We are pleased to present the Management Discussion and Analysis
(MD&A) section of the Annual Report for the year 2023, highlighting the performance
and outlook of our Non-Banking Financial Company (NBFC) specializing in gold loans and
MSME business loans. This section provides an in-depth analysis of our Companys
operations, financial position, and prospects.
1. Economic Outlook
Global Economy
The economy at large is moving towards a gradual recovery from the
effects of Covid pandemic and the Russia-Ukraine war of 2022. However, such unprecedented
events have left a series of aftershocks leading to strained market conditions and high
inflation across global economies. High inflation resulting from easy monetary policies
over the last decade and a half have led to Central Banks across the developing world
hiking interest rates in synchronicity in a bid to reign inflation expectation in a
desirable range. The side effects arising from the unprecedented rise in the policy rates
and slowing growth are now more obvious with funding challenges and asset liability
mismatches that could likely persist for many companies across various sectors. This has
caused a marketable shift in sentiment as investors are now focusing increasingly on
profitability and cash flow instead of growth in market share.
On a positive note, global growth is anticipated to be propelled by the
recovery of the Chinese economy, the continued upswing of India, and relatively strong
growth in other emerging economies. It is worth acknowledging that the pandemics impact
in China caused substantial disruptions in the supply chain, which is now gradually
recovering. Global economy is expected to grow by 2.8% in 2023 and 3.0% in 2024. However,
indications have emerged that tightened monetary policy has dampened demand and inflation
to some extent, but its full impact is yet to be realized.
Source: https://www.oecd.org/newsroom/global-
economic-outlook-improving-albeit-to-a-low-growth- recovery.htm
Indian Economy
India stands tall in the last few years as it emerges as a beacon of
resilience and stability in the global economy. It is expected to display sturdy progress
driven by private consumption and investment built on the back of government policies to
nurture the business ecosystem; and improved transport, and logistics infrastructures.
India should continue to remain one of the fastest growing global economies despite
significant challenges posed by synchronized tightening of the global monetary policies
and continuing inflationary pressures. International Monetary Fund (IMF) has gone to the
extent of coining India as a bright spot on the back of a promising growth trajectory
reliant on strong indicators. It goes on to claim that in 2023, India and China will
together contribute to half of the worlds growth.
Source:
https://economictimes.indiatimes.com/news/economy/indicators/indiaseconomic-resilience-imf-
predicts-indian-economy-will-grow-by-nearly-6-per-cent-this-fiscal-year/articleshow/99842943.cms?from=mdr
The RBIs (Reserve Bank of India) SPF (Survey of Professional
Forecasters) report has projected that Indias real GDP will grow to 6% in FY 2023-24.
Indias Real GDP Growth
Source: The RBIs (Reserve Bank of India) SPF (Survey of Professional
Forecasters) Report
India has been a top contributor to the global economic growth;
powering it alongside China, USA and Indonesia. With only 20 countries driving more than
75% of global growth, India remains a top contributor. Thereby, cementing itself as a
leading economic power.
The Indian economy has experienced robust investment activity,
supported by the governments focus on capital expenditure, as well as stable private
consumption, particularly among high-income earners. However, the persistence of
escalating inflationary pressures and long-term forecasts of higher interest rates pose
potential risks to the global economy, which could affect Indias growth trajectory.
The total CPI (Consumer Price Index) inflation rate was 6.5% in
February 2023, up from 6.1% in February 2022. The Monetary Policy Committee of the RBI has
recently kept the repo rate unchanged at 6.5% while maintaining its stance on
"withdrawal of accommodation". Further, the RBI forecasts consumer inflation to
decline to 5.2% in FY 2023-24. The combination of digitalization and efficiency-enhancing
measures, along with robust capex investments, will eventually boost business productivity
in India. Moreover, Indias financial sector remains robust, bolstered by improvement in
asset quality and healthy private-sector credit growth.
Amongst its peers, Indias growth story is better placed and anchored
by supportive macros and intact structural advantage.
