OVERVIEW
During the year under review, overall economic activities faced several
challenges. Some of the challenges that clouded the economic environment were,
Russias invasion of Ukraine, thereby leading to supply shocks, outbreak of COVID-19
in China and its zero-Covid policy that further accentuated the supply-shocks. This led to
building up of inflationary pressure, thereby compelling the central banks to tighten
monetary policies to mitigate the inflation. Lets have a detailed perspective of the
economic situation in the below sections.
GLOBAL ECONOMIC OVERVIEW
The global economy was faced with challenges at different levels,
sustained the momentum gained in the preceding quarters despite the still elevated but
somewhat moderate inflation, tighter financial situation and lingering geopolitical
tensions.
The world economy witnessed a major shock when Russia invaded Ukraine
in the first quarter of CY2022, and the war still continues to cloud the economic
recovery. The Russian attack on Ukraine had an immediate response of a ban being imposed
by the western powers on dealings with Russia that led to supply chain disruptions. This,
in turn, affected the overall pace of growth across geographies. As per IMFs
projections, global economic growth moderated to 3.4% in 2022 from 6.3% in 2021, due to
several factors such as impact of the Russia-Ukraine war, disruptions in trade, zero-Covid
policy of China. This aggravated the already ubiquitous high inflationary situation in
many countries, that led to tightening the financial conditions on the back of higher
interest rates, among other factors. Economic growth in Advanced Economies (AEs) halved to
2.7% in 2022 from 5.4% in 2021. Within this group, European economies posted a moderate
growth of 3.5% in 2022 against 5.4% in 2021. The US economic growth also slowed down to
2.1% compared to the growth of 5.9% in 2021. The performance of Emerging Market and
Developing Economies (EMDEs) was slightly better than the performance of AEs. EMDEs
expanded by 4% in 2022 as against the growth of 6.9% in 2021. A severe slowdown in growth
is due to Chinas zero-Covid policy that led to a drastic decline in Chinas
growth from 8.5% in 2021 to 3% in 2022, accounting for most of the moderation in economic
growth among the EMDEs. On the price front, global inflation remained elevated at 8.7% in
2022, compared with 4.7% in 2021. Higher global commodity prices due to the Russia-Ukraine
war as well as stressed global supply chains were responsible for the steep increase in
prices. Inflation in several AEs as well as EMDEs remained well over the central
banks target bands. To bring inflation under control, central banks world over
raised policy rates aggressively. Amongst major AE central banks, the US Federal Reserve
raised policy rates by 500 bps, followed by the Bank of England (BoE) and the European
Central Bank (ECB) with rate hikes of 440 bps and 375 bps, respectively, during the same
period. Amidst a decline in global growth and weak demand, the world trade volume of goods
and services dipped in 2022 to 5.1% from 10.6% in 2021. This was led by a sharp
deceleration in volume of goods export to 2.6% compared with 10.7% in 2021. The volume of
goods imports was also lower at 4% in 2022 compared with 11.5% in 2021. Uncertainties have
once again risen over the global growth outlook. Owing to these headwinds, the IMF
projects global GDP growth at 2.8% in 2023 with heavily tilted downside risks. In fact,
the report notes that the possibility of a "hard landing" has increased. As per
the report, growth in AEs is expected to moderate further to 1.3%. This will be led by a
sharp slowdown in growth in Euro Area to just 0.8%, on one hand. On the other hand, the
growth in EMDEs is expected to be slowing marginally at 3.9%. This will be supported by a
strong rebound in growth in China, which is expected to grow by 5.2%. This is expected to
offset the loss in momentum in activity in other countries such as India, Brazil and South
Africa. On the back of softer global commodity prices, led by food and fuel, the global
inflation is expected to decelerate in 2023. Core inflation in several economies continues
to remain high. However, recently the inflationary trend appears to have slowed down,
leading to a hawkish pause in raising of rates by RBI and similarly in several other
countries across the globe.
