Nouveau Global Management Discussions


This report covers the operations and financial performance of the Company for the year ended 31st March, 2022 and forms part of the Directors Report.

> GLOBAL ECONOMY

After witnessing a significant contraction related to the COVID-19 pandemic in 2020, the global economy recovered in 2021. However, the momentum was slowed down in Q2 by a deadlier variant of the virus, the impact of which was fortunately short-lived helped largely by main vaccination drives across the world. Towards the end of Q4 FY2022, escalated geopolitical tension arising from the prolonged Russia-Ukraine conflict has led to increased financial volatility.

Oil and other commodity prices have surged significantly, thereby worsening the already high inflation dynamics of both advanced as well as emerging and developing economies. Record inflation has led the US Fed to accelerate its monetary policy normalisation.

This, in turn, has led to capital outflows from the emerging markets as risk-off takes centre stage. Global growth is thus expected to moderate to 3.2% in 2022. Even the global trade estimates for 2022 have been revised downwards to 3.0%.

> INDIAN ECONOMY OVERVIEW AND INDUSTRY STRUCTURE AND DEVELOPMENTS

Against backdrop stated in global economy, the Indian economy grew by 8.7% in FY2022. On the external front, Indias merchandise exports performance remained buoyant growing by 14.53% and crossing the $400 billion mark in FY2022. However, imports growth too remained strong at 55% during the year. Meanwhile, RBI increased the repo rate recently by 40 bps in an off-cycle meeting to rein in inflation, while supporting growth.

The recovery in real GDP growth with the ebbing of the second wave lost some momentum in H2FY2022 with the emergence of the Omicron variant which was fortunately short-lived. However, Indias economy grew by 8.7% in FY2022 as against the NSDs earlier estimate of 8.9%.Gross Value Addition in agriculture and allied activities expanded by 3.3% in FY2022, supported by an adequate monsoon, good reservoir levels and improved soil moisture, which helped rabi acreage increase by 1.5% over the previous year. Food grain production touched a new record in FY2022, with both Kharif and Rabis output exceeding the final estimates for the year.

Industrial activity lost some momentum in the second half of FY2022, as manufacturing was affected by supply- side shortages and input cost pressures. Mining activity was supported by coal and natural gas, offsetting the contraction in crude oil production. Hence, industrial GVA decelerated sharply from 23.1% in H1 to 0.9% in H2.

Services sector activity grew by 7.1% in H2 and crossed its pre-pandemic level. The contact-intensive services, viz., trade, hotels, transport, and communication, inched towards normalisation, though their rebound was held back by the Omicron variant. Merchandise exports and imports remained buoyant in FY2022.

Exports at $42.2 billion in March 2022 touched a new record and remained above $30 billion for the 13th consecutive month. During FY2022, merchandise exports at $419.6 billion surpassed the target of $400 billion. The $300 billion mark in exports was achieved in FY12, and it took almost a decade to add an incremental $100 billion in exports.

Merchandise imports reached an all-time high of $60.7 billion in March 2022 and remained above $50 billion for the seventh consecutive month. Overall, Indias merchandise exports increased by 43.8% in FY2022 vis-a-vis a decline of 6.9% in FY2021, while imports grew by a whopping 55.1% in FY2022 compared to a 16.9% contraction in FY2021.

India recorded a current account deficit of 1.2% of GDP in April-December 2021 against a surplus of 1.7% in April- December 2020. Though CPI inflation is projected to average below 6.0% in FY2023 by RBI, there remain several risks to this forecast.

The risks could emanate from a further hardening of global crude and other commodity prices due to geopolitical tensions, longer supply chain disruptions, a larger pass-through of input cost pressures and volatility in the global financial markets induced by an affirmative normalisation of monetary policy by the advanced economies.

Financial &Consultancv

India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth of existing financial services firms and new entities entering the market. The Government of India has introduced several reforms to liberalise, regulate and enhance this industry. The Government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small and Medium Enterprises (MSMEs). These measures include launching Credit Guarantee Fund Scheme for MSMEs, issuing guideline to banks regarding collateral requirements and setting up a Micro Units Development and Refinance Agency (MUDRA). With a combined push by Government and private sector, India is undoubtedly one of the worlds most vibrant capital markets. bined push by Government and private sector, India is undoubtedly one of the worlds most vibrant capital markets.

Over the Years, the Indian consulting industry has seen a substantial growth, not only in terms of size, but also in terms of the service offerings. Due to the involuntary reduction in workforce, many organizations lack the technological, strategic and project management abilities to handle market and technical changes in the ever growing market. The major strengths that set Indian consultancy firm above the consultancy organizations of developed economies are professional competence, low-cost structure, high acceptability, flexible thinking, high learning agility, strong interpersonal skills, focused approach and overall business understanding.

