Munoth Capital Markets Ltd Management Discussions.

A. Industry structure and developments

The average daily traded volumes (ADTO) for the equity markets during FY2019 stood at Rs. 9.93 lakh crores, up 46% YoY from Rs. 6.79 lakh crores in FY 2018. The overall Cash market ADTO reported growth of 7% YoY at Rs. 35,180 crores in FY 2019. However, the absolute growth was affected due to decrease in delivery, which saw de-growth of 8.2% YoY to Rs. 8,854 crores v/s 26% growth in FY 2018. Within derivatives, futures volume rose 9.7% YoY to Rs. 87,564 crores while options rose 54% YoY to Rs. 8.70 lakh crores. Amongst cash market participants, retail constitutes 53% of total cash volume, institution constitutes 25% of total cash volume and prop constitutes 20%. Within institution, DII cash volumes increased 6% YoY to Rs. 3,627 crores vs 51% in the previous year, reflecting the lull market sentiments during the year. The proportion of DII in the cash market remained constant at 10.4%. The increase in demat accounts during the year stood at 12% with total number of accounts as on March 2019 at Rs. 3.59 crores. The revival in market sentiments along with clearer picture on political front is expected to give push to the primary market activities and overall volumes.

B. Opportunities and Threats

The Indian financial markets are stable and the company is sure to get benefits of the overall economic growth environment. The company is exploiting opportunities in the capital market and investment banking. The present government is also supportive of business growth and for the purpose amended many Acts and introduced new laws like The Insolvency and Bankruptcy Code, 2016, amendments in Companies Act, 2013, Income Tax Act, 1961, making effective Goods and Service Tax for making the business easy in India. On the whole foreign investors are very positive on India and its policies. Ease of doing business, however, still needs to improve. Some of reforms have been initiated which shall continue irrespective of Government in power. And thereby attract foreign investment, relaxing FDI in many sectors and other steps to grow the economy by the government creates optimistic business environment.

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 Indian Economy is growing strongly and remains a bright spot in the global landscape. Indias overall outlook remains positive, although growth was slow temporarily as a result of disruptions to consumption and business activity from the recent withdrawal of high- denomination banknotes from circulation. The Countrys Economy has recovered from effect of demonetisation and GST. The nations expansion will pick up as economic reforms accelerate. The government has made significant progress on important economic reforms, which will support strong and sustainable growth going forward. Therefore, the company is optimistic about the recovery of Indian economy and the capital market.

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 2018-19 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.

Registered Office: By the Order of the Board of
Shanti Nivas, Opposite Shapath V, MUNOTH CAPITA L MARKET LIMITED
Near Karnavati Club, S.G Road, Sd/-
Ahmedabad - 380 058 Siddharth Shantilal Jain
Director
Date: 14th August, 2019 Place: Ahmedabad DIN: 00370650