stephanotis finance ltd share price Management discussions


BUSINESS & FINANCIAL PERFORMANCE

Stephanotis Finance Limited being a registered NBFC with RBI has been primarily engaged into Lending activities & Investing in securities.

The investment portfolio of your company is as financial services. Your Company, as in the last few years, continues to evaluate investment opportunities in transactions with good growth prospects.

The details with respect to financial performance has been included in the Directors Report.

OPPORTUNITIES:

The sentiment in the Indian financial market has changed considerably over the past few years; the economic growth, though subdued for last couple of years, is likely to show positive momentum over the coming years. This has presented opportunities for lending to Indian corporate and investments in the vibrant secondary as well as primary markets. The following factors present specific opportunities across our businesses include:

Growing Corporate activities and related need for investments;

Credit penetration in India is low as compared to other economies. On similar benchmarks, the non-bank finance penetration in India is even lower;

Growing midsize segment of corporate activity where the need for customized solution is particularly high;

Low penetration of financial services and products in India along with unique nature of credit demand makes difficult traditional bank lending;

Digital trends in consumer and MSME to offer new disruptive opportunities for innovation and partnerships;

Deepening of wholesale debt markets to provide easier access to funds.

Regulatory reforms including policy framework aiding greater participation by all class of investors;

Growing Financial Services industrys share of wallet for disposable income;

Wealth management business is transforming from mere wealth safeguarding to growing wealth;

Emerging technology to enable best practices and processes;

Size of the Indian capital market and favourable demographics like huge middle class, relatively large younger population with disposable income and investible surplus and risk taking abilities of the youth.

THREATS:

Despite great opportunities, there are significant factors presenting threats to our businesses viz.

Impact of Covid-19

Impact on economic growth of the rising prices of oil and industrial raw materials, decelerating investment demand and high inflation;

Regulatory changes impacting the landscape of business;

Increased competition from local and global players operating in India;

However, your Company is well aware of the above threats and has worked steadily to strengthen its business operations by putting appropriate policies and measures in place and well positioned to counter any adverse threat successfully.

STRENGTHS :

Simplified and prompt loan appraisals and disbursements; Experienced senior management team; A well-defined and scalable organizational structure;

Distinguished financial services provider with close control on investment.

WEAKNESS :

Uncertain economic and political environment;

Growth directly linked with the GDP growth of the country

RISK MANAGEMENT:

The risk for the Company arises mainly out of the risks associated with the operations we carry. Experienced professionals review and monitor risks in our Company. We have comprehensive risk management policies and processes for risk identification, risk assessment and risk mitigation planning for business, strategic, operational, financial and compliance related issues. The management also periodically reviews the policies and procedures and formulates plans for control of identified risks and improvements in the systems. A risk/compliance update report is regularly placed before the Audit Committee /Board of Directors of the Company. The Directors/ Audit Committee review the risk/ compliance update reports and the course of action taken or to be taken, to mitigate and manage the risks is taken.

HUMAN RESOURCES:

The Human Resources initiative focuses on structured training programs (both in-house and external) intended to equip employees at all levels, with the necessary knowledge and experience in order to demonstrate high levels of performance.

Stephanotis Finance Limited believes in taking care of its employees and ensuring that their career aspirations are met through professional growth, personal development and fair economic rewards.

Our organization is committed and focused on identifying and retaining the right talent to meet the overall business strategy and objective. The broad range of activity includes viz. robust manpower planning process in line with the business objective, enhancement of employee skill-sets by identifying training and development needs, retention programs, reward and recognition, learning and development

INTERNAL CONTROL AND THEIR ADEQUACY:

The Companys internal control system is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance with laws and regulations. The Company being in lending and investment industry, has put in place an adequate internal control system to safeguard all assets and ensure operational excellence. The system also meticulously records all transaction details and ensures regulatory compliance. The Companys internal control system is commensurate with the size, nature and operations of the Company.

SEGMENT-WISE PERFORMANCE

The Company is a Non-Banking Finance Company (NBFC). It is engaged in the business of financing which is the major segment in the Company.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may be “forward looking statements” within the meaning of the applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic and political conditions in which the Company operates, interest rate fluctuations, changes in Government / RBI regulations, Tax laws, other statutes and incidental factors. This report contains statements extracted from reports of Government Authorities / Bodies, Industry Associations etc.