Source: https://www.bls.gov/opub/ted/2023/consumer-
price-index-up-0-4-percent-over-the-month-6-0-percent-over-the-year-in-february-2023.htm#:~:text=End%20of%20interactive%20chart.&text=The%206.0%2Dper
2. Industry structure and Developments
NBFCs have become increasingly important in recent years as they have
played a critical role in providing credit to individuals and businesses that are
underserved by traditional banks. One of the key advantages of NBFCs is their ability to
be flexible in their lending practices. Unlike banks, which have a rigid set of guidelines
for lending, NBFCs can tailor their lending practices to meet the specific needs of their
clients. NBFCs have played a significant role in the Indian economys growth story,
especially in the rural and semi-urban areas. They cater to the financial needs of small
and medium-sized businesses, entrepreneurs, farmers, and individuals who do not have
access to traditional banking services.
According to the RBI data, outstanding bank credit to NBFCs has
significantly increased from 3.68 lakh crore in 2017 to 13.20 lakh crore as of
December 2022. NBFCs are expected to play a crucial role in financing Indias transition
from the worlds fifth largest to third largest economy by the end of this decade. The
Government is also focusing on developing NBFCs with high emphasis on
driving quality corporate governance across these entities. Following sluggish years amid
liquidity stress post the IL&FS crisis in September 2018, NBFCs have bounced back
strongly with higher capital levels, reasonable stability in delinquency accounts, better
asset quality and larger balance sheets. Stronger risk assessment frameworks, Government
support such as debt moratorium and liquidity enhancement measures and broader economic
revival have helped them tide through these challenges and pursue innovative strategies to
meet evolving opportunities.
The RBI implemented Scale-Based Regulation (SBR) for NBFCs in FY
2022-23, to harmonize regulatory frameworks with these institutions evolving risk
profiles. The main points of the aforesaid regulation are as follows:
(i) Regulation Structure - Categorization of NBFCs: NBFCs have been
categorized into four layers based on their size, activity, and riskiness.
| Layers |
Classification |
Component |
| Basic |
NBFC - Base Layer (NBFC-BL) |
(a) Non-deposit taking NBFCs below the asset size of 1,000
crore (b) NBFCs undertaking the following activities: (i) NBFC-Peer to Peer Lending
Platform (NBFC-P2P), (ii) NBFC-Account Aggregator (NBFC-AA), (iii) Non-Operative Financial
Holding Company (NOFHC) (iv) NBFCs not availing public funds and not having any customer
interface. |
| Middle |
NBFC - Middle Layer (NBFC-ML) |
The Middle Layer shall consist of (a) All deposit-taking
NBFCs (NBFC-Ds), irrespective of asset size (b) Non-deposit-taking NBFCs with asset size
of 1,000 crore and above (c) NBFCs undertaking the following activities: (i) Standalone
Primary Dealers (SPDs), (ii) Infrastructure Debt Fund - Non- Banking Financial Companies
(IDF-NBFCs), (iii) Core Investment Companies (CICs), (iv) Housing Finance Companies (HFCs)
and (v) Infrastructure Finance Companies (NBFC-IFCs) |
| Upper |
NBFC - Upper Layer (NBFC-UL) |
The Upper Layer of NBFCs will be identified by the RBI using
specific parameters and scoring methodology for enhanced regulatory requirements. |
| Top |
NBFC - Top Layer (NBFC-TL) |
Upper Layer NBFCs may move to the Top Layer if the RBI
perceives a significant increase in potential systemic risk. |
(ii) The regulatory minimum Net Owned Fund (NOF) for NBFC-ICC, NBFC-MFI
and NBFC-Factors has been increased to 10 crore, while for NBFC-P2P, NBFC-AA, and NBFCs
with no public funds and no customer interface, the NOF remains at 2 crore. There is no
change in the existing regulatory minimum NOF for NBFCs - IDF, IFC, MGCs, HFC, and SPD.
The NPA classification norm for all categories of NBFCs has changed to
an overdue period of more than 90 days in a phased manner.
(iii) At least one director of NBFCs should have relevant experience
working in a bank/NBFC, etc.
