K K Fincorp Ltd Management Discussions

a) Industry structure and developments

NBFCs have become important constituents of the financial sector and have been recording higher credit growth than scheduled commercial banks (SCBs) over the past few years. NBFCs are leveraging their superior understanding of regional dynamics and customised products and services to expedite financial inclusion in India. Lower transaction costs, quick decision making, customer orientation and prompt service standards have typically differentiated NBFCs from banks. Considering the reach and expanse of NBFCs, they are well-suited to bridge the financing gap in a large country like India.

The other serious risk relates to major disruptions in the global supply chains mostly emanating from China; and, more recently, with the Ukraine conflict, from Russia. It is difficult to predict how these will play out. So, we need to be prepared for continuous volatility and external disruptions.

b) Opportunities and Threats

Non-Banking Finance Companies (NBFCs) continue to play a critical role in making financial Services accessible to a wider set of Indias population and are emerging as strong intermediaries in the retail finance space. Going forward, one should expect NBFCs to further Strengthen their presence in retail finance and grow at a reasonably healthy pace.

Your Company being an investment Company seeks opportunities in the capital market. The volatility in stock indices in the financial year under report represents both an opportunity and challenge for the Company.

Unfortunately, the conflict in Ukraine has led to chaos in global commodity markets. Crude prices are very high posing a threat to Indias economic recovery. How increased commodity prices will unfold is yet to be seen. What is sure, however, is that there will be a considerable impact on inflation which was already a cause of concern.

c) Segment-wise Performance

The Company is engaged in investment activities and other financial services during the year under review, hence the requirement of segment-wise reporting is considered irrelevant.

d) Outlook

We continue to see a significant opportunity in the market and will use periods of interim weakness as investment opportunities for long term.

e) Risks and Concerns

The performance of the Company is dependent on the capital markets for its returns. Even though it is envisaged that Indian stock market will continue to do well, global concerns can result in sharp corrections.

f) Internal Control Systems and their adequacy:

The Company has adequate internal control systems in technical and financial fields.

g) Financial Performance:

The Financial Performance of the Company during the year was satisfactory .

h) Human Resources/ Industrial Relations:

The Company has maintained good relations with its employees.

i) Cautionary Statement:

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be "forward looking statements” within the meaning of applicable securities laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting global and domestic financial Markets, changes in Government regulations, tax regimes, economic developments within or outside India and other factors such as litigation etc. The Company assumes no responsibility to publicly amend, modify or revive any forward looking statements on the basis of any subsequent developments, information or events.

j) Details of significant changes in Key Financial Ratios:

There is no significant change in key financial ratios as compared to the ratios of previous financial year except following:

Sr. No.	Particulars	2022-23	2021-22	Remarks
1)	Debtors Turnover Ratio	Nil	37.06	There are no Debtors at the year end.
2)	Current Ratio	11.22	46.69	Due to Increase in long term investments .
3)	Operating Profit Margin Ratio (in %)	76.03 %	90.58%	Due to decline in capital gains during the year .
4)	Net Profit Margin (in %)	68.18 %	77.41 %	Due to decline in capital gains during the year
5)	Return on Net worth	7.56 %	23.07%	Due to decline in capital gains during the year