Lakshmi Finance & Industrial Corporation Ltd Management Discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS</dhhead>

REVIEW OF ECONOMY:

In General, global economic shocks in the past were severe but spaced out in time. This changed in the third decade of this millennium. At least three shocks have hit the global economy since 2020. It all started with the pandemic - induced contraction of the global output, followed by the Russian-Ukraine conflict leading to a worldwide surge in inflation. Then, the central banks across economies led by the Federal Reserve responded with synchronized policy rate hikes to curb inflation. The rate hike by the US Fed drove capital into the US markets causing the US Dollar to appreciate against most currencies. This led to the widening of the Current Account Deficits (CAD) and increased inflationary pressures in net importing economies. The rate hike and persistent inflation also led to a lowering of the global growth forecasts for 2022 and 2023. The frailties of the Chinese economy further contributed to the weakening the growth forecasts. Slowing global growth apart from monetary tightening may also lead to a financial contagion emanating from the advanced economies where the debt of the non-financial sector has risen the most since the global financial crisis. With inflation persisting in the advanced economies and the central banks hinting a further rate hikes, downside risks to the global economic outlook appear elevated. The Indian economy, however, appears to have moved on after its encounter with the pandemic, staging a full recovery in FY22 ahead of many nations and positioning itself to ascend to the pre-pandemic growth path in FY23.

The overall performance of the Company is low comparing with previous year performance because of subdued Stock Market conditions and portfolio investments valuation during the Financial Year 2022-23. The Company will continue to focus its efforts to closely monitor portfolio Investment activity to generate optimum returns by way of capital appreciation and periodic dividend returns.

INVESTMENTS:

Total Investments as on March 31, 2023 is 4,026.47 lakhs excluding 250 lakhs of Fixed Deposits, 250 lakhs of Government Bonds and 50 lakhs of NCDs as against 3,586.65 lakhs of Investments and 200 lakhs of Fixed Deposits and 211.84 lakhs in Government Bonds as at March 31,2022.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The CEO and CFO certification provided in the certification section of the Annual Report discusses the adequacy of our Internal Control systems and procedures.

KEY FINANCIAL INDICATORS: LAST THREE YEARS: ( in Lakhs)

	F.Y 2022-23	F.Y.2021-22	F.Y.2020-21
Equity Capital and Reserves	4668.08	4704.78	> 4223.37
Investments	4026.47	3586.65	3351.31
Gross Profit/(Loss) (before tax)	17.73	625.50	1399.38
Net Profit/(Loss) (after tax)	55.05	570.69	915.35
Dividend (%)	20%	30%	30%
Earnings per share	1.84	19.02	30.51