A. eCONOMIC OVeRVIe W
1. Global economy
Global economic conditions are beset by heightened uncertainty as financial conditions
remain volatile and financial markets are on edge. A generalised surge in global inflation
triggered synchronously hike in interest rates by central banks across the world.
According to the International Monetary Fund (IMF), successive increase in interest rate
and the pulling back of liquidity slowed the growth from
6.2 per cent in 2021 to 3.4 per cent in 2022.
For emerging market economies (EMEs), the outlook appears even more uncertain as they
look back at a year of lingering pandemic woes, surging food and energy prices and even
shortages, unsustainable debt overhangs and repeated incidence of global spillovers that
brought in their train volatile capital flows and generalised risk aversion.
2. Domestic economy
In this turbulent global economic environment following the successive waves of the
COVID-19 pandemic and war in Ukraine, Indian economy exhibited robust resilience in
2022-23 and recorded a growth of 7.0 per cent, the highest among major economies in the
world. Indias merchandise exports touched US$ 450.4 billion during 2022- 23, which is 6.7
per cent above the previous years record level. Non-banking financial companies (NBFCs)
maintained robust credit growth during 2022-23, supported by the broad-based revival in
economic activity and targeted policy initiatives. The sector strengthened its financial
soundness during the year through robust capital buffers, improved asset quality and
consolidation of balance sheet. A scale based regulatory framework was implemented for
NBFCs during 2022-23.
India has emerged stronger and more resilient from the pandemic, partly due to the wave
of digital transformation. Transactions routed through digital modes recorded a marked
expansion in 2022-23 over and above the strong growth witnessed a year ago. In 2022-23,
total digital payments recorded growth of 57.8 per cent and 19.2 per cent in volume and
value terms, respectively, on top of growth of 63.8 per cent and 23.1 per cent,
respectively, in the previous year. The Reserve Bank released the Payments Vision 2025
during the year with the theme E-Payments for Everyone, Everywhere, Everytime promising to
further elevate Indias payment systems to empower every user with safe, secure, reliable,
accessible, affordable and efficient payment options. India is one of the fastest growing
major economies and is currently ranked as the worlds fifth largest economy.
To commemorate 75 years of independence (Azadi Ka Amrit Mahotsav), 75 Digital Banking
Units (DBUs) were set up in 75 districts of the country to catalyse the adoption of
digital modes of doing banking transactions in the country. These 75 DBUs were dedicated
to the service of the nation by the Honble Prime Minister on October 16, 2022. As on
March 31, 2023, there were 84 DBUs functioning across the country.
Like many other economies, India also experienced a surge in inflation during 2022-23
and overall, headline inflation increased to 6.7 per cent in 2022-23 from 5.5 per cent in
2021-22. As inflation spiked, the Monetary Policy Committee (MPC) sensed that the
near-term inflation outlook would deteriorate sharply amidst geopolitical tensions, and
therefore, cumulatively increased the policy repo rate by 250 bps during 2022-23 from 4.00
per cent to 6.50 per cent, to keep inflation expectations anchored.
B. INDUSTRY STRUCTURe AND DeVeLOPMeNTS – CAPITAL MARKeT
Global macroeconomic uncertainty, unprecedented inflation, monetary policy tightening,
volatile markets, etc., resulted in hurting investor sentiments, leading to a downbeat
performance of global capital markets in FY23. Though global macroeconomic and financial
market capital markets, Indias capital market had a good year, overall. Although the year
so far has been lacklustre in terms of fund mobilisation through IPOs, the number
of SMEs coming out with public offer has been quite encouraging. This year also witnessed
the largest IPO ever in the history of India. In May 2022, the Central Government diluted
its stake in the Life Insurance Corporation (LIC) of India and listed it on the stock
exchanges, thereby making LICs IPO the largest IPO ever in India and the sixth biggest
IPO globally of 2022. Listing of LIC accounted for more than a third of resources
mobilised in the primary equity market until November 2022. During the year, global stock
markets declined because of geopolitical uncertainty. On the contrary, the Indian stock
market saw a resilient performance, with the blue chip index Nifty 50 registering a return
of approx. 3.7 per cent during the same period. Even among major emerging market
economies, India outperformed its peers. equity derivatives volumes recorded a
considerable jump, reflectingthe drifting interests of individuals and proprietary traders
away from the equity cash segment to the equity derivatives segment. Driven by the
uncertainty prevailing across the globe, currency and commodity derivatives volumes too
increased during the same period.
