Ajcon Global Services Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

Your company is primarily engaged in Stock Broking, Corporate Advisory, Merchant Banking and Depository participant Services. All these activities are facing competitive, taxation, regulatory headwinds and game changing structural changes. Your company is gearing up to face such developments and re-engineer business strategy as required to bring in growth in all its main verticals i.e. Stock Broking, Corporate Advisory Services and Merchant Banking Services.

The Companys Corporate Advisory and Merchant Banking business also started getting good traction as Corporates required Companys services for new projects & additional fund requirements. Companys Merchant banking Division is receiving good number of Valuation assignments. The Institutional Broking business of the Company is also growing owing to more & more empanelment(s).

According to the Reserve Bank of India (RBI), there is a growing optimism that India is on the cusp of a long-awaited economic take-off. Recent indicators are pointing to a quickening of the momentum of aggregate demand. Non-food spending is being pushed up by the green shoots of rural spending recovery. A modest easing of headline inflation in the reading for April 2024 confirms the expectation that an uneven and lagged pace of alignment with the target is underway.

The Indian economy grew 8.2 per cent in the June quarter, 8.1 per cent in the September quarter and 8.4 per cent in the December quarter of 2023-24. The GDP numbers for the fourth quarter (January-March 2024) and the provisional estimates for the 2023-24 fiscal are scheduled to be released on May 31, 2024. For the full year FY24, the National Statistical Office (NSO) has pegged the GDP growth at 7.6%; but with the projected fourth quarter growth, Indias economy likely grew at 7.8% in the year.

According to Reserve Bank of India, Indias real GDP growth is projected to be 7% for FY25, with Q1 at 7.1%, Q2 at 6.9% %, Q3 at 7% %, and Q4 at 7%.

Indias fiscal deficit during the first 11 months of FY24 stood at Rs. 15.01 trillion, or 86.5% of the revised annual estimate, according to data from the Controller General of Accounts. Honble Finance Minister Nirmala Sitharaman during the Interim Union Budget announcement said that the government has narrowed its fiscal deficit aim for FY24 by 10 basis points to 5.8 per cent of gross domestic product, and aims to bring it down to 5.1 per cent in the next financial year.

The prospects on Indian Economy remains bright with robust government capital expenditure, signs of the upturn in the private capex cycle, business optimism across various sectors, healthy corporate and bank balance sheets. However, there are headwinds like geopolitical tensions, volatility in international financial markets, rising Red Sea disruptions and extreme weather events pose risks to Indias GDP growth outlook. According to the RBI, The outlook for the global economy is turning fragile as the descent of inflation is stalling, re-igniting risks to global financial stability. Capital flows have become volatile as nervous investors turn risk averse.

Indian companies have reported good performance in FY24 so far with good management commentary for the future.

Indian economy is strongly placed as compared to the global peers which will attract investors. Domestically, the economy is doing well which is evident from the recent power consumption, coal production data, mining data, auto sales, GST collection data, increase in investment led spending and other indicators like passenger air traffic, hotel occupancy. The Banks are also seeing healthy pickup in credit demand which was missing. While the global central banks especially in US and Europe are grappling with issues like balancing inflation and growth; however, Reserve Bank of India is balancing inflation and growth in a good manner.

Structurally, Indian economy has done well led by major reforms like thrust on digital economy after demonetization with emphasis on Artifical Intelligence and Machine Learning, implementation of GST, RERA, Insolvency and Bankruptcy Code, reforms in the power sector, Governments focus on investment led spending to drive growth with impetus on Privatisation, thrust on Aatmanirbhar Bharat resulting into Production Linked Incentive (PLI) schemes for various sectors, financial inclusion, reforms in Direct Taxes, thrust on renewables sector, Ethanol blending, scrapping policy etc. India is marching towards "Suviksit Bharat" in Amrut Kaal by 2047.

Your company is expected to reap the fruits of this golden opportunity in the coming years.

OPPORTUNITIES AND THREATS Opportunities

• Long-term economic outlook positive will lead to opportunity for financial services.

• Increasing domestic flows of funds in the equity markets through mutual funds and direct investment .

• Retail investor participation in IPO market augurs well for Indian broking industry.

• Strong equity research cell.

• The requirement of the funds by the corporates to increase capex and working capital in the coming months will augur well for the corporate advisory and merchant banking services of the company.

Threats

• Low capital base as the business requires large funds to expand its network and increase its Net Worth for empanelment with large Mutual Funds and FIIs for institutional broking (Internal).

• Fewer dealing branches & franchisee outlets (Internal).

• Competition in the Market place especially with discount brokerage firms. (External).

• Regulatory Challenges. (External).

