DAPS Advertising Ltd Management Discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS REPORT </dhhead>

a) Industry Structure and Developments

The advertising industry in India continues to evolve rapidly, with significant shifts shaping its structure and operations. Advertising agencies, including ours, remain pivotal in delivering a wide array of services such as creative development, media planning and buying, market research, and digital marketing. Collaboration with media houses, which provide diverse platforms for advertising from television and radio to print media, outdoor spaces, and digital channels remains a cornerstone of the industry. Marketers and advertisers, ranging from small local businesses to global corporations, continue to drive demand, seeking innovative and effective ways to reach their target audiences. The ongoing digital transformation is further accelerating, with programmatic advertising, mobile advertising, influencer marketing, and social media marketing becoming increasingly prominent. The emergence of technologies like artificial intelligence and data analytics is revolutionizing how campaigns are conceptualized, executed, and measured. To stay ahead, industry players must continuously adapt and innovate. Our agency, with its comprehensive understanding of the industry and its trends, is well positioned to provide strategic, insightful, and creative advertising solutions that meet the evolving needs of our clients.

b) Opportunities and Threats

Building on last years progress, our company continues to recognize significant opportunities and threats in the evolving advertising industry. Our successful entry into the Digital Out-Of-Home (DOOH) advertising sector has opened new avenues for growth, allowing us to leverage advanced technologies and reach a broader audience. This expansion enables us to offer innovative solutions that blend traditional and digital advertising, catering to the diverse needs of our clients. However, the industry remains fiercely competitive, with new players and rapid technological advancements posing constant challenges. To maintain our competitive edge, we must stay agile, continuously innovate, and enhance our service offerings. By capitalizing on our strengths and addressing these challenges proactively, we are well-positioned to sustain growth and deliver value to our shareholders.

c) Segment wise performance

The company operates as a single reportable segment, focusing exclusively on providing advertising services. Within this segment, revenue continues to be generated through various channels, including print media, outdoor media, and electronic media. For the Financial Year 2024-25, print media remains our primary revenue source, contributing around 87% to the total revenue. The electronic media share has increased to 7%, while outdoor media accounted for 6%, reflecting our strategic entry into Digital Out-Of-Home (DOOH) advertising. This diversification across different media channels allows us to drive impactful advertising campaigns and deliver superior results for our clients, while maintaining a robust overall revenue performance.

d) Outlook

Building on the foundation of our previous strategies, we continue to prioritize traditional advertising methods, recognizing their dominance and preference among many clients. Our focus remains on attracting new clients who value these established approaches. However, we have significantly advanced our digital capabilities, particularly through our successful entry into DOOH (Digital Out-Of-Home) advertising. This shift has enabled us to better serve clients who are reallocating portions of their budgets from traditional to digital advertising. Our strategy to blend traditional and digital platforms ensures we cater to the diverse needs of our clients, maintaining our competitive edge in the evolving advertising landscape. Further, we are confident that being a publicly listed company will create long-term value for our shareholders and stakeholders alike.

e) Risks and Concerns

While we have made significant strides in our digital transformation and strategic outlook, several risks and concerns continue to demand our attention. The challenge of disintermediation persists, pushing us to innovate and offer distinct value propositions to remain relevant and competitive in the market. Additionally, the rapid evolution of technology presents the risk of obsolescence if we do not continually upgrade our tools and keep up with the latest industry trends. Moreover, the increasing regulations against misleading advertisements require us, as an ad agency, to be particularly careful to avoid potential legal and reputational issues. By proactively addressing these concerns, we aim to position ourselves as a resilient and forward-thinking company in the ever-changing advertising environment.

f) Internal Control Systems and their adequacy

A robust internal control framework is indispensable for optimizing our service-oriented business operations. By implementing comprehensive systems and procedures, we enhance operational efficiency, ensure data accuracy, and mitigate risks. Our commitment to adherence to accounting standards and regular internal audits strengthens our financial reporting and overall business performance.

g) Financial performance with respect to operational performance

Despite challenging market conditions, the Company has made significant strides in optimizing its operational