Yamini Investment Company Ltd Management Discussions.

Industry Structure And Developments

Indias Gross Domestic Product (GDP) growth moderated to 6.8% in 2018-19, from 7.2% in the previous financial year. Nevertheless, India still continues to be one of the fastest growing major economies in the world. Economic momentum was robust in the first half of the year, though showed some signs of moderation in the second half. The Indian Economy During the year 2018-19, the Indian economy continued its journey towards restoring macroeconomic stability. Despite the global sluggishness, economic growth continued to be robust as inflation remained stable, while key macro parameters such as Fiscal Deficit and Current Account Deficit The IMF revised Indias growth forecast to 6.8% in FY19, a decline from the official advance estimates of 7.1%. Measured in terms of Gross Value Added (GVA) at constant prices, agriculture grew at 4.9%, while manufacturing recorded a growth of 7.9% in 2018-19. Among the services sector, growth rate of ‘financial, real estate & professional services remained at 5.7% during the year. Large terms-of-trade gains, positive policy actions, structural reforms (the introduction of GST and formalisation of the inflation targeting framework) and improved confidence are expected to support consumer demand and investment. In the near term, however, private investment will likely be constrained by weakened corporate and public bank balance sheets and after effects of temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative. The Union budget remained focused on boosting personal consumption through a reduction in the tax rates at the lowest slabs and record high allocation towards Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), which is expected to increase the spending power of the salaried class and rural population.

GLOBAL ECONOMIC OUTLOOK Global economic environment remained challenging in 2018 although economic activity is expected to pick up in 2018 and 2019, especially in emerging markets and developing economies. International Monetary Fund (IMF) in its latest outlook has upped the world GDP growth projections from 3.1% in 2016 to 3.5% in 2017. The real GDP growth in the United States dropped sharply to 1.6% in 2016 primarily on account of soft exports and declining investments. The growth is expected to rebound to 2.3% in 2018 and 2.5% in 2019 backed by expectations of fresh fiscal stimulus from the administration. The US seems to be the driver of global equity markets. Undoubtedly, the worlds largest basket of wealth is managed in the US and therefore allocations are driven by the views of Fund Managers in the US. A vibrant US market motivates fund managers to allocate larger funds to other markets in search of new opportunities and as a means of diversification. Equity investors look for growth and global market capitalisation has grown with substantial growth in GDP. Going forward, perhaps the biggest risk to equity markets are the extended valuations in the US markets. The S&P 500 EPS over the last decade has remained in a narrow band of 85 -110 whereas the value of the S&P has appreciated significantly, especially in the last five years. The S&P EPS has fallen in the last three years. Further, since 2010, US companies have borrowed funds to do share buybacks which, according to some research reports, aggregated $3.25 trillion for the S&P 500 companies and net of issuances, has reduced the number of shares issued by about 9.3%. Thus, in essence, if the number of shares had remained the same, the EPS would be lower by about 11%, reflecting a higher de growth in this period of rampant exuberance.

Opportunities, Threats & Risks

The Company is mainly exposed to market risk (including liquidity risk), interest risk and credit risk. However prudent business and risk management practices followed by the company over the years helps its to manage normal industry risk factors, which inter alia includes economic/ business cycle, fluctuations in the stock prices in the market, besides the interest rate volatility, and credit risk.The Company is confident of managing these risks by observing a conservative financial profile in investment are trading of securities business.

Indian Economy will see reasonable growth of 5.6% in the near terms of inflation, oil prices, budget deficits, interest rates, commodity prices and infrastructural bottlenecks remains area of concern.

The sheer unpredictable nature of the markets makes investments a risky proposition. An investment company has to live with the fear of falling markets and movement of the Sensex. However, the company hopes to improve its performance on the strength of its long experience and its strong emphasis on the fundamentals. Your management has got ample exposure of the capital markets, which provide us an opportunity to make safer and profitable investments with minimum risks.

