ECONOMIC AND INDUSTRY OVERVIEW GLOBAL ECONOMY
Prospects for a robust global economic recovery remain dim amid stubborn inflation,
rising interest rates and heightened uncertainties. The world economy faces the risk of a
prolonged period of low growth as the lingering effects of the COVID-19 pandemic, the
ever-worsening impact of climate change and macroeconomic structural challenges remain
unaddressed, according to the World Economic Situation and Prospects as of mid-2023.
The world economy is now projected to grow by 2.3 per cent in 2023 and 2.5 per cent in
2024 a slight uptick in the global growth forecast for 2023. In the United States,
resilient household spending has prompted upward revision of growth forecast to 1.1 per
cent in 2023.The European Unions economy—driven by lower gas prices and robust
consumer spending—is now projected to grow by 0.9 per cent. Chinas growth this year
is now forecast at 5.3 per cent as a result of COVID-19 related restrictions being lifted.
But a sombre picture still remains. Despite this uptick, the growth rate is still well
below the average growth rate in the two decades before the pandemic of 3.1 per cent. For
many developing countries, growth prospects have deteriorated amid tightening credit
conditions and rising costs of external financing.
Global trade remains under pressure due to geopolitical tensions, weakening global
demand and tighter monetary and fiscal policies.
Inflation remains stubbornly high in many countries
Inflation has remained stubbornly high in many countries even as international food and
energy prices fell substantially in the past year. Average global inflation is projected
at 5.2 per cent in 2023, down from a two-decade high of 7.5 per cent in 2022. While upward
price pressures are expected to slowly ease, inflation in many countries will remain well
above targets. Amid local supply disruptions, high import costs and market imperfections,
domestic food inflation is still elevated in most developing countries, disproportionately
affecting the poor, especially women and children.
Strong labour markets in developed economies are a bright spot
Labour markets in the United States, Europe and other developed economies have
continued to show remarkable resilience, contributing to sustained robust household
spending. Amid widespread worker shortages and low unemployment rates, wage gains have
picked up.
Employment rates are at record high levels in many developed economies with gender gaps
narrowing since the pandemic.
Global spillovers from monetary tightening demand enhanced policy cooperation
Exceptionally strong labour markets are, however, making it harder to tame inflation.
The Federal Reserve, the European Central Bank and central banks in other developed
countries have continued to raise interest rates in 2023, but at a slower pace than last
year,which saw the most aggressive monetary tightening in decades. The banking sector
turmoil has added new uncertainties and challenges for monetary policy.
Although swift and decisive actions by regulators helped contain financial stability
risks, vulnerabilities in the global financial architecture and the measures taken to
contain them will likely dampen credit and investment growth going forward.
Rapid tightening of global financial conditions poses major risks for many developing
countries and economies in transition. Rising interest rates, coupled with a shift in
developed economies from quantitative easing to quantitative tightening, have exacerbated
debt vulnerabilities and further constrained fiscal space. Current policy challenges call
for stronger cross-border policy cooperation and concerted global actions to prevent many
developing economies from becoming trapped in a vicious cycle of low growth and high debt.
INDIAN ECONOMY
Asian Development Bank (ADB) projects growth in Indias gross domestic product (GDP) to
moderate to 6.4% in fiscal year (FY) 2023 ending on March 31, 2024 and rise to 6.7% in
FY2024 ending on March 31, 2025, driven by private consumption and private investment on
the back of government policies to improve transport infrastructure, logistics, and the
business ecosystem.
The growth moderation for India in FY2023 is premised on an ongoing global economic
slowdown, tight monetary conditions, and elevated oil prices. However, FY2024 is expected
to see faster growth in investment, thanks to supportive government policies and sound
macroeconomic fundamentals, lower non performing loans in banks, and significant corporate
deleveraging that will enhance bank lending.
“Despite the global slowdown, Indias economic growth rate is stronger than in
many peer economies and reflects relatively robust domestic consumption and lesser
dependence on global demand. The Government of Indias strong infrastructure push under
the Prime Ministers Gati Shakti (National Master Plan for Multimodal Connectivity)
initiative, logistics development, and industrial corridor development will contribute
significantly to raising industrial competitiveness and boosting future growth.”
Improving labor market conditions and consumer confidence will drive growth in private
consumption. The central governments commitment to significantly increase capital
expenditure in FY2023 will also spur demand. Helped by recovery in tourism and other
contact services, the services sector will grow strongly in FY2023 and FY2024 as the
impact of COVID-19 wanes. However, manufacturing growth in FY2023 is expected to be tamped
down by a weak global demand, but it will likely improve in FY2024. Recent announcements
to boost agricultural productivity, such as setting up digital services for crop planning
and support for agriculture startups will be important in sustaining agriculture growth in
the medium term.
