blue circle services ltd share price Management discussions

INDIAN ECONOMY AND OUTLOOK

India to witness GDP growth of 8.0-8.5 per cent in 2022-23, supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. The Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman tabled the Economic Survey 2021-22 in Parliament today, which states that the year ahead is well poised for a pick-up in private sector investment with the financial system in a good position to provide support to the revival of economy. The growth projection for 2022-23 is based on the assumption that there will be no further debilitating pandemic related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be broadly orderly, oil prices will be in the range of US$70-$75/bbl, and global supply chain disruptions will steadily ease over the course of the year. The Survey says, the above projection is comparable with the World Bank’s and Asian Development Bank’s latest forecasts of real GDP growth of 8.7 per cent and 7.5 per cent respectively for 2022-23. As per the IMF’s latest World Economic Outlook (WEO) growth projections released on 25th January, 2022, India’s real GDP is projected to grow at 9 per cent in both 2021-22 and 2022-23 and at 7.1 per cent in 2023-24. This projects India as the fastest growing major economy in the world in all these three years.

INDUSTRY OVERVIEW

The capital market rally was largely led by flush liquidity, supportive monetary policy, better-than-expected pace of post-pandemic macro recovery, and a strong vaccination drive. But investors are now worried whether the recent market weakness, with the Nifty down 7% since October 18, is an indication that the market might be entering a bear phase. Even the market breadth which touched nearly 100% in October is now at 62%, the lowest in a year, highlighting a broader consolidation in the recent fall of the market. "This also suggests to us that market is no more overheated, and offers selective opportunities. The strong rally of 2021 was led by utilities, industrials, materials, and real estate; while FMCG, healthcare, autos and finance sector were the key laggards.

OPPORTUNITIES & THREATS Opportunities

Capital Market is a commonly used term. Capital market is a market for both debt and equity securities in India. It is the market where business enterprises, including companies and governments, can raise long-term funds. In other words, it can be said that the capital market is a market where the money is provided to the borrowers for more than a year. The Indian capital market includes both the stock or the share market and the bonds market. Share or stock market is the market where equities are traded, whereas, the bond market is the market where debt securities are traded. The Capital Market is regulated by Securities and Exchange Board of India (SEBI) or the U.S. Securities and Exchange Commission (SEC) that overlook the market in their jurisdiction ensuring that the investors are protected against fraud apart from other duties. The regulatory bodies lay down specific rules and regulations that must be adhered to safeguard the investors’ interest.

Threats & Concerns

Indian economy is one of the largest and fastest-growing economies in the world. There have been various reforms that have acted as a catalyst in the growth of the Indian economy; however, there are specific challenges that continue to block the development of the Indian economy. Main challenges that act as a hurdle in the growth of the Indian economy are as follows: Inflation: The rate of inflation indicates the falling purchasing power of the people of the country and the rising prices of the goods and services. Inflation happens and continues to be one of the biggest concerns of any nation, and so is the case with India. Though there have been many monetary policies and regulatory policies released by the Reserve Bank of India, inflation is still one of the biggest challenges that hamper the growth and development of the Indian Capital Market. GDP: Gross Domestic Product or GDP is another deciding factor in the growth and development of the capital market. GDP growth of the Indian economy is highly disappointing and highlights a downward trend. The lower the GDP, the more challenging it becomes for the country. Currently, India is facing a negative GDP growth due to the pandemic spread all across the world. Foreign Policy: A country’s foreign policy deals with Foreign Direct Investments (FDI) that a country is likely to receive. The higher the rate of the FDI flowing to the country, the better it is for the country in the short run as well as in the long run. Non Uniform Tax Reforms: India has non-uniformity in its tax system across the state that makes it difficult for organizations to carry out business. This has resulted in the undergrowth of the businesses. The difference in the tax rates implemented in some states across India is one of the significant challenges to carry out the business smoothly. It also accounts for the rising prices of the goods and services in the country.

HUMAN RESOURCE DEVELOPMENT

The Company recognizes that its success is deeply embedded in the success of its human capital. During 2021-2022, the Company continued to strengthen its HR processes in line with its objective of creating an inspired workforce. The employee engagement initiatives included placing greater emphasis on learning and development, launching leadership development programme, introducing internal communication, providing opportunities to staff to seek inspirational roles through internal job postings, streamlining the Performance Management System, making the compensation structure more competitive and streamlining the performance-link rewards and incentives.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The provision of the Companies Act, 2013 relating to CSR Initiatives are not applicable to the Company.

COMPLIANCE

The Compliance function of the Company is responsible for independently ensuring that operating and business units comply with regulatory and internal guidelines. The Compliance Department of the Company continues to play a pivotal role in ensuring implementation of compliance functions in accordance with the directives issued by regulators, the Company’s Board of Directors and the Company’s Compliance Policy. The Audit Committee of the Board reviews the performance of the Compliance Department and the status of compliance with regulatory/internal guidelines on a periodic basis. The Company has complied with all requirements of regulatory authorities except the payment of Listing Fees to BSE & Depositories as well as Penalties levied for Non-Compliance with provision of SEBI LODR Regulations related to previous years. The Company is also in default with the provision of Regulation 6 for non-appointment of qualified Company Secretary as Compliance Officer.

Mumbai, May 25, 2022	By order of the Board
	For Blue Circle Services Limited
Registered Office :	Dhruva Narayan Jha
Unit No. 324, 3rd Floor, Bldg. No. 9	DIN: 01286654
Laxmi Plaza, New Link Road, Andheri (W), Mumbai 400 053	Managing Director