1. ECONOMY OVERVIEW
In accordance to the summary of the economic survey 2022-23, India to
witness GDP growth of 6.0 per cent to 6.8 per cent in 2023-24, depending on the trajectory
of economic and political developments globally. Economic survey 2022-23 projects a
baseline GDP growth of 6.5 per cent in real terms in FY24. Credit growth to the micro,
small, and medium enterprises (MSME) sector has been remarkably high, over 30.5 per cent,
on average during Jan-
Nov 2022. Capital expenditure (capex) of the central government, which
increased by 63.4 per cent in the first eight months of FY23, was another growth driver of
the Indian economy in the current year. Surge in growth of exports in FY22 and the first
half of FY23 induced a shift in the gears of the production processes from mild
acceleration to cruise mode. Private consumption as a percentage of GDP stood at 58.4 per
cent in Q2 of Fy23, the highest among the second quarters of all the years since 2013-14,
supported by a rebound in contact-intensive services such as trade, hotel and transport.
2. OUTLOOk: 2023-24
Dwelling on the Outlook for 2023-24, the Survey says, Indias
recovery from the pandemic was relatively quick, and growth in the upcoming year will be
supported by solid domestic demand and a pickup in capital investment. It says that aided
byhealthyfinancials,incipient signs of a new private sector capital formation cycle are
visible and more importantly, compensating for the private sectors caution in
capital expenditure, the government raised capital expenditure substantially. Budgeted
capital expenditure rose 2.7 times in the last seven years, from FY16 to FY23,
re-invigorating the Capex cycle. Structural reforms such as the introduction of the Goods
and Services Tax and the Insolvency and Bankruptcy
Code enhanced the efficiency and transparency of the economy and
ensured financial discipline and better compliance.
Global growth is forecasted to slow from 3.2 per cent in 2022 to 2.7
per cent in 2023 as per IMFs World Economic Outlook, October 2022. A slower growth
in economic output coupled with increased uncertainty will dampen trade growth. This is
seen in the lower forecast for growth in global trade by the World Trade Organisation,
from 3.5 per cent in 2022 to 1.0 per cent in 2023. On the external front, risks to the
current account balance stem from multiple sources. While commodity prices have retreated
from record highs, they are still above pre-conflictlevels. Strong domestic demand amidst
high commodity prices will raise Indias total import bill and contribute to
unfavourable developments in the current account balance. These may be exacerbated by
plateauing export growth on account of slackening global demand.
Should the current account deficit widen further, the currency may come
under depreciation pressure. Entrenched inflation may prolong the tightening cycle, and
therefore, borrowing costs may stay ‘higher for longer.
In such a scenario, global economy may be characterised by low growth
in FY24. However, the scenario of subdued global growth presents two silver linings –
oil prices will stay low, and Indias CAD will be better than currently projected.
The overall external situation will remain manageable. Indias economy, the largest
in the South Asian region, is expected to remain a bright spot.
|
India Size of Economy and GDP per capita |
|
| year |
size of Economy ( Us $ Billion) |
Gdp Per Capita at Current Price |
| 2021 |
3150 |
2234 |
| 2022 |
3386 |
2379 |
| 2023 |
3736 |
2601 |
| 2024 |
4062 |
2802 |
| 2025 |
4403 |
3011 |
| 2026 |
4765 |
3231 |
| 2027 |
5153 |
3465 |
| 2028 |
5575 |
3720 |
Source; PHD Research Bureau, PHD Chamber, Complied from World Economic Outlook, April
2023, IMF
3. INDUSTRIAL STRUCTURE & DEVELOPMENTS
Economic Survey 2022-2023 highlights buoyant performance of the Indian
capital markets in the past year, driven by increased contribution of Small & Medium
Enterprises (SMEs) and greater participation of domestic institutional and retail
investors.
Indias capital markets had a good year despite global
macroeconomic uncertainty, unprecedented inflation, monetary policy tightening, volatile
markets, etc. The number of SMEs coming with IPOs was almost double compared to the FY
2022 (till November 2021), and the total funds raised by them were almost three times the
funds raised by them in the same period last year.
This year also saw 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.
In April-November 2022, the under activity in public debt issuances was
more than compensated by private debt placements. The number of private debt placements
increased by 11 per cent from 851 to 945, while resources mobilised increased by 6 per
cent in April-November 2022, compared to the corresponding period in the year before.
Regarding performance of the stock market, the Indian stock markets
witnessed a resilient performance, with the bluechip index Nifty 50 registering a return
of 3.7 per cent during April-December 2022. This is despite the decline in global stock
markets because of geopolitical uncertainties, supply chain disruptions post
Russia-Ukraine crisis. Even among major emerging market economies, India outperformed its
peers in April-December 2022.
Towards the end of the year, the India Volatility Index (VIX) which
measures expected short-term volatility in the stock market witnessed a declining trend as
the impact of the conflict started to wane as the year progressed. The number of demat
accounts increased sharply to 39% by the end of November 2022 on YoY basis, showing
increased retail participation in the capital market.
On account of the strong macroeconomic fundamentals of the Indian
economy and the improvement in market risk appetite from time to time, India remains an
attractive investment destination. The assets under custody (custodial holdings of FPIs
reflecting the total market value of the holdings) witnessed an increase despite the
outflows driven by global factors. The total assets under custody with FPIs increased by
3.4 per cent at the end of November 2022 compared to November 2021. The overall net
investments by Foreign Portfolio Investors during FY23 registered an outflow of Rs.16,153
crore at the end of December 2022 from an outflow of Rs.5,578 crore during FY22 at the end
of December 2021.
Investments by Domestic Institutional Investors (DIIs) acted as a
countervailing force against FPI outflows during recent years, rendering the Indian equity
market relatively less susceptible to large scale corrections.
Setting up and operationalizing Indias maiden International
Financial Services Centre (IFSC) in GIFT City as a new avenue and opportunity for capital
market players, with the aim to facilitate India to emerge as a significant economic power
by accelerating the development of a strong base of International Financial Services in
the country. Over the last two years, GIFT-IFSC has witnessed tremendous growth and
traction across the entire spectrum of financial services, including banking, capital
markets, insurance, fund management, aircraft leasing, etc. With an internationally
aligned regulatory regime, competitive tax structure and beneficial cost of operations,
GIFT IFSC is now emerging as a preferred jurisdiction for international financial
services.
Stock market for India with key indices both the NIFTY 50 and BSE
Sensex clocked their all-time highs in December 2022.
4. OPPORTUNITIES AND THREAT
Opportunities
Trading in Financial Instruments services will have more
opportunities if the long-term economic outlook is favourable.
Growing percentage of discretionary income going to the financial
services industry.
Regulatory changes would encourage increased engagement from
investors of all types. Making use of technology to support best practices and
procedures.
Threats
Short-term economic slowdown impacting investor sentiments and
business activities.
Other assets are becoming more appealing as investment
opportunities due to market changes.
5. SEGMENT–wISE OR PRODUcT-wISE PERFORMANcE
The Company is a technology driven trading entity. We are one of the
leaders in Low-risk arbitrage and high frequency trading in the Indian Capital Markets.
Our team of highly talented individuals help to run sophisticated algorithms at ultra-low
latencies.
6. FUTURE OUTLOOk AND PROSPEcTS
The year under review was characterized by a recovery from the
pandemic. While some aspects of the economy and lifestyles have returned to pre-pandemic
practices, others have retained the benefits of the transition.
As per the records available on the website of the BSE Limited
(‘BSE), the Company entered and occupied the position of top 2000 Companies
based on the market capitalization calculated as on the last day of the financial year*.
Our focus remained to continuously invest in personnel, technology and
improve the size of balance sheet. We are on track to achieve several milestones as per
our internal forecasts. The roadmap appears equally encouraging and we are ready to march
to the next leg of growth that will demonstrate our growing capabilities at scale as well
as expertise in several complex trading strategy. The industry is supportive, and the
demand scenario continues to be favorable. Our objective is to continue on this profitable
growth journey and deliver sustained value for our stakeholders.
*(https://www.bseindia.com/static/about/downloads.aspx)
7. RISK MANAGEMENT & CONCERNS
The Company has laid down procedures to inform Board Members about the
risk assessment and minimization procedures. The Company has framed a comprehensive
enterprise risk management policy and a new risk register, not only to manage risks but
also to minimize their impact. This policy is periodically reviewed by the management and
the board in consultation with reputed and specialized consultants. The policy is updated
as per requirements to ensure that the risks are properly dealt and mitigated.
8. HUMAN RESOURcE DEVELOPMENT AND INDUSTRIAL RELATIONS INcLUDING
THE NUMBER OF PEOPLE EMPLOYED
The Company considers human capital to be a key pillar of growth. Its
skilled and professional management team is a strong driving force. The Company ensures a
safe, conducive, and productive work environment. The HR policies continually strive
towards attracting, retaining, and developing the best talent required for the business to
grow. To provide a constant and consistent connection as well as uninterrupted services,
the Company has used technology to promote regular communication inits staff on the
financial year ended on 31st March 2023.
9. INTERNAL cONTROL SYSTEM AND THEIR ADEQUAcY
The Company has in place, an adequate system of internal controls
commensurate with its size, requirements and the nature of operations. These systems are
designed keeping in view the nature of activities carried out at each location and various
business operations.
The Companys in-house internal audit department carries out
internal audits at all, offices, across all locations of the country. Their objective is
to assess the existence, adequacy and operation of financial and operating controls set up
by the Company and to ensure compliance with the Companies Act, 2013, SEBI (Listing
Obligations & Disclosures Requirements) Regulations, 2015 (SEBI Listing Regulations,
2015) (to the extent as applicable) and corporate policies.
Board of Directors of the Company has appointed M/s V B R G &
Associates having office at 04, Rainbow Complex,
Bazaria, Ghaziabad, Uttar Pradesh-201001, as the Internal Auditor of
the Company to conduct the Internal Audit Functions for Financial Year 2022-23.
A summary of all significant findings by the audit department/auditor
along with the follow-up actions undertaken thereafter is placed before the Audit
Committee for review. The Audit Committee reviews the comprehensiveness and effectiveness
of the report and provides valuable suggestions and keeps the Board of Directors informed
about its major observations, from time to time.
The Company has in place adequate financial controls commensurate with
its size, scale and complexity of its operations. The Company has in place policies and
procedures required to properly and efficiently conduct its business, safeguard its
assets, detect frauds and errors, maintain accuracy and completeness of accounting records
and prepare financial records/statements in a timely and reliable manner.
10. FINANcIAL REVIEw AND ANALYSIS
given as under: - forthefinancial Thefinancial
| PERFORMANCE |
year ended 31-03-2023 (Rs. In lakh) |
year ended 31-03-2022 (Rs. In lakh) |
| Total Revenue from continuing operations |
1371.01 |
1,710.33 |
| Total Expenditure from continuing operations |
2019.87 |
1,393.94 |
| Profit before tax from continuing operations |
(648.89) |
316.39 |
| Tax expense |
(355.80) |
(7.40) |
| Profit for the year from continuing operations |
(293.09) |
323.82 |
| Profit for the year from discontinued operations |
(48.79) |
19.08 |
| Profit/(Loss) for the year |
(341.88) |
342.90 |
| Other comprehensive income |
416.43 |
999.86 |
| Total comprehensive income for the year |
74.55 |
1,342.73 |
*Profit before tax from continuing operations includes amount from
exceptional gain.
11. Details of Significant Changes (i.e., change of 25% or more
as compared to the immediately previous financial year) in key financial ratios along with
detailed explanations thereof:-
| s. No. Particulars |
Fy 2022-23 |
Fy 2021-22 |
Detailed explanation for changes thereof |
| i Interest Coverage Ratio |
3.08 Times |
5.96 times |
There is loss reported in current year which results in
decrease in interest coverage ratio as compare to previous year where company made profit. |
| ii Current Ratio |
1.61 times |
1.27 times |
Increase in current ratio is due to increase in investments
& other financial assets due to which current assets increased by higher margin as
comparedtopreviousfinancialyear. |
| iii Net Profit Margin (%) |
-26.62% |
20.92% |
There is loss reported in current year which results in
decrease in net profit ratio as compare to previous year where the company made profit. |
| iv Debtors Turnover |
N.A. |
N.A. |
During the current financial year there is no trade
receivable. Accordingly, this ratio is not applicable for the current year. |
| v Inventory Turnover |
N.A. |
N.A. |
The Company did not have any inventory as on 31st March 2022
& 31st March 2023. Therefore, the ratio is not applicable. |
| vi Debt Equity Ratio |
0.80 |
N.A. |
As on 31.03.2023, the Company has an outstanding loan to the
tune of Rs 30.47 Crores |
| vii Operating Profit Margin (%) |
36.25% |
23.20% |
The company has reported loss during the year due to which
operating profit ratio becomes negative for the year. |
12 DETAILS OF ANY CHANGE IN RETURN ON NETWORTH AS
COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR
ALONGWITH A DETAILED EXPLANATION THEREOF.
The Return on Net Worth for the financial year 2022-23 is (19) % as
compared to 9% for the previous financial year2021-22.The negative return on net worth is
on account of negative PBT majorly caused by enhanced employee benefit cost, among others.
13. CAUTIONARY STATEMENT:
Certain Statements in the "Management Discussion and
Analysis" describing the Companys objectives, expectations or predictions may
be" forward looking Actual results could differ materially from those expressed or
implied due to various risk & uncertainties. Important factors that could make a
difference to the Companys operations include changes in Govt. regulations, tax
regimes, economic developments and other factors such as litigation. The company does not
undertake to update these statements.
| By the Order of the Board of Directors |
|
| For Algoquant Fintech Limited |
|
| Earlier known as Hindustan Everest Tools Limited |
|
| devansh gupta |
dhruv gupta |
| (Managing Director) |
(Director) |
| DIN: 06920376 |
DIN: 06920431 |
| Date: 01.09.2023 |
|
| Place: New Delhi |
|
+91-9892691696
