INDUSTRY STRUCTURE AND DEVELOPMENT
"Indian NBFCs Set to Keep Rising In 2023"
The world seems to be recovering from the aftermath of the challenges posed in the last
few years. Overall despite the challenges, India has emerged as a bright spot in terms of
economic growth amidst an outlook of global slowdown. The World Bank has reported that
India is better positioned to navigate global headwinds and handle global spill overs, as
compared to other major emerging economies.
Also, it is heartening to see that the RBI and policymakers recognise the contribution
of NBFCs in supporting real economic activity and meeting the credit demand, especially
reaching the unbanked. RBI Scale based norms implemented last year have strengthened the
sector while offering operational flexibility to meet the increasing credit demand and aid
Indias economic growth.
During the last financial year, despite geopolitical events, extremely high global
volatility in commodities, currencies, financial markets and increase in interest rates
globally to tame the high inflation, NBFCs in India have weathered the storm well and
exhibited resilience.
In 2023, NBFCs are expected to play a larger role in supporting the socioeconomic
construct of the Indian economy. The opportunity for credit penetration remains very high
in India. The NBFCs can set a new benchmark by introducing new business models with
personalised offerings through digital platforms. CRISIL recently reported that riding on
macroeconomic tailwinds, NBFCs are expected to see growth.
In India, large population remains largely unfamiliar with technology and face
challenges in financial literacy. When it comes to
serving the underbanked, Indian NBFCs and fin-techs are leveraging technology and
innovation to drive the financial inclusion agenda. NBFCs will continue to play a vital
role in the growth of the economy due to its deeper reach, ability to offer more
flexibility, personalised services through innovative digital solutions. Gold loans have
played an important part during the pandemic and will continue to be an important source
of credit to MSMEs, agriculture sector, small businesses, unorganised sector and this is
also evident from the steady demand for gold loans.
NBFCs with stronger business models, strong capital adequacy, strong underwriting
capabilities and focus on digital strategy will continue to perform better and grow
stronger in years to come. To benefit from the growth opportunities, many industrial
groups have ventured into this segment with new business models. According to ICRAs
recent report, in 2023 non-bank lenders will focus on reviving growth by improving asset
quality supported by increasing retail demand and liquidity.
Governments policy push by promoting "Atmanirbhar Bharat", "Make in
India" and expanding manufacturing base through "Production Linked Incentive
Scheme" has attracted interest of many Indian and global players to participate in
Indias growth journey.
To ramp the virtuous cycle of Investment and job creation, the budget 2023, has given
the needed impetus by increasing allocation to Capital Expenditure outlay by 37.4 % in
2023-24 to Rs. 10 lakh crore over Rs. 7.28 lakh crore in 2022-23. Adding to this, the
Capex from private sector would give a strong base to the GDP Growth. RBI in its Policy
Meeting on April 06, 2023 has increased the real GDP forecast for FY24 marginally to 6.5
percent from 6.4 percent earlier on the back of higher Rabi crop output, moderating
commodity prices, monsoon trajectory and the governments plan of higher capital
expenditure.
OPPORTUNITIES AND THREATS
RBI Policy document states that the risks for GDP are evenly balanced but the
protracted geo political tensions pose downside risk to the growth.
In its last policy meeting held on April 06, 2023 RBI exercised pause and kept the
Policy rate at 6.50%. Since March 2022, RBI has increased the policy rates by 4.50%.
RBI has projected that during FY 2024 Indias GDP is expected to grow at 6.50% and
inflation is expected to soften towards 5.20%. Price stability, sustainable growth and
financial stability to remain at the core of RBI.
Based on the above the nominal GDP is expected to grow at 11.70%
On the conclusion of the recent 27th meeting of Financial Stability and
Development Council (FSDC) headed by honourable Finance Minister Smt. Nirmala Sitharaman,
she said that "We see that global financial situation is daunting but at the same
time, the Indian economy and financial sector is well protected and well regulated. We
have to be cautious and be on our toes and need to take timely steps to mitigate any
vulnerability.
India is positioned to grow much better than its peers as and when the global
environment improve. Well Capitalised NBFCs having good client profiling risk management
system will outpace the growth of the economy.
We remain positive.
BUSINESS OUTLOOK
As India moves from $3.50 Trillion economy towards the projected $5 Trillion by
2025-26, we see tremendous growth opportunities for every segment of the credit ecosystem.
Credit being an essential part of economic growth, all segments will benefit be it banks,
NBFCs, housing finance, gold finance, microfinance. Credit demand from Agriculture,
Industry, MSME, Discretionary and Retail are expected to remain robust.
Regulatory surveillance and quality governance will enable the faster and sustainable
growth.
RISK AND CONCERNS
Geopolitical uncertainty, global financial stability and return of upward volatility in
inflation continue pose risk and slowdown the pace of global recovery. Slowdown or
recession in developed economies can also impact the economic growth.