Loan against Gold
The Gold loan financial industry demonstrated resilience during FY23,
driven by its countercyclical nature and the safe-haven appeal of gold in times of
economic uncertainty. Gold prices remained stable during the fiscal year, sustaining the
industrys attractiveness to borrowers and investors alike. Increased consumer awareness
and favorable regulatory reforms contributed to the industrys growth and legitimacy. Gold
lending has been one of the initial precursors to financial inclusion by enabling the
new-to-credit segment to build a credit score through monetizing an asset and gain access
to a diverse set of lending products. Credit history builds on the back of repayment
history built by gold loans offers a structural basis for financial inclusion. This
segment also comes with tangible benefits such as accessibility, convenience, pricing
advantage over informal loans and quick disbursal process. For borrowers without a credit
history or with insufficient real estate collateral, the simplicity of the gold loan
process, minimal documentation requirements, quick approval and disbursal timelines have
made gold loans a preferred option in times of immediate liquidity.
Demand for the yellow metal stays steady and increasingly technology
solutions are driving the demand for gold loans. The gold loan market in India was valued
at ~ 2,921.42 billion in 2019 and is expected to reach ~ 6,275.40 billion by 2025,
expanding at a compound annual growth rate (CAGR) of ¦—12.75% during the 2020-
2025 period. The unorganized segment accounts for more than 60% of the gold loan market in
the country. (Source: Report Ocean published a recovery-based report for India Gold Loan
Market).
Micro, Small and Medium Enterprises (MSMEs)
Micro, Small, and Medium Enterprises (MSMEs) play a vital role in the
Indian economy as significant contributors to employment generation, industrial output,
and export growth. MSMEs encompass a wide range of enterprises, including manufacturing,
services, and trade sectors, and they serve as a backbone for economic development and
inclusive growth.
MSMEs face unique challenges such as limited access to finance,
inadequate technological capabilities, and a need for skill development. To address these
challenges and promote the growth of MSMEs, the government of India has introduced various
schemes and initiatives. These include financial support through collateral-free loans,
credit guarantee schemes, and specialized MSME-focused lending institutions. Additionally,
programs for capacity building, entrepreneurship development, and technology upgradation
have been implemented to enhance the competitiveness of MSMEs.
The introduction of the Goods and Services Tax (GST) regime has
streamlined taxation processes for MSMEs, simplifying compliance and fostering a more
favorable business environment. The governments "Make in India" campaign has
also focused on promoting manufacturing activities, providing MSMEs with opportunities to
participate in domestic and global supply chains.
MSMEs in India have demonstrated resilience and adaptability,
contributing significantly to employment generation, export growth, and economic
development. Their role in fostering entrepreneurship, innovation, and regional
development cannot be overstated. As India continues to focus on economic growth and job
creation, fostering a supportive ecosystem for MSMEs remains a key priority.
Credit exposure to MSMEs is a crucial aspect of the financial sector,
supporting their growth and contributing to economic development. Here are some relevant
data points highlighting the significance of credit exposure to MSMEs:
(a) Contribution to Employment and Credit to MSMEs: MSMEs are a
major source of employment in India, providing livelihoods to millions of people. As per
National Sample Survey (NSS), MSME sector has been creating 11.10 crore jobs in the rural
and urban areas across the country.
As per RBI, Credit-to-GDP ratio stands at 55%, the credit to MSMEs has
improved to 30% by November22, supported by the extended Emergency Credit Linked
Guarantee Scheme (ECLGS) of the Union government. It adds that the recovery of MSMEs is
proceeding apace, as is evident in the amounts of GST they pay, while the ECGLS is easing
their debt servicing concerns.
(b) GDP Contribution: MSMEs play a significant role in contributing
to Indias GDP. With 63.4 million units spread across the country, the sector contributes
around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities,
showcasing their economic significance.
(c) Priority Sector Lending: MSMEs are considered a priority sector
for lending by banks. As per RBI guidelines, banks are required to allocate a certain
percentage of their total advances to the priority sector, which includes MSMEs.
Currently, the priority sector lending target for domestic commercial banks is set at 40%
of their net bank credit.
The lending to MSMEs in India remains crucial for fostering economic
growth, job creation, and entrepreneurship. Overall, the lending outlook to MSMEs is
positive, driven by government initiatives, digital transformation, credit guarantee
support, and post-pandemic recovery efforts. With continued focus on inclusive lending
practices, streamlined processes, and proactive risk management, banks and NBFCs are
expected to play a vital role in supporting the growth and development of MSMEs in India.