During the year under review, Mutual Funds witnessed significantly lower net
inflows than last year. However, during the same period, some schemes comprising
growth/equity oriented schemes and solution-oriented schemes inflows observed
significantly higher than in the previous year.On the other hand, income/debt-oriented
schemes and hybrid schemes recorded outflows compared to inflows in the same period of the
previous year. Outflows from liquid funds and hybrid schemes were mainly affected by
increasing interest rate cycles, liquidity requirements and advance tax commitments by
corporates. Despite that, the mutual fund industrys assets under management (AUM) grown
by 6.79% compared to
April 2022, on YOY basis.
C. FINANCIAL PeRFORMANCe as total income Thefigures stated in
financialstatements reflects includes only interest income, dividend income, Net gain on
fair value changes of mutual funds, profit/loss and Net Profit/loss fully understand the
performance of the Company, members are requested to look at the increase in "Other
Equity" shown in the balance sheet. Members will note that the Other Equity of the
Company has increased to Rs. 1608.42 lakhsin 2022-23 from Rs. 1568.83 lakhs in 2021-22.
The Companys total equity (Equity Share Capital and other equity) has become Rs. 1,946.46
lakhs.
D. SeGMeNT WISe OR PRODUCT WISe PeRFORMANCe The Company is engaged primarily in the
business of investment and accordingly there are no separate reportable segments. e.
FUTURe PROSPeCTS AND OUTLOOK
The Company is making all efforts to accelerate the growth of its business. Inspite of
the market risks faced by Company, Management of the Company is optimistic about the
future prospects of the Company.
As a NBFC, The Companys growth and profitability are dependent on the functioning of
Capital Markets. The Company expects a favourable market in the years to come. The Company
on its part is also well poised to seize new opportunities as they come.
F. OPPORTUNITIeS & THReATS
Opportunities:
• Indias Growth Rate
• Financial Inclusion
• Increased retail participation in capital
markets
• Announcement of
Buy-back, Bonus issue and mergers of listed entities.
Threats
• Russias invasion of Ukraine
• Inflationary pressures and economic
slowdown
• Fiscal deficit and current account
deficit
• Protectionist policies by developed
economies.
G. RISK MANAGeMeNT
Risk Management is an on-going process. Effective risk management is therefore critical
to any organizational success. Globalization with increasing integration of markets, newer
and more complex products and transactions and an increasingly stringent regulatory
framework has exposed organizations to and integrated approach to risk management. Timely
and effective risk management is of prime importance to our continued success. The
sustainability of the business is derived from the following: a) Identification of the
diverse risks faced by the Company. b) The evolution of appropriate systems and processes
to measure and monitor them. c) Risk Management through appropriate mitigation strategies
within the policy framework.
d) Reporting these risk mitigation results to the appropriate managerial levels.
There is the risk of loss from credit defaults or failed systems, processes or
procedures.ontradeofmutualfunds These may be attributed to human in
Equityderivativetrading/ShareDealing. failure or technical problems given the increase use
of technologyTo and staff turnover. Our Company has placed suitable mechanisms to
effectively reduce such risks. All these risks are continuously analysed and reviewed at
various levels of management.
H. INTeRNAL CONTROL SYSTeMS AND THeIR ADeQUACY
The Company has robust internal controls systems (including Internal Financial
Controls) that ensure that transactions are properly authorised, recorded and reported,
apart from safeguarding its assets and timely preparation of reliable financial and
management information. The internal control system ensures compliance with all applicable
laws and regulations facilitates optimum utilization of resources and protect the
Companys assets and investors interests.
The Companys well-defined organizational structure, documented policy guidelines,
defined authority matrix and internal controls ensure efficiency of operations, compliance
with internal policies and applicable laws and regulations as well as protection of
resources.
The Company has a vigil mechanism/ whistle blower policy to address fraud risk. The
Audit Committee of the Board regularly reviews significant audit findings of the Internal
Audit system covering operational, financial and other areas.
I. HUMAN ReSOURCeS
The Company continues to give priority to its human assets. The Company is providing an
equal opportunity to all the employees to utilize their full potential and grow with the
organization. The Company is also continuously working to create and nurture an atmosphere
which is highly motivated and result oriented.
CAUTIONARY STATeMeNT
The statement in the Management Discussion & Analysis describing the Companys
objectives, projections, estimate, expectations are ‘forward–looking statements
within the meaning of applicable securities laws and regulations. Actual results could
differ materially from those expressed or implied. Important factors that could make a
difference to the Companys operation include economic conditions affecting demand/supply
and price movements in the domestic and overseas markets in which the Company operates,
changes in the government regulations, tax, corporate and other laws.
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