shiv kamal impex ltd Management discussions

INDUSTRY STRUCTURE & DEVELOPMENT

Shivkamal Impex Limited is a Non-Banking Finance Company (NBFC) Registered under RBI Act 1934. NBFC are financial intermediaries engaged in the business of delivering credit, playing an important role in channelizing the scares financial resources and contributing to capital formation. 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. NBFCs are generally regarded to be complementary to banks and are often able to offer better services and products to their customers. Further, they play a key role in providing innovative financial services to Micro, small, Medium Enterprises (MSME). 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.

OPPORTUNITIES & THREATS

Over the years, the NBFC sector has evolved in terms of its size and assumes an important role in the process, as it is a valuable source of financing for many firms, micro and small units as well as individuals/small business owners and facilitating competition amongst the credit providers.

Further, niche NFBCs fulfil the unmet and exclusive credit needs of various segments such as infrastructure, factoring/ leasing, operations and technological sophistication. The NBFC sector has also grown significantly and more interconnected with the financial system.

With private banks deemed to be expensive and public banks struggling with bad loans, opportunities for NBFCs to grab the credit market are higher than ever because NBFCs have the ability to move fast and tap into specific customer segments and meet the non- corporate needs of the economy that is those of Small and Medium Enterprises and retail customers.

Thus NBFCs need to be mindful of frailty and ensure robust asset-liability management apart from improving the quality of their credit portfolios. The central bank also introduced scale-based regulatory framework for the sector, wherein larger NBFCs will be subject to tighter regulations, given their systemic importance

The Company closely monitors the threats which comprise of:

1) Unpredicted changes in regulatory norms

2) Inflation

3) Liquidity crunch

4) Long-term impact of COVID-19

5) Economic slowdown

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Company operates in only single segment; hence segment wise or product wise performance is not applicable.

OUTLOOK AND FUTURE PROSPECT

Non- banking finance 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 nonbanking finance companies to catalyse the economy with free flowing credit lines. The market share of nonbank finance companies could continue to expand consequent to their ability to customise products, mitigate risks and manage costs. Various schemes of Government concentrating on finance sector will bring greater opportunities in the coming years.

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 interest rate volatility, economic cycle, credit risk and market risk. The Company in order to identify and mitigate risks to minimize its impact on business, ensures that prudent risk management practices are followed during the decision making process.

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 system is supplemented by extensive internal audits, regular reviews by the management and standard policies and guidelines which ensure reliability of financial and all other records as required under Companies Act 2013.

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.

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	2021-22	2020-21
Total Revenue	31.41	32.55
Profit Before Tax	19.27	21.98
Profit after Tax	14.42	16.45

KEY FINANCIAL RATIOS

Particulars	2021-22	2020-21	% change	Reason (if more than 25% change)
Debt Equity Ratio	NA	NA
Debtors Turnover	NA	NA
Inventory Turnover	NA	NA
Interest Coverage Ratio	-	164	-	No debt in current year
Current Ratio	574.59	53.24	-979.25	Payables decreased during current year
Operating Profit Margin	0.61	0.68	9.70
Net Profit Margin	0.46	0.51	9.15
Return on Net worth	2.23%	2.60%	14.27

HUMAN RESOURCES

The Company always regards human resources as its most valuable asset and endeavour to help them realize their full potential. The Companys 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: 20-08-2022
	Lav Kush Mishra	Manu Jain
	Director	Director
	DIN:02241380	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