Global Economy Overview
Post pandemic the global economy was estimated to have grown at a slower (3.2%) rate in
2022, compared to 6% in 2021. The relatively slow global growth of 2022 was marked by the
Russian invasion of Ukraine, unprecedented inflation, pandemic-induced slowdown in China,
higher interest rates, global liquidity squeeze and quantitative tightening by the US
Federal Reserve.
The challenges of 2022 translated into moderated spending, disrupted trade and
increased energy costs. Global inflation was 8.8% in 2022, among the highest in decades.
US consumer prices increased about 6.5% in 2022, the highest in four decades. The Federal
Reserve raised its benchmark interest rate to its highest in 15 years. The result is that
the world ended in 2022 concerned that the following year would be slower.
On the positive side, the reopening of Chinas economy after the waning of the
pandemic, the decline in the European energy crisis and robust
US consumption (despitehighinflation)remain positives. Interestingly, even as the
global economy is projected to grow less than 3% for five years, India and China are
likely to account for half the global growth in 2023 (IMF).
Indian Economy Overview
The Indian economy stayed on a steady growth path, demonstrating strong resilience to
multiple headwinds stemming from elevated inflation and a volatile global macro
environment. The Indian economy is estimated to have grown by 7.2% in FY 2022-23, driven
by strong private consumption, steady manufacturing and normalisation of contact-intensive
services sectors. Although inflation remained above the upper band of the RBIs comfort
range of 4-6% for most part of FY 2022-23, it started easing during the third and fourth
quarters, as the central bank hiked its policy rates by 250 basis points cumulatively to
contain inflation. The countrys retail inflation had crept above the RBIs tolerance
range in January 2022. It returning to below the upper end of the target range of 6% in
November 2022. During those 10 months, rising international commodity prices weather
conditions like excessive heat and unseasonal rains, which kept food prices high. The
contributedto Indiasretailinflation government cut excise and customs duties and
restricted exports to restrain inflation, while the RBI, like other central banks, raised
repo rates and rolled back excess liquidity.
Performance overview
During the year 2022-23, the Companys growth was encouraging. The Company always
adhere to achieve best in the industry and try to optimise the cost and its efficiency
level which translates into increasing the profit margins for the Company. Despite the
subdued performance of overall trading sector, your Company earned a profit after tax of
Rs. 9.38 crores as against a profit of Rs. 2.70 crores in the previous year. The Companys
performance overview during the financial year 2022-23 is shown below: (Rs. in lakhs)
PARTICULARS |
Consolidated |
Standalone |
|
2023 |
2022 |
2023 |
2022 |
| Revenue from Operations |
2,794.70 |
1102.13 |
2,794.70 |
1102.13 |
| Other Income |
2,594.66 |
1265.63 |
2,594.66 |
1265.63 |
| Total Revenue |
5,389.36 |
2367.76 |
5,389.36 |
2367.76 |
| Expenses |
3,785.63 |
2044.60 |
3,785.63 |
2044.60 |
| Profit before tax |
1,603.73 |
323.16 |
1,603.73 |
323.16 |
| Tax expenses |
|
|
|
|
| (i) Current tax |
418.82 |
92.31 |
418.82 |
92.31 |
| (ii) Income tax for earlier years |
75.17 |
- |
75.17 |
- |
| (iii) Deferred tax |
171.57 |
(39.69) |
171.57 |
(39.69) |
| Profit for the year after tax |
938.17 |
270.54 |
938.17 |
270.54 |
| Share of net profit of associate (net) |
1,449.54 |
1638.79 |
- |
- |
Profit for the year after tax after considering share of net profit of
associate (net) |
2,387.71 |
1909.33 |
- |
270.54 |
Business
During the year 2022-23, the Company has dealt in trading of commodities, and has also
generated income from interest on inter-corporate deposits, trading in mutual funds and
other miscelleneous incomes. Further, the Company has been carrying on the real estate and
other non-financial activities since its inception.
Overview of segment wise performance
During the year ended March 31, 2023, the Company was operating under the business of
trading, real estate and investing as separate business segments. Details of segment wise
revenue, results and capital employed are given under note no. 39 of notes to accounts
forming part of the annual report.
