Aspire & Innovative Advertising Ltd Management Discussions

Economic Overview Indian economy

India has maintained its strong growth momentum in FY 2024-25, consolidating its position as the worlds fifth- largest economy. Real GDP in the first quarter of FY 2024-25 grew by 7.9% year-on-year, supported by resilient domestic demand, rising private consumption, and robust services activity.

The services sector continues to be the primary growth engine, with IT, business services, travel, and hospitality showing double-digit expansion. Indias services exports are projected to exceed US$ 360 billion this year, while total exports (goods and services combined) are expected to cross US$ 805 billion, reflecting strong global demand for Indian products and services.

Private consumption is picking up, supported by higher employment, improved income levels, and strong consumer sentiment. Government capital expenditure on

infrastructure, logistics, and connectivity projects is expected to remain a key driver of growth. Tax buoyancy, a simplified GST regime, and continued digitisation of tax administration will further strengthen fiscal stability.

The agriculture sector is showing steady progress with favourable monsoon conditions and improved Kharif sowing. Meanwhile, High-Frequency Indicators (HFIs) such as GST collections, power demand, air passenger traffic, and digital payments indicate broad-based momentum across the economy.

Looking ahead, India is projected to remain the fastest- growing major economy globally, with medium-term growth supported by infrastructure investments, manufacturing expansion under "Make in India", and deepening global supply chain integration.

Amid global uncertainty, Indias position as a stable and attractive investment destination has strengthened. Record inflows into India-focused funds and growing investor confidence highlight the resilience of the “Invest in India" story, backed by strong fundamentals, a young workforce, and a robust democratic framework.

WORLD ECONOMIC OUTLOOK

The global economy is moving forward on a slow and uneven recovery trajectory, shaped by the aftermath of the pandemic, Russias invasion of Ukraine, and the prolonged cost-of-living crisis. While resilience has been stronger than expected, growth is not yet back on its pre-pandemic track, with divergences widening across advanced, emerging, and developing economies.

Global activity bottomed out in late 2023, and inflation pressures are gradually easing. Headline inflation has fallen sharply from 9.2% in 2022 to 5.2% in 2024, and is expected to

decline further to 4.6% in 2025. Core inflation, though easing more gradually, is projected to fall to around 4.0% by 202526. This supports expectations of a “soft landing", especially in the United States, where unemployment is projected to rise only modestly from 3.8% in 2024 to about 4.1% in 2026.

Global Growth Outlook

• 2024: Global GDP growth is forecast at 3.1%.

• 2025: Growth is projected to edge up to 3.2%, supported by stronger consumption and investment in emerging markets.

• 2026-27: Medium-term growth is expected to stabilize around 3.3%, still well below the 2000-2019 historical average of 3.8%.

Advanced economies will remain subdued, with projected growth of 1.6% in 2024, 1.5% in 2025, and around 1.4% by 2026, reflecting ongoing structural challenges in Europe and Japan despite resilient US demand.

Emerging markets and developing economies are expected to remain the primary growth drivers:

• China: Growth is forecast at 4.5% in 2024, moderating to 4.2% in 2025 and below 4% by 2026 amid its property sector crisis.

• India: Growth remains strong at 6.5% in 2024, 6.6% in 2025, and close to 6.7% by 2026-27, making it the fastest-growing major economy.

• Other Emerging Asia: Vietnam, Indonesia, and the Philippines are projected to sustain growth above 5% over the medium term.

Risks and Uncertainties

• Chinas property sector and slower global trade could drag growth.

• Geopolitical tensions in Europe, the Middle East, and Asia may disrupt energy and commodity markets.

• Climate shocks·extreme heat waves, floods, and food supply disruptions·pose rising risks.

• Debt distress remains a looming challenge, with over 50% of low-income countries at risk.

Policy Roadmap

• Monetary policy: Central banks must continue to prioritize price stability while being flexible to contain financial stress.

• Fiscal policy: Governments should rebuild buffers, reduce deficits, and ensure targeted support for vulnerable households.

• Structural reforms: Policies that boost labour

participation, enhance productivity, accelerate the green transition, and expand digital infrastructure will shape long-term resilience.

