Kajal Synthetics & Silk Mills Ltd Management Discussions

The Indian economy has witnessed profound positive transformation and has showed resilience and strong growth across the sectors and continues to be and continues to be among the fastest growing economies in the world. The geopolitical tensions, supply chain, disruptions, high inflation and tighter monetary conditions were some of the challenges for the economy recovery NBFCs has always been an important component of the financial sector and has seen higher credit growth over the past few years. The NBFC sectors in India is expected to grow due to several factors like governments commitment to financial inclusion, sectors digital transformation, regulatory changes that aims to ensure the sectors ability and prevent excessive risk-taking and also due to impressive growth projections. Lower transaction costs, quick decision making, customer orientation and prompt service standard have typically differentiated NBFCs from banks.

Your company is committed to addressing the changes boosted by its strengthen in market position, agile execution capabilities, robust early warning system and extensive use of analytics for risk mitigation and resources allocation. It will ensure to take advantage of the tailwinds that may emerge during the course of year.

The Stringent RBI and other regulatory norms governing the functioning of NBFC and certain government restriction act as hindrance in smooth functioning of NBFC

Your Company operates only single segment which is non-banking financial services (Granting/taking of loans and making long term Investments).

Due to financial liquidity, the Company is not able to undertake any financial / investment activities in last few years. The Board is planning to disinvest its investment and have the liquid funds available to deploy the same for the better return.

Further as the Company has not carried out any Non-Banking Financial activities since long, the Management is planning for voluntary surrender of Certificate of Registration issued by Reserve Bank of India and carry on other business activities.

The very nature of the Companys business make it subject to various kind of risk. As an NBFC, the Company is exposed to credit, liquidity, market and interest rate risk. The Capital market activities in which most of our activities depends on is also influenced by global events and hence there is amount of uncertainty in the near term outlook of the market. In line with Listing Regulations and as per the requirement of Section 134(3) (n) of the Companies Act, 2013 read with the rules made there under, as amended, at present the Board has not identified any element of risk which may threaten the existence of the company.

The Company had adequate internal control system commensurate with its size and nature of business. Your companys internal control procedures are adequate to ensure compliance with various policies, practices and statutes.

On a consolidation basis, the Total Income for the financial year 2025-26 Rs. 6.90 Lakh (Previous Year 5.50 Lakh) and Loss After Tax before comprehensive Income was Rs. 240.49 Lakh (Previous year Loss After tax before comprehensive income was Rs. 306.68 Lakh)

On a standalone basis, the Total Income for the financial year 2025-26 Rs. 6.90 Lakh (Previous Year 5.50 Lakh) and Loss After Tax before comprehensive Income was Rs. 240.01 Lakh (Previous year Loss After tax before comprehensive income was Rs. 214.97)

The Company recognizes the importance of Human Resource as a key asset instrumental in its growth. The Company has well developed management information system giving daily, monthly and periodical information to the different levels of management. Such reports are being analyzed and effective steps are taken to control the efficiency, utilization, productivity and quality in the Company.