Sarthak Global Ltd Management Discussions.

Economic Review Global Economy

Global growth is projected at 6% in 2021, moderating to 4.4% in 2022. The projections for 2021 and 2022 are stronger than in the October 2020 WEO. The upward revision reflects additional fiscal support in a few large economies, the anticipated vaccine-powered recovery in the second half of 2021, and continued adaptation of economic activity to subdued mobility. High uncertainty surrounds this outlook, related to the path of the pandemic, the effectiveness of policy support to provide a bridge to vaccine-powered normalization, and the evolution of financial conditions. (Source: https://www.imf.org/en/publications/weo?page = 1)

Indian Economy

The Indian economy was negatively impacted by an unprecedented health crisis in 2020-21 with the highly contagious corona virus (Covid-19) spreading across the country. In response to the pandemic, Government has taken several proactive preventive and mitigating measures starting with progressive tightening of international travel, issue of advisories for the members of the public, setting up quarantine facilities, contact tracing of persons infected by the virus and various social distancing measures. Government imposed a strict 21 days nationwide lockdown from 25th March, 2020, under the Disaster Management Act, 2005, with subsequent extensions and relaxations, to control the spread of Covid-19 while ramping up the health infrastructure in the country. The lockdown measures, imposed to control the spread of Covid-19 pandemic in India, ubiquitously affected employment, business, trade, manufacturing, and services activities. The real Gross Domestic Product (GDP) growth is projected to contract by 7.7 percent in 2020-21 as compared to a growth of 4.2 percent in 2019-20. GDP growth, however, is expected to rebound strongly in 2021-22 owing to the reform measures undertaken by the Government.

(Source: https://www.indiabudget.gov.in/doc/frbm1.pdf)

Industrial Structure and Developments

Your Company is a registered Share Transfer Agent from SEBI since 1995. It is successfully handling share transfer activities for various client Companies & serving more than 1,00,000 shareholders. In compliance with SEBIs circular of single point share transfer & Demat activities, the Company has taken direct electronic connectivity from both the depositories i.e. the National Securities Depository Ltd. (NSDL) & the Central Depository Services (India) Limited (CDSL).

Opportunities and Threats

Depending on market opportunities the Company is undertaking Merchant Trading activities of various commodities. The future performance of your Company would depend to a large extent on its ability to successful diversification, market of commodities. Due to COVID-19 pandemic, the situation is uncertain and it is difficult to predict when economies will fully normalise. Hence, FY 21-22 is likely to be a challenging year.

Opportunities

• Indias Growth Rate

• Financial Inclusion

• Utilize technology to provide more efficient solutions

• Increased retail participation in capital markets

• Regulatory reforms would aid greater participation by all class of investors.

Threats

• Volatile environment

• Fiscal deficit and current account deficit

• Inflation and economic slowdown

• Competition Outlook

Your Company is now exploring opportunities to get more business from corporate in the field of share transfer & other capital market activities. The management is optimistic about the future outlook of the Company. The industry witnessed testing times with global economic slowdown and weakening profitability and tightening of financial conditions, still the Company has demonstrated its ability to withstand the challenges posed by the current environment.

Risk and concerns

The Company like any other Company is exposed to specific risks that are particular to its business and the environment within which it operates. The company is exposed to the market risk, which inter alia includes economic/business cycle, interest rate volatility and credit risk. While the Indian economy has shown sustained growth over the years, the Company is confident of managing these risks by maintaining a conservative financial profile, and by following prudent business and risk management practices.

Competition from existing and prospective registrar & share transfer agents may affect the profitability of the company. The Company is exposed to risks from change in policy of similar Companies; changes in Govt. Policies/SEBI policies, etc. which may affect profitability and working of the Company.

Internal Control System and their adequacy

Your Company has good and effective internal control systems, which provide efficiency of operations, financial reporting, proper recording and safeguarding of assets, compliance with applicable laws and regulations, etc.

The adequacy of the same has been reported by the statutory auditors of your Company in their report.

Financials

Your Company has succeeded in achieving satisfactory results for the financial year 2020-21:

Balance Sheet As at March 31, 2021 As at March 31, 2020
Share Capital 3,00,00,000 3,00,00,000
Reserve & Surplus 2,71,87,542 2,66,54,059
Non-current Liabilities 14,01,76,449 16,33,06,243
Current Liabilities 3,29,72,757 4,96,55,445
Non-current Assets 1,05,15,330 6,53,62,855
Current Assets 21,98,21,418 20,42,52,892
Profit and Loss Account For the year ended March 31, 2021 For the year ended March 31, 2020
Total Revenue 19,48,83,287 1,04,42,86,583
Profit/(Loss) before tax and depreciation 11,27,920 13,55,600
Depreciation and amortization 4,06,999 97,276
Profit after tax 5,33,483 9,29,496
Earnings Per Share 0.18 0.31

Human Resource Development and Industrial Relations:

The Company is being equipped with all the modern amenities like Intranet, Internet & latest models of computers & printers. By intensive training from both the depositories and upgradation of systems & software, transfer & Demat work is being managed successfully.

Your Company considers the quality of its human resources to be the most important asset and constantly endeavors to attract and recruit best possible talent. Our training programs emphasize on general management perspective to business. The Company continues to empower its people and provide a stimulating professional environment to its officers to excel in their respective functional disciplines.

The industrial relations of the Company continue to remain harmonious and cordial with focus on improving productivity and quality. The number of permanent employees on the rolls of Company as on 31.03.2021 is 9.

KEY FINANCIAL RATIOS ANALYSIS

S. No. Particular FY 2021 FY 2020 Remarks
1. Debtors Turnover Ratio 100.73 9. 00 Increase in ratio due to reduction in turnover and increase in sundry debtors.
2. Inventory Turnover Ratio 6.95 6. 21 Increase in ratio due to change in turnover and stock.
3. Interest Coverage Ratio 106 109 Decrease in ratio due to change in turnover and Interest.
4. Current Ratio 6.67 4.11 Increase in ratio due to decrease in Current liability.
5. Debt Equity Ratio 2. 45 2. 88 Decrease in ratio due to reduction in outside loans.
6. Operation Profit Margin (%) 7. 00 2. 00 Increase in ratio due to better sales realization.
7. Net Profit Margin (%) 0. 38 0.13 Increase in ratio due to better sales realization.
8. Return on Net Worth (%) 1.00 2. 00 Decrease in ratio due to reduction in net profit (value wise) and turnover.

Cautionary Statement

Statements in this Management Discussion & Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic developments in the country and improvement in the state of capital markets, changes in the Government regulations, tax laws and other status and other incidental factors.