Medium-Term Outlook (2025-27)

The world economy is projected to expand at around 3.23.3% annually, with advanced economies growing slowly and emerging markets·particularly India and parts of Southeast Asia-driving global momentum. Inflation is expected to return close to central bank targets by 2026-27, creating conditions for a more stable financial environment. However, without decisive reforms and stronger multilateral cooperation, the risk of a "low-growth trap" will persist.

INDUSTRY OVERVIEW

Indias Consumer Electronics and Appliances (ACE) industry

is on a robust growth trajectory and is expected to emerge as the fifth-largest market globally by 2025. Rising disposable incomes, urbanisation, digitisation, and evolving consumer preferences are driving sustained demand across categories such as smartphones, TVs, air-conditioners, refrigerators, washing machines, and kitchen appliances.

The Indian ACE market, valued at US$ 9.84 billion in 2021, is projected to nearly double to US$ 21.2 billion (Rs. 1.48 lakh crore) by 2025, reflecting strong domestic demand as well as export potential. Electronics hardware production in India stood at US$ 87 billion in 2022, supported by government initiatives such as Make in India, Production-Linked Incentive (PLI) schemes, and a growing ecosystem of domestic manufacturing.

Market Growth Outlook

• 2025: ACE industry projected at US$ 21.2 billion.

• 2027: Market expected to expand by an additional US$ 2.3 billion over 2022-27, registering a CAGR of 1.3%.

• 2030: With continued policy support and rising consumer penetration, the market size could cross US$ 30 billion, making India one of the most attractive global hubs for electronics and appliances.

Key Growth Drivers

• Rising Middle-Class Consumption: Expansion of urban households and increasing per capita incomes are driving demand for premium and smart appliances.

• Digitisation & E-commerce: Online platforms are accelerating penetration of electronics into Tier-II and Tier-III cities.

• Government Push for Manufacturing: Initiatives like PLI for large-scale electronics manufacturing and National Policy on Electronics 2019 aim to position India as a global electronics manufacturing hub.

• Smart & Energy-Efficient Products: Consumer preference is shifting towards connected devices, IoT- enabled appliances, and energy-efficient solutions.

• Exports Potential: With global companies diversifying supply chains, India is emerging as a preferred destination for electronics sourcing.

Future Outlook (2025-2030)

The next five years are expected to be transformative for Indias consumer electronics and appliances sector:

• Smart appliances and wearable devices will account for a growing share of the market.

• Domestic manufacturing will rise significantly, reducing import dependence.

• Exports are likely to expand with India integrating deeper into global value chains.

• Sustainability & energy efficiency will shape consumer demand and product innovation.

By 2030, Indias ACE industry is poised to be not just a large consumption market but also a global manufacturing hub, contributing significantly to exports, employment generation, and the digital economy.

OPPORTUNITY AND THREATS

The areas of strength are promoters having long track record, rich experience and adequate infrastructure with strong warehousing and transportation network.

The company is also delivering some home appliances under its brand "Aspire." However, the areas of weaknesses: IT systems are critical to our ability to manage our operations. Our IT systems enable us to coordinate our operations, from planning, production scheduling, product ordering, invoicing, delivery, customer relationship, management and decision support. If we do not allocate and effectively manage the resources necessary to build and sustain the proper IT infrastructure, we could be subject to transaction errors, processing inefficiencies, customer service disruptions and, in some instances, loss of customers.

Company performance overview

We are engaged in the business of trading of wide range of consumer durables like kitchen appliances, home appliances, white goods, mobile phones and its accessories, solar products etc. of multiple renowned brands such as Bajaj, Prestige, Vivo, Samsung, Crompton, Whirlpool, Hindware, Havells and many more. Our range of products are offered at different price points to meet diverse customer requirements across India along with delivery of products mainly in the rural and semi urban areas. We provide one platform that bring multiple brands under one umbrella so as to fulfil the requirements of the customer thus, improving their lifestyles.