Source:
https://www.marketwatch.com/press-release/india-gold-loan-market-size-and-share-examining-the-
future-of-booming-global-industry-till-2030-2023-06-07?mod=search_headline
3. Business & Financial Performance
During the year under review, the disbursements were 1,006.3 crore up
from 430.8 crore a year ago led strongly by gold loans and business loans to MSMEs. The
AUM has increased to 581 crores in FY23 which marks a 1.89x increase over FY21.
With a substantial increase in disbursements of 1,006.3 crore, the
revenue increased by 77% to 124 crore up from 70 crore in the previous year. This was
powered by strong interest income growth up 104% year over year to 932 crore in FY23
from 455 crore in FY22.
Owing to large investments in the branch build-up, the pre-tax profit
was 7.2 crore displaying a decline of 32% over the previous fiscal. We will see scale
and efficiency arising from these branches in upcoming years.
While our loan book increased significantly, it has been made possible
by the Company lending over 1.5 lakh loans cumulatively with count of active customer base
at 64,824. Our coverage of women customers has increased significantly from 6,208 in FY22
to 16,478 in FY23.
The product composition of the loan book today is 57% MSME Gold loans,
39% in MSME Business loans and 4% in LAP and personal loans, etc.
| Financial Summary |
Financial year Ended |
|
Mar23 |
Mar22 |
Mar21 |
| Interest Income |
93.2 |
45.5 |
12.2 |
| Less: Finance Cost |
50.8 |
24.4 |
4.2 |
| Net Interest Income |
42.4 |
21.1 |
8.0 |
| Other Income |
30.8 |
24.6 |
12.2 |
| Operating Expenses |
65.9 |
35.0 |
18.5 |
| Profit Before Tax |
7.2 |
10.7 |
1.7 |
| Less: Tax |
1.8 |
3.3 |
1.1 |
| Profit for the period |
5.5 |
7.4 |
0.7 |
Chart Mix of Borrowers of the Company - Gender Insight
| Particulars |
FY23 |
FY22 |
Growth % |
| #Loan Book (in Rs crore) |
581 |
305 |
89.90 |
| Customer (Count) |
64,824 |
33,430 |
93.90 |
| Women Customers (Count) |
16,478 |
6,208 |
165.40 |
* On Standalone basis.
# Loan Book for Financial Year 2022-23 includes On and Off Balance
Sheet.
In FY23, our NBFC continued to strengthen its presence in the Gold
Finance industry, leveraging our established branch network and customer trust.
We maintained a well-diversified portfolio of gold- backed loans,
catering to various segments ranging from small businesses and MSMEs to retail customers.
Our robust risk management practices ensured prudent lending, resulting
in a stable asset quality and near zero non-performing assets (NPAs) in Gold loans.
The Company is able to compete on service, last mile credit delivery
and domain expertise alongside robust risk management. Increased demand for gold-backed
loans resulted in a growing loan book, expanding our customer base and revenue streams.
The rise in gold prices positively impacted our loan portfolio, enhancing the value of
collateral and reducing credit risk.
Having entered the gold finance business in 2020-21, the Company has
shown significant growth by achieving an AUM of 332.84 crore. Since FY-2022, it has
entered co-lending and business correspondent relationship with multiple reputable
financial institutions such as Central Bank of India, DCB Bank and Shivalik Small Finance
Bank.
Strategic Initiatives
To capitalize on the industrys growth potential, the Company focused
on expanding its reach to untapped markets, strategically opening new branches in
high-potential regions. The Company reached 78 Dhanvarsha branches and entered the state
of Gujarat to expand geographical presence and make formal growth credit accessible.
The Company prioritized compliance with regulatory norms, safeguarding
against potential regulatory risks and ensuring strict adherence to applicable guidelines.
The Company further strengthened its gold valuation and appraisal processes to ensure
accurate assessment of collateral value.
It expanded current product offerings by introducing innovative gold
loan schemes tailored to the specific needs of different customer segments. The Company
has been focusing on enhancing its customer experience through digitization, enabling
seamless online loan application, repayment, and tracking.
