chandrima mercantiles ltd Management discussions


A. Overview of the Indian Economy:

Indias GDP is projected to grow around 6 percent this year, though the ongoing Russia & Ukraine war, financial bank crisis in US, and the elevating fuel & food prices may also cast some clouds in 2023 for India. Indias GDP growth might fall short of 6 percent as higher interest rates and global economic slowdown weigh on investment and exports. Agriculture is projected to grow by 3.5 percent in 2022-23 as compared to 3 percent in the previous year. The industry sector is projected to witness modest growth of 4.1 percent in F.Y. 2022-23 relative to 10.3 percent in F.Y. 2021-22. The services sector is set to rebound with y-o-y growth of 9.1 percent in F.Y. 2022-23 over 8.4 percent in 2021-22. Positives for India are the lowering of the unemployment rate to 6.4 percent, the lowest in the last 5 years, easing of inflation to 5.5 percent in 2023-2024 and lower energy import cost. Despite the fears of recession in some parts of the global economy, India remains a largely domestic economy, which provides strength to growth.

Agriculture continues to be 17% of the GDP employing over 40% of the workforce. It remains the backbone of Indian economy journey. Modern input and tools are being deployed to improve the output and efficiency of our farmlands. Mechanisation and deployment of implements like harvesters, tillers, seeders, rotavators, sprayers etc. have added to the productivity of the farm. Internet technologies as well as the wide coverage of mobile phones and an ever-expanding usage of smartphones is aiding the farmers to modernise their practices as well as get transparent access to market prices for their end products.

B. Outlook:

Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russias invasion of Ukraine and its effects, climate change and the lingering COVID-19 pandemic all weigh heavily on the outlook. IMF forecasts global growth to slow from 3.4 percent in 2022 to 2.8 percent in 2023 before settling at 3.0 percent in 2024. Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023. However, with the recent relaxations of COVID-19 restrictions in China and the unleashing of the pent-up demand, there is an expectation of faster-than-expected recovery in the global economy in a gradual manner.

C. Industry structure and development:

Indias huge population and geographical conditions have boosted the demand for agricultural production, and it has become the worlds second-largest agricultural producer. The production of various items is abundant.

D. Opportunities and Threats:

Opportunities:

> With rising population, demand for food will continue to drive the need for better seeds.

> Improved varieties of seed will be required to meet the changing needs of climate, processing industry and modern retail. The governments focus and various subsidy and incentive schemes for the farmers will also add to the requirement of better quality seeds.

> With shifting educational reforms and government regulations aimed at educating investors and raising trading awareness among the general public, there is a growing opportunity for stock brokerage firms.

> Number of modern techniques and tools along with awareness created by agri-tech start-ups is helping farmers get into precision farming. This has in turn increased the appreciation of the farming community towards the value of inputs like seeds, bio fertilisers etc.

Threats:

> Agriculture continues to be dependent on the vagaries of temperature and rainfall. Not only is quantity of rain important, but timing is even more critical. Rapidly changing climatic conditions and impact of global climate change is having a drastic effect on the performance of crops as well as cropping patterns.

> The competition has increased from Domestic and other developed countries.

> Because firms can enter and quit an industry with few limitations, the number of substitutes in the same product line at different prices poses a risk of losing the investor base.

> Threats for this Industry are very common and every person is aware of the threats and the risks involved with this Industry.

E. Segment-wise or Product-wise performance:

The Company is primarily engaged in single segment i.e. Agriculture Products.

The Turnover of the Company for the Financial Year 2022-23 is Rs. 2187.70 Lakhs

F. Future Outlook:

The Company presents the analysis of the Company for the year 2022-23 & its outlook for

the future. This outlook is based on assessment of the current business environment. It

may vary due to future economic & other developments, both in India and abroad.

G. Internal control systems and their adequacy:

The Company has taken adequate preventive and precautionary measures to overcome all negative factors responsible for low trend to ensure steady growth.

Internal Control Systems are the foundation for ensuring achievement of organisations objectives of operational efficiencies, reliable financial reporting and compliance with laws, regulations & policies. The Company has in place Internal Control Systems commensurate with the nature of its business, size and complexity of its operations. These systems are regularly tested for their effectiveness by Statutory as well as Internal Auditor and were found to be operating effectively during the year. Based on the Internal Audit Programme approved by the Audit Committee of the Board, the Internal Auditor carry out regular internal audits covering all offices, factory and key areas of business. Reports of the Internal Auditor are placed before the Audit Committee on quarterly basis for review. The Audit Committee regularly reviews the reports and discusses the actions taken with the management in addition to reviewing the effectiveness of the internal control systems and monitoring the implementation of audit recommendations. There are adequate checks & balances in place, wherein deviation from the systems laid-out are clearly identified and corrective actions are taken in the respective areas, wherever required.

H. Discussion on financial performance with respect to operational performance:

The financial performance of the Company for the Financial Year 2022-23 is described in the Directors Report of the Company.

I. Material developments in Human Resources / Industrial Relations front including number of people employed:

The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

J. MATERIAL FINANCIAL AND COMMERCIAL TRANSACTIONS:

During the year there were no material financial or commercial transactions.

K. KEY FINANCIAL RATIOS:

In accordance with the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector-specific financial ratios. In this regard, the Company has no significant changes in any key sector-specific financial ratios to report.

L. HUMAN RESOURCES:

These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company operations include global and domestic demand supply conditions, Government regulations, tax regimes, economic developments and other factors such as litigation and business relations.

M. Caution Statement:

Statements made in the Management Discussion and Analysis describing the various parts may be “forward looking statement” within the meaning of applicable securities laws and regulations. The actual results may differ from those expectations depending upon the economic conditions, changes in Government. Regulations and amendments in tax laws and other internal and external factors.

Registered Office:

By the Order of the Board of

B-712 Seven Floor Tiitanium City Center,

Chandrima Mercantiles Limited

Near Sachin Tower,

100 Feet Anandnagar Road,

Ahmedabad - 380015

Sd/-

Sd/-

Place: Ahmedabad

Pranav Trivedi

Chiragkumar Parmar

Date: 6th September, 2023

Managing Director

Director

DIN: 09218324

DIN:09432185