Vardhman Holdings Ltd Management Discussions.

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A. FINANCIAL ANALYSIS:

(i) STANDALONE

During the year under review, your Company has registered Revenue from Operations of Rs. 6,317.94 Lakhs as compared to Rs. 18,693.87 Lakhs in the previous year. The Company earned other income of Rs. 136.14 Lakhs during the year as against Rs. 357.02 Lakhs during last year.

PROFITABILITY:

The Company earned profit before depreciation, interest and tax of Rs. 5,836.91 Lakhs as against Rs. 18,797.78 Lakhs in the previous year. After providing for depreciation of Rs. 1.44 Lakhs (Previous Year Rs. 3.95 Lakhs), provision for current tax Rs. 756.56 Lakhs (Previous Year Rs. 4,079 Lakhs), deferred tax Rs. (93.53) Lakhs [Previous Year Rs. 51.08 Lakhs], MAT Credit Entitlement Rs. (329.53) [previous year Rs. (3,500.69)], the net profit from operations worked out to Rs. 5,501.97 Lakhs as compared to Rs. 18,164.44 Lakhs in the previous year.

The balance available for appropriation after adding balance in surplus account is Rs. 33,039.25 Lakhs. Out of this, a sum of Rs. 159.58 Lakhs and Rs. 32.80 Lakhs have been appropriated towards proposed dividend and corporate dividend tax respectively thereon, Rs. 1,121.53 Lakhs is proposed to be transferred to Special reserve and the balance of Rs. 31,725.34 Lakhs is proposed to be carried as surplus to the balance sheet.

(ii) CONSOLIDATED

During the year under review, your Company has registered Revenue from Operations of Rs. 4,172.47 Lakhs as compared to Rs. 6796.16 Lakhs in the previous year. The Company earned other income of Rs. 136.13 Lakhs during the year as against Rs. 357.02 Lakhs during last year.

PROFITABILITY:

The Company earned profit before depreciation, interest and tax of Rs. 19230.88 Lakhs as against Rs. 30,954.50 Lakhs in the previous year. After providing for depreciation of Rs. 1.44 Lakhs (Previous Year Rs. 3.95 Lakhs), provision for current tax Rs. 756.56 Lakhs (Previous Year Rs. 4,079 Lakhs), deferred tax Rs. (93.53) Lakhs [Previous Year Rs. 51.08 Lakhs], MAT Credit Entitlement Rs. (329.53) Lakhs [previous year Rs. (3,500.69) Lakhs] the net profit from operations worked out to Rs. 18,895.94 Lakhs as compared to Rs. 30,321.16 Lakhs in the previous year.

The balance available for appropriation after adding balance in surplus account is Rs. 155,467.47 Lakhs. Out of this, a sum of Rs. 159.58 Lakhs and Rs. 32.80 Lakhs have been appropriated towards proposed dividend and corporate dividend tax respectively thereon, Rs. 1,121.53 Lakhs is proposed to be transferred to Special reserve and the balance of Rs. 154,153.57 Lakhs is proposed to be carried as surplus to the balance sheet.

B. RESOURCES UTILISATION:

a) Fixed Assets:

The Net Block as at 31st March, 2018 was Rs. 303.40 Lakhs as compared to Rs. 82.14 Lakhs in the previous year.

b) Current Assets:

The current assets as on 31st March, 2018 were Rs. 24,558.43 Lakhs as against Rs. 37,652.62 Lakhs in the previous year.

C. FINANCIAL CONDITIONS & LIQUIDITY:

Management believes that the Companys liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:-

(Rs. in lakhs)
PARTICULARS 2017-18 2016-17
Cash and Cash equivalents:
Beginning of the year 130.96 62.38
End of the year 168.03 130.96
Net cash provided (used) by:
Operating Activities 2367.81 (3,435.26)
Investing Activities (2,137.90) 3,617.38
Financial Activities (192.84) (113.54)

D. BUSINESS OUTLOOK:

Vardhman Holdings Limited primarily earns its income from investments. The Companys strategy is to adopt a systematic approach of investment into different asset classes namely debt, equity & real estate and to keep the portfolio dynamic as per the changing market conditions. Companys current portfolio consists of investments into debt, equity and real estate. The investment is made in accordance with the asset allocation model fixed by the Board.

E. MANAGEMENT PERCEPTION OF RISK AND CONCERNS:

The Company recognises that risk is an integral and unavoidable component of business and is committed to managing the risk in a proactive and effective manner. The Company is a NBFC registered with RBI and mainly engaged in investment activities. It follows a strategy of adopting a systematic approach to investment into different asset classes and keeping the portfolio dynamic as per the changing market conditions. The aim is a well diversified portfolio to mitigate the market risk.

The Company is prone to all the financial risks and capital market fluctuations.