We started our business in 2017 with an objective of providing basic but advanced products to Indias rural and semi urban population along with product delivery upto customers doorstop, in rural and semi urban areas of the country with focus on un-banked and under-banked customer segments through partners working in this space. To achieve this objective, in addition to our sales team & rural distributors,

we have entered into commercial arrangements with a large number of intermediaries like Non-Banking Financial Companies (NBFCs), Non-Banking Financial Companies (NBFCs) - Micro Finance Institutions (MFIs) along with Warehousing and Transportation facilities in 18 states in India.

We operate an asset light business model, where our major expenditure is for payment of facilitation fees & commission to these intermediaries for their services which include services like marketing of our products to their existing customer base in rural and semi urban communities, allowing our field staff & trainers to interact with their customers, collation of expected demand and providing banking and financial services to them for buying our products. Based on such expected demand, we place orders with related product companies to deliver the required products at our different warehouses across various states of India. For the purpose of storing and then delivering the products to customers, we have warehousing and transporting facility in 18 states of India from where we deliver these products at doorsteps of customers, mostly in the rural and semi-urban areas. For the period ending March 31, 2025, , our total expenditure towards Facilitation Fees & commission expenditure accounted for Rs. 3662.25 lakhs in comparison of Rs. 7325.72 lakhs of for the period ended March 31, 2024.

Our product portfolio comprises of more than 50 products such as pressure cookers, induction cooktops, mixer-grinder, Dinner Sets, sewing machine, ceiling fan, iron, inverter bulbs, electric heaters, mobile phones, television, fridge, washing machine, headphones, solar lanterns etc. In addition to offering third-party brands, we started selling Stainless Steel Dinner Sets under our own brand name in 2022. Furthermore, in 2023, we expanded our product range to include pressure cookers, also, branded under our name i.e. "Aspire Classico".

These products are sourced or manufactured by third parties according to the specifications developed by us. For the F.Y. ending March 31, 2025 and F.Y ending March 31, 2024 our total turnover from sale of products under our own brand was Rs.1331.42 lakhs and 5157.67lakhs respectively, which constituted 7.97 % and 13.43% % of total revenue from trading business respectively.

Our Company was founded in the year 2017 and our Promoter, Mr. Nitesh Agarwalla, with his prior experience of approx. 16 years in sales and marketing has been associated with the company since its inception. In 2019 he was elevated as the Director of the Company.

Since he himself has worked with NBFCs & MFIs in past, he understands the ground realities of rural and semi urban operations along with an exposure of dealing with rural and semi urban population. He is involved in the critical aspects of our business, including expansion, sales and marketing. We believe that the sector specific experience and expertise of our promoter has contributed significantly in the growth of our Company.

OUR STRENGTHS

We believe that the following are our primary strengths: Strong portfolio and diverse range of products across consumer preferences.

Ourcompany provides diverse product portfolio across various segments of consumer durables like kitchen appliances, home appliances, mobile and accessories, solar products. We

deal in a wide range of products, which enables us to cater widespread customer base with diversified requirements across India and expanding our reach to the rural and semi urban areas where there are very few selling channels. We believe that we have necessary resources, experience and network to launch additional products in future. We provide a common platform for products of various reputed and trusted brands. Further, we believe that we have necessary resources, experience, and network that can be customized and leveraged to cater to wider range of consumer durables as per requirements of the customers. With an operating history of more than five years, we are primarily known for our wide range of quality products spread across India at a competitive price.

RISK AND CONCERNS

Aspire employs an efficient Risk Management framework to identify, assess, and mitigate key business risks. Here are the primary risks and corresponding mitigation strategies:

1. Competition Risk: Operating in highly competitive market with low barrier to entry. Aspire faces competition from both organized and unorganized players in the in aggregator or household appliances industry.

Mitigation: The Company leverages its expertise, end- to-end offerings, and extensive presence to stay ahead. With a robust portfolio of over 100 branded products, Aspire ensures quality products.

2. Regulatory Risk: The focus on the quality, efficacy, safety and standardization of home appliances or white goods by regulatory agencies worldwide demands understanding and adaptation to evolving regulations, increasing compliance risks and cost.

Mitigation: Aspire adheres to all statutory and regulatory requirements timely, maintaining excellence in quality standards.