Lending as a Service (L-a-a-S) and Business Correspondent Partnerships
Your Company has entered co-lending arrangements with marquee lenders
for originating MSME loans, starting with one of the largest and first of its kind with
Central Bank of India and has steadily expanded this relationship with other financial
institutions of repute such as HDFC Bank, DCB Bank, UGRO Capital and a business
correspondent relationship with Shivalik Small Finance Bank.
The co-lending arrangements are termed in the Company as Lending as a
Service (L-a-a-S) partnership, and it is extremely pertinent to the Companys growth
strategy owing to its high profitability and capital efficiency for the Companys Balance
Sheet. In L-a-a-S, the Company is a minority capital provider in the range of 5% to 20%,
whereas a larger financial institution is a majority capital provider. While the Company
is responsible for originating, servicing, and collections of the L-a-a-S loans, it is a
high IRR product and a lot more capital efficient.
The share of L-a-a-S as part of loan book has increased from a modest
4% in FY22 to 28% in FY23 demonstrating the firms focus on scaling this vertical. It is
even more critical in a rising policy rate environment and funding winter wherein capital
on favorable terms is increasingly becoming hard to source for all entities. The Company
is also expecting enhanced NIM on account of enhanced volumes in L-a-a-S owing to the
capital efficient nature of this product. Going forward, L-a-a-S will occupy a significant
portion of the loan book.
Your Company has made significant investment to shore up its
distribution capability to L-a-a-S lenders by opening 41 Dhanvarsha branches in the year
past, taking the total tally to 78 Dhanvarsha branches. The Company has bolstered its
people vertical to be able to scale business operations effectively and build extensive
customer relationships. The Company will look to enter new geographies and further expand
the branch network with the purpose of serving the last mile customer by making credit
accessible.
Omni-channel distribution and new geographies
From 37 Dhanvarsha branches in FY22 to 78 branches in FY23, the
Company added 41 new branches and entered the state of Gujarat. The entry into the state
of Gujarat will further open new markets and opportunities for the Company with an
enhanced product suite.
The expansion in the branch strength and introduction of technology
solutions has enabled building scale in the business. The Company witnessed a surge in its
ability to service high loan volumes and enhance its total customers served count to more
than 1,55,200 in FY23 from 61,000+ in FY22. The tech-enabled underwriting and
collections coupled with growth of Dhanvarsha branch network are instrumental to scaling
the L-a-a-S partnerships with large financial institutions of repute and contribute
towards enhanced profitability.
4. Opportunities and Threats Opportunities
(a) Co-lending through NBFCs is the optimum solution to liquidity
conversion from banks to lesser served priority sectors through credit funding. It leads
to consumption growth and acts as an excellent way of sharing risk. It prevents the entire
loan from falling onto NBFCs balance sheet as banks lend to the borrowers directly.
(b) The gold loan segment witnessed strong demand and disbursal growth.
The lower credit eligibility makes gold loans accessible to all. This loan segment saw a
surge in demand from small businesses and individuals during the pandemic to manage their
liquidity needs.
(c) Brand equity to garner higher acceptability among the
underprivileged section of society.
(d) Higher and ever-increasing government regulations and tightening of
norms to restrict competition and deter entry of unorganised players, thus benefiting the
leaders in the industry.
(e) Increasing geographical reach and higher customer base creating
opportunity to penetrate further into the hinterland.
(f) With governments initiatives to increase spend in the MSME segment
to increase start-up businesses and thus demand for MSME loans.
(g) The introduction of the guidelines for the First Loss Default
Guarantee (FLDG) represents a momentous achievement for Indias FinTech sector. This is a
pioneering occasion as it marks the RBIs endorsement of the FLDG program, facilitating
credit-risk sharing agreements between FinTech companies and regulated financial
institutions such as banks and NBFCs.
Threats
(a) Global economic downturn may cause market slowdown.
(b) Unanticipated changes in regulatory norms may cause certain impact
in the Companys operations.
(c) Increasing competition from the global and local competitors in
terms of product development and technology innovations leaving a very thin margin of
errors.