INDIAN ECONOMIC OVERVIEW
Indias economy registered a strong growth of 7.2% in FY23, much
higher than anticipated, signalling a kind of resilience in the economy. Despite the
global headwinds at play, Indian economy is poised to do much better than the global
counterparts on the back of strong domestic fundamentals. Among the sectors, agriculture
and allied sector posted a growth of 4% in FY23 compared with 3.5% in FY22. Industry
sector came down from a high base of 11.4% in Apr-Mar 2022, to 5.1% in Apr-Mar 2023, which
was led by slowdown in manufacturing and mining activity, while electricity production
continued to inch up. Manufacturing activity moderated with 4.5% growth in FY23 versus
11.8% growth posted during FY22. Separately, services sector performed very well, as was
also indicated by services PMI, averaging at 57.3 in FY23 against 52.3 in FY22. Despite
the moderation experienced in economic momentum in FY23, prices continued to remain
elevated. CPI inflation averaged at 6.7% in FY23, up from 5.5% in FY23, thus also crossing
RBIs upper tolerance band of 6%. During Q1 of FY23, the inflation was at its peak of
7.3%, following the breakout of war between Russia and Ukraine in February 2022. Core
inflation, too, remained sticky with around 6.1% in FY23 compared to 6% in FY22. In the
current fiscal year (FY24), RBI expects headline CPI to ease to 5.2%. However, significant
upside risks to the projection remain, owing to food price dynamics, adverse climate
conditions leading to erratic performance and spread of monsoon and imported inflationary
pressures. The external situation in FY23 was strained as trade deficit ballooned to
US$267 bn from US$191 bn in FY22. Coming off a high base and due to weakening global
demand, our export growth slowed to 7.2% in the last fiscal year, following 54% growth
witnessed in FY22. On the other hand, relative stability in domestic demand and volatile
commodity prices led to a less-sharper dip in imports. On the monetary policy front, RBI
has hiked repo rate by 250 bps in FY23, in line with global central banks. In its first
policy for FY24, RBI decided to pause but has indicated that it stands ready to act if
inflation does not fall within the targeted band. Going forward, RBI expects FY24 growth
to settle at 6.5%. As most developed economies are projected to enter recession/face
significant slowdown in economic activity in CY23, and uncertainty is likely to prevail in
global financial systems, this could pose risks to our domestic growth. On the positive
side, Indian Meteorological Departments (IMD) prediction of normal monsoon augurs
well, enhanced government budget for capex spending, and lower inflation, is expected to
provide the necessary support to growth during FY24.
OUTLOOK FOR 2023Rs24
Although some challenges are persisting such as inflationary pressure
– though benign – holds the future direction of RBIs monetary policy, the
threat of economic slowdown in the advanced economies leading to weak demand for our
exports, could impinge upon the domestic economy. Nevertheless, the huge potential of
domestic economy could insulate against the external forces of economic slowdown.
There are noteworthy positives as well, such as the decline in
commodities prices including crude oil prices, solid momentum in GST collections, and the
government push for capex in both – the public and the private sector. Given the
challenges, the growth looks to moderate a bit owing to lower exports and impact of high
interest rate regime on the business sentiments. With the potential such as strong
domestic demand, resilient if not robust economic activities could push the economic
growth higher in the long-term. IMF has projected that the Indian economy is a bright spot
in the overall economic scenario.
NEW VISION
63 moons technologies limited, with technology in its DNA, aspires to
lead into a world of new technology and its applications for the benefit of the masses. It
is already marching ahead with a vision to master in a new arena of Web 3.0, with an
objective to enrich the user experience. 63 moons technologies already has ventured into
the areas of digital assets, blockchain and AI technology through its stepdown subsidiary
- 3.0 Verse. This business initiative is expected to open doors to a totally different
world for the general public on one hand and for technocrats on the other, as its arms
such as 3.0 University and 3.0 TV would further its developments through knowledge
imparting and sharing the latest updates and insights. Your Company envisions that these
technological fields would open doors for new opportunities, be it for job seekers or for
budding entrepreneurs.
FINANCIAL POSITION AND RESULT OF OPERATIONS Overview
The financial statements of the Company, including consolidated
financial statements, have been prepared in accordance with the Indian Accounting
Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 ("the 2013
Act") read with the Companies (Indian Accounting Standards) Rules, 2015, subsequent
amendments thereto and the relevant provisions of the 2013 Act, as applicable.
The discussion on financial performance in the Management Discussion
and Analysis relate to the standalone financial statement of the Company.
Equity Share Capital
Your Companys authorised share capital is Rs 3,000 lacs, divided
into 1,500 lacs equity shares of Rs 2 each. The paid up share capital of your company
stood at Rs 921.57 lacs. During the year, there was no change in the paid-up share capital
of your Company.
Other Equity
Your Companys other equity amounted to Rs 260,734.88 lacs as on
March 31, 2023 as against Rs 258,097.98 lacs as on March 31, 2022. The addition is mainly
on account of net profit for the year Rs 2,775.41 lakhs (previous year net loss Rs
6,134.31 lakhs) During the year, there was no change in Securities premium account which
stood at Rs 41,746.62 lacs as on March 31, 2023.
