Shiv Kamal Impex Ltd Management Discussions

Annexure-III

In compliance with the provisions contained in Regulation 34(3) read with Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, please find below Management Discussion & Analysis Report:

1. INDUSTRY STRUCTURE & DEVELOPMENT

The Non-Banking Financial Company (NBFC) sector continues to be an integral component of Indias financial system, complementing the banking sector by expanding access to credit and financial services across diverse customer segments. NBFCs play a significant role in promoting financial inclusion by catering to individuals, micro, small and medium enterprises (MSMEs), and other sectors that may have limited access to traditional banking channels.

Over the years, the Indian NBFC industry has seen a tremendous growth, supported by increasing credit demand, expanding digital adoption, improving financial awareness, and a conducive regulatory environment. With their customer-centric approach, faster credit assessment processes, and operational flexibility, NBFCs have strengthened their position as an important source of finance for retail and business borrowers alike.

The Reserve Bank of India (RBI) has continued to strengthen the regulatory framework for NBFCs through the Scale Based Regulatory (SBR) framework, which seeks to align the regulatory standards for NBFCs with their size, complexity, and risk profile. The framework has enhanced governance standards, risk management practices, capital adequacy norms, and disclosure requirements, thereby fostering greater resilience and transparency within the sector.

Technology has emerged as a key driver of transformation in the NBFC industry. Increasing adoption of digital lending platforms, data analytics, artificial intelligence, and automated credit assessment tools has improved operational efficiency, customer experience, and risk management capabilities. These advancements have enabled NBFCs to expand their reach while maintaining prudent credit underwriting standards.

Despite challenges arising from global economic uncertainties, inflationary pressures, and changing interest rate cycles, the Indian NBFC sector has demonstrated resilience, supported by robust domestic economic growth, improving asset quality, and sustained credit demand. Going forward, the sector is expected to continue playing a pivotal role in supporting inclusive economic development, fostering entrepreneurship, and meeting the evolving financing needs of the economy.

Shivkamal Impex Limited, being a Base Layer Non-Banking Financial Company registered with the Reserve Bank of India under the Reserve Bank of India Act, 1934, remains committed to conducting its business in compliance with the applicable regulatory framework while maintaining sound governance, prudent risk management practices, and a customer-focused approach.

2. OPPORTUNITIES & THREATS

NBFCs have solidified their position as an integral part of the financial services system. They also complement the banking system in achieving the agenda of financial inclusion.

The Micro, Small and Medium Enterprise (MSME) sector is critical to the Indian economy. However, only a minor percentage of formal sources of credit have reached MSMEs. This enormous credit gap experienced in this sector allows NBFCs to expand significantly and provide last-mile credit delivery with the help of technology to achieve better operational efficiency and risk management.

A stable regulatory framework and continued emphasis on sound governance and risk management are expected to further enhance stakeholder confidence in the sector.

NBFCs must remain vigilant to potential vulnerabilities by strengthening asset liability management and enhancing the quality of their credit portfolios. To address systemic risks, RBI has implemented a scale-based regulatory framework, subjecting larger NBFCs to more stringent compliance requirements in line with their systemic significance. Following are the challenges faced, opportunities available and possible threats for a NBFC:

Challenges

Rising competition from banks; Increasing cost of funding; Retention of talent; Geopolitical developments;

Need for rapid adoption of fintech solutions to meet customer expectations; Cybersecurity and data privacy risk; Rising NPAs due to stressed sectors, economic slowdowns, or borrower defaults

Opportunities

Growth in income levels facilitate wider adoption and accessibility of financial product; Recovery in economic activity; Digitalisation and data-driven decision making; Positive regulatory reforms

Threats

Future waves of the pandemic may negatively impact asset quality; Uncertain global political environment; Tightening regulations for NBFCs; Impact on demand in the backdrop of sustained inflation; Banks expanding aggressively into retail and MSME lending;

Rising risk of cyberattacks, data breaches and digital fraud in an increasing tech reliant ecosystem

The Company remains committed to identifying emerging risks proactively and mitigating them through prudent lending practices, robust internal controls, effective risk management systems, and adherence to applicable regulatory requirements.

3. SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Company is engaged primarily in the business of financing and investment activities. The nature of the Companys operations constitutes a single reportable business segment in accordance with the applicable provisions of the Indian Accounting Standards (Ind AS) relating to Operating Segments. Hence, segment wise or product wise performance is not applicable.

4. OUTLOOK AND FUTURE PROSPECT

The outlook for Indian NBFC sector remains positive, supported by robust domestic economic growth, increasing credit demand, continued emphasis on financial inclusion, and rapid digital transformation in the financial services industry. NBFCs are expected to play a significant role in extending credit to underserved sections of the economy and complementing the efforts of the banking sector.

