Chartered Capital & Investment Ltd Management Discussions

A. Industry Structure, Developments and Outlook

The company is operating in the Merchant Banking industry; therefore its performance is largely dependent on the state of the capital markets and the macroeconomic conditions, within the country and globally.

The domestic economy continued to remain resilient on major macro indicators including robust forex reserves (USD 676Bn), easing inflation (3.3% in March 2025), GDP growth expectation of 6.5% for FY25, Manufacturing PMI (58.1) remained robust compared to other Asian peers, INR appreciated against the USD to 86/USD, Trade deficit of USD 282Bn in FY25 was cushioned by the robust services surplus of USD 188Bn amidst the heightened uncertainty around tariffs and the trade tensions. However exports remained fat (0.1%YoY) in FY25 while imports grew by 6.2%, indicating that the sluggishness in exports could deteriorate further as the elevated tariffs are implemented and restricted access of China to US markets would lead to large scale dumping in neighbouring countries, further deteriorating the trade imbalance.

EQUITY MARKETS

The Indian stock markets witnessed a fat ending to FY25 across the board: Nifty rose by 5%, Nifty Midcap 50 by 6%, and Nifty Smallcap 50 by 7%. Indias market cap reached USD 4.6 tn, retaining its fifth rank in the world in terms of market capitalization for two consecutive years.

Primary Markets

Despite muted primary capital activity globally, Indian primary capital markets reached new highs in FY25, and were one of best performing markets globally. The Indian markets witnessed H 3,27,758 crore equity raise via IPOs, QIPs and Rights (including REITs and InvITs) in FY25, increase of 83% over FY24. There were 81 IPOs (including REITs and InvITs) and 89 QIPs in FY25, the highest in the last decade.

B. Opportunities & Threats

Opportunities:

• Low penetration of financial services and products in India;

• Regulatory reforms would aid greater participation of all class of investors;

• Favorable demographics like huge middle class, larger younger population with disposable income and investible surplus, change in attitude from wealth creation and risk taking abilities of the youth etc.;

• Corporate are looking at expanding in overseas/domestic markets through merger & acquisitions and Corporate advisory Services.

Threats:

• Execution Risk;

• Increased competition from local and global players operating in India;

• Regulatory Change impacting the landscape of business;

• Unfavorable economic condition.

C. Segment-wise or Product-wise Performance

The Company is engaged primarily in Merchant Banking activities and there are no separate reportable segments as per the Accounting Standard 17.

D. Risk Management

It is our constant endeavour to ensure that every risk we take has been thoroughly assessed, and that all risks are concomitant with their potential return. We have worked to strengthen our enterprise wide risk management processes and practices through our risk philosophy, whose core lies in the identification, measurement, monitoring and action along with the development of risk mitigation plans.

Our risk management process is overseen by the Board of Directors. Our risk management approach and practices continued to focus on minimizing the adverse impact of risks on our business objectives and to enable the Company to leverage market opportunities based on risk-return parity. Our periodic assessment and monitoring of business risk and regulatory environment resulted in timely deployment of appropriate mitigation measures.

E. Internal Control Systems & Their Adequacy

The companys internal control systems are adequate and provide, among other things, reasonable assurance of recording transactions of operations in all material respects and of providing protection against significant misuse or loss of company assets. The internal control systems lay down the policies, authorization and approval procedures. The adequacy of the internal control systems has been reported by the auditors under the Companies (Auditors Report) Order, 2016.

F. Discussion on Financial Performance

During the year under review, the total income of the Company increased from Rs. 796.32 lacs during the previous year to Rs. 1175.63 lacs during the current year. The profit after tax decreased from a profit of Rs. 543.33 lacs during the previous year to a profit of Rs.538.51 lacs during the current year mainly due to increase in employees cost, other expenses and Tax expenses. The Board of Directors expect this situation to improve further in the coming years.

G. Analysis of Significant change in Financial Ratios

Profit Before Tax Margin: The Profit Before Tax Margin for FY25 was 70.21% compared to 78.01% for FY24 mainly because of the increase in employees cost, Other expenses and Tax expenses.

Net Profit Margin (%): The Net Profit Margin for FY25 was 45.81% compared to 68.23% for FY24 mainly because of the increase in employees cost, Other expenses and Tax expenses.

Other parameters, namely Debt Equity Ratio, Debtors Turnover, Inventory Turnover, Interest Coverage Ratio and Current Ratio, are not applicable to the company.

H. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

Return on Networth for FY25 was 3.47% down from 3.61% a year ago mainly due to increase in employees cost, Tax expenses and other expenses in comparison to the previous year.

I. Material Development in Human Resources / Industrial Relations Front, Including Number of People Employed

There has been no material development on the Human Resource / Industrial Relations front during the year. Employee relations at all levels continue to remain cordial. The Company had 8 employees (including Managing Director) as on March 31,2025.

CAUTIONARY STATEMENT

aStatements in this Management Discussion & Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic developments in the country and improvement in the state of capital markets, changes in the Government regulations, tax laws and other status and other incidental factors.