GLOBAL ECONOMIC OVERVIEW
The global economy faced headwinds in FY 2023 due to weak demand. Commodity prices
declined gradually; however, they are still higher than their five-year average.
Inflationary pressures are expected to persist, whereas currency depreciation and capital
outflows from emerging markets and developing economies have been widespread. The outlook
for global trade remains uncertain due to downside risks pertaining to intense trade
protectionism and supply chain disruptions. Inflation continued to rise throughout FY 2023
in most economies. The sanctions and hawkish monetary policies that followed the Ukraine
war had a significant impact on global trade.
In FY 2024, global GDP growth is anticipated to be 3.0%. Additionally, after reaching
its peak in FY2023, global inflation is expected to decline to 4.3% in the days ahead,
banking on stable policies and favorable regulatory guidelines.
INDIAN ECONOMIC OVERVIEW
The Indian economy proved to be one of the fastest growing in FY2023, supported by
strong domestic demand. Despite a challenging external environment, exports performed
better than expected, due to Indias vast domestic market and limited reliance on
international trade flows. According to the National Statistical Office, Indias Gross
Domestic Product (GDP) is projected to see robust growth of 7% during the fiscal year
2022-23. Indias economic ranking has also improved significantly, with the
current-account deficit being financed by increasing foreign direct investment and a solid
cushion of foreign exchange reserves.
Although consumer inflation was above the Reserve Banks upper limit, which prompted a
2.25 percentage point increase in the policy rate, Indias growth story was propelled by
rising retail demand after the pandemic and new investments in areas such as automobiles,
electronics, mining and the aviation industries.
With the broadening of the investor base for government securities, constructive policy
changes for controlling inflation levels have augured well for the Indian economy.
However, geopolitical tensions, tight monetary policies and slow global growth are
expected to have an impact on Indias economic growth in FY2024. However, India will
continue to be one of the fastest developing countries in FY2024 due to its strong
domestic demand, robust macroeconomic forces and limited reliance on the global market.
Indias GDP is also predicted to grow by a steady 6.6%, making it one of the worlds
fastest-growing countries.
MOONGIPA CAPITAL FINANCE LIMITED AN OVERVIEW
Moongipa Capital Finance Limited (‘MCFL or ‘the Company) is a growing
Non-banking Financial Company ("NBFC") undertaking the Business of Portfolio
investment and trading in equity shares, preference shares, stocks, debentures
(convertible and non-convertible), Company deposits and to deal in Government Securities,
including Government Bonds, Loans, National Saving Certificates, Post Office saving
Schemes, units and all other Financial Instruments.
The Company also serving the credit requirements and financial assistance to industries
by way of advance, deposit or lend money, securities and properties to or with any
company, body corporate, firm, person or association whether falling under the same
management or otherwise.
INDUSTRY STRUCTURE AND DEVELOPMENTS
Your Company is engaged in the business of portfolio investment and trading in equity
shares, preference shares, stocks, debentures (convertible and non-convertible), and to
deal in Government Securities, including Government Bonds, Loans, National Saving
Certificates, Post Office saving Schemes, units and all other Financial Instruments and
providing retail loans and advances for industrial and other purpose. MCFL is registered
with the Reserve Bank of India (RBI) as a Non- Systematically important, non-deposit
taking NBFC, bearing Registration No. 14.01051 dated 10th Day of August, 1998.
The activities of Finance and investment Companies in India have undergone qualitative
changes over the years. They have become prominent in a wide range of activities. By now,
there role as effective financial intermediaries has been well recognized as they have
inherent ability to take inherent decisions, assume greater risks, apply innovative
marketing strategies and customize their products and services according to the needs of
the clients. In order to have a healthy financial and investment sectors in a country like
ours, there has to be a sustainable marriage between the primary lending institutions
(Banks and FIIs) and the intermediaries so that both of them stick to their core
competencies and not to compete with other unnecessarily.
Your company has built a strong presence in the market through its cumulative
experience, strong distribution network as well as sound systems and processes.
OPPORTUNITIES AND THREATS
The growth of the company is subject to opportunity and threats as are applicable to
the Industry from time to time.
Being loan provider, company is exposed to specific risks that are particular to its
business and the environment within which it operates including credit risk, economic
cycle, and market risk.
As the demand for financial services is a derived demand, developments in the
industrial sector exert a significant influence on the business of financial sector. Your
company strives to continually understand the implication to its business of the various
changes, as also effect of altered economic policies and international developments.
SEGMENT WISE / PRODUCT WISE PERFORMANCE
The Company engaged in investment activities and other financial services during the
year under review, hence the requirement of segment-wise reporting is considered
irrelevant.
FUTURE OUTLOOK
In the near future, the Company intends to continue to focus on its current business of
portfolio investment, trading in shares and lending to grow on larger scale, set new
targets.
RISK AND CONCERN
While risk is an inherent aspect of any business, the Company is conscious of the need
to have an effective monitoring mechanism and has put in place appropriate measures for
its mitigation including financial risk, legal risk and internal process risks. The
Company has made appropriate provisions for mitigation of risk factors which may occur
from Borrowers. Apart from this, Company has taken necessary measures to safeguard its
assets/interests etc.
There are a lot of uncertainties on the interest front in the economy and there is the
likelihood of the hardening of interest and the said situation may create a lot of turmoil
in the market.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The company has adequate internal control systems commensurate with the Size of the
business duly supplemented with an internal audit to ensure against any unauthorized use
or disposition of assets. The internal controls are periodically reviewed by the Audit
Committee to ensure their adequacy and effectiveness. Rule 8(5)(viii) of Companies
(Accounts) Rules, 2014 requires the information regarding adequacy of Internal Financial
Controls with reference to the financial statements to be disclosed in the Boards report.
To ensure effective Internal Financial Controls the Company has laid down the following
measures the Company has a well placed, proper and adequate IFC system which ensures that
all assets are safeguarded and protected and that the transactions are authorised,
recorded and reported correctly.
According to Section 134(5)(e) of the Companies Act, 2013 the term Internal Financial
Control (IFC) means the policies and procedures adopted by the company for ensuring the
orderly and efficient conduct of its business, including adherence to companys policies,
the safeguarding of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely preparation of
reliable financial information.
DISCUSSION OF FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The financial statements are prepared in compliance with the requirements of the
Companies Act, 2013 and the Indian Accounting Standards prescribed by the Institute of
Chartered Accountants of India. The financial performance of the Company for the year
2022-23 is described in the Directors Report under the head Financial Performance of the
Company.
FINANCIAL YEAR OF THE COMPANY
The Financial Year of the Company continues to remain of twelve months starting with 1st
April of every financial year.
OPERATIONS
Your Company continuously taking effective steps in broad basing of its range and
activities. From last financial year, your company shows a negative profit but it has the
potential to recover and make huge profits in the future. Apart from financial term, it is
immense pleasure to inform you that your company render service to pan India basis and
recorded a sound numerous of satisfactory customers.
HUMAN RESOURCES
The Company seeks respects and values of the diverse qualities and background that its
people bring to it and is committed to utilizing the richness of knowledge, ideas,
experience that this diversity provides.
The proper training and Personality Developments sessions were conducted for
upgradation of employees, so that employees can get familiar with Companys rules and
regulations. The Company has built a resource base and cross-functional managers to take
care of multi dimensional businesses Your Company has required manpower to manage its
activities keeping in view its emphasis on cost reduction. The Company recognizes the
importance of human resources in achieving success in its commercial pursuits and follows
a good man management policy.
DISCLOSURES
During the year, the Company has not entered into any transaction of material nature
with its promoters, the Directors or the management, their subsidiaries or relatives, etc.
that may have potential conflict with the interest of the Company at large.
CAUTIONARY STATEMENT
Statements in this "Management Discussion and Analysis Report" describing the
Company 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 global
and India demand supply conditions, cyclical demand and pricing in the Companys principal
markets, changes in Government regulations, tax regimes, and economic developments within
India.
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