Annual Report: 2024
Annual Report 2023-24 for Maxvalue Credits and Investments Ltd.
Corporate Information Maxvalue Credits and Investments Limited, incorporated in 1995, is a non-banking financial company (NBFC) registered with the Reserve Bank of India. The registered office is located in Thrissur, Kerala. The board of directors includes Sri. Manoj VR (Managing Director), Sri. Christo George (Whole-Time Director), several non-executive and independent directors, including Sri. Kottarath Nandakumar, Sri. Parameswaran PN, Smt. Saraladevi M, Sri. Roy Johnson V, Sri. Prathapan KR, Sri. Gireesh K, and Sri. V K Gopinathan. Key managerial persons include Sri. Joy Thomas (CEO), Smt. Salini Narayanan K (CFO), and Sri. Akhil B Vijay (Company Secretary). The statutory auditors are M/s. VKS Narayan & Co. and the debenture trustee is Jokin A Pereira. Link Intime India Private Limited serves as the Registrar & Share Transfer Agents.
From the Managing Director's Desk The company achieved a net profit of Rs. 10.41 crore for the fiscal year ending March 31, 2024, reversing previous losses. This was due to efficient management of resources, strategic realignment of business portfolios, and prompt repayment of obligations to lenders, with successful repayment of Rs. 372 crore to NCD holders and subordinate debt providers without any delays. Asset portfolios were effectively managed through rigorous credit risk assessments and efficient collection mechanisms, focusing on auto loans, gold loans, and micro-finance. Operating expenses were reduced by relocating to more cost-effective premises and merging unprofitable branches. The company commenced operations in Tamil Nadu and plans for further expansion.
Notice to Shareholders The 29th Annual General Meeting will be held on September 10, 2024, via video conferencing to transact ordinary and special business. Ordinary business includes approving the audited financial statements for the year ending March 31, 2024, and appointing directors who retire by rotation. Special business includes the issuance of fully secured redeemable non-convertible debentures up to Rs. 150 crore on a private placement basis. The board is authorized to mortgage company assets and ratify the appointment of Mr. Manoj Vellamparambil Raman as Managing Director. There are also resolutions to appoint and ratify the appointments of Independent Directors, including Mr. Sadanandan Prasanna Kumar, Mr. Perinthalakkat Parameswaran Narayanan, and Mrs. Saraladevi Mecheriparambil.
Directors' Report The financial summary for 2023-24 (with 2022-23 figures in parentheses) includes a total income of Rs. 136.73 crore (Rs. 154.91 crore) and a profit for the year of Rs. 10.41 crore (loss of Rs. 21.54 crore). No dividend has been recommended. The company offers auto loans, gold loans, traders' loans, and microfinance, and also provides investment opportunities via non-convertible debentures and subordinated debts. The company’s portfolio size decreased from Rs.562.26 crore on March 31, 2023, to Rs.437.95 crore on March 31, 2024. The company repaid Rs.19.40 Cr towards redemption of matured NCDs and Rs.353.47 Cr towards matured subordinated debts, raised Rs.20.79 Cr as NCD and Rs.125.28 Cr as subordinate debt. The overall CRAR and Tier-I CRAR of the company stood at 29.79% and 19.64%, respectively. The company plans to improve operational efficiency and profitability, including branch restructuring, expansion into southern and central India, and reviewing loan products. As of March 31, 2024, the company had 76 branches in Kerala, 50 in Karnataka, and 9 in Andhra Pradesh, with plans to expand into Tamil Nadu. The company has transferred Rs. 2,08,24,316.36 to statutory reserves. The Company has not accepted or renewed any deposits covered under chapter V of Companies Act, 2013. There were 13 Board Meetings during the year. The company appointed M/s. Prasanth and Associates as the Secretarial Auditor to make the Secretarial Audit report for the financial year 2023-24. During the year, the Company had issued and allotted 28000000 Equity shares of Rs. 5 each aggregating Rs. 14,00,00,000 on Right issue basis.
