Shyamkamal Investments Ltd Management Discussions

A. Overview of the Global Economy:

The global economy reflected a period of subdued growth for 2024-2025, increasing uncertainty, and persistent policy challenges. Major institutions, including the IMF, World Bank, and OECD, project global GDP growth to range between 2.3% and 3.3%, with a central tendency around 2.5-3.0%, down from earlier expectations due to rising trade tensions and geopolitical instability. Advanced economies are forecasted to grow modestly at 1.0-1.6%, while emerging markets may see stronger performance around 3.7-4.0%, led by India (6.3- 6.8%) and China (4.5%).

Trade disruptions, driven by escalating tariffs and deglobalization, have reduced global trade growth and investment flows. Inflation is moderating globally expected to be around 4.2% in 2025 and easing further to 3.5% by 2026 but remains uneven across regions.

Monetary policy has begun easing in some economies, though central banks remain cautious amid fragile conditions. Technological advances, especially in AI, offer potential productivity gains but also raise labor market and equity concerns.

Overall, while consumer demand and select regional growth offer resilience, risks such as prolonged trade wars, policy fragmentation, and financial volatility continue to weigh heavily on the global economy.

B. Overview of the Indian Economy:

Indias economy in 2024-25 demonstrated strong resilience amid global uncertainties, maintaining its position as one of the fastest-growing major economies. Real GDP grew by approximately 6.5%, supported by robust performance in the agriculture and services sectors, and bolstered by strong government capital expenditure. Inflation eased significantly, with retail inflation falling to a six-year low of 2.8% in May 2025, allowing the Reserve Bank of India to implement monetary easing measures, including rate cuts.

Fiscal consolidation remained a focus, with the fiscal deficit targeted to narrow to 4.8% of GDP. Exports, especially in services, picked up, and foreign direct investment (FDI) saw notable growth. On the employment front, formal job creation improved, though youth and urban female unemployment remain areas of concern. The financial sector continued to strengthen with improved asset quality and healthy credit growth.

While the outlook for 2025-26 remains optimistic with projected economic growth of 6.3-6.4%, challenges such as slow private investment, global trade tensions, and food price volatility persist and will need careful policy management to sustain momentum.

C. Outlook:

As of mid-2025, the global economy is navigating a complex landscape marked by moderate recovery, lingering inflation, and geopolitical uncertainty. After a period of high interest rates aimed at curbing inflation, major central banks such as the U.S. Federal Reserve and the European Central Bank have begun cautiously shifting toward monetary easing, aiming to support slowing growth without reigniting price pressures.

The United States remains relatively resilient, supported by consumer spending and strong labor markets, while the Eurozone continues to face sluggish growth amid weak industrial output. Chinas economy shows signs of stabilization following stimulus efforts, but structural challenges like real estate debt and demographic shifts remain a drag.

Emerging markets are seeing varied performance, with commodity exporters benefiting from stable prices, while others struggle with capital outflows and currency volatility. Looking ahead, the global outlook is cautiously optimistic, with modest growth expected in 2025, but downside risks persist due to geopolitical tensions, supply chain disruptions, and climate related shocks.

D. Industry structure and developments:

Indian economy is going through a period of rapid financial liberalization. Today, the intermediation is being conducted by a wide range of financial institutions through a plethora of customer friendly financial products. Emerald leasing finance & Investment Company Limited today has emerged as a strong & reliable player in a fiercely competitive market of financial services. Emerald leasing finance & Investment Company Limited has built a strong presence in the market through its cumulative experience, strong network as well as sound systems and processes. The companys long-term aspiration is to play a significant role in meeting the financial requirements of retail customers as well as corporate clients.

E. Opportunities and Threats:

Opportunities:

Digital Transformation & Fintech Innovation: Adoption of AI, blockchain, and automation can improve efficiency, reduce costs, and enhance customer experience. Expanding Emerging Markets: Growth in Asia, Africa, and Latin America offers new customer bases and investment potential.

Sustainable Finance & ESG Investing: Rising demand for ethical and environmentally sustainable financial products creates new service lines. Increased Financial Inclusion: Serving underbanked populations via mobile banking and microfinance expands market reach. Regulatory Technology: Advanced tools for compliance management can streamline operations and reduce regulatory risk.