(d) Liquidity squeeze may adversely affect the lending capability of
the Company.
5. Outlook
Looking ahead, the industry is expected to maintain its growth
trajectory, given the sustained demand for gold- backed credit and investments, enduring
allure of gold as a safe-haven asset in times of economic uncertainty and favorable
regulatory environment facilitating the expansion of the industry.
The Company aims to further enhance its technological capabilities,
deploying data analytics and tools to improve credit underwriting and fraud detection.
Prudent risk assessment and constant monitoring of borrower behavior
will remain a key focus area to mitigate credit risk effectively.
In conclusion, the Companys performance within the Gold Finance
segment for FY23 was commendable and remains optimistic about the industrys prospects.
The Companys strategic initiatives and commitment to prudent risk management have
positioned us well to capitalize on emerging opportunities and navigate potential
challenges effectively. As the Company moves forward, it remains steadfast in its mission
to serve customers financial needs while delivering sustainable value to its
stakeholders.
6. TruCap - Customer Service
The Company is committed to setting industry standards and driving
innovation in its products, processes, and service delivery. A key focus is to provide
seamless experiences to customers through continuous monitoring of customer interactions
across various channels. In response to changing customer needs, the Company has enhanced
channel capabilities, ensuring ease of transactions from the comfort of home. To meet
customer expectations, frequently used functionalities have been made available through
digital channels and the contact centre. This enables customers to access our services
conveniently and efficiently. The contact centre is equipped to serve customers in their
preferred languages, including Hindi, English, Marathi and Gujarati. This language
expansion allows for better communication and understanding with our customers.
By investing in digital infrastructure and expanding language
capabilities, the Company aims to cater to diverse customer requirements and enhance the
overall customer experience. It strives to provide seamless and personalized services,
ensuring that the customers have access to essential functionalities through their
preferred channels.
7. Risk Management and Concerns
As a lending firm, we are exposed to various types of risks, including
market risk, credit risk, interest rate risk and operational risk. The Company has
implemented a robust risk management process to proactively identify and mitigate risks
that could significantly affect our business objectives. These risks are carefully
assessed and managed to safeguard the interests of our stakeholders.
The Board of Directors plays a crucial role in overseeing the
effectiveness of our risk management systems. The Risk Management & Strategy Committee
headed by the Chairperson of the Company regularly evaluates the risk management
framework. The Risk Management & Strategy Committee oversees risk management policy
and procedures to review credit and operational risk while the Asset-Liability Management
Committee reviews policies in relation to investment strategy and other risks like
interest rate risk and liquidity risk. Credit risk is managed through rigorous credit
assessment processes, including creditworthiness evaluation of counterparties, and
implementing appropriate risk mitigation measures. Operational risk is addressed by
establishing robust internal controls, implementing comprehensive compliance procedures,
and conducting regular audits to identify and address any potential vulnerabilities. This
ensures that risk management practices are continually reviewed and updated to align with
evolving industry standards and best practices.
The Company recognizes the importance of maintaining a strong risk
management culture to protect the interests of our stakeholders and ensure sustainable
growth. By continuously evaluating and enhancing our risk management systems, we aim to
effectively navigate the dynamic business environment and mitigate potential risks that
could impact our operations.
Through these measures, we strive to uphold the highest standards of
risk management and maintain the trust and confidence of our clients, investors and
regulatory authorities.
8. Internal Control Systems and their adequacy
The Company has implemented a robust internal control system that is
proportionate to its size and the nature of its operations. This system is designed to
enhance internal controls and ensure compliance with laws and regulations. To achieve
this, the Company has established well-defined processes, guidelines, and procedures.
These provide a framework for conducting business activities in a controlled and efficient
manner. Additionally, the Company has implemented suitable internal information systems
that support and facilitate internal controls. Internal controls have been put in place
for each business process to ensure strict adherence to laws and regulations. These
controls include built-in checks and balances, as well as control mechanisms, that
safeguard assets, ensure proper authorization for asset utilization and ensure accurate
accounting.
The Company has defined roles and responsibilities across the
enterprise, enabling the smooth flow of information and effective monitoring. Regular
internal audits and reviews are conducted to assess the effectiveness of controls and
recommendations from the internal auditors are considered for system and procedure
improvements.
