MACRO ECONOMY:
REVIEW AND OUTLOOK
Global economic conditions continue to deteriorate as central banks
across the world synchronously hike interest rates in response to tame inflation and to
keep inflation expectations anchored. With economic growth slashed by various agencies,
the signals appear to indicate that many economies may head towards a recession. Side
effects from the fast rise in policy rates are becoming obvious, as banking sector
exposures have come into focus; however, it has been largely priced in. Yet, navigating
inflation, have had been a tightrope walk for Central banks.
Going forward, global growth is expected to be driven by the recovery
of the Chinese economy and a relatively strong growth in some of the emerging markets,
while the Euro zone and U.S. economies are expected to see muted growth.
With strong macroeconomic factors, India stands tall and steadfast,
emerging as a beacon of resilience in the global economy. High frequency indicators
suggest that economic activity will continue to remain strong.
Going forward, driven by private consumption and private investment on
the back of government policies to improve transport infrastructure, logistics, and the
business ecosystem, the Indian economy will continue to remain as one of the fastest
growing major economies globally despite significant challenges in the global environment
-, the synchronized tightening of global monetary policies and inflationary pressures.
Indias growth prospects have brightened as the private sector poised
for stronger investment growth following the improvement of corporate and bank balance
sheets in the past few years, supported by the governments infrastructure drive.
Undoubtedly, both macros and structural story of India appears to be better placed among
its peers.
CAPITAL MARKETS
The Indian equity market seems comfortably seated in an optimism zone,
on the back of an ebbing fear of rate hikes in a reversionary environment and a lower
valuation premium for emerging markets. As the fundamentals of the Indian macroeconomic
are intact, it is expected that India will continue to remain as a bright spot among other
emerging countries and market will continue to move northward.
The governments focus on infrastructure development, ease of doing
business, and initiatives like Make in India and Atmanirbhar Bharat are expected to boost
the economys growth. The governments focus on ease of doing business, a stable political
environment and promising economic growth will continue to attract foreign investors to
the Indian stock market.
Indian markets had a quiet FY2023 with major indices closing flat. The
year started with ongoing Russia-Ukraine geopolitical tensions, accelerated monetary
tightening by major central banks, volatility in commodity prices etc.
Equity markets, which were down during the first quarter, bounced back
with Sensex and Nifty achieving an all-time high of 63.28A and 18,812 respectively in the
month of December 2022.
INDUSTRY STRUCTURE AND DEVELOPMENTS
Talking about the global economy, at present, India is better
positioned to navigate global headwinds than other major emerging economies. Europe is
currently facing problems and the US is grappling with decades high inflation. Like many
developing economies, India is also confronting inflation following a surge in global food
and fuel prices after Russias invasion of Ukraine.
However, institutions like IMF have confidence that our Country
continues to remain at a "bright spot" in the world economy, and will alone
contribute 15 per cent of the global growth in 2023. The policy reforms and prudent
regulatory measures have played an important role in developing resilience in the economy.
Accordingly, the global as well as our stock markets may witness small
to moderate gains over the coming year given that the challenges in the global economy.
The Indian economy continues to be a favorable spot for PE players
given the robust credit cycle, improving capex cycle, rising incomes leading to higher
consumption and supportive government policies. Indian economys tremendous performance in
2022 and the positive outlook for growth in the coming decade make India one of the best
investment destinations for both foreign and domestic investors across multiple sectors.
Further, expectations of peaking interest rates and an uptick in IPOs and other investment
exits improve the prospects.
OPPORTUNITIES ANDTHREATS
Opportunities
• Favorable demographics
• Growing demand for financial products in semi-urban and rural
areas
• Increase in financial savings to drive capital market investment
• Technology advancement
• Long-term economic outlook positive, will lead to opportunity
for financial services
• Corporate looking at consolidation / acquisitions /
restructuring opens out opportunities for the corporate advisory business
Threats
• Spread of Pandemic
• Indias lower sovereign rating
• Increase in interest rates making debt more attractive,
impacting flows into eguity market
• Technological disruptions
• Execution risk
• Regulatory changes
• Threats to cyber security, regulatory overhauls and data privacy
are potential threats to the financial services sector.
SEGMENT WISE PERFORMANCE-FINANCIAL PERFORMANCE
Your Company operates in only one segment i.e., trading and investment
in Shares and Securities.
The Board of Directors primarily uses a measure of adjusted earnings
before interest, tax, depreciation and amortization (adjusted EBlTDA to assess the
performance of the operating segments. However, the Board of Directors also receives
information about the segments revenue and assets on a periodical basis.
Your Company recorded a performance with turnover of Rs. 21,879.26
lakhs as against Rs. 37,472.99 Lakhs in previous year and profit after tax stood at Rs.
604.86 Lakhs as against Rs. 941.61 Lakhs in previous year.
OUTLOOK. RISKS ANDCONCERNS
The nature of Companys business is susceptible to various kinds of
risks. The Company encounters risks like Market Risk, Credit Risk, Technology Risk,
Reputation Risk, Regulatory & Compliance Risk, Operational Risks on daily business
operations. For overcoming such risks Company has framed comprehensive risk management
techniques and safe guards, to ensure that major risks are properly assessed, analyzed and
appropriate mitigation tools are applied.
These techniques remain dynamic and align with the continuing
requirements and demands of the market.
Our Outlook, risks and concerns are as follows:
• Spending on technology products and Services including both the
economic and regulatory requirement in the market.
• We have reduced debt on the balance sheet to nearly zero and as
we have articulated in the past, we do not expect to leverage the balance sheet. Our focus
will be on generating income from trading and investment in securities market.
INTERNAL CONTROLSYSTEMSANDTHEIR ADEQUACY
BLB Limited has an adequate internal audit and control system. Risk
based internal audit, through external audit firms, are being conducted periodically to
independently evaluate adequacy of internal controls, adherence of processes and
procedures and compliance of regulatory and legal requirements. The internal audit
programme is periodically reviewed by Audit Committee of Board, which is chaired by
Independent Director, for its effectiveness and timely reporting. The internal control
procedures include segregation of roles and responsibilities, independent confirmations,
physical verifications and preventive checks on compliance risk.
Statutory and standard auditing practices employed include, interalia,
compliance to accounting and auditing standards, compliance of all relevant rules &
regulations, tax laws and review of related party transactions.
BLB believes in conduct of its affairs in a fair and transparent manner
by adopting highest standards of professionalism, honesty, integrity and ethical behavior.
MATERIAL DEVELOPMENTS IN HUMAN RESOUCE/ INDUSTRIAL RELATIONS FRONT.
INCLUDING NUMBER OF PEOPLE EMPLOYED
At BLB, it is our endeavor to create an employee centric culture. The
knowledge, skill, competencies of the employees are being continuously developed by way of
proper training programs. Company emphasizes in improving the efficiency and skills of
employees by adopting Total Quality Management (TQM) Technique, this helps employees to
resolve problems through a pro-active approach. We believe in growing with the growth of
employees.
The company has also organized motivational activities for its
employees. We have always strive to act as a catalyst in achieving the goals of the
organization by developing the capabilities of the employees.
DETAILS OFSIGNIFICANT CHANGES
As per the amendment made under Schedule V to the Listing Regulations
read with Regulation 34(3) of the Listing Regulations, details of significant changes
(i.e. change of 25% or more as compared to the immediately previous financial year) in Key
Financial Ratios and any changes in Return on Net Worth of the Company including
explanations there for are given below:
s. No. Particulars |
Previous F.Y. March 31,
2022 |
Current F.Y. March 31,
2023 |
Changes, if any, and reason
thereof |
1. Current Ratio |
7.29 |
16.00 |
Increased due to increase in
current assets and reduction in non-current assets. |
2. Debt Equity Ratio |
0.05 |
0.04 |
- |
3. Return on Equity |
11.36 |
6.67 |
Decreased due to low
profitability during the year. |
4. Debt Service Coverage Ratio |
24.61 |
18.83 |
- |
5. Inventory Turn over Ratio |
43.88 |
14.24 |
Decreased due to decrease in
inventories and purchases. |
6. Net Capital Turnover Ratio |
9.47 |
3.55 |
- |
7. Net Profit Ratio |
3.19 |
3.30 |
- |
8. Return on Capital Employed |
12.95 |
8.48 |
Decreased due to low
operating profit. |
9. Return on Investment |
29.89 |
0.49 |
Decreased due to loss in
realization of investment in shares and securities. |
DISCLOSUREOFACCOUNTINGTREATMENT
The financial statements of the Company have been prepared in
accordance with the Section 133 of the Companies Act, 2013 and Indian Accounting Standard
Rules, 2015, which became applicable on the Company w.e.f. 01.04.2017. The significant
accounting policies which are consistently applied are set out in the Notes to the
Financial Statements.
CAUTIONARY NOTE
All statements that address expectations or projections about future,
but not limited to the companys/ groups strategy for growth, product development, market
position, expenditures and financial results may be forward - looking statements within
the meaning of applicable rules and regulations. Since these are based on certain
assumptions and expectations of future events, the company cannot guarantee that these are
accurate or will be realized.
The company assumes no responsibility to publicly amend, modify or
revise any such statements on the basis of subsequent developments, information or events.
For and on behalf of the Board of Directors of
BLB Limited
Brij Rattan Bagri Chairman DIN: 00007441
Place: New Delhi Date : August 9, 2023
+91-9892691696
