sri amarnath finance ltd Management discussions

MANAGEMENT DISCUSSION & ANALYSIS REPORT

In compliance of Regulation, 34(3) and 54(f) read with Schedule V of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, please find Management Discussion and Analysis Report forming part of the Annual Report.

1. Industry Structure & Developments

The long-term fundamentals of the Indian economy continue to be strong due to rising incomes and large investments these growth drivers are expected to sustain over a long period. At the same time, there are some concerns due to the uncertain global economic environment and slow recovery in developed markets.

NBFCs are an integral part of the countrys financial system complementing the services of commercial banks. The main reason attributed to the growth of NBFCs is the comprehensive revaluation of the banking system. Other factors include a high level of customer orientation, lesser pre/post sanctions requirements and higher rates of interest on deposits being offered by NBFCs.

2. Opportunities and Threats

OPPORTUNITIES

• The players in the NBFC sector still have a lot of scope to cover large markets and rural markets are still untapped.

• With the increased desire of individuals to improve their standard of living the NBFC industry is getting to new category of clients (individuals) in a big way with large share of business coming from this segment part from corporate clients.

• Increase in Income levels will aid greater penetration of financial products.

• Positive regulatory reforms

• Increase in corporate growth & risk appetite.

• Greater efficiency in debt market operations which will also help greater penetration.

• Increased securitization

• Focus on selling new product/services

THREATS

• If the economic downturn is prolonged it can reduce the financing need of people due to shrinking business opportunities.

• Private banks are also working on a similar business model as the NBFCs do thereby giving very strong competition to the NBFCs

• RBI and government restrictions: with more stringent norms governing the functioning of NBFC and certain government restrictions act as a hindrance in the smooth functioning of NBFC.

• Inflation could trigger an increase in consumer price inflation, which would dampen growth

• Increased competition in both local & overseas markets

• Unfavorable economic development

• Market risk arising from changes in the value of financial instruments as a result of changes in market variables like interest rates and exchange rates.

3. Segment-wise/ Product-wise Performance

Segment reporting is not applicable to the Company. The company is engaged in the business of granting loans and making investments.

The total turnover of the company from its operation for the year under review is Rs. 48,815,621 thus thereby registering an increase of 7.71% (approx) from last year. i.e., 2021-22

4. Risks and Concerns

As an NBFC, Sri Amarnath Finance Limited is exposed to credit risk, liquidity risk and interest rate risk. The Company has invested in people, processes and technology to mitigate risks posed by the external environment and by its borrowers. To mitigate these risks, Company has diversified its revenue steam across multiple verticals. Your Companys risk management system is a comprehensive and integrated framework comprising structured reporting and stringent controls. Through its approach, it strives to identify opportunities that enhance organizational values while managing or mitigating risks that can adversely impact the companys future performance. Within the organization, every decision taken is after weighing the pros and cons of such decision-making takes note of the risk attributable

The Company continues to have a conservative provisioning policy which is significantly more stringent than the RBI norms.

5. Internal Control Systems and Their Adequacy

The Companys well defined organization structure, documented policy guidelines, predefined authority levels, and an extensive system of internal controls ensure optimal utilization and protection of resources, IT security, accurate reporting of financial transactions and compliance with applicable laws and regulations. The Internal Control systems are guided to ensure that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are authorized, recorded, and reported correctly. The Company has an exhaustive budgetary control system. Actual performance is reviewed with reference to the budget by the management on an ongoing basis. The Companys internal auditors review business processes and controls. The Audit Committee of the Board then discusses significant findings and corrective measures initiated.

6. Discussion on Financial Performance with respect to Operational Performance

The details of the financial performance of your Company are reflected in the Balance Sheet, Profit & Loss Account and other Financial Statements, appearing separately. Highlights are provided below:

		(Rs.)
Particulars	2022-23	2021-22
Revenue from Operations	48,815,621	45,320,495
Other Income	66,332
Total Revenue	48,881,953	45,320,495
Profit Before Interest, Depreciation & Tax	33,173,626	31,193,433

The financial performance of your Company has been further explained in the Directors Report of your Company for the year 2023, appearing separately.

7. Economic Outlook

The long-term fundamentals of the Indian economy continue to be strong due to rising incomes and large investments. These growth drivers are expected to sustain over a long period of time. At the same time, there are some concerns due to the uncertain global economic environment and slow recovery in developed markets.

8. Human Resources

The Company keeps developing its organizational structure consistently over time efforts are made to follow excellent Human Resource practices. Adequate efforts of the staff and management personnel; are directed on imparting continuous training to improve management practices. The objective of your company is to create a workplace where every person can achieve his or her potential. The employees are encouraged to put in their best. Lots of hard work is put in to ensure that new and innovative ideas are given due consideration to achieve the short and long-term objectives of your company.

The employees are satisfied and have a good relationship with management.

9. Cautionary Statement

Certain statements in the Management Discussion and Analysis describing your Companys views about the industry, expectations/predictions, objectives etc. may be forward-looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied in these statements. Your Companys operations may, inter-alia, be affected by the supply and demand situations, input prices and availability, changes in Government regulations, tax laws, government or court decisions and other factors such as industry relations and economic developments etc. Investors should bear this in mind when considering the above statements.

By order of the Board of Directors
For SRI AMARNATH FINANCE LIMITED
RAKESH KAPOOR	MANISH KAPOOR
MANAGING DIRECTOR	DIRECTOR
DIN: 00216016	DIN: 00025655
Dated: 15th July 2023
Place: Delhi