The Audit Committee plays a crucial role in examining the internal
control system. It investigates the findings of both external and internal auditors,
ensuring a comprehensive review. The Committee also reviews the Companys approved
policies and procedures to ensure the orderly and effective operation of the business. Any
anomalies or deviations in business operations are identified and corrected promptly.
The Audit function provides reasonable assurance that operations are
effective and efficient, assets are safeguarded, financial records and reports are
accurate. Through these measures, the Company maintains a strong internal control system
that promotes transparency, accountability and compliance, thereby ensuring the smooth
functioning and integrity of its operations.
9. Material Developments in Human Resources/ Industrial Relations front
including number of people employed
The Companys Human Resources (HR) policies revolve around fostering
the comprehensive development and advancement of a skilled and diverse workforce, which
serves as the driving force behind the Companys expansion in all market categories.
Recognizing the significance of training and employee motivation, the Company prioritizes
these components as vital aspects of its business strategy.
The Company actively encourages its employees to broaden their
professional horizons, creating opportunities for learning and career advancement.
Throughout the year, our primary focus has been on enhancing our workforce through
strategic hiring, comprehensive training and creating ample opportunities for individuals
to showcase their abilities. We are dedicated to recognizing and motivating our talented
pool of employees, fostering an environment that encourages their professional growth and
success.
Furthermore, the Company values productivity and efficiency, and thus,
employees who demonstrate exceptional performance are duly recognized and rewarded.
Extensive implementation of employer branding has greatly supported
talent acquisition, resulting in increased networking and heightened visibility of the
TRU & Dhanvarsha brand within the job market. Job postings are effectively
conducted through various social media channels such as LinkedIn & Instagram,
simplifying and streamlining the hiring process.
Due to the thriving business opportunities in tier 2 and tier 3 cities,
our team has experienced a significant increase in hiring, approximately by 47% during FY
2022-2023. Our focus now shifts to non-metro areas where the next phase of business growth
is anticipated. Consequently, we have initiated the recruitment process to support our
operations in those regions.
The Company actively recruits interns who bring fresh perspectives,
innovative ideas, and hands-on training to various functions and departments, enhancing
our processes and operations.
As of March 31, 2023, the Company employed 474 permanent staff members.
10. Material Financial & Commercial Transactions Involving Senior
Management
The Company has in place a Code of Corporate Governance which
stipulates that senior management personnel shall make disclosures to the Board of
Directors of the Company regarding any material, financial and/or commercial transactions
in which they are interested which may have a potential conflict with the interest of the
Company.
11. Details of significant changes (i.e., change of 25% or more as
compared to the immediately previous financial year) in key financial ratios
As per the provisions of Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, and
applicable Master Directions issued by the RBI, the key financial ratios are given below:
| Particulars |
FY 22-23 |
FY 21-22 |
| Interest coverage ratio |
1.14 |
1.44 |
| Debt to Equity Ratio |
1.98 |
1.65 |
| Net Profit Margin (%) |
4.4 |
10.5 |
| Return on Net Worth (%) |
2.51 |
4.21 |
Notes:
1. Debtors turnover, inventory turnover, current ratio and operating
profit margin are not relevant for the Company.
2. Significant change i.e., 25% or more over previous year in (a) debt
equity ratio is attributable to increase in debt from 286.5 crore to 442.5 crore (b)
net profit margin (%) is attributable to increase in revenue from 70 crore to 124
crore and net profit from 7.4 crore to 5.5 crore and (c) Return on Net Worth from
4.21% to 2.51% is attributable to increase in net worth by 49 crore.
Cautionary Statement
The statements made in Management Discussion and Analysis describing
the Companys expectations and estimations may be forward looking within the meaning of
applicable securities laws and regulations. These statements are based on certain
assumptions and expectation of future events. The actual results may differ from those
expressed or implied in this report due to the influence of factors beyond the control of
the Company. The Company assumes no responsibility in respect of forward- looking
statements herein which may undergo changes in future on the basis of subsequent
developments, information or events. Readers are cautioned not to place undue reliance on
the forward-looking statements.
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