Outlook for 2019-20:

IMF has projected that global economic growth may moderate from 3.6% in 2018 to 3.3% in 2019 and then pick up modestly to 3.6% in 2020. The current outlook can be attributed to a confluence of global factors like geopolitical uncertainty and ambiguity in US-China trade talks. Global trade is expected to slow down this year, with world trade volume growth estimated at 3.4% in 2019 from 3.8% in 2018.

Performance

During the year, the company has earned Gross profit before tax of Rs. 22, 92, 070/- mainly from sale of shares and securities and interest earned.

Discussion on financial performance with respect to operational performance

Due to increasing competition an introduction of GST regime, there is a decrease in company turnover by Rs. 2,36,44,099

Details of significant changes
Particular 2017-18 2018-19 Changes
Turnover 4,56,77,029 2,20,32,930 -2,36,44,099
Debtors Turnover 1.46 0.76 -0.69
Inventory Turnover 10.63 3.70 -6.93
Interest Coverage Ratio NA NA NA
Current Ratio 52.04 23.15 28.89
Debt Equity Ratio NA NA NA
Operating Profit Margin (%) -62.38 -311.75 249.37
Net Profit Margin (%) 3.28 8.49 -5.20

Internal Control Systems

The Company has an Internal Control System which is commensurate with the size, scale and complexity of its operations. The Internal Auditors monitor the efficiency and efficacy of the internal control systems in the Company, compliance with operating systems/accounting procedures and policies of the Company. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

The Company has adequate systems and procedures to provide assurance of recording transactions in all material respects. During the year, Ms. Shalini Agarwal, Chief Financial Officer, reviewed the adequacy and operating effectiveness of the internal financial controls as per Section 134 (5) of the Companies Act, 2013 by covering the following broad areas: i. Material level assessment ii. Entity level assessment iii. Risk Control Matrix covering major processes and developing controls internal audit and compliance.

The Company conducts its internal audit and compliance functions within the parameters of regulatory framework which is well commensurate with the size, scale and complexity of operations. The internal controls and compliance functions are installed, evolved, reviewed, and upgraded periodically.

The Company has appointed, Vikas N Jain and Associates, Chartered Accountants, to conduct internal audit covering all areas of operations including branches. The reports are placed before the Audit Committee of the Board.

The Audit Committee reviews the performance of the audit and compliance functions, the effectiveness of controls and compliance with regulatory guidelines and gives such directions to the Management as necessary / considered appropriate. The Company has framed a compliance policy to effectively monitor and supervise the compliance function in accordance with the statutory requirements.

Human Resources

People remain the most valuable asset of your Company. Your Company is professionally managed with senior management personnel having rich experience and long tenure with the Company. Your Company follows a policy of building strong teams of talented professionals. Your Company encourages, appreciates and facilitates long term careers. Your Company continues to build on its capabilities in getting the right talent to support different products and geographies and is taking effective steps to retain the talent. The Company continues to focus on training programs for Skill Development, compliance and improved customer experience.

Cautionary Note

Certain statements in this Report may be forward-looking and are stated as may be required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook. Your Company doesnt undertake to update these statements.

Disclosure of Accounting Treatment:

The Company has adopted Indian Accounting standards (Ind AS) with effect from 01st April, 2017 and accordingly, the results have been prepared in accordance with the Companies (Indian Accounting Standard) Rules, 2015 prescribed under Section 133 of the Companies Act, 2013

Acknowledgement

Your directors take this opportunity to place on record their appreciation to all employees for their hard work, spirited efforts, dedication and loyalty to the Company which has helped the Company maintain its growth. The Directors also wish to place on record their appreciation for the support extended by the Reserve Bank of India, other regulatory and government bodies, Companys auditors, customers, bankers, promoters and shareholders.

By Order of the Board
For YAMINI INVESTMENTS COMPANY LIMITED
Sd/- Sd/-
Place : Mumbai Arzoo Bimat Patodia Vandana Agarwal
Date : 10/08/2019 Director Whole Time Director
DIN: 07555814 DIN: 02347593