Threats:

Cybersecurity Risks & Data Breaches: As services go digital, companies face increased vulnerability to hacking, fraud, and data theft. Economic Uncertainty & Market Volatility: Global downturns, inflation, or interest rate shifts can disrupt revenue and investment portfolios. Stringent Regulatory Compliance: Constantly evolving regulations across different regions increase compliance costs and complexity

Intensifying Competition from Fintechs & Big Tech: New entrants with agile tech platforms can outpace traditional firms in customer acquisition and innovation.

Geopolitical Instability & Trade Disruptions: Conflicts, sanctions, and trade tensions can affect cross-border operations and investor confidence.

F. Segment-wise or Product-wise performance:

The Company is primarily engaged in single segment i.e. Trading and Investment in Shares. The Turnover of the Company for the Financial Year 2024-25 is 158.15 Lakhs

G. Future Outlook:

The future outlook for financial sector companies is marked by both dynamic opportunities and complex challenges. As technology continues to reshape the industry, firms that invest in digital innovation, data analytics, and automation are likely to gain a competitive edge. The increasing demand for personalized financial solutions, sustainable investing, and seamless digital experiences will drive transformation across banking, investment, and insurance services. At the same time, companies must navigate rising regulatory scrutiny, cybersecurity threats, and global economic uncertainties. Strategic partnerships, agility, and a customer-centric approach will be essential for long-term growth. Overall, while the landscape remains competitive and fast-evolving, well-positioned financial companies that embrace innovation and resilience are expected to thrive in the coming years.

H. Risks and concerns:

The financial sector faces a range of risks and concerns that can significantly impact its stability and performance. One of the most pressing challenges is cybersecurity, as increasing digitalization exposes firms to data breaches, fraud, and cyberattacks. Regulatory compliance is another major concern, with financial institutions required to navigate complex and frequently changing laws across multiple jurisdictions, leading to higher operational costs. Additionally, global economic uncertainty, including inflation, interest rate volatility, and geopolitical tensions, can affect market confidence and investment returns. Competition from fintech startups and tech giants also poses a threat, as they often offer more agile and innovative solutions. Furthermore, reputational risk remains high, as any misstep in customer service, data handling, or ethical practices can quickly erode trust and damage a companys brand

I. Material developments in human Resources / Industrial relations:

In recent years, the financial sector has witnessed significant material developments in human resources and industrial relations, driven by digital transformation, evolving workforce expectations, and a heightened focus on diversity and inclusion. Companies are increasingly investing in upskilling and reskilling programs to equip employees with digital and analytical capabilities required in a tech-driven environment. Hybrid and remote work models have also become more prominent, prompting organizations to rethink workplace policies and employee engagement strategies. Additionally, there is a growing emphasis on mental health and well-being, with financial firms enhancing support systems and flexible benefits. Industrial relations have remained stable overall, though firms must continue to navigate challenges related to automation, workforce restructuring, and compliance with labor regulations across global operations. These developments reflect a broader shift toward building a more agile, inclusive, and resilient workforce.

J. Internal control systems and their adequacy:

Financial sector companies operate in a highly regulated and risk-sensitive environment, making robust internal control systems essential for ensuring operational efficiency, regulatory compliance, and risk mitigation. These systems encompass a comprehensive framework of policies, procedures, and monitoring mechanisms designed to safeguard assets, prevent fraud, and ensure the accuracy of financial reporting. Regular audits, both internal and external, are conducted to assess the effectiveness of these controls, identify gaps, and implement necessary improvements. With increasing reliance on digital platforms, companies are also enhancing their cybersecurity protocols and automated compliance tools to address emerging threats. Overall, the adequacy of internal control systems is continuously evaluated and strengthened to align with evolving regulatory standards and business complexities, ensuring a high level of governance and operational integrity.

K. Discussion on financial performance with respect to operational performance:

The financial performance of the Company for the Financial Year 2024-25 is described in the Directors Report of the Company.

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

The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

M. Cautionary Statement:

The Statements made in the ‘Management Discussion and Analysis describing the various parts may be “forward looking statement” within the meaning of applicable securities laws and regulations. The actual results may differ from those expectations depending upon the economic conditions, changes in Govt. Regulations and amendments in tax laws and other internal and external factors.