3. Reputational Risk: Brand recognition and reputation are crucial as Aspire expands into new geographies in an increasingly competitive market. The inability to maintain or enhance its brand image could negatively impact its business.

Mitigation: The company has developed and continues to enhance the Aspire brand, focussing on maintaining quality standards and customer satisfaction. The company actively promotes the brand through social media and other mediums.

4. Third party risk: The Companys reliance on third party manufactures exposes it to risk related to quality and compliance.

Mitigation: The Company ensures that third parties adhere to high standards of probity and integrity through robust compliance and monitoring systems. Reliable third parties manufacture Aspires products under strict quality standards monitored by the Company.

5. Potential litigation risk: Consumer compliant and

potential litigation on ground of product deficiency injuries due to operation of product could generate negative publicity and reduce consumer confidence.

Mitigation: The Company maintains a zero tolerance policy on quality issues. The Companys dedicated contact centres actively coordinate with customers to process orders, address queries and complaints, and ensure satisfaction.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

To achieve effectiveness and efficiency of operation, reliability of financial reporting and compliance with applicable laws, rules, and regulations and compliance of significant policies, the Company has a well-defined system of internal control throughout the organization.

The internal audit department regularly probes the deficiency in operation of internal control and suggest ways to rectify such deficiencies. To improve efficiency and internal control company has introduced Microsoft- Navision 2009, an Enterprise Resource Planning (ERP) system. Due to the total integration, there is a consistent flow of accurate and easy to access data within all the departments. The company has adequate systems of internal control to provide reasonable assurance that assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported properly.

FINANCIAL PERFORMANCE

The company has achieved a turnover ? 16695.33 Lakhs in FY 2024-25 compared to ? 38398.76 Lakhs during the previous year.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

One of the "Key" reasons for the exponential growth of Aspire is undoubtedly its "People". The Company has always provided an open and challenging work environment, wherein the staff members get an opportunity to rapidly gain and assimilate knowledge.

Creativity and dedication of all the employees represent it he most precious assets of the Company.

For the growth of the organization, the human resource function has an important role to play not only in identifying and recruiting suitable individuals, but also in developing and rewarding its employees. As such, we have remained focused on strengthening human capital through continuous training and development and by upgrading skills of employees to meet the Companys objectives. The Company has a union free environment and the industrial relations scenario continued to be stable during the year.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR, INCLUDING:

There has been significant changes in the Financial Ratios of the Company. The key Financial Ratio are as below:

S.No.	Particulars	FY 2023 24	FY 2024 25	Reasons for difference
I	Debtors Turnover Ratio	9.66	3.67	Basis change in various costs and Trade Payables
II	Inventory Turnover Ratio	13.46	6.71	Basis change in Sale of Goods and Inventory of Finished Stock
III	Return on Equity Ratio	35.55	9.03	Basis change in Profit and Total Equity
IV	Current Ratio	1.47	1.83	-
V	Debt Equity ratio	0.35	0.18	Basic change in Debt and Net Worth
VI	Net Profit Margin Ratio	2.43	2.33	Owing to the companys commensurate expansion
VII	Net Capital Turnover Ratio	11.16	4.53	Basis change in Revenue and Working Capital

In Calculation of net worth, we have excluded share application money received during the year 2024-25

CAUTIONARY STATEMENT

Statements in the Directors Report & Management Discussion and 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 operation include raw material availability and prices, cyclical demand and pricing in the Companys principal market, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factor.

APPRECIATION

Your directors express their warm appreciation to all the employees working at various units for their diligence and contribution. Your directors also wish to record their appreciation for the support and cooperation received from the dealers, agents, suppliers, bankers and all other stakeholder.

ANNEXURE-3

1. A brief outline on CSR Policy of the Company: -

The Companys CSR Policy is in adherence to the updated Section 135 of the Companies Act, 2013 read with rules framed thereunder and provides for carrying out CSR activities and Initiate projects that benefit communities, encourage an increased commitment from employees towards CSR activities and volunteering and contribution towards some specific project being undertaken by any of the organizations or directly by the Company.