During the year, there was no change in General reserve which stood at
Rs 32,579.86 lacs as on March 31, 2023.
Total Equity
Total equity stood at Rs 261,656.45 lacs as on March 31, 2023 as
against Rs 259,019.55 lacs as on March 31, 2022.
Deferred Tax assets (net)
Deferred tax is recognised in respect of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. At the year end, your Company has reported accrual of
total net deferred tax asset of Rs 4,721.93 lacs compared to Rs 8,399.73 lacs at the end
of previous year. It mainly includes MAT credit entitlement of Rs 5,217.69 lacs as at
March 31, 2023 compared to Rs 8,585.02 lacs as at March 31, 2022. The reduction in
deferred tax asset is mainly attributed to utilisation of MAT credit during the year.
Trade payable
At the end of the year, trade payables stood at Rs 312.47 lacs as
compared to Rs 230.33 lacs at the end of previous year.
Other financial liabilities (current + non-current)
Other financial liabilities at the end of the year amounted to Rs
8,518.48 lacs as against of Rs 8,539.38 lacs at the end of previous year. It mainly
includes Rs 6,911.78 lacs ( previous year Rs 6,911.78 lacs) towards unpaid dividend, which
has not been paid pursuant to the Honble Bombay High Courts ad interim order
dated September 30, 2015 inter alia restraining the Company from distributing any dividend
or depositing the same in the dividend distribution account in accordance with the
provisions of the Companies Act, 1956 (to be read as Companies Act, 2013) pending the
final hearing and disposal of the Notice of Motion. The matter is pending for hearing.
Current tax assets and liabilities
Current tax assets at the end of the year amounted to
Rs 3,270.51 lacs as against Rs 1,729.60 lacs at the end of previous
year.
Other liabilities (current + non current)
Other liabilities at the end of the year amounted to Rs
10,751.36 lacs as against of Rs 2,525.57 lacs at the end of previous year. It mainly
includes income received in advance / unearned revenue, statutory liabilities and other
contractual obligations. Increase is mainly due to receipt of income in advance during the
year which was Rs 10318.90 lakhs at the year end as compared to Rs 2,114.35 lakhs
at the end of previous year.
Provisions (current + non-current)
Total provisions as at the end of the year amounted to Rs
1,556.44 lacs as against of Rs 1,341.63 lacs at the end of the previous year. It mainly
includes provision for employee benefits viz. provision for compensated absences and
gratuity.
Lease Liability (current + non-current)
At the end of the year, lease liability, accounted in accordance with
Indian Accounting Standard (Ind AS 116 Leases), stood at Rs 420.19 lacs as compared to Rs
27.95 lacs at the end of previous year. The increase in amount is mainly due to computer
hardware and premises taken on long term lease.
Property, plant and equipment, right of use assets, investment
properties and other intangible assets
The carrying value of property, plant and equipment, right of use
assets, investment properties and other intangible assets is shown in the table below:
| As on March 31, |
2023 |
2022 |
| (A) Property, plant and equipment |
|
|
| Freehold Land |
4,836.18 |
4,836.18 |
| Buildings |
14,563.26 |
14,863.47 |
| Office Equipments |
315.64 |
324.05 |
| Computer Hardware |
460.65 |
493.52 |
| Furniture and Fixtures |
48.62 |
59.34 |
| Vehicles |
245.13 |
347.43 |
| Total (A) |
20,469.48 |
20,923.99 |
| (B) Right of use assets |
428.01 |
26.25 |
| (C) Investment Property |
10,238.73 |
10,448.80 |
| (D) Other Intangible assets |
207.47 |
319.18 |
| including Software, |
|
|
| Technical know-how etc. |
|
|
| Total (A+B+C+D) |
31,343.69 |
31,718.22 |
Financial Investments (current + non-current)
The total financial investments (net of provision) as at March 31, 2023
were at Rs 76,214.15 lacs as compared to Rs 90,202.12 lacs as at March 31, 2022. The
investments mainly comprised of investment in bonds, mutual funds and investments in
subsidiaries. The reduction as compared to previous year was mainly on account of maturity
of certain bonds, proceeds of which has been invested in bank fixed deposits and write off
/ impairment of certain debentures (Refer Note 42 to the financial statements for the year
ended March 31, 2023).