Inflation will likely moderate to 5% in FY2023, assuming moderation in oil and food
prices, and slow further to 4.5% in FY2024 as inflationary pressures subside. In tandem,
monetary policy in FY2023 is expected to be tighter as core inflation persists, while
becoming more accommodative in FY2024. The current account deficit is projected to decline
to 2.2% of GDP in FY2023 and 1.9% in FY2024. Growth in goods exports is forecast to
moderate in FY2023 before improving in 2024, as production-linked incentive schemes and
efforts to improve the business environment, such as streamlined labor regulations,
improve performance in electronics and other areas of manufacturing growth. Services
exports growth has been robust and is expected to continue to strengthen Indias overall
balance of payments position.
For India, it said the positive effect of high public and private investment and
consumption as well as rising exports was partly offset by higher energy import which
deepened the current account deficit and ate up reserves.
The Reserve Bank of India started tightening its policy stance to limit damage caused
by foreign capital outflows, a weakening currency and inflation risks. Higher financing
cost slightly dented buoyant economic activity, and overleveraging in the corporate sector
may become a factor of financial instability.
However, geopolitical tensions and weather-related shocks are key risks to Indias
economic outlook.
OPERATIONAL PERFORMANCE, OPPORTUNITIES, THREATS, RISKS AND CONCERNS
The Company was in the business of Mushroom production and operated a 100% Export
Oriented Unit from its manufacturing plant situated at Gat No. 379, Village Bebadohol,
Pune. Due to change in international horticulture scenario the mushroom plant of the
Company was non-operational since several years. During the financial year 2020- 21,the
said manufacturing plant has been monetized by your Company after receiving all applicable
legal consents and approvals.
The management of the Company is looking forward for new opportunities to utilize the
funds of the Company with a continuous impetus to maximize the value for its shareholders,
provide benefits to other stakeholders and to maintain an optimum capital structure with
proper care by mitigating the risks. The Company has temporarily invested the funds in
short term treasury operations.
FINANCIAL PERFORMANCE
A brief synopsis on the financial information of the Company for the FY 2022-23 and FY
2021-22 is given below:
in Lakhs
|
FY 2022-23 |
FY 2021-22 |
| Total Equity |
? 6,584.22 |
? 6,630.04 |
| Total Revenue |
? 424.45 |
? 666.05 |
| Earnings Per Share |
? 1.01 |
? 2.34 |
INTERNAL CONTROL SYSTEMS
The Company has effectively and efficiently laid down policies, guidelines and
procedures keeping in mind the nature, size and complexity of Companys business
objectives. The Company maintains proper and adequate system of internal controls with
well-defined policies, systems, process guidelines and operating procedures. The Company
positively ensures strict adherence to various procedures, laws, rules and statutes. All
transactions are recorded and reported in accordance with the applicable Indian Accounting
Standards and within the terms of accounting policies.
The Company has also ensured the periodical Internal Audit by an independent auditor,
whose report is submitted to the Audit Committee and Board of Directors for consideration.
During the Audit Process no material discrepancies have been reported by the Internal
Auditor.
The Audit Committee is responsible to ensure the monitoring of Internal Control System
and oversees the various financial transactions on a regular basis and deviations, if any,
are promptly reported to the Senior Management to ensure normalcy is established at the
earliest, though, no such deviations had been reported by the Audit Committee during the
financial year 2022-23.
HUMAN RESOURCES
The Company has adequate trained professionals to manage the affairs of the Company in
the most efficient and prudent manner.
The Company aims to develop, motivate and retain diverse talent. The Company seeks to
maximize the potential of every employee by creating a purpose-driven, inclusive,
stimulating, and rewarding work environment.
The Company has been broadening and deepening employees relationships by continually
looking for new opportunities and newer areas in the businesses to add value, proactively
investing in building newer capabilities and reskilling the workforce.
The Company appreciates the participation and contribution of employees, commitment,
effective deployment of knowledge and expertise, integrity and maintenance of
confidentiality and looks forward for their continuous participation in years to come.
CAUTIONARY STATEMENT
Statements made in the Management Discussion and Analysis describing the Companys
projection, estimates and expectations may be interpreted as “forward looking
statements” within the meaning of applicable securities, laws and regulations. The
Company assumes no responsibility to publicly amend, modify or revise any forward looking
statements on the basis of any subsequent information or events.
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