Management Discussion and Analysis Report NBFCs facilitate financial inclusion. The industry is expected to be worth USD 326 billion by 2023. NBFCs can expand operations by leveraging blended finance and employing digital tools. There is increased competition from the banking sector and NBFCs will need to investigate securitization, co-origination, and co-lending, and M&A activity. The company's strengths include a solid history of funding against gold jewelry and technology adoption. Weaknesses/areas for improvement are refinancing, non-flexibility in NPA classification, limited leverage ratio, and lack of education among people. A majority of people in India reside in places where banks are hesitant to offer loans providing an area where NBFCs can intervene and expand their credit delivery. The rate of credit growth accelerated in fiscal 2023 and is now comparable to pre-COVID levels. Systemic retail credit increased by 19.2% while overall credit is estimated to have grown by 13.3%.
Financial Performance and Segment Analysis Operating revenue has dropped from Rs.149.65 crore to Rs.124.99 crore sand interest income from the loan has decreased from Rs.136.15 crore to Rs.117.24 crore. During FY 2023-2024, the percentage of the vehicle loan segment decreased from 53.90% to 40.55%, and the traders loan decreased from 4.27% to 3.03%. On the other hand, the percentage of gold loans has increased from 27.54% to 32.26%, while the percentage of microfinance has increased from 14.29% to 24.16%. A segment-wise split of income as of March 2024 is provided for vehicle loans, gold loans, micro finance, and traders loans. The company also concentrated on utilising its resources in those geographies that offer better cost efficiency and margins.
Outlook, Risks and Concerns, and Internal Control The company concentrated on resizing and recasting its loan portfolios, placing a greater emphasis on quick recycling loan products like traders' loans and gold loans. The company collected Rs.3.52 crore during the previous year (2023–24), and efforts are being made to collect the balance NPAs. Key risks include credit risk, interest rate risk, market risk (price of collateral), liquidity risk, and operational risk. A methodical audit plan is in place which will occur 1) in all branches once every 2 months, 2) for gold in branches every month, and 3) for other offices, every quarter. A clear performance management model is in place.
Auditor's Report An independent auditor's report from V.K.S. Narayan & Co., Chartered Accountants, provides an unqualified opinion on the financial statements as of March 31, 2024. The report states that the financial statements present fairly the financial position, financial performance, and cash flows of Maxvalue Credits and Investments Ltd in accordance with accounting principles generally accepted in India. The report also addresses the responsibilities of management and those charged with governance, the auditor's responsibilities, and compliance with ethical requirements and legal and regulatory requirements, including the Companies Act, 2013. Additionally, the auditors provided a separate report in "Annexure B", expressing an unmodified opinion on the adequacy and operating effectiveness of the company's Internal Financial Control over Financial reporting
Financial Statements The balance sheet as of March 31, 2024, shows total equity and liabilities of Rs 51,728.99 Lakhs, and total assets of the same amount. Key components include Share capital of Rs 17,875.98 Lakhs, Reserves and surplus of -Rs 7,839.89 Lakhs, and Long term borrowings of Rs 22,507.01 Lakhs. The profit and loss statement for the year ended March 31, 2024, reports a Total Revenue of Rs 13,671.51 Lakhs, Total Expenses of Rs 12,653.00 Lakhs and Profit / (Loss) for the period of Rs 1,041.22 Lakhs. The cash flow statement for the year ended March 31, 2024, provides details of cash flows from operating, investing and financing activities. It is shown that cash flow from operating activities Rs 8,338.05 Lakhs, Cash flows from investing activities of -Rs 53.63 Lakhs, and Cash flows From Financing Activities of -Rs 9,548.53 Lakhs. This resulted in a Net increase/decrease in cash or cash equivalents of -Rs 1,264.11 Lakhs.
Additional Financial Disclosures
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