Opportunities
The Company is exploring new opportunities for diversification into other sectors
through new investments and also exploring possibilities of undertaking some real estate
projects, the outlook for which seems to be quite encouraging. The Company is cautiously
optimistic in its outlook for the year 2023-24.
Challenges
While the management of your Company is confident of creating and exploiting the
opportunities, it finds the following challenges:
(i) Economic Uncertainty (ii) Interest Rates and Financing (iii) Regulatory Changes
(iv) Supply and Demand Imbalance (v) Technological Disruptions (vi) Labor and Construction
Costs
(vii) Environmental and Sustainability Concerns
Risks & concerns
The Company is exposed to specific risks that are particular to its businesses and the
environment within which it operates, including inter alia, market risk, competition risk,
human resource risk, execution risk and significant downturn in the economic cycle. It is
endeavour of the management that the profitability of the Company is insulated to the
extent possible from all the above risks by taking appropriate steps for mitigating the
risks in a proper manner.
Human resources
The Company is committed to ensuring that all are treated with dignity and respect. We
have been taking utmost care of our people and providing them with the best working
facilities. The Human Resources and the Legal and Secretarial departments in collaboration
with other functions ensure protection against sexual harassment of women and men in the
workplace and for the prevention and redressal of complaints in this regard. We also aim
to build a safe environment to work in and to ensure a sense of belongingness, that they
are heard here, among the workers. We provide various learning opportunities to enhance
the skills and knowledge the workers already possess.
Internal Control Systems
Adequate internal control systems commensurate with the nature of the Companys
business, size and complexity of its operations are in place and have been operating
satisfactorily.
Internal control systems comprising of policies and procedures are designed to ensure
reliability of financial reporting, timely feedback on achievement of operational and
strategic goals, compliance with policies, procedure, applicable laws and regulations.
Internal control systems are designed to ensure that all assets and resources are acquired
economically, used efficiently and adequately protected.
Discussion on financial performance with respect to operational performance
The companys major operations are in trading activities. It also deals in financing
activities like extending company earned a profit after tax of Rs. 9.38 Crores as against
a profit after tax of Rs. 2.70 Crores in the previous year.
The company revenue from operations comprises of revenue from trading activities of Rs.
27.94 crores for financial year 2022-23. Furthermore, the company is actively trading in
commodities in financial year 2023-24.
Apart from trading segment, during the year, the Company has also received income from
interest on Inter-Corporate deposits (ICDs) and investments in mutual funds. The future
outlook of the company remains positive and encouraging considering the fact the economy
is picking up pace post the implementation of unlock of the economy in phased manner and
declining impact of the COVID-19.
Key financial ratios
A comparative table showing synopsis of financial year 2022-23 below: vs. 2021-22 of
Key Financial Ratiosis provided
Ratio |
2022-23 |
2021-22 |
Remarks |
| Inventory Turnover Ratio |
0.43 |
0.17 |
Due to increase in sales |
| Current Ratio |
57.08 |
71.81 |
Due to decrease in current assets |
| Operating Profit Margin |
0.30 |
0.14 |
On account of increase in revenue |
| Net Profit Margin |
0.17 |
0.10 |
On account of increase in revenue |
| Return on net worth |
1.55 |
0.56 |
On account of increase in revenue |
| Debtor turnover ratio |
1.02 |
0.29 |
Due to substantial increase in credit sales |
| Interest coverage ratio |
NA |
NA |
No interest cost on debt in the company |
| Debt equity ratio |
NA |
NA |
No debt in the company |
Risk Management
The Board takes responsibility for the total process of risk management in the
organization. The Company follows well- established and detailed risk assessment and
minimization procedures, which are periodically reviewed by the Board.
The Company takes a very structured approach to the identification and quantification
of risk management policy. The scope of the Audit Committee includes review of the
Companys financial and risk management policies. The Audit Committee reviews the Audit
reports covering operational, financial and other business risk areas.
Cautionary Statement
Statements in the Management Discussion and Analysis Report describing your Companys
objectives, projections, estimates and expectations may be interpreted as
"forward-looking statements" within the meaning of applicable securities laws
and regulations. Actual results could differ from those expressed or implied. Important
factors that could make a difference to Companys operations include economic conditions
affecting demand/ supply, price conditions in the domestic and overseas markets in which
the Company operates, changes in Government regulations, tax laws and other statutes.
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