Swarna Securities Ltd Management Discussions.

a) INDUSTRY STRUCTURE AND DEVELOPMENT:

With the entry of Banking Companies into the Non-banking Sector and the strict controls imposed by the Apex Bank, the NBFC sector is strugulling fro existence. The future of these Companies seems to be grim except for a few who have strong investor confidence and support. There shall be no development unless these Companies diversify to other fund/non-fund based activities.

b) OPPORTUNITIES AND THREATS:

At present there seems to be no good opportunities for NBFCs in future

C) SEGMENT WISE PERFORMANCE:

The Company is engaged in the hire purchase loans and advances segment, the perform ance of which was discussed earlier in the report.

d) RISKS AND CONCERNS:

Risk of delayed receipt of installments:

In case of delayed receipts of installment amounts of the hire purchase finance given, the funds of the Company get blocked resulting in high non-performing assets.

To mitigate this risk, the Company is trying to put pressure on the delayed payers for payment of installments and in inevitable cases legal action is also being initiated.

Risk of insolvency of the borrowers:

Where the borrower becomes insolvent, and is unable to clear the loan, the same becomes a bad debt and the total loan amount and the interest accrued thereon becomes a charge on the income generated by other good transactions.

To m itigate this risk, the com pany follow s a very conservative policy of lending.

e) INTERNAL CONTROL SYSTEMS:

The Company has an adequate system of internal control and management with respect to disbursement of loans and follow-up action for collection of installments.

f) HUMAN RESOURCES:

There are no significant developments in this front during the year under review.

IX. GENERAL SHAREHOLDERS’ INFORMATION:

vii) Market Price Data

viii) Performance in comparison to Broad based indices :