1. OPERATING RESULTS
During the year under review, the Company reported Total Income of Rs 1193.88 Lakhs as
compared to Rs 162.15 Lakhs in the previous year. The Company incurred total expenses
amounted to Rs 919.79 Lakhs as compared to Rs 218.56 Lakhs during the previous year.
Profit/Loss after tax stood at Rs 223.04 Lakhs
(55.12) Lakhs in the previous year.
2. INDUSTRY STRUCTURE AND DEVELOPMENTS
The strength of any modern economy is based on the soundness of its financial system.
With a combined push by Government and private sector, India is undoubtedly one of the
worlds most vibrant capital markets. Indian financial services industry has experienced
huge growth in the past few years and this momentum is expected to continue. The
Commodities markets play a vital role in the functioning and development of the Indian
economy. The biggest driver of exchange business in India has been the application and
operationalization of information technology, which changed the entire face of the
industry. The growth of online commodity futures trading and development of an
efficient,transparent, and well-organized market, over the past few years, have thrown
open number of opportunities and enormous benefits to various stakeholders, ranging from
producers to processors and consumers. The Indian economy recorded a growth of 7.2 per
cent in GDP in 2022-23 amidst global challenges - the war in Ukraine, the persistent
elevation in food and energy inflation and tightening of financial conditions in response
to aggressive and synchronized monetary policy tightening across the globe. The Financial
markets experienced bouts of volatility in 2022-23, as geopolitical tensions intensified,
interest rate hikes by the US Fed turned aggressive and global growth outlook
deteriorated. A sustained recovery in discretionary spending, restoration of consumer
confidence, high festive season spending after two consecutive years of COVID-19 provided
impetus to the growth momentum.
3. OPPORTUNITIES AND THREATS
After the COVID-19 pandemic forced the world to limit face-to-face contact, businesses
were urged to escalate their digital transformation efforts. Rise in cases of data
breaches and privacy concerns, coupled with progressive regulatory and compliance
requirements are the new hurdles for Finance Sector in India. With the threat of recession
looming, organizations are forced to rethink their strategies and investments. The
problems faced by financial markets have resulted from short term economic slowdown,
geopolitical tensions and global surge in inflation.
India is still a highly under penetrated market in terms of geographical reach and
wallet shares across wealth, credit and protection products. Positive long term economic
outlook will lead to opportunity for financial services. After the COVID-19 pandemic,
regulatory reforms have accelerated and it would aid greater participation by all class of
investors. Indian financial market outperformed most of its competitors on the strength of
macroeconomic fundamentals and favorable growth prospects.
4. FUTURE PROSPECTS AND OUTLOOK
Research from the World Bank shows that the quantities of consumption of many
commodities have risen over the past years, as there has been a corresponding growth in
global demographics as well as growth in incomes. Any commodity market today, therefore,
should be a fruitful one for investment. However, due to innovations in the technology
sector, the relevance of commodities has seen a shift. This is largely because
technological advancement has given rise to new ways of use of some raw materials, and
some commodities have been substituted so that they may not be required at all. On the
subject of the growth of technology, this is one of the key variables that will have an
effect on commodities and commodity trading in the future. Though the commodity futures
market has proved their mettle over the years, there are huge benefitsfor the economy
waiting to be reaped, if a more liberalized environment is permitted for this market to
operate in. Ultimately, new measures can potentially alter the face of the commodity
derivativeseconomyinIndiagiventhelong-termbenefitsthat flow to all sections of the
economy.
The Outlook of the Company for the year ahead is to derive profitablegrowth by
exploring various options to strengthen its capital base to augment the long-term
resources for meeting funds requirements for its business activities, future growth
opportunities and general corporate purposes.
5. RISKS AND CONCERNS
The Company like any other Company is exposed to specific risks that are particular to
its business and the environment within which it operates. The Company is exposed to the
market risk (including liquidity risk) and also the factors that are associated with
Capital market, which inter alia includes economic / business cycle, fluctuations in
the stock prices in the market, besides the interest rate volatility and credit risk.
Risk Management Policy
The Company has implemented a systematic process to assist in the identification,
assessment, treatment and monitoring of risks which provides the necessary tools and
resources to management and staff to support the effective management of risks. The
Company is primarily engaged in investment in Securities viz. Equity Shares, Preference
Shares, Mutual Funds etc. which involves macroeconomic risks, investee company specific
risks, market wide liquidity risks and execution risks relating to the
Company / its intermediaries.