The Company has Risk Management framework to identify, evaluate business risks and
opportunities. The framework helps in identifying risks, exposure and potential impact
analysis at the Company level. The Company is making investments in various themes and is
judicious in selecting the opportunities, so as to ensure that investments are in the
sectors that are growing or expected to turnaround in line with the economic cycles.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has internal control system which examines and ensures adequate internal
checks and control procedures for safety of funds and securities. It also ensures proper
accounting, records authorization, control of operations and compliance with law. The
Company also believes in the importance of technology and systems in improving controls at
various levels and strives to enhance them on a continuous basis. Further the Company is
continuously working to improve and strengthen internal check and control system to align
with the expected growth in operations.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Since the Company is only managing investments in securities and require minimal staff
for its operations. As the business expands the company may hire more staff.
SEGMENT WISE/ PRODUCT WISE PERFORMANCE
As the Company is in only one line of business, product wise and/or segment wise
disclosure of performance is not required to be made.
For and on behalf of the Board of Directors
Place : Gurugram Vijay Rathee Kuldip Singh Rathee
Date : May 17, 2023 Managing Director Director
DIN- 00042731 DIN-00041032
INFORMATION PURSUANT TO SECTION 197 OF THE ACT READ WITH RULE 5 (1) OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
a. The Ratio of the remuneration of each director to the median remuneration of the
employees of the company and the percentage increase in remuneration of each Director,
Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager if any for
the financial year 2022-23:
Name of the Director/Key Managerial Personnel |
Remuneration of Director/Key Managerial Personnel(Rs. In lacs) |
Ratio of the remuneration of each Director to the median remuneration of
the employees |
% increase/ (decrease) in remuneration of each Directors, Chief
Financial Officer, Company Secretary |
Mrs. Vijay Rathee, Managing Director |
7.43 |
1.33 |
21.70 |
Mr. Kuldip Singh Rathee, Non-Executive Director |
0 |
NIL |
NIL |
Mr. Hardeep Kumar Mahotra Independent Director |
2.50 |
NA |
NA |
Mr. Rajvir Singh Chhillar Independent Director |
2.50 |
NA |
NA |
Mr. Ankit Yadav Chief Financial Officer |
2.33 |
NA |
NA |
Mr. Sandip Kumar Chaubey Company Secretary |
2.93 |
NA |
0.10 |
Mr. Anshuman Singh Tomar
Company Secretary & Chief Financial Officer |
1.12 |
NA |
NA |
Mrs. Simran Malhotra
Company Secretary & Chief Financial Officer |
0.65 |
NA |
NIL |
b. The percentage increase in the median remuneration of employees in the financial
year: Nil
c. The number of permanent employees on the rolls of the Company: 2
d. Average percentile increase already made in the salaries of employees other than the
managerial personnel in the last financial year and its comparison with the percentile
increase in the managerial remuneration and justification thereof and point out if there
are any exceptional circumstances for increase in the managerial remuneration: The Average
Increase in the salaries of employee other than managerial personnel in 2022-23: Nil
e. We confirm that remuneration paid to directors and managerial personnel are as per
the remuneration policy of the Company.
FORM NO. AOC -2
Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of
the Companies (Accounts) Rules, 2014-Form for Disclosure of particulars of
contracts/arrangements entered into by the company with related parties referred to in
subsection (1) of Section 188 of the Companies Act, 2013 including certain arms length
transaction under third proviso thereto.
1. Details of contracts or arrangements or transactions not at Arms length basis.
| SL. No. |
Particulars |
Details |
| a) |
Name (s) of the related party & nature of relationship |
NIL |
| b) |
Nature of contracts/arrangements/transaction |
|
| c) |
Duration of the contracts/arrangements/transaction |
|
| d) |
Salient terms of the contracts or arrangements or transaction including
the value, if any |
|
| e) |
Justification for entering into such contracts or arrangements or
transactions |
|
| f) |
Date of approval by the Board |
|
| g) |
Amount paid as advances, if any |
|
| h) |
Date on which the special resolution was passed in General meeting as
required under first proviso to section 188 |
|
2. Details of material contracts or arrangements or transactions at Arms length basis.
| SL. No. |
Particulars |
Details |
| a) |
Name (s) of the related party & nature of relationship |
NIL |
| b) |
Nature of contracts/arrangements/transaction |
|
| c) |
Duration of the contracts/arrangements/transaction |
|
| d) |
Salient terms of the contracts or arrangements or transaction including
the value, if any |
|
| e) |
Date of approval by the Board |
|
| f) |
Amount paid as advances, if any |
|
Note: The above disclosures on material transactions are based on threshold of 10% of
total turnover.
For and on behalf of the Board of Directors
Place: Gurugram Vijay Rathee Kuldip Singh Rathee
Date : May 17, 2023 Managing Director Director
DIN-00042731 DIN-00041032
+91-9892691696
