Chandrima Mercantiles Ltd Management Discussions.

A. Industry structure and developments

In the last six years, Indian markets have witnessed a spurt in volumes at 34.4% Compound Annual Growth Rate (CAGR) from F.Y. 2013 to F.Y. 2021. The industry volumes Average Daily Turnover (excluding proprietary) was up by 55% YoY. In this, while the gross equity ADTO increased by 11%, delivery ADTO contribution decreased to 24%. There was a substantial growth in the number of new retail investors entering the equity market, as witnessed through the number of NSDL and CDSL Demat Accounts being opened in F.Y. 2021, which was up by 25% as compared to F.Y.2019. The volatility in market is expected to encourage trading turnover, the recent corrections in valuations on account of the COVID- 19 impact, coupled with the cautious investor stance, would have a bearing on industry revenues in F.Y. 2021. On account of the COVID-19 impact, brokerage companies are expected to report a marginal reduction in revenue and profitability across businesses.

B. Opportunities and Threats Opportunities:-

Securities businesses are expected to benefit from the structural shift in the financial savings environment as well as the improving technology infrastructure of India. Some of the broad macro trends that underline the opportunities are:

1. Despite the short-term impact of COVID-19, India is expected to be a relatively high growth economy in the medium to longer term and this augurs well for the capital markets.

2. India has been and is expected to remain a high savings economy. The young working population is expected to increasingly channel a higher share of their savings into financial assets. The growing preference for equity among retail investors, as an asset class coupled with and the relative under-penetration in terms of both market capitalisation to GDP ratio or ratio of investments in shares and debentures to GDP, signify a positive outlook for equity-based businesses in India.


Worsening of macro-economic factors and low economic growth can negatively impact the capital market sector thereby affecting business. Movement in crude oil prices is one of the key determinants of the direction of financial markets. It can be bundled with rising account deficits, inflation, depreciating currency, slowdown in foreign investment flows etc thereby posing threat to the business. Uncertainty in the global markets, owing to the increased strain in the advanced economies and emerging economies due to the COVID 19 impact result in volatile capital inflows and currency fluctuations.

C. Segment-wise or product-wise performance.

The Company is operating in only one segment. Therefore there is no requirement of Segment wise reporting.

D. Outlook

The outlook for the industry is dependent upon key factors such as domestic and global economic growth, buoyancy in primary markets, lack of alternative investment opportunities and technological up-gradation.

A broad-based macro-economic recovery will lead to improved corporate profits, thus supporting higher stock prices and positive equity market sentiments. While FIIs have sold lately, Indias structural long-term attractiveness will attract foreign investors.

E. Risks and concerns.

The capital market industry is mainly dependent on economic growth of country and capital market is also further affected by number of issues arising out of International policies of foreign government as well any change in international business environment. The industrial growth is very sensitive which is dependent on many factors which may be social, financial, economical or political and also natural climatic conditions in the country. However, with the positive attitude of country which can mitigate the avoidable risks. Geopolitical tensions, raising crude oil prices, rising US bond yields, scams in the banking sector are some of the affecting factors that the country witnessed during the year under review. The country faced the said concerns with positive measures by way of making amendments or introducing new laws that can assist to grow the economy. Foreign investors are very positive for India and trust its policies which are very much investor friendly. It is expected that the said efforts shall continue during the coming years irrespective of the Government which is in power.

F. Internal control systems and their adequacy.

The company has implemented proper system for safeguarding the operations/business of the company, through which the assets are verified and frauds, errors are reduced and accounts, information connected to it are maintained such, so as to timely completion of the statements.

The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information. The company has internal audit and verification at regular intervals.

The requirement of having internal auditor compulsory by statue in case of listed and other classes of companies as prescribed shall further strengthen the internal control measures of company.

G. Discussion on financial performance with respect to operational performance.

The financial performance of the Company for the Financial Year 2020-21 is described in the report of Board of Directors of the Company.

H. 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.

By the Order of the Board of
Chandrima Mercantiles Limited
Sd/- Sd/-
Pranav Trivedi Rakeshkumar Zala
Whole-Time Director Director
DIN:09218324 DIN: 08973414

Registered Office:

A/12, Punam Parina Flats, Nr. Vasna Telephone Exchange, Vasna, Ahmedabad - 380 007

Date: 7th September, 2021

Place: Ahmedabad