Lakshmi Finance & Industrial Corporation Ltd Management Discussions.

INDUSTRY OVERVIEW AND OUTLOOK:

The cyclical upswing in global economic activity since the last quarter of 2016 continued to persist until the middle of 2018, resulting in the highest degree of synchronized global expansion during the post-crisis period. However, momentum in Global GDP growth started to peter out thereafter, amid broad-based moderation in activity across developed and emerging economies.

The trajectory of Indias economic expansion behaved in line with the global trend. The first half of FY 2018-19 saw GDP growth printing at 7.5%. However, as per implied Central Statistical Organizations forecast for the full financial year GDP growth momentum could slip sharply to 6.4-6.6% in the second half of FY 2018-19. Increase in crude oil prices during the course of the financial year to USD 70 pb from USD 56 pb in FY 2017-18 and adverse spillover impact of recent tightness in financial conditions for the Non-Banking Financial Company sector provided headwinds for domestic growth momentum.

The overall performance of the Company is quite low because of unfavourable stock market conditions during the

Financial Year 2018-19, imposition of the new capital gains tax and dividend tax from F Y 2018-19 and categorization and rationalization of Mutual Fund Schemes by SEBI. The Company will continue to focus its efforts to closely monitor portfolio Investment activity to generate optimum returns by way of capital appreciation and periodic dividend returns.

INVESTMENTS:

Total Non Current Investments as on March 31, 2019 is Rs.3,670.34 lakhs excluding Rs.425 lakhs of Bank Fixed Deposits as against Rs.3,400.50 lakhs as at March 31, 2018.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The CEO and CFO certification provided in the certification section of the Annual Report discusses the adequacy of our

Internal Control systems and procedures.

KEY FINANCIAL INDICATORS: LAST THREE YEARS: (Rs. in lakhs)

F.Y 2018-19 F.Y.2017-18 F.Y.2016-17
Equity Capital and Reserves 4,247.38 4,209.46 3,874.08
Non Current Investments 3,670.34 3,400.50 3,651.29
Gross Profit (profit before tax) 187.64 473.92 318.67
Net Profit (profit after tax) 182.59 461.75 314.60
Dividend (%) 25% 40% 35%
Earnings per share 6.09 15.39 10.49

For and on behalf of the Board LAKSHMI FINANCE & INDUSTRIAL CORPORATION LIMITED

Sd/- K. HARISHCHANDRA PRASAD

Date: 27.05.2019 Managing Director Place: Hyderabad ( DIN: 00012564)