(a) The macroeconomic risks, investee company specific risks are covered by investment
decisions based on third party research and internal assessment. (b) Market wide risks are
assessed and managed by investment timing decisions.
(c) The execution risk is managed by dealing with reputed intermediaries and through
own back office discipline re accounting and follow up of trades.
(d) All investment decisions are made after distinguishing among alternative courses of
action with identification of expected risks. against Profit/Loss of Rs The Company also
faces credit default risks, concentration risk and industry specific risk while making
Inter corporate loans to other body corporate. The Company performs the credit check on
the prospective borrower considering various factors relating to the loan such as loan
purpose, credit rating, and loan-to-value ratio and estimates the effect on yield (credit
spread). The Company mitigates the concentration risk, industry specific risks by
diversifying the borrower pool relating to different industries. The Company periodically
monitors and reviews the financial condition, credit rating, debt to equity ratio to
minimize the credit default risks associated with the borrowers. The Company has
established Internal Financial Control Systems to provide reasonable assurance regarding
safeguarding of assets, maintenance of proper accounting records and the reliability of
financial reporting.
The Company controls the operational risks associated with its business activities by
way of prescribing / amending processes, imposing controls and defining roles and
responsibilities. The Company assesses the effectiveness of its risk management plan
through structured continuous improvement processes to ensure risks and controls are
continually monitored and reviewed.
6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has proper and adequate system of Internal Controls to ensure that all its
assets are safeguarded and protected against loss from unauthorized use or disposition of
assets and that the transactions are recorded and reported.
The Company ensures adherence to all Internal Control policies and procedures as well
as compliance with all regulatory guidelines. The Internal Auditor monitors and evaluates
the efficacy and adequacy of Internal Control Systems in the Company, its compliance with
the operating systems, accounting procedures and policies. The Audit Committee reviews the
internal controls at periodic intervals in close coordination with the Internal Auditors.
7. FINANCIAL PERFORMANCE a) Share Capital: The Companys Issued and
Subscribed Share Capital consists of Equity Share Capital only. The Paid-up Share Capital
of the Company as at 31st March, 2023 stood at Rs 10,76,42,300/- comprising of 1,07,64,230
nos. of Equity Shares of Rs 10/- each. b) Financial Assets and Non-Financial Assets:
The Financial Assets and Non-Financial Assets for the year under review stood at Rs
15995.75 Lakhs and Rs 254.28 Lakhs respectively as against Rs 17,375.70 Lakhs and Rs
242.70 Lakhs for the previous year. c) Financial Liabilities and Non-Financial
Liabilities: During the year under review, the Financial Liabilities and Non-Financial
Liabilities stood at Rs 105.80 Lakhs and Rs 30.97 Lakhs respectively as against Rs 135.26
Lakhs and Rs 35.68 Lakhs during the previous year. d) Key Financial Ratios
(Standalone):
Sr. No. |
Particulars |
FY 2022-23 |
FY 2021-22 |
% change over previous year |
Reason for change of more than 25% in Key Financial Ratios: |
| 1 |
Debtors Turnover Ratio |
NA |
NA |
NA |
|
| 2 |
Inventory Turnover Ratio |
NA |
NA |
NA |
|
3 |
Interest Coverage Ratio |
42.92 |
(17.90) |
(97.24) |
Increase in operating profit |
4 |
Current Ratio |
14.07 |
11.56 |
(5.98) |
Decrease in current liabilities |
| 5 |
Debt Equity Ratio |
0.00 |
0.00 |
NA |
|
6 |
Operating Profit Margin (%) |
22.44 |
(32.98) |
511.12 |
Increase in operating profit and Net Profit |
7 |
Net Profit Margin (%) |
18.68 |
(34.03) |
673.14 |
Increase in operating profit and Net Profit |
| 8 |
Return on Net Worth (%) |
20.72 |
(5,12) |
93.37 |
Increase in Net Profit |
8. HUMAN RESOURCES
The Company has adequate human resources which is commensurate with the current volume
of activity and is reviewed by the management periodically and the Company would induct
competent personnel on increase / expansion of the activity.
9. CAUTIONARY STATEMENT
Statements in this "Managements Discussion and Analysis" describing the
Companys objectives, projections, estimates, expectations or predictions may be
"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 operations include
interest rates and changes in the Government regulations, tax regimes, economic
developments and other factors such as litigation etc.
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