Areas of Business Operations
Your company is engaged in Merchant Banking, Stock Broking, Depository Participant,
Distribution of Mutual Fund and other investment products. Your company is registered with
SEBI as a Merchant Banker. Your company is a member of NSE (Equity & Derivatives
segments), BSE (Equity & Derivatives) and registered with NSDL and CDSL as a
Depository Participant. Your company is also registered with Association of Mutual Funds
of India (AMFI) for distribution of Mutual Fund products.
Operations during the year
During the year your company has earned a gross income of Rs.2135.08 lakhs as against
Rs.2445.96 lakhs in the previous year. Under Stock Broking your company has a mix of
institutional and individual clients and has achieved a turnover of Rs. 10720.50 crores
during the year as against Rs. 13541.03 crores in the previous financial year. Your
company also provides Depository services to institutions and retail customers and has
81898 accounts under DP operations and 37872 accounts under broking operations.
Opportunities and Threats
Opportunities
Indian economy is fast growing and amongst top growing economies in the world. Seeing
the recent trends of money inflow into various mutual funds, it is evident that there is a
significant shift from physical assets to financial assets. We are seeing large number of
corporates both SMEs and large companies prefer raising funds from the capital markets.
There has been robust retail participation in good quality IPOs. Going forward there lies
a huge potential and unmatched opportunities for stock broking firms given the steady
increase in institutional and public activity in the financial markets.
Threats
Industry as a whole is seeing significant shift and usage of latest and modern
technology such as Artificial Intelligence (AI), Data Analytics and various other
applications in broking business irrespective of their costs. Online Zero/free brokerages
pose a serious threat and disruption for the industry as a whole.
Segment wise or product-wise performance
1. Due to decrease in the volume of business in stock broking activities, the fee based
income from stock broking operations has decreased to Rs.1244.13 lakhs for FY 2022-23 from
Rs.1388.48 lakhs for the pervious FY 2021-22 registering a decrease of 10.40%.
2. Income from DP operations has decreased by 7.46% to Rs.232.86 lakhs from Rs.251.62
lakhs for the previous year ended 31.03.2022 due to decrease in volume of business under
stock broking operations.
3. Income under Merchant Banking and Mutual Fund distribution has decreased by 8.67% to
Rs.112.31 lakhs from Rs.122.97 lakhs for the previous year ended 31.03.2022.
4. Other income has decreased by 19.50% to Rs.308.72 lakhs from Rs.383.49 lakhs for the
previous year ended 31.03.2022. Other income comprise of income from reversal of
provisions of Rs.305.46 lakhs for the year 31.03.2023 as against Rs.383.49 lakhs for the
previous year ended 31.03.2022 towards income from reversal of provisions on write off of
dues from discontinued fund based operations like Lease, Hire Purchase and ICDs.
5. On the basis of the aforesaid segmental income, total income has decreased by 12.71%
to Rs.2135.08 lakhs from Rs.2445.96 lakhs for the previous year ended 31.03.2022.
Risk Management & Internal Control Systems
The major risks among others that your company manages include credit risk, liquidity
risk, interest rate risk and operational risk. In view of the discontinuance of fund based
activities the credit risks on appraisal and disbursement do not arise. The company has
put in place an aggressive recovery mechanism for realisation of existing fund-based
exposures.
Your company has detailed operating manuals and well laid down delegation of powers to
ensure that operational controls are maintained on the business. The policies and
procedures are continuously reviewed through interaction between office heads and other
support functional heads. Your company also has an adequate internal audit system to
ensure feedback on adherence to the defined policies and procedures and regulatory
guidelines.
Human Resources
Human Resources of your company comprise a mix of 3 Officers on deputation from Indian
Bank and 104employees on direct rolls. The employees are well qualified and experienced in
their field of operations.
Financial Performance
Balance Sheet
Share Capital
The Share Capital of your company comprises 44378200 number of Equity shares of Rs.10/-
each. Your companys shares are listed in BSE and The National Stock Exchange. There is no
change in share capital of the company during the year.
Reserves & Surplus
The accumulated profits of the pervious years has been carried over to the reserves and
the Reserves & surplus stands at Rs.3012.72 lakhs as on 31.03.2023.
Current Liabilities
The current liabilities have increased to Rs.2287.67 lakhs from Rs.2050.51 lakhs mainly
in view of increase in credit balances available in clients accounts under Stock Broking
compared to previous year. The provision for leave encashment has increased to Rs.140.93
lakhs from Rs. 124.66 lakhs on account of additional provisions made for encashment of
leave on actuarial valuation as at the end of the year.
Fixed Assets
Property plant and equipment have decreased by Rs.27.96 lakhs in view of purchase of
new desktop computers for the company during previous year. Investment property has
decreased by Rs.7.76 lakhs due to provision of depreciation and impairment.
Investment
Other Investments at FVTPL of your company comprise of quoted shares and unquoted
investments. Net investments have increased to Rs.136.96 lakhs as on 31.03.2023 as against
Rs.129.73 lakhs in the previous year in view of fresh investments in quoted shares.
Non-current Other Financial Assets
Non-current Other Financial Assets have increased from Rs.5694.39 lakhs to Rs.5974.33
lakhs due to increase in fixed deposits having maturity period above 12 months.
Deferred Tax Assets
During the year the company has provided Rs.67.08 lakhs towards deferred tax asset in
the profit and loss account. Accordingly, the net deferred tax assets have decreased from
Rs.300.70 lakhs in the previous year to Rs.237.40 lakhs in the current year.
Current Assets
The current assets have increased to Rs.2445.56 lakhs as on 31.03.2023 from Rs.2283.31
lakhs as on 31.03.2022 in view of increase in Trade receivables which are less than 90
days old and increase in fixed deposits having maturity period below 12 months.
Profit and Loss account
Revenue from Operations
The fee based income from stock broking operations has decreased to Rs.1244.13 lakhs
for FY 2022-23 from Rs.1388.48 lakhs for the pervious FY 2021-22 due to decrease in the
volume of business in Stock broking activities, Income from DP operations has decreased to
Rs.232.86 lakhs from Rs.251.62 lakhs for the previous year ended 31.03.2022 due to
decrease in volume of business under stock broking operations. Income under Merchant
Banking and Mutual Fund distribution has decreased to Rs.112.31 lakhs from Rs.122.97 lakhs
for the previous year ended 31.03.2022. Other income has decreased to Rs.308.72 lakhs from
Rs.383.49 lakhs for the previous year ended 31.03.2022. Other income comprise of income
from reversal of provisions of Rs.305.46 lakhs for the year 31.03.2023 as against
Rs.383.49 lakhs for the previous year ended 31.03.2022 towards income from reversal of
provisions on write off of dues from discontinued fund based operations like Lease, Hire
Purchase and ICDs.
Expenses
Direct cost has increased from Rs.83.62 lakhs to Rs.112.83 lakhs due to increase in
volume of transactions as compared to the previous year.
Employee benefit expenses have increased from Rs.692.54 lakhs in the previous year to
Rs.758.74 lakhs in the current year mainly due to revision of service regulations with
respect to Salary and allowances with effect form 01.08.2021, periodic revision of DA
payable to employees and increase in number of employees
Depreciation and amortization expenses has increased to Rs.37.13 lakhs in FY 2022-23
from Rs.19.91 lakhs in FY 2021-22.
Finance Cost has decreased from Rs.150.68 lakhs to Rs.88.90 lakhs.
Provision and write offs has decreased from Rs.383.09 lakhs to Rs.304.34 lakhs mainly
due to write off of Lease/HP/ICD and Client dues amounting to Rs.304.34 lakhs made during
the year.
Other expenses have increased from Rs.239.99 lakhs to Rs.308.89 lakhs mainly due to
expenses incurred for availing managed services from software vendor for the new trading
software.
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 therefore, including:
| Particulars |
2022-23 |
2021-22 |
Variance in % |
Reason for change |
| (i) Interest Coverage Ratio |
6.99 |
6.73 |
3.83 |
Due to decrease in volume of business. |
| (ii) Operating Profit Margin |
27.38 |
40.67 |
(32.69) |
|
| (iii) Net Profit Margin |
15.80 |
28.01 |
(43.60) |
|
| (iv) Current Ratio |
3.63 |
3.40 |
6.76 |
|
Details of change in Return on Net Worth:
| Particulars |
2022-23 |
2021-22 |
Variance in % |
Reason for change |
| (i) Return on Net Worth |
0.045 |
0.096 |
(53.00) |
Due to decrease in volume of business. |
| Sl. No. |
FY 2022-23 |
FY2021-22 |
| 1 Income from Fee based operations |
1589.32 |
1763.08 |
| Of which income from Stock Broking |
1244.14 |
1388.48 |
| DP |
232.87 |
251.63 |
| Merchant Banking/ Mutual Funds |
112.31 |
122.97 |
| 2 Other income |
545.76 |
682.88 |
| 3 Total income (1+2) |
2135.08 |
2445.96 |
| 4 Employee Expenses |
758.74 |
692.54 |
| 5 Other expenses |
415.72 |
323.61 |
| 6 Interest Expenses |
88.90 |
150.68 |
| 7 Depreciation |
37.13 |
19.91 |
| 8 Provisions for NPAs/Write off |
326.07 |
403.91 |
| 9 Total expenses (4+5+6+7+8) |
1626.56 |
1590.65 |
| 10 Profit before exceptional items (3-9) |
508.52 |
855.31 |
| 11 Prior period income/Exp |
0.00 |
0.00 |
| 12 Profit before tax (10-11) |
508.52 |
855.31 |
| 13 Current Tax |
91.22 |
143.40 |
| 14 MAT Tax |
0.00 |
0.00 |
| 15 Deferred tax |
67.08 |
15.55 |
| 16 Prior Year tax |
0.00 |
0.00 |
| 17 Items reclassified as per IND-AS re-measurement of the defined benefit plans |
(12.92) |
(11.22) |
| 18 Net profit / Loss after tax (12-13-14-15-16+17) |
337.30 |
685.14 |
| 19 EPS |
0.79 |
1.57 |
Outlook
Your company will continue to focus its efforts to increase its activities under
fee-based business in addition to concentrating on recovery of overdues and reduction of
Non Performing Assets, disinvestment of quoted and unquoted investments. Your companys
involved management network, satisfied clientele, quality manpower, profitable expansion
and diligent internal control and cost control measures will enable your company to
continue to report better performance in the coming years.
+91-9892691696