Trade receivables
As at the end of year, trade receivables (net of provision) were at Rs
915.31 lacs as compared to Rs 597.68 lacs at the end of the previous year
Cash & cash equivalents (including other bank balance)
At the end of the year cash & cash equivalent (including other bank
balance) stood at Rs 125,219.94 lacs as compared to Rs 110,564.17 lacs at the end of the
previous year. This included fixed deposits placed with banks Rs 119,533.40 lacs (Previous
Year Rs 108,085.77 lacs).
Financial Assets: loans (current + non-current)
At the end of the year, Loans and advances (current + non-current) (net
of provision) amounted to Rs 520.34 lacs as against Rs 531.62 lacs at the end of previous
year.
Other financial assets (current and non-current):
At the end of the year, other financial assets stood at Rs
30,762.53 lacs as against Rs 15,009.82 lacs at the end of the previous year. The increase
is due to bank deposits kept for longer duration. It mainly includes fixed deposits with
banks maturing after one year, deposit kept with Honble Bombay High Court in respect
of a legal matter, interest accrued on fixed deposits / bonds, and other bank balances.
Other assets (current and non-current):
At the end of the year, other assets amounted to Rs 10,246.99
lacs as against Rs 12,931.45 lacs at the end of the previous year. It includes income tax
paid for earlier years which are in appeals, prepaid expenses and advance for goods and
services etc.
Revenue Analysis
During the year, revenue from operations stood at Rs 27,249.38
lacs compared to Rs 14,438.82 lacs in the previous year. The increase is mainly due to
renewal of contract with a major customer for the period from October 2022 to June 2023 at
revised term.
Other Income
During the year, other income stood at Rs 10,241.36 lacs as compared to
Rs 6,669.89 lacs in the previous year. The increase was mainly due to increase in interest
rates on bank fixed deposits during the year. Other Income mainly includes interest from
bonds, interest on bank deposits / investments, gain / (loss) on fair valuation of
financial assets, rental income etc.
Expense Review
During the year, employee benefits expenses were at Rs 12,304.16
lacs as compared to Rs 10,573.27 lacs in the previous year, increase being in line with
general industry trend. Finance cost was Rs 54.47 lacs during the current year as compared
to Rs 39.31 lacs during the previous year. Other expenses during the year were Rs 9,672.21
lacs as compared to Rs 10,374.36 lacs in the previous year. Total expenses during the year
was Rs 23,218.10 lacs as compared to Rs 22,194.31 lacs in the previous year.
Exceptional Items
During the year, exceptional items stood at loss of Rs 7,386.55
lacs compared to Rs 5,208.28 lacs in previous year. The exceptional items during the year
mainly includes
(a) Write off / impairment of receivable in respect of debentures /
bonds Rs 4,136.55 lacs (b and (b) allowance for expected credit loss in the value of
investments in subsidiaries were Rs 3,500.00 lacs.
Profit / (Loss)
Your Company has reported the following during the year.
• Profit before finance cost, depreciation, exceptional items and
tax was Rs 15,514.37 lacs, compared to profit of Rs 161.08 lacs in the previous year.
• Profit before tax and exceptional items was Rs 14,272.64 lacs,
compared to Loss before tax and exceptional items Rs 1,085.60 lacs in the previous
year.
• Profit before tax was Rs 6,886.09 lacs, compared to Loss before
tax Rs 6,293.88 lacs in the previous year.
• Net Profit after tax was Rs 2,775.41 lacs, compared to Net Loss
after tax Rs 6,134.31 lacs in the previous year.
• Other Comprehensive Loss, net of tax, for the year was Rs 138.51
lacs as compared to income of Rs 93.61 lacs in the previous year.
• Total comprehensive Income for the year was Rs 2,636.90 lacs as
compared to Total comprehensive Loss Rs 6,040.70 lacs in the previous year.
CAUTIONARY STATEMENTS
This report may contain forward-looking statements about 63 moons
technologies ltd (formerly Financial Technologies (India) Ltd.) and its group companies,
including their business operations, strategy and expected financial performance and
condition. Forward-looking statements include statements that are predictive in nature,
depend upon or refer to future events or conditions, or concern future financial
performance (including revenues, earnings or growth rates), possible future Company plans
and action. Forward-looking statements are based on current expectations and understanding
about future events. They are inherently subject to, among other things, risks,
uncertainties and assumptions about the Company, economic factors and the industry in
general. The Companys actual performance and events could differ materially from
those expressed or implied by forward-looking statements made by the Company due to, but
not limited to, important factors such as general economic, political and market factors
in India and internationally, competition, technological change and changes in Government
regulations.
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