported by rising retail demand and liquidity, according to a recent analysis by ICRA. The MSME sector and other growing sectors will see more participation from NBFCs as part of the same. Additionally, more NBFCs will start exploring AI and machine learning for services or full-fledged applications when 5G services are introduced in the nation.


In spite of the difficulties, NBFCs in India appear to have a bright future. Between 2021 and 2026, the industry is projected to expand at a very fast rate. Several factors, including the rising demand for credit, the governments initiatives to support financial inclusion, and the rise of digitalization, are anticipated to fuel the growth.

In the coming years, NBFCs will contribute more to the socio-economic framework of the Indian economy. In India, the potential for credit penetration is still very high. By collaborating with fintech and developing new business models with tailored products, NBFCs may raise the bar.

Your Company is a core investment Company. In the era of shifting investor preferences and developing consumer experiences, a quicker go- to-market has emerged as a critical component for survival.

Researchers believe that rising interest rates may pose a challenge to retail flows in Indian equities. "On the domestic front, the risks in the markets would be a function of sustenance of retail flows in the markets. As deposit rates increases retail flows into equities might get affected.

In 2022, foreign investors sold Indian shares worth ?1.21 lakh crore, while domestic investors bought ?2.56 lakh crore of equities reflecting the mood of Indian investors toward the stock market.

Higher crude oil prices are also a key threat as they impact Indias trade and current account balance and fuel inflation. Weakening rupee against USD is the single most important risk to Indian equities. Further, Domestic flows, which were supportive in the last two years, due to high deposit rates could also pose a risk to equities in 2023 as higher fixed deposit rate is always followed by retail inflows into equities gets slowed.

However, that being said India now decisively stands out as an economy that is the fastest growing. Data around services and manufacturing PMI and GST collections too are quite positive. The banking system in India has been purged of many of the legacy problems and credit growth numbers are encouraging as well. Earnings growth has been quite good and companies are now benefitting from lower commodity prices.

Looking past the macro, at this micro level, where we are focused, high-quality businesses continue to do all the right things to grow and deliver sustainable earnings. There are definitely also pockets of opportunities where businesses are at interesting positions. Hence, we are expecting a robust growth in the market.


The Company follows accrual basis of accounting under the historical cost convention. It has adopted Indian Accounting Standards ("Ind AS") notified under section 133 of the Companies Act 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, 2015.

Balance Sheet

- Net worth increased to Rs.65.04 crores as on March 31, 2023 as compared to Rs. 61.18 crores as on March 31, 2022.

- The Borrowings for FY 2022-23 declined to Rs. 39.81 lakhs as compared to Rs.48.55 lakhs during FY 2021-22 owing to debt repayments during the year.

Profit and loss statement

- Total income for FY 2022-23 stood increased to Rs. 8.75 crores as compared to Rs. 7.72 crores in FY 2021- 22.

- Total expenses for FY 2022-23 increased to Rs. 2.58 crores as compared to Rs. 2.65 crores in FY 2021- 22.

- Depreciation and amortization decreased to Rs. 6.30 lakhs in FY 2022-23 as compared to Rs. 8.39 lakhs in 2021-22.


Following are ratios for the current financial year and their comparison with preceding financial year, along with explanations where the change has been 25% or more when compared to immediately preceding financial year:

Summary of Key Financial Metrics and Key Ratios

(Amount in Lakhs)

FY 2022-2023 FY 2021-2022 FY 2022-2023 FY 2021-2022
Revenue from Operations 587.15 456.30 9232.00 9,316.16
Other Income 287.58 315.65 628.38 499.37
Total Expenses 258.24 265.11 8,247.63 7,416.48
Profit/(Loss) before Tax 616.49 506.84 1,612.74 2,399.05
Profit/(Loss) After Tax 503.18 420.46 1,292.74 1,803.07
EPS (Rs. per share) 2.98 4.08 8.01 14.81

Significant Ratios

The Disclosure w.r.t. details of significant changes in key financial ratios as stipulated under Regulation 34(3) read with Schedule V Clause B of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are as follows:

Sl. Ratio Description No. FY 2022-23 FY 2021-22 Reason for increase (in case of more than 25%)
1 Debtors Turnover 0.14 0.19 Debtors recovery has improved in comparison to earlier financial year
2 Inventory Turnover - - NA
3 Interest Coverage Ratio (times) 7912:1 1430: 1 PBT has increased and interest on car loan has reduced as the loan tenure has completed in Apr-22.
4 Current Ratio (times) 27.50:1 27.98: 1 During the financial year there has been increase in the value and gain of financial instruments.
5 Debt Equity Ratio 0.01:1 0.01:1 NA
6 Operating Profit Margin (%) 1.05 1.11 During the financial year there has been increase in the value and gain of financial instruments.
7 Net Profit Margin (%) 0.44 0.68 OCI income has decreased though the PBT has improved in comparison to previous year.
8 Return on Net Worth (%) 0.06 0.09 OCI income has decreased though the PBT has improved in comparison to previous year.

Segment-Wise Performance

On a consolidated basis, the Investment and Financial Segment has posted a revenue of Rs.1426.79 lakhs (Previous Year Rs. 1942.12 lakhs), Job Work segment has posted a revenue of Rs. 103.83 lakhs (Previous Year Rs. 92.50 lakhs), Hotel business segment has posted a revenue of Rs. 2224.13 lakhs (Previous Year Rs. 1392.19 lakhs) and heat treatment activity generated revenue of Rs. 6142.31 lakhs (Previous Year Rs. 6423.21 lakhs) including inter segmental revenue of Rs. 36.69 Lakhs for F.Y 22-23.

On a standalone basis, the Investment and Financial Segment posted segment revenue of Rs. 770.90 lakhs (Previous Year revenue of Rs. 679.45 lakhs) and the Job Work segment recorded a profit of Rs. 103.83 lakhs (Previous Year profit of Rs. 92.50 lakhs).

The Company operates only in India, hence there is no other significant geographical segment that requires disclosure.


Risk is an integral part of the Companys business and sound risk management is critical to the success of any organization. The Company is exposed to specific risks that are particular to its business and the environment within which it operates, including interest rate volatility, economic cycle, credit risk and market risk.

The Company is mainly exposed to market risks in the form of reduction in the value of its investment and fall in return due to dip in the investee Companys performance. The investments represent a material portion of the Companys business and are vulnerable to fluctuation in the stock market.

Further, change in regulatory requirements for NBFCs from time to time, can have a bearing on the running of the Company. The overall economic fluctuations/ slowdown and its impact on service sector are also a cause of concern.

The Company is aware of the need to better understand, anticipate, evaluate and mitigate risks in order to minimize its impact on business. The Company has put in place a Risk Management Policy to ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated, minimized and managed.

The performance of the Company is dependent on the Indian Capital markets for its returns. Even though it is envisaged that stock market will continue to do well, but global concerns can result in sharp corrections.


Effective internal controls are necessary for building up an efficient organization. Your Company has in place, an adequate internal control and internal audit system managed by qualified and experienced people to ensure the compliances under statutory regulations. Corporate policies are made to figure out the weaknesses persisting in the system and suggest remedial measure for the same.

The system is improved and modified continuously to meet with the changes in business condition, statutory and accounting requirements. Internal controls are supplemented by an effective Internal Audit being carried out by M/s. Heerwal& Associates, Chartered Accountant and are periodically reviewed by the management.

The Audit Committee also met the Companys statutory auditors to ascertain their views on the financial statements, including the financial reporting system, compliance to accounting policies and procedures, the adequacy and effectiveness of the internal control and systems followed by the Company.


The Company always regards human resources as its most valuable asset and ensures friendly work environment that encourages initiatives by individuals and recognizes their performance. Total 9 employees were employed during the financial year.

To maintain competency and to improve the analytical abilities of employees for gearing them to face challenges, proper training and development is imparted by the Company before the employee takes up any responsibility. Our Company has always valued its employees whose dedication and contribution have helped us to reach the levels of excellence and rewarded them appropriately during the appraisal.


The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2022-23.

Number of complaints received: Nil Number of complaints disposed off: Nil

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimate, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Important factors that could make a difference to the Companys operations indude change in Government regulations, tax regimes, economic developments within India and other such factors over which the Company does not have any direct control