Indian management consulting industry is one of the fastest-growing industries, fuelled by the advancement in technology and rapid adoption of mobile devices. This sector includes areas like telecommunications, e- commerce, software designs, hardware systems design and implementation, intranet and internet schemes and functionality, and website development and operation.

The Consulting Industry in India is growing at fast pace and soaring new heights all across the world. This time, it is required to make an action plan to exploit the tremendous potential available for growth of consulting market. Also, there is a need to strengthen the framework of Indian consulting industry by embracing innovation, nurturing talent, improving the quality of consulting services, and enhancing consulting skills.

Multimedia

The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making significant strides. The Indian media and entertainment industry is projected to increase at a Compounded Annual Rate of Growth (CAGR) of 13.5% from 2019 to 2024 and estimated to reach US$ 43.93 billion by 2024.

In July 2021, WinZO, a leading gaming and entertainment platform, secured US$ 6 million in a Series C investment round that was headed by Griffin Gaming Partners of California, bringing the companys total capital raised to US$ 90 million. In September 2021, Reliance Entertainment signed a 10-film agreement with T-Series at a transaction value of Rs. 1,000 crore (US$ 135.61 million).In the second quarter of 2021, smart TV shipments from India increased by 65% YoY, due to rising expansion activities adopted by original equipment manufacturers (OEMs) for their smart TV portfolios. In October 2021, Star & Disney India signed advertising deals worth Rs. 1,200 crore (US$ 160.16 million), for the ICC T20 World Cup, marking a three-time rise over the last tournament, which was held in 2016 in India.In November 2021, media consulting firm Ormax Media, launched an OTT Brand Health Tracking Tool called Ormax Brand Monitor (OBM). The tool is based on syndicated research conducted every month among SVOD & AVOD audiences across India, to track the performance of 16 OTT platforms on key brand measures. In March 2022, Pocket FM in India raised US$ 65 million and has plans to expand in new regional languages. In March 2022, Krafton infused US$ 19.5 million in Indian audio content platform Kuku FM.

As per BCG report, Indias M&E industry is expected to grow between US$ 55-70 billion by 2030.Advertising revenue in India is projected to reach Rs. 915 billion (US$ 12.98 billion) in 2023, from Rs. 596 billion (US$ 8.46 billion) in 2020.The Government of India has supported this sectors growth by taking various initiatives such as digitizing the cable distribution sector to attract greater institutional funding, increasing Foreign Direct Investment (FDI) limit from 74% to 100% in cable and direct-to-home (DTH) satellite platforms and granting industry status to the film industry for easy access to institutional finance. The industry is expected to grow at a much faster rate than the global average rate in near future.

Trading Division

The Department of Commerce announced the heartening news that in the first quarter of the current financial year (April-June 2021), merchandise exports were $95 billion, the highest ever for a quarter in Indias history.

In 2021-22, Indian industrial capacity generated enough excess output to dramatically increase exports.Indias export performance in the year 2021 was strong, particularly accelerating from the start of the fiscal year 202122 in April. This applies to both merchandise (goods) and services (such as software).Every single month between March and December saw merchandise exports in excess of $30 billion.

India is presently known as one of the most important players in the global economic landscape. Its trade policies, Government reforms, and inherent financial strengths have contributed to its standing as one of the worlds most sought-after destinations for foreign investments. The key initiatives aimed to boost the export of both goods and services by systematically addressing domestic and global trade constraints by reducing the transaction cost; implementing WTO-compliant policies should support the economy to reach the target of a $5 trillion mark by 2025. The Ministry of Commerce has also taken various measures to enhance the ease of doing business for importers and exporters by starting Paperless issuance and redemption of AA/EPCG licenses, setting up helpdesk services for exporters & importers, launching an online portal for 24X7 auto issuance of Import Export Code (IEC) and e-issuance of Preferential Certificates of Origin, e-issuance of licenses for import/export of restricted items and, paperless processing and e-verification of the authenticity of DGFT issued documents. Additionally, the Government of India has been working on important deals with the Governments of Japan, Australia, and China to grow Indias trade activity in the global market. India can potentially increase its goods and services exported to Australia to US$ 15 billion by 2025 and US$ 35 billion by 2035.

COMPANY OVERVIEW (SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE)

Nouveau Global Ventures Limited ("NGVL" or "the Company")is functioning in various segments such as Multimedia, Financial& Consultancy, dealing in securities and Trading Division. During the F.Y. 2021-22, the total turnover of the Company was Rs.236.25Lakhs as compared to Rs. 31.25 Lakhs in the previous year i.e. 2020-21, which has increased and givena positive sign to the Companys financial growth.

