United Credit Ltd Management Discussions

The economy is currently experiencing a liquidity crunch, compelling business enterprises across sectors to explore various financing options to maintain cash flow, meet operational expenses, and offset prior losses. In this environment, the demand for structured and alternative credit solutions has surged, as companies strive to stabilize their financial position, revive growth, and navigate short- to medium-term challenges. This scenario has further underscored the critical role of NBFCs in bridging credit gaps and supporting business continuity, especially for small and mid-sized enterprises.

Non-Banking Financial Companies (NBFCs) have traditionally played a crucial role in financing key sectors such as infrastructure, transportation, and providing credit to underserved and economically weaker sections of society. However, in the current financial landscape, many NBFCs are experiencing a credit squeeze, with a marked decline in the flow of fresh disbursements. This contraction is driven by tighter liquidity conditions, cautious lending practices, and increased risk aversion among investors and financial institutions. As a result, the ability of NBFCs to support grassroots economic activities and large-scale developmental projects has been temporarily constrained, impacting overall credit availability in the system.

The company is principally engaged in non-banking financial activity. The Company has booked Profit before Tax of Rs.130.14 lakhs. During the year under review the company earned interest of Rs.237.38 lakhs on loans given as compared to the previous year of Rs.225.80 lakhs. The Company also earned Rs.100.34 lakhs on property let out as against of Rs.108.24 lakhs in the previous year.

The Company has undertaken strategic initiatives to expand into new business areas, recognizing that the conventional NBFC model has become less profitable under current market conditions. Diversification efforts are aimed at enhancing revenue streams, reducing dependency on core lending activities, and tapping into emerging opportunities that offer better returns and long-term sustainability.

Risk Management is an integral part of the Companys business strategy with focus on building risk management culture across the organization. The Risk Management oversight structure includes Committees of the Board and Senior Management Committees. The Risk Management process is governed by the Group level comprehensive Enterprise Risk Management Framework which lays down guidelines for Risk identification, assessment and monitoring as an ongoing process that is supported by a robust risk reporting framework.

Internal control systems of the Company commensurate with its scale of operation and complexity involved in the nature of business carried on by the Company.

During the year under review, the gross revenue from operations was Rs.343.59 lakhs as compared to that of Rs.339.56 lakhs for the previous financial year. Profit before tax in the current financial year was Rs.130.14 lakhs as compared to that of the previous financial year of Rs.207.67 lakhs.

The Company considers its employees a key asset and continues to invest in their development through training and performance-based incentives. Industrial relations remained cordial during the year, and efforts to build a strong, digitally-capable workforce are ongoing.

Details of Significant change (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor:

Explanations (Serial Number-wise):

(i) The decrease is due to decrease in outstanding Debtors and decrease on Gross Return compared to last year.

(ii) N.A.

(iii) The decrease is due to the decrease in earning before interest and Tax (EBIT) as compared to last year by Rs. 77.57 lakh.

(iv) The decrease is due to the increase in Current Liability as compared to the last year by Rs. 7.89 Lakhs

(v) The Increase in loan liability as compared to last year by Rs. 6.81 Lakhs.

(vi) The Decrease is due to decrease in EBIT in current year as compared to last year by Rs. 77.57 lakhs

(vii) The Decrease is due to decrease in PAT of current year as compared to last year.

(j) Details of any change in Return on NetWorth as compared to the immediately previous financial year along with a detailed explanation thereof.

Explanations:

This is mainly due to the decrease in Net Income (PAT) as compared to last year by Rs.62.17/- Lakhs

This report is a forward-looking statement subject to variation in real life situation. Actual results could differ substantially from those expressed or implied.