Adcon Capital Services Ltd Management Discussions.

The Company is in the business of financial and investment activities. The key issues of the Management

Discussion and Analysis are given below.

(A) INDUSTRY STRUCTURE AND DEVELOPMENTS: The Company is engaged in Investments, Finance and derives its revenue from said activities. The fortune of the Finance industry is expected to be positive across the emerging markets economies and to a large extent, linked to the growth of the Country. The proposed infrastructure spending by the Government will give and opportunity to the Companies across Financial Service industry to perform in the coming years.

(B) STRENGTH: The strength of the Company is known from its values which the Company has earned over a decade and its cordial relation with its clients and presently the Companys financial position is improving on account of positive sentiments in capital market activities.

(C) COMMENT ON CURRENT YEARS PERFORMANCE: The management of the Company is considering various options to review the business activities of the Company and is hopeful to achieve the future objectives.

(D) OPPORTUNITIES AND THREATS: The confidence in the security situation and the stability of the country has created a positive macroeconomic environment. Economic development is expected in all areas of the country. The existing high competition could lead to the lowering of profit margins and a reduction in market share. The new regulations relevant to capital adequacy and liquidity may create pressure on profit margins. Special attention is paid to customer retention, and attracting new customers, leading to high advertising and promotional costs. Policies are implemented in order to take required action, with regard to the identified threats.

(E) SEGMENT WISE PERFORMANCE: The business of the Company falls under a single segment

i.e. Investments, and Related Financial activities for the purpose of Accounting Standard AS-17.

(F) OUTLOOK: The continual growth in the financial service sector is expected to give the necessary support to the Finance industry. The Company is making all efforts to accelerate growth of its business activities. It expects to improve its position in the market by focusing on technologically advanced and more profitable products / market segments and working aggressively in the areas of productivity, efficiency and cost reductions.

(G) RISK AND CONCERNS: The negative growth in western countries and slow recovery of United States of America coupled with slowdown in European Countries are major cause of concern of growth.

(H) INTERNAL CONTROL SYSTEM: Internal audit and other controls have been found to be adequate. These are reviewed periodically by the Audit Committee and found the performance satisfactory.