India, 12th May 2022: Rubix Data Sciences Pvt Ltd (Rubix), a technology and analytics-based B2B Risk Management and Monitoring platform, released its Quarterly Risk Transition Report covering changes in risk from Q3 FY 2022 (October – December 2021) to Q4 FY 2022 (January – March 2022).
At the end of each quarter of the Indian financial year (April - March), Rubix compares the data of how Indian business entities in its monitoring portfolio have performed versus the prior quarter, from a statutory compliance and credit rating perspective. The key parameters being monitored each quarter are GST Filings, Provident Fund Filings and Credit Ratings.
The purpose of the Quarterly Risk Transition Report is to see if the business entities being monitored show any deterioration or improvement from a statutory compliance or external credit rating perspective as compared with the prior quarter. There could be several reasons for non-compliance with statutory requirements for paying of GST and Provident Fund and filing the Returns. Of these, cash flow delays or liquidity problems that business entities face are probably the most important drivers for non-compliance. Similarly, changes in Credit Ratings need to be examined closely in order to understand the reasons behind the change.
A deterioration in any of the above parameters for the business entities should raise red-flags and serve as early warning signals for those monitoring the portfolio.
Kaushal Sampat, Founder of Rubix Data Sciences said, “The Rubix Quarterly Risk Transition Report for Q4 FY 2022 indicates an improving risk environment in India as the country puts the nightmare of the Covid pandemic behind it. While inflationary concerns have grown and the RBI has begun the process of monetary tightening in Q1 FY 2023, the prospect of a normal monsoon is a significant positive for the economy. Indian businesses would do well to be cautious given the volatility in the forex and commodity markets caused by the Russian invasion of Ukraine.”
Below are the key insights highlighted in the report, reflecting the risk environment in India:
• There was an improvement in the Rubix GST Compliance Score of 37% of the business entities between Q3 and Q4 FY 2022 versus 20% improvement recorded in the prior quarter – this is the largest improvement in the Rubix GST Compliance Score in 6 quarters i.e., since Q2 FY 2021.
● The Rubix GST Compliance score of 738 business entities of the 11,393 companies (only 6%) deteriorated between Q3 and Q4 FY 2022. In the prior quarter, 10% of the business entities had witnessed a drop in this indicator.
● The Rubix Provident Fund Compliance Score of 32% of the business entities improved in Q4 FY 2022, compared with only 18% in the prior quarter.
● The external Credit Rating of 81 companies (4% of total) improved in Q4 FY 2022, compared with only 29 companies (2%) in the prior quarter.
● The percentage of companies showing no deterioration in any of the three Risk Variables increased to 78% in Q4 FY 2022 compared with 73% in the prior quarter.
All the above facts indicate an improvement in the risk environment in India in Q4 FY 2022.
Appendix
Below are the detailed key findings of the Rubix Quarterly Risk Transition Report for Q4 FY 2022:
1. The GST Quarterly Monitoring Report is prepared on the basis 11,393 business entities whose GST filing details were available for both Q3 and Q4 FY 2022. The business entities being monitored belong to more than 35 sectors of the economy.
o There was an improvement in the Rubix GST Compliance Score of 37% of the business entities between Q3 and Q4 FY 2022 versus 20% improvement recorded in the prior quarter – this is the largest improvement in the Rubix GST Compliance Score in 6 quarters i.e., since Q2 FY 21. This indicates that the risk environment in Q4 FY 2022 has shown a robust recovery when compared with the prior quarter.
o Rubix GST Compliance Score of 738 Business Entities (only 6% of the total number being monitored) deteriorated between Q3 and Q4 FY 2022. In the prior quarter, 10% of the business entities had witnessed a drop in their Rubix GST Compliance Score.
Change in Rubix GST Compliance Score between Q3 FY 2022 and Q4 FY 2022
Type of Change Number of Companies / Firms %
Deterioration 738 6% ↓
Improvement 4,162 37% ↑
No Change 6,493 57% ↔
Grand Total 11,393 100%
Quarterly Risk Transition of GST Compliance
Q4 FY 2020 (Jan – Mar 2020) to Q4 FY 2022 (Jan – Mar 2022)
2. The Provident Fund (PF) Quarterly Monitoring Report is prepared on the basis of 5,374 business entities whose PF filing details were available for both Q3 and Q4 FY 2022.
o The Rubix PF Compliance Score of 1,877 business entities (35% of the total number being monitored) deteriorated between Q3 and Q4 FY 2022 compared to the prior quarter in which a whopping 48% of the business entities had witnessed a drop in their Rubix PF Compliance Score.
o There was an improvement in the Rubix PF Compliance Score in 32% of the business entities between Q3 and Q4 FY 2022, compared with only 18% in the prior quarter.
o Both the above facts indicate an improvement in the risk environment.
Change in Rubix PF Compliance Score between Q3 FY 2022 and Q4 FY 2022
Type of Change Number of companies / firms %
Deterioration 1,877 35% ↓
Improvement 1,723 32% ↑
No Change 1,774 33% ↔
Grand Total 5,374 100%
Quarterly Risk Transition of PF Compliance
Q4 FY 2020 (Jan – Mar 2020) to Q4 FY 2022 (Jan – Mar 2022)
3. The Quarterly Monitoring Report pertaining to external Credit Ratings has been prepared based on data pertaining to 1,885 business entities whose external credit ratings were available for both Q3 and Q4 FY 2022.
o The external credit ratings of 81 companies (4% of the total) improved in Q4 FY 2022, compared with only 29 companies (2%) in the prior quarter.
o The external Credit Ratings of 46 companies (3%) deteriorated between Q3 and Q4 FY 2022. In the prior quarter, 2% of the business entities had witnessed a deterioration in their Credit Ratings.
Change in Credit Ratings between Q3 FY 2022 and Q4 FY 2022
Type of Change Number of
Companies / firms %
Deterioration 46 3% ↓
Improvement 81 4% ↑
No Change 1,758 93% ↔
Grand Total 1,885 100%
Quarterly Risk Transition of Credit Ratings Compliance
Q4 FY 2020 (Jan – Mar 2020) to Q4 FY 2022 (Jan – Mar 2022)
4. Extent of Risk Deterioration in Monitored Business Entities:
Rubix then studied the extent of risk deterioration in the 11,393 business entities being monitored. It conducted an analysis to check how many of the 3 Risk Variables (GST Compliance, PF Compliance and External Credit Rating) had deteriorated for each of the companies. The more the Risk Variables in which there is a deterioration, the higher is the Risk associated with the business entity.
o 2,457 business entities (22% of the total) saw a deterioration in any one of the three Risk Variables, compared with 26% in the prior quarter.
o Only 1% of the total entities saw a deterioration in any two of the three Risk Variables, consistent with the prior quarter.
o In Q4 FY 2022, not a single entity witnessed a deterioration in all three Risk Variables, compared with 2 entities in the prior quarter.
o The percentage of companies showing no deterioration in any of the three Risk Variables increased to 78% in Q4 FY 2022 compared with 73% in the prior quarter.
Deterioration in Risk Variables between Q3 FY 2022 and Q4 FY 2022 Number of Companies %
No Deterioration in any Risk Variable 8,836 78%
Deterioration of 1 Risk Variables 2,457 22%
Deterioration of 2 Risk Variables 100 1%
Deterioration of 3 Risk Variables 0 0%
Grand Total 11,393 100%
About Rubix Data Sciences
Rubix Data Sciences Pvt. Ltd. helps you to take prudent credit risks, build a robust supply chain and monitor compliance for your business partners in India and around the world. Rubix helps you collect payments in time from your debtors, helping generate predictable cash flows.
Set up by highly experienced Risk Professionals, Rubix has been awarded the Certificate of Recognition at the IMC Digital Technology Awards 2020 for its Rubix ARMSTM platform. In recognition of its information security management system, Rubix has received the ISO 27001:2013 accreditation from LRQA. Rubix has been appointed as India’s first Validation Agent for the Legal Entity Identifier by Legal Entity Identifier India Ltd, the Local Operating Unit accredited by Global Legal Entity Identifier Foundation (GLEIF), Switzerland.
The Rubix ARMSTM platform and its suite of reports, products and services are based on its extensive database of structured and unstructured data aggregated from over 120+ sources, customized predictive analytics and proprietary technology. Through its solutions, Rubix provides deep insights to Credit, Risk, Supply Chain and Compliance professionals in Banks, Credit Insurance Companies, Fintechs and Corporates, facilitating quicker and more effective decision-making.
For more information about how to assess and monitor the Credit, Supplier and Compliance Risk of your counterparties, and validate their identities using the Legal Entity Identifier, please contact us at:
Rubix Data Sciences Pvt. Ltd.
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Vidyavihar (W),
Mumbai – 400 086
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