2. Composition of CSR Committee:

Sr. No Name of Director	Designation	Number of meetings of CSR Committee held during the year	Number of meetings of CSR Committee attended during the year
1. Mr. Gaurav Maheshwari (Independent Director)	Chairman	2	2
2. Mr. Nitesh Agarwalla (Managing Director)	Member	2	2
3. Mrs. Rinku Agarwalla (Whole Time Director)	Member	2	2

3. Average net profit of the company for the last three financial year:

Financial Year	Amount (INR)
2021-22	6,13,33,469
2022-23	7,20,03,986
2023-24	12,67,79,456
Total Profit of Preceding Three FYs	26,01,16,911
Average Profit of Preceding Three Financial Years	8,67,05,637
2% of Average Profit of Preceding Three Financial Years	17,34,113
Amount to be Deposited as CSR Obligation	17,34,113

4. Web-link where Composition of CSR committee, CSR Policy approved by the board are disclosed on the website of the company: - https://cdn.shopify.com/s/files/1/0710/5822/7236/files/CorporateSocialResponsibiltyPolicy.pdf?v=1740750678

5. Details of spent CSR amount during financial years:

S. No. Particulars	As on March 31, 2024
1. Amount required to be spent by the company during the Year	17,34,113
2. Amount of expenditure incurred	18,00,000
3. Shortfall at the end of the year	Nil
4. Total of previous years shortfall	Nil
5. Reason for shortfall	NA
6. Nature of CSR activities	Eradicating hunger, poverty and malnutrition, promoting healthcare, promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects, promoting gender equality, empowering women, ensuring environmental sustainability, animal welfare, rural development projects.
7. Details of related party transactions, e.g. contribution to a trust controlled by the company in relation to CSR expenditure as per relevant Accounting Standard	Nil
8. Where a provision is made with respect to a liability incurred by entering into a contractual obligation, the movements in the provision during the year shall be shown separately	Nil

FORM MR-3

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31 MARCH, 2025

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014]

To,

The Members,

Aspire & Innovative Advertising Limited,

C-4 Baldev Park, East Delhi, Shahdara, Delhi 110051

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Aspire & Innovative Advertising Limited (hereinafter called "the Company"). Secretarial audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Companys books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the period covering the financial year ended on 31 March, 2025 (Audit Period) complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31 March, 2025 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Byelaws framed thereunder;

(iv) The Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act): -

(a) The Securities and Exchange Board of India

(Substantial Acquisition of Shares] and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India

(Prohibition of Insider Trading) Regulations, 2015;

(c) The Securities and Exchange Board of India (Issue of

Capital and Disclosure Requirements) Regulations, 2018 (Not applicable to the Company during the Audit Period);

(d) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (Not applicable to the Company during the Audit Period);

(e) The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (Not applicable to the Company during the Audit Period);

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client (Not applicable to the Company during the Audit Period);

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (Not applicable to the Company during the Audit Period);

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (Not applicable to the Company during the Audit Period) and

(i) The Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements), Regulations, 2015.

(vi) Mention the other laws as may be applicable specifically

to the company- (Not applicable to the Company

during the Audit Period)

We have also examined compliance with the applicable

clauses of the following:

(i) Secretarial Standards with respect to Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India; and

(ii) Listing Agreements entered into by the Company with National Stock Exchange of India Limited.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were generally sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All decisions at Board Meetings and Committee Meetings were carried out unanimously as recorded in the minutes of the meetings of the Board of Directors or Committees of the Board, as the case may be.

The circular resolutions passed by the Board of Directors of the Company were approved with requisite majority.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

ANNEXURE TO THE SECRETARIAL AUDIT REPORT

To,

The Members,

Aspire & Innovative Advertising Limited,

C-4 Baldev Park, East Delhi, Shahdara, Delhi 110051

Our report of even date is to be read along with this letter:

1. Maintenance of secretarial records is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test-check basis to ensure that correct facts are reflected in secretarial records. We believe that the process and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and books of accounts of the Company.

4. Wherever required, we have obtained Management Representation about the compliance of laws, rules and regulations and happening of events, etc.

5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test-check basis.

6. The Secretarial Audit report is neither an assurance as to future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.