MANAGEMENT DISCUSSION AND ANALYSIS Financial Review: Sterling Guaranty & Finance Ltd. (SGFL) has suffered before Tax loss of Rs. 3.65 lacs for the financial year ended March 31, 2014 compared to loss of Rs. 3.20 lacs in the brvious year. The accumulated loss is Rs. 824.20 lacs compared to share holders' funds of Rs.771.30 lacs. The Company has negative Net worth as on March 31, 2014 of Rs.52.90 lacs against Rs. 49.24 lacs of last year. Resources and Liquidity: The Company has not accepted any fixed deposits from the public during the year 2013-2014 and there is no outstanding Liabilities. The company holds interest free Inter Corporate Deposit of Rs. 53.05 lacs which include Rs.22.80 received during the year from Sterling Investments (India) Ltd. The company has during the year repaid interest free sum to Indistock Securities Ltd and as on 31-03-2014, no amount is payable to it. Industry Structure and Developments: The NBFC sector in India is rebrsented by a mix of a few large companies with nationwide brsence and a large number of small and medium sized companies with regional focus. The Reserve Bank of India regulates the operations of NBFCs. In last year, revival appears to be on the agenda of regulators. Opportunities: The Company sees ample opportunity in reviving NBFI business after considering the proposed merger and amalgamation with Sterling Investments (India) Ltd, a registered NBFC having positive net worth and resources. Challenges: The NBFC sector continues to face competitive brssures from the banking sector and financial institutions, due to their increased penetration in the consumer financing market, with comparatively low cost of funds at their disposal. The sbrads in the lending business have also narrowed considerably, bringing risk-adjusted margins to make it unviable. Outlook: In view of proposed future plan the Company is confident of revival. Risks and Concerns: The company is exposed to specific risks of interest rate fluctuations, credit risk, lack of resources which are peculiar to its businesses and the environment within which it operates. Adequacy of Internal Control: There internal controls in the company and control policies and procedures are adequate commensurate to the nature and scale of business activities. The Audit Committee of Directors reviews the adequacy of internal control periodically. |