The Company remains focussed on strengthening its business fundamentals through prudent financial management, sound governance management practices, effective risk management and strict adherence to the regulatory framework prescribed by RBI. It will continue to evaluate opportunities for sustainable business growth while maintaining a disciplined approach to asset quality, liquidity management and capital allocation.

5. RISKS & CONCERNS

Risk is an integral part of the Companys business and sound risk management is critical to the success of the organization. As a financial institution, the Company is exposed to risks that are particular to its lending and the environment within which it operates. Being an NBFC, risks that are particular to its business and environment includes: -

Credit risk: It arises from the possibility of borrowers failing to meet their repayment obligations. The Company mitigates this risk through prudent credit appraisal processes, regular monitoring of loan portfolios, diversification of exposures, and timely recovery measures.

Liquidity Risk: Liquidity risk refers to the possibility of the Company being unable to meet its financial obligations as they fall due. The Company maintains adequate liquidity buffers, closely monitors cash flows, and adopts a prudent asset-liability management (ALM) framework to ensure sufficient liquidity at all times.

Interest rate risk: This refers to the fluctuations in interest rates, which could adversely affect borrowing cost, interest income and net interest margins of companies in the financial sector, thereby influencing profitability and competitiveness in the financial sector. The Company periodically reviews its pricing strategy and asset-liability profile to minimize the impact of interest rate volatility.

Compliance risk: The possibility of financial loss, legal exposure, or reputational damage resulting from failure to adhere to applicable statutes, regulations, directives, standards, and guidelines issued by regulatory authorities. The Company continuously monitors regulatory developments and ensures timely compliance with all applicable laws and guidelines.

Cybersecurity Risk: With increasing digitalization of financial services, cybersecurity and data protection have become critical areas of focus. The Company has implemented appropriate IT security measures, access controls, data backup mechanisms, and cyber risk management practices to safeguard customer information and business operations.

The Company remains committed to strengthening its risk management framework and continuously enhancing its governance practices to effectively manage emerging risks while pursuing sustainable growth.

6. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company believes that strong internal control system and processes play a critical role in the health of the Company. The internal control system of the Company is effective and adequate for business processes commensurate with the size and nature of the operations, compliance requirements with the applicable laws and regulation, financial reporting etc.

These controls are designed to provide reasonable assurance regarding the safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records, compliance with applicable laws and regulations, and the timely preparation of reliable financial information.

The internal auditors have expressed their satisfaction about the adequacy of the control systems and the manner in which the Company is updating its systems and procedures to meet the challenging requirements of the business.

Significant audit observations and follow-up action thereon are reported by the Internal Auditors to the Audit Committee. The Audit Committee reviews the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations.

7. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Companys operations continue to be mainly focused in the area of NBFC activities- financing and Inter- Corporate Investments. The significant financial highlights of the Company are mentioned below:

(in Lakhs)

Particulars	2025-26	2024-25
Total Revenue	53.42	51.20
Profit Before Tax	33.68	36.92
Profit after Tax	24.87	27.62

KEY FINANCIAL RATIOS

Particulars	2025-26	2024-25	% change	Reason (if more than 25% change)
Debt Equity Ratio	NA	NA
Debtors Turnover	NA	NA
Inventory Turnover	NA	NA
Interest Coverage	NA	NA
Ratio
Current Ratio	471.34	1368.44	-65.56	Current liabilities increased during current year
Operating Profit	0.63	0.72	-12.50	NA
Margin
Net Profit Margin	0.47	0.54	-12.96	NA
Return on Net worth	3.41%	3.92%	-13.01	Profits decreased during current year

8. HUMAN RESOURCES

The Company always regards human resources as its most valuable asset and endeavour to help them realize their full potential. The Company aims to provide an environment for its employees that helps their goals with Companys mission. The Company is committed to maintaining a safe, healthy, and inclusive workplace and follows fair and transparent human resource practices.

DISCLAIMER

Certain Statements in the Management Discussion and Analysis Report describing the Companys view about the industry, expectations, objectives, etc may be ‘forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied. Factors like changes in government regulations, tax laws and other factors such as industrial relations and economic developments, etc. may further influence the Companys operations.

The Company is not under any obligation to publicly amend, modify or revise any forward- looking statement on the basis of any subsequent developments, information or events.

		For and on behalf of Board of Directors of
		Shivkamal Impex Limited
Place: New Delhi
Date: 12-08-2026
	Anu Jain	Manu Jain
	Director	Director
	DIN: 03515530	DIN: 07801467