INTERNAL CONTROL SYSTEM AND THEIR ADEQUECY

The Companys internal control systems are adequate, operating effectively and are commensurate with the size of business and the same is provided through competent management, implementation of standard policies and processes, maintenance of an appropriate audit program with internal control environment, effective risk monitoring and management information systems. Moreover, the Company continuously upgrades these systems in line with the best available practices.

The Board of the Company has constituted an Audit Committee, which is headed by a Non-Executive Independent Director. The Audit Committee periodically reviews internal audit reports and brings to the notice of the Board any significant process deviations.

SEGMENT - WISE OR PRODUCT WISE PERFORMANCE

Your company has only one segment and entire revenue is generated from financial activities only. Accordingly, segment reporting as required under Ind-AS-108, issued by the Institute of Chartered Accountants of India, is not applicable.

RISK AND CONCERN

The Company operates in the Challenging business environment and exposed with following risks which includes economic risk, competition risk, market risk, human resources risk and regulatory risk etc. Any unfavorable changes in the in the government policies and economic condition of the Indian & Global financial market impact the growth of the Company. In this competitive world, your Company faces competition from existing players and new entrants.

However, we have always considered competition as a favorable factor since it drives us further towards growth. The Company with its well diversified service offerings, nationwide reach, coupled with the latest technological infrastructure and strong risk management systems will facilitate continuous growth in the coming years Availability of skilled man power is the most important factor for the growth of the Company, your Company try to retain its skilled man power.

ANALYSIS OF FINANCIAL PERFORMANCE

Due to improvement in markets coupled with a few good assignments for consultancy & Investment Banking, we could post a decent performance. The summary of previous three years financial results are given below:-

("r in Lacs)

FINANCIAL YEAR	TOTAL REVENUE	EBITDA
2023-2024	1494.74	223.45
2022-2023	782.94	145.40
2021-2022	4086.58	330.27

OUTLOOK

The Company expects the financial year 2024-2025 to be the year of good financial activities on both capital market front and corporate advisory front. The outlook for investment banking and merchant banking also seems to be brighter. The Company will continue to keep its thrust on its business under the tie up with Bank Of India for 3 in 1 Accounts through Companys online Platform https://pyarapaisa.com/Default.htm and also through off line services. The Company will also benefit with the increased activity by the Institutions being categorised as the Institutional Broker & increasing the number of Institutional clientele.

HUMAN RESOURCES

The Company has been following standard procedure for recruitment of best personnel for all the departments and is making constant and continuous efforts to retain and groom them to meet its present and future requirements. The relation between the management and staff remained very cordial during the year. The HR department has very cordial relations with the employees and takes due care of their growth and professional credentials & abilities of employees.

CODE FOR PREVENTION OF INSIDER TRADING PRACTICES

As a part of code of conduct, the Company has a well-defined and laid down policy approved by the Board for the prevention of Insider Trading in line with SEBI Insider Trading Prohibition Regulations which is applicable to all Directors, senior management/ Employees categorized as "Designated Employees".

SAFE HARBOR CLAUSE

The statements in this document, other than factual/ historical information, contain the words or phrases such as "expect", "plan", "objective" and other similar words, which are forward looking in nature. Such forward looking statements may be subject to a variety of risks and uncertainties that could result in actual results differing materially from those indicated in this document. The Company is not under any obligation to update such forward looking statements after this date.

FINANCIAL PERFORMANCE AND OPERATIONAL REVIEWAS ON MARCH 31, 2024 Share Capital

The paid up equity share capital of the Company as on March 31, 2024 stands at ^6,11,62,000/- divided into 61,16,200 fully paid up equity shares of ^10/- each.

Net Worth

The Net Worth of the Company stands at ^1853.78 lakhs.

Secured Loans

The Company has secured borrowings stands at ^176.63 lakhs as at the end of the year.

Total Income

During the year total income was reported at ^1494.74 lakhs.

Finance Cost

The finance cost (including Lease Interest) of the Company was ^49.31 lakhs.

Tax Expense

The Company has incurred a tax expense of ^30.98 lakhs in the current year.

KEY FINANCIAL RATIOS

The key financial ratios and details of significant changes in these ratios, to the extent applicable, as required by SEBI Listing Regulations are given below:

Key Financial Ratios

Key Financial Ratios	Financial Year 2023-2024	Financial Year 2022-2023
(i) Debtors Turnover	25.55	6.50
(ii) Interest Coverage Ratio	4.53	3.48
(iii) Current Ratio	0.85	1.28
(iv) Debt Equity Ratio	0.10	0.20
(v) Operating Profit Margin (%)	14.95	41.13
(vi) Net Profit Margin (%)	6.98	6.13

By Order of the Board

Place: Mumbai Date: 27.05.2024

Sd/-

Ashok Ajmera Managing Director & CEO DIN: 00812092