BLB Ltd Management Discussions.

MACRO ECONOMY: REVIEW AND OUTLOOK

Global economies witnessed a healthy 2.8% CAGR over 2015- 2019 in the pre-pandemic period led by China, United States and India primarily. The world is becoming more and more responsible towards achieving sustainable growth, with technology playing a pivotal role.

The year 2020 started on a very challenging note, as the rapid spread of Covid-19 risked overwhelming healthcare in various countries and required implementation of strict social distancing measures. However, such measures brought the world to a virtual standstill and hurt the global economy substantially.

The Indian economy contracted by 8.0% in FY 2020-21 marking a recession for the first time since 1980 as per the IMF World Economic Outlook in April 2021. Overall economic slowdown, led by the COVID-19 onset followed by stringent lockdowns severely impacted economic activity, bringing manufacturing and trading activities to a halt. Prolonged lockdown exacerbated existing vulnerabilities of the country including the weakened financial sector, private investments, and consumption demand.

The IMF in its latest World Economic Outlook in April 2021 has upgraded their global GDP growth projections to 6.0% and 4.4% for FY 2021 and FY 2022 respectively. The upwards revision in GDP growth estimates is a result of additional fiscal support in a few large economies and expectations of a vaccine powered normalization in the second half of 2021.

OVERALLOUTLOOK

Despite a softer growth, the Indian economy remains one of the fastest growing economies in the world. The effects of external shocks such as rising global volatility, largely from financial volatility, externs from trade disputes, and investment rerouting was contained in part by Indias strong macroeconomic fundamentals. The policy changes including amendments to the policy related to insolvency and bankruptcy, bank recapitalization, and foreign direct investment further helped in coping with the de-growth.

The growth trajectory is expected to resume with public policy support and private participation. Reform measures have been made by RBI to ease out liquidity in the markets and to encourage credit inflows via NBFC, HFC, MFIs.

CAPITAL MARKETS

Capital markets play a crucial role in the economic development of a country. They provide the financial resources required for the long-term sustainable development of the economy. Capital markets are therefore considered an important element as it enables higher productivity growth, higher real-wage growth, greater employment opportunities and greater macroeconomic stability.

The Indian capital market also witnessed a phenomenal rebound in the current fiscal, factoring in quick resumption of economic activity and future growth prospects. Like its global peers, India too witnessed a strong rebound from the pandemic lows with the key indices reaching an all-time high by the fourth quarter on the back of continued and strong recovery in economic activities in the second half of FY 2020-21 and record FPI flows. Indias market capitalisation to GDP ratio now stands at approximately 105% for the first time in a decade in March 2021 up from approximately 56% in March 2020.

Despite COVID-induced turbulence, Indian equity markets showed their best performance in a decade in FY 2020-21. Surge in trading by retail investors and Foreign Institutional Investors (Fils) fuelled a rally in equity markets post sharp correction of March 2020. Flls net investment recorded an all-time high in FY 2020-21 owing to continuous rally in equity prices. Unlike Fils, Domestic Institutional Investors (Dlls) remained strong sellers of Indian equities. Net

investment by Dlls remained negative due to redemption pressures and profit-booking as equity valuations touched lifetime highs.

Fund mobilisation via the primary market route was the highest ever in FY 2020-21. Market traction has been supported by strong FPI investment inflows, optimism related toa recovery after the graded re-opening of the economy, and steadily rising retail investor momentum. Funds raised through Initial Public Offerings (IPOs), Follow on Public Offerings (FPOs) and Offer for Sale (OFS) stood at a record Rs. 747.1 billion in FY 2020-21 as compared to Rs. 376.8 billion raised in FY2019-20.

The exchange turnover remained subdued in the beginning of FY 2020-21 amid weak global and domestic cues, coupled with increasing COVID-19 concerns. Turnover was further impacted after the Securities and Exchange Board of India (SEBI) revised market-wide position limit in March 2020, in a bid to reduce market risks. Thereafter, there has been a steady increase in exchange turnover.

The spread of COVID-19 has led to volatility in markets. Debt mutual funds, gilt funds, banking & PSU funds have been showing negative return unlike prior to COVID-19 where the growth seemed promising.

The current Budget is drawn with the focus to improve on the Government spending in the areas affected by COVID-19. Its guidelines on seamless and paperless customer on-boarding procedures have played a big role in retail participation in the capital market.

INDUSTRY STRUCTURE AND DEVELOPMENTS

At a macro-economic level, due to peak margin regulations, intra-day volumes were impacted. There has been gradual recovery and the economy is getting back on track.

Despite the onset of the COVID-19 pandemic, India is still expected to be the fastest growing economy. India had earlier set a target to achieve USD 5 trillion GDP by 2025. As this happens, the funding needs for corporate India will continue to rise, and opportunities for institutional broking and investing banking will be enormous.

The industry is increasingly becoming competitive and technology-driven, with newer format players making a foray and making use of technology and pricing-based disruptions.

Number of demat accounts opened and number of clients transacting on stock exchanges are witnessing an increase. Untapped potential for new clients, favourable demographics, rising financial literacy levels, increasing smartphone and internet penetration are the key drivers for increased retail participation.

OPPORTUNITIES AND THREATS

Opportunities

• Favourable demographics

• Growing demand forfinancial 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

• Corporates 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 equity 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 EBITDA) 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.

FY 2020-21 has been a remarkable year in terms of growth for the Company. Our sustained efforts on focusing on growth backed by revenues and cost efficiency has helped turned profitable in current FY 2020-21 with Profit before tax stands at Rs 403.96 lakhs as against loss of Rs. 1175.05 lakhs in FY 2019-20. Profit after Tax (PAT) stands at Rs. 113.03 lakhs as against loss of Rs. 804.01 lakhs in FY 2019-20.

Revenues have seen a strong growth of 165.50% amounting to Rs. 53,721.17 lakhs in FY 2020-21, as against Rs. 20,233.80 lakhs in FY2019-20.

OUTLOOK. RISKS AND CONCERNS

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 safeguards, 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 CONTROL SYSTEMS AND THEIR 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 endeavour 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 therefor are given below:

S. Particulars No. Current F.Y. March 31, 2021 Previous F.Y. March 31, 2020 Changes, if any, and reason thereof
1. Debtors Turnover 3344.20 43.56 Improved due to better turnover achieved during the year and decrease in debtors.
2. Inventory Turnover 108.72 74.68 Improved by 45.58% Due to increase in delivery based turnover and operational activities
3. Interest Coverage Ratio 4.13 Negative (0.57) Turned positive due lower borrowing cost and better financial performance of the Company
4. Current Ratio 12.11 2.03 Improved by 496.55% Due to reduction in borrowings and increase in inventories
5. Debt Equity Ratio 0.04 0.33 Reduced by 87% Due to reduction in borrowings of the Company.
6. Operating Profit Margin (%) 1.07 (0.26) Turned positive due to better margins and financial performance of the Company
7. Net Profit Margin (%) 0.26 (4.43) Turned positive due to better operational activities
8. Return on Net worth (%) 1.86 (11.66) Improved due to increase in Profits and revenue during the year and reduction in proportionate cost.

DISCLOSURE OF ACCOUNTING TREATMENT

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 12, 2021