Shiv Kamal Impex Ltd Management Discussions

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

Shivkamal Impex Limited is a Non-Banking Financial Company (NBFC) Registered under RBI Act, 1934 as a Base Layer NBFC in terms of Reserve Bank of India (Non-Banking Financial Company-Scale Based Regulation) Directions, 2023. NBFCs play a vital role in the nations financial ecosystem, supplementing and enhancing the services offered by commercial banks. Their rapid growth can largely be credited to the extensive restructuring and reform of the banking sector.

This sector has emerged as the primary source of financing for a vast section of the population including small and medium-scale enterprises as well as the economically unserved and underserved individuals. Leveraging their extensive geographic presence, deep understanding of diverse financial needs, and exceptionally quick processing capabilities, they have emerged as key enablers in delivering credit to borrowers with remarkable efficiency and timeliness.

The sector has evolved from being fragmented and informally governed to being well regulated and in many instances adopted best practices in innovation, governance and risk management.

Their presence has been particularly impactful in rural and semi-urban regions, where they have successfully bridged the gap left by the formal banking sector.

Observing the importance of NBFCs in India, Reserve Bank of India has issued regulatory framework with the objective to harmonize it with Banks and Financial Institutions.

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.

Overall, NBFCs will play a key role in supporting the socio-economic construct of the Indian economy as the opportunity for credit penetration remains high.

Further, niche NFBCs fulfil the unmet and exclusive credit needs of various segments such as infrastructure, factoring/ leasing, operations and technological sophistication.

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;

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

3. SEGMENT WISE OR PRODUCT WISE PERFORMANCE The Company operates in only single segment; hence segment wise or product wise performance is not applicable.

4. OUTLOOK AND FUTURE PROSPECT

Non- Banking Financial Companies continue to remain at the forefront in terms of driving new credit disbursals for the countrys underserved retail and micro, small and medium enterprises market. As Indias economy grows, the requirement for credit will rise more than proportionately and would require banks and NBFCs to catalyse the economy with free flowing credit lines.

The market share of NBFCs could continue to expand consequent to their ability to customise products, mitigate risks and manage costs. These growth drivers are expected to sustain over a long period of time. Various schemes of Government concentrating on finance sector will bring greater opportunities in the coming years.

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. The Company is exposed to risks such as financial, operational and political risks. Being an NBFC, risks that are particular to its business and environment includes: -

Credit risk: Possibility of losses associated with a diminution in the credit quality of borrowers or counterparties. This risk is influenced by factors such as interest rate volatility, economic cycles, market conditions, and the overall financial stability of borrowers.

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.

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.

To address risks stemming from the external environment as well as borrower profiles and to minimize its impact on business, the Company has strategically invested in enhancing its human capital, operational processes and technological capabilities

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. The internal control systems are designed to safeguard assets from loss due to unauthorized use or disposal, while ensuring that all transactions are duly authorized, accurately recorded, and appropriately reported.

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:

Particulars	2024-25	2023-24
Total Revenue	51.20	44.52
Profit Before Tax	36.92	26.68
Profit after Tax	27.62	19.31

KEY FINANCIAL RATIOS

Particulars	2024-25	2023-24	% 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	1368.44	1907.30	-28.25	Current liabilities increased during current year
Operating Profit	0.72	0.60	20.33	NA
Margin
Net Profit Margin	0.54	0.43	24.40	NA
Return on Net worth	3.92%	2.85%	37.45	Profits increased 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.

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: 02-08-2025
	Anu Jain	Manu Jain
	Director	Director
	DIN: 03515530	DIN: 07801467
Registered office:
Shivkamal Impex Limited (CIN L52110DL1985PLC019893),
Ground Floor, Block-P-7, Green Park (Extn.) New Delhi-110016
Tel: 011-26192964, e-mail: siv_kamal@yahoo.com, info@shivkamalimpex.com
Website: www.shivkamalimpex.com