sanmar international ltd Management discussions

The financial statements are prepared under historical cost convention, on accrual basis of accounting and in compliance with the requirements of the Companies Act, 2013 and Accounting Standards issued by the Institute of Chartered Accountants of India.

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the company describing the companys objectives, expectations or predictions are based on the current beliefs, assumptions, expectations, estimates and projections of the directors and management of the company about the business, Industry and markets in which the company operates. These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, many of which beyond the Companys control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not, and should not be regarded as a projection of future performance of the company. It should be noted that the actual performance or achievement of the Company may vary significantly from such statements. However, readers are cautioned that this discussion may contain "forward - looking statements" by the Company.

NBFC

The Company is a Non-Banking Financial Company (NBFC) governed by Chapter lll-B of the Reserve Bank of India Act, 1934 (RBI) which, with its regulatory and supervisory framework, ensures strong and healthy functioning of NBFCs by limiting excessive risk taking practices and protecting the interest of deposit holders. The Company does not accept Public Deposits and as required by the RBI, the Board of Directors have passed necessary resolution not to accept Public Deposits without prior approval of RBI.

Overview

Your Company is a Non-Banking Finance Company dealing and making investment in shares & securities and mutual funds. The Performance of the Company depends upon market conditions with proper market strategy.

The move of demonetizing in November 2016, made with the objective to curb black money in circulation, weighed on growth during the second half of FY 17.This reflected in relatively weaker growth in manufacturing and rural consumption as well as services sector PMIs (purchase managers indices) in H2, FY17. However it is expected to have a positive long term impact on the economy through better tax compliance, increase in Tax-to-GDP ratio and higher tax collections.

Continued fiscal consolidated and an anti-inflationary monetary policy stance helped cement macro- economic stability,

The Year under review was characterized by declining interest rates and high liquidity in the monetary system with concern of a lower growth in manufacturing sector. Your Company continued to improve its financial performance within the ambit of strong risk management processes.

The Deployment of temporary surplus liquidity during the year remained guided by the twin objectives of capital protection and return optimization. The timely investments in various financial products such as bank fixed deposits. Mutual fund units coupled with purchase of tax free bonds , equity shares of listed companies and other Non convertible Bonds helped in enhancing yields.

India is fast developing country and Corporate India will continue to show impressive growth in earnings in future as well as the Capital Market. Your company investment strategy is mix of investment in liquid and debt schemes of mutual fund and Equity Shares of various companies in secondary market has shown sound growth during the year under review.

We are looking ahead with the same philosophy and strategy of investment.

Opportunities and Threats

There is a general improvement in the overall economic conditions in India with brighter aspect in Capital Market, increased foreign inflow is expected to provide sustained growth and this is likely to open up additional opportunities.

Your Companys major risks in the course of its business are interest rate risk and operational risk. Any change in the policies of the government towards NBFC Companies, Slowdown of the economy in India and the Global economy may pose as a challenge to the Company,

Risks & concerns

Risk is inherent in every business activity and securities investments are subject to market risk. It is difficult to predict that the past performance will continue. Any general slowdown of the economy in India and the global economy as a whole may result in slower growth in the business. Trading volumes, settlement periods, transfer procedures changes, change of interest rate in government policy may restrict the liquidity of the investments and this could lead to limiting the business opportunity for the company.

Internal Control System and Adequacy

Your Company has a proper and adequate system of internal controls with its size and nature of operations to provide reasonable assurance that all assets are safeguarded, transactions are authorized, recorded and reported properly and applicable statutes are duly complied with. The Company has constituted an Audit Committee to monitor the adequacy and efficiency of internal control system.

Financial performance with reference to operational performance

The Company recorded a profit after tax of Rs.1,804.44 lacs for the year ended 31^st March 2017 as compared to Rs. 2,727.61 lacs for the previous year.

The Companys Net worth as on March 31, 2017 stood at Rs.33,391.82 lacs as against Rs. 31,748.37 lacs last year. Earnings per share have decreased from Rs, 56.65 to Rs. 37.48.

In order to optimize shareholder value, the company continues to focus on the investment strategy of Debt Schemes of Mutual Funds, Debenture/ Bonds of Companies, Tax Free Bonds, Fixed Deposits and Equity Shares of various companies.