shreenath investment company ltd Management discussions

Industry Structure and Developments:

Global economic overview

We started 2022-23 with hopes of gradual economic recovery after the decline of pandemic. However, a number of issues such as global inflation, prevailing Ukraine- Russia war, sharp policy tightening in our major markets, financial institutions disappearing and its resulting side effects have all kept us busy managing risks. For emerging markets and developing economies like India, the growth rates have recovered post-pandemic. According to The International Monetary Fund (IMF), the fourth quarter growth for emerging markets and developing economies of 2022 was at 4.5% compared to 2.8% during the same quarter last year.

Global GDP is predicted to drop to 2.8% in CY23 due to the delayed effect of synchronized global monetary tightening. Growth in advanced economies is expected to decrease to 1.3%, with the US and the Eurozone growing at 1.6% and 0.8%, respectively. The impact of recent rate hikes, as well as developing credit crunch worries from US regional banks, remain major concerns for advanced economies. In CY23, emerging market growth is predicted to remain close to the pre-pandemic average of 3.9%, led by India and China. Chinas growth is predicted to rebound to 5.2% in CY23 from 3% in CY22, thanks to the economys three-year reform and continuing monetary policy support. According to the IMF, India will continue to be one of the fastest expanding economies.

The global economy increased 3.4% in CY22, slowing after a post-COVID bounce of 6.2% in CY21. Despite the Russia-Ukraine conflict and strong central bank rate hikes, growth was in line with the pre-pandemic average (2015-19) of 3.4%. In CY22, advanced economies (AEs) experienced above-trend growth of 2.7%, compared to the 2.1% average seen in the five years preceding the pandemic. This was driven by significant growth in both the US and the Eurozone, which increased at 2.1% and 3.5%, respectively.

For 2023, economists believe that the downside risks dominate - with talks of mild recession being heard more frequently in investment circles in addition. The labour market is expected to remain tight especially for technology skills.

Indian economic overview

Despite several challenges in the global environment, the Indian economy remained quite resilient, with the PMI-Manufacturing remaining in the expansionary zone for 18 months since July 2021. According to India Development Update from the World Bank, the Indian economy continues to show strong resilience to external shocks.

Notwithstanding external pressures, Indias service exports have continued to increase,

and the current-account deficit is narrowing.

In terms of sales, India surpassed Germany and Japan to take third place in the automotive industry in December 2022. India is now the worlds second-largest maker of mobile phones. India continues to adopt digital technology quickly. UPI payments kept up their excellent performance in FY 2022-23, with transaction volumes virtually tripling from FY 2021-22s 45 billion to 84 billion in FY 2022-23, and transaction value increasing to 139 lakh crores from 84 lakh crore. In 2022, the monthly mobile data traffic in India as a whole reached 14.4 Exabyte, a 3.2x increase over the previous five years. The economy is being driven toward efficiency and productivity through rapid digitalisation underpinned by reliable infrastructure.

Global supply chain improvements and falling commodity prices coupled with softening domestic demand are likely to moderate inflation to 5.1% in the current financial year. With a growing working age population, a large domestic market, boost to infrastructure development and advent of digitisation, India is well positioned to be the fastest growing large economy in the world. India GDP is expected to grow at 6.5% in FY24.

Outlook

While the economy broadly continues to be somewhat bumpy, it is reasonable to assume that some sectors will continue to show positive growth, while others will benefit from their inherently recession-proof character. We foresee the healthcare sector to be in the forefront of stable expansion, given the vulnerabilities in state public health infrastructure, post-pandemic social consciousness on physical and mental conditions, wellness becoming a new hygiene requirement in peoples lives, and the ageing pensioner population who will require medical/ financial support. Thus, even insurance will probably boom in India; one, we have a fairly low penetration rate, secondly, there is greater awareness of contingencies and unforeseen black swan moments.

Segment-wise or product-wise performance:

The Core Business of the Company is to hold long term Investments.

As compared to the previous reporting period, the company has shown an increase in income.

The Company, with superior Investment idea, will focus on positioning the revenues and lead towards high growth path in future.

Risks, Concerns and Threats

It must be understood that a risk-free investment does not exist, but investment funds

vary between being low risk and high risk. Even cash held with a financially secure bank is exposed to inflation risk (the risk that rising prices will erode the ‘real value or purchasing power of the cash held on deposit) and counterparty risk (the risk that the bank is unable to meet its financial obligations, i.e. return a depositors money).

Internal control systems and their adequacy:

Your Company ensures that appropriate risk management limits, control mechanisms and mitigation strategies are in place through its efficient and effective Internal Control System and the same completely correspond to its size, scale and complexity of operations. The Company strives to put several checks and balances in place to ensure that confidentiality is maintained. Effective procedures and mechanisms are rolled out by a full-fledge Internal Audit System to ensure that the interest of the Company is safeguarded at all times. In addition to this, the Risk Assessment policy of the organization is reviewed on a quarterly basis by the Audit Committee / Board of Directors of your Company to ensure that its robustness is reinforced in keeping with the requirements of a dynamic business environment.

Discussion on financial performance with respect to operational performance:

Total income achieved during the year under review is Rs. 1,87,43,952.54 as against Rs. 71,09,746 in the previous year. After all Expenses, Depreciation and Taxation, the net profit of the Company is Rs. 1,03,08,874.87 as against the profit after tax of Rs. 39,29,499 in the previous year.

Cautionary Statement:

Your Company endeavours to perform and attempt to deliver the best at all times. However, the statements made in this report describing the Companys objectives, expectations or predictions shall be read in conjunction with the government policies as issued and amended from time to time, the micro as well as macroeconomic scenario

prevailing at that time, global developments and such other incidental factors that may extend beyond the control of the Company and Management. Keeping this in view, the actual results may materially vary from those expressed in the statement.

Material developments in Human Resources / Industrial Relations front, including number of people employed:

The Company continuously strives to attract and retain the best talent from the local markets, clearly define their roles and responsibilities, create an inspiring and rewarding work environment, imparting training to them and creating development opportunities for increasing employee knowledge and efficiency to make them future ready and create career opportunities within.

The Company is committed in ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. In strongly believes in maintaining the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

Details of any changes in Return on Net Worth as compared to the immediately previous financial year:

Return on Net Worth, the company continues to maintain healthy return on net worth in FY 23 at 30%.

By order of the Board of Directors

For Shreenath Investments Company Limited

Sd/-

Vikas Mapara

Managing Director

DIN:- 00211580

Place: Mumbai

Date: 31.08.2023