During the year under review, the Company has earned revenue generated from the Financial Consultancy segment amounting to Rs. 31.25 Lakhs as compared to Rs. 31.25Lakhs, in the previous year i.e. 2020-21 which is same yet growing. This year, the Multimedia sector of the Company performed well and marked a revenue of Rs. 205.00 Lakhs as Compare to Rs. Nil in the previous year i.e. 2020-21.

Due to the economic concern hit by COVID-19 which brought sluggish trend in market policies and struggling growth in various sectors, the other segments of the Company, i.e, Trading Division and dealing in securities was unable to give a positive stand during F.Y 2021-22 and continued to earned Nil revenue like previous year.

The growth of multimedia sector and rise in overall revenue brought a positive hope for the Company which likely will improve its financial performance in the upcoming years.

OPPORTUNITIES

• The Indian M&E industry is on an impressive growth path. The industry is expected to grow at a much faster rate than the global average rate. Currently valued at $27Bn, the industry is witnessing strong growth tailwinds and is poised to grow to become a $55-70Bn industry by 2030. As per PWCs report, Indias Entertainment & Media industry is expected to reach INR 412656 Cr by 2025 at 10.75% CAGR.

• Besides the traditional media such as TV and cinema, new-age digital platforms such as over-the-top (OTT) services would play a key role.TV advertising has continued to expand in 2020, despite COVID, reaching INR 35015 Cr. India is the fourth-largest market globally after the US, China and Japan. Further expansion at a 7.6% CAGR will take TV ad revenues to the level of INR 50586 Cr in 2025.Online TV advertising will make modest inroads in the forecast period, with broadband penetration remaining extremely low at 7.3% of households.

• For better trading and long-term investment, one can trade in sectors, namely, Information Technology, Fast moving consumer goods (FMCG), Housing finance Companies, Automobiles and Infrastructure. These are the topmost fast-growing sectors from the point of view of investing.

• The consulting space is massive. Even if it were to shrink by 50%, there would still be money for the people who know how to do it. Currently, the business world desperately needs consulting assistance. It is projected that by the next two years, there would be more than 2.2 lakh people getting employment in almost 10,000 consultancy firms across the nation

S Opportunities of the Company are:

1. Devote more energy to financial and Consultancy division;

2. Explore its media division;

3. Diversify business into related media and entertainment sectors;

4. New distribution platforms like DTH and IPTV will only increase the subscriber base and push up subscription revenues;

5. Home video segment becoming more profitable with increasing sifts of VCDs and DVDs;

6. Reduction in domestic bandwidth rate by 70% may increase the download of films through internet;

7. Indian Entertainment & Media (E&M) industry has out-performed the Indian economy and is one of the fastest growing sectors;

8. Finding new avenues in other divisions for the overall business growth;

> THREATS

• Account takeover is the biggest threat in Media and Entertainment Industry. Because media organizations invest millions into building followers, engaging and turning social reputation in dollars, attackers value these accounts too.

• The cyber criminals bread and butter, spearphishing, performs incredibly well on social media.

• The major weaknesses of Indian consulting organizations, which has hindered the export growth of consulting sector in the country, are low quality assurance, low local presence overseas, low equity base, lack of market intelligence, and low level of Research &Development.

• Threats of the Company are:

1. Increasing competition in the industry;

2. Further drop in sales volume due to spread of radio, cheap VCDs and MP3 pirated discs;

3. Cyclical or seasonal fluctuations in the operating results;

4. Only promoted products will attract consumers share of wallet which could be a threat for traded catalogue;

5. Changes in the foreign exchange control regulations, interest rates and tax laws in India;

6. International business weakening further due to piracy and parallel import.

> OUTLOOK

The company is putting continuous efforts to attain further efficiencies. Further, the Company is confident that in spite of the challenges and competition in the industry it will perform better in view of the strong fundamentals of the Company and hope to improve its turnover. The Company is expecting to enhance its presence globally to rationalize its significance by entering into the new alliance.

> RISK & CONCERNS

The coronavirus ravaged the Indian economy from a bright spot of the world to become one of the hardest-hit economies. COVID impact continued into F22 - the second wave which hit India in Q1 F22 disrupted business because of its intensity. Global supply chain was affected, impacting logistics cost and lead time due to port congestions and container unavailability. The potential adverse impact of the pandemic, on Indias already stressed banking sector, which is saddled with legacy non-performing assets, remains of concern. Experts fear a fresh wave of bankruptcies that add stress to the books of commercial banks, and that loan repayment schedules could be further delayed. Rising inflation could pose a serious risk though, while inflationary pressure could increase because of supply dislocations, policymakers should see through them for now, unless price pressures seep into the rest of the economy. Private sector investment plans are also likely to be affected, given uncertainty about consumer behavior. The key medium-term risk to the Indian economy remains a deepening employment crisis, which prevents India from utilizing its favorable demographics.Q4 F22 saw another risk emanating due to the Russia-Ukraine conflict which led to soaring commodity prices and impact on availability of material. The Company took aggressive steps to counter the problem to minimise the impact including the effect of fresh wave of COVID in China threating global supply chain. Yet these factors affected Companys growth.

The Company recorded fluctuating growth during the F.Y.2021-22. It recorded good revenue and less loss in 1st Quarter, the 2nd quarter remained struggling with nil revenue and more loss. 3rd quarter shown a better recovery with good revenue and reduced loss. The Company couldnt generated revenue in 4th quarter but it recorded profit which improved its financial capacity.

In F22, the Company initiated various countermeasures to minimise any short-term impact and mitigate any longterm impact on the Company. This included comprehensively looking at cost structures and optimizing them, cash flow management, and sustained investment in new products.

Further,the management of risk does not imply risk elimination but prudent risk management.

We can withstand the competition despite an increasing number of new players. In a highly competitive environment, we may face margin pressures. In any business, risks and prospects are inseparable. As a responsible management, the Companys principal endeavour is to maximize returns. The Company continues to take all steps necessary to minimize its expenses through detailed studies and interaction with experts.

> INTERNAL CONTROLS SYSTEMS AND ADEQUACY

Your Company has an adequate system of internal controls to ensure that transactions are properly authorised, recorded, and reported, apart from safeguarding its assets. The internal control system is supplemented by well documented policies and procedures and reviews carried out by the Companys Internal Auditor which submits reports periodically to the Management and the Audit Committee of the Board.

> DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCES

The operating performance of the Company has been discussed in Directors Report.

> MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING EMPLOYEMENT.

People are one of the key and critical success factors for the Company. The Companys HR philosophy is to establish and build a high performing organization, where each individual is motivated to perform to the fullest capacity to contribute to developing and achieving individual excellence and departmental objectives and continuously improve performance to realize the full potential of our personnel. Industrial relations are cordial and satisfactory. The company expects to continue to get their unflinching support in future also. During the year under review, industrial relations have generally remained struggling yet cordial. Considering the ongoing difficulty due to COVID-19 pandemic, the Company was forced to lay-off few staff in F.Y. 2020-21 but it managed to retain maximum old staff that proves to be an asset to the management and add cooperation in business. The current year witnesses continued cash crunch phase, but despite illiquidity, the Company maintained its existing staff. It faced pressure due to various resignations made in FY2021-22. Overall, the F.Y 2021-22 was struggling yet less difficult than F.Y. 2020-21 for Companys survival but with the strength of industrial relation supported human resource.

> RATIOS WHERE THERE HAS BEEN A SIGNIFICANT CHANGE FROM FINANCIAL YEAR 2021 TO FINANCIAL YEAR 2022

During the year under review, the detail of changes made in the following key financial ratios as compare to the immediately previous financial year. The details of the same in a form of comparison is provided as:-

S.No. Particulars of Ratio Financial Year 2021-22 Financial Year 2020-21
1 Debtors Turnover Ratio 0.46 2.81
2 Inventory Turnover Ratio 273.46 1.58
3 Interest Coverage Ratio 0.26 (11.03)
4 Current Ratio 0.38 0.32
5 Debt Equity Ratio 1.08 1.12
6 Operating Profit Margin 0.03 (5.43)
7 Net Profit Margin (0.04) 3.56
8 Return on Net worth (0.01) (0.27)

a) DISCLOSURE OF ACCOUNTING TREATMENT

The Company has followed accounting principles generally accepted in India, including the Indian Accounting Standard(Ind AS) as specified under Section 133 of Companies Act,2013 ("the Act") and other relevant provision of the Act. The Company has uniformly applied the Accounting Polices during the period presented. Kindly refer notes to the financial statements for significant accounting policies adopted by the Company.

CAUTIONARY STATEMENT:

Statements in foregoing paragraphs of this report describing the current industry structure, outlook, opportunities, etc., may be construed as "forward looking statements", based on certain assumptions of future events over which the Company exercises no control. Therefore, there can be no guarantee as to their accuracy. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those that may be implied by these forward looking statements. Such risks and uncertainties include, but are not limited to: growth, competition, domestic & international economic conditions affecting demand, supply & price conditions, changes in Government regulations, tax regimes and other statutes.

By and on behalf of the Board For Nouveau Global Ventures Limited
KrishanKhadaria Manoj Bhatia
Managing Director Director
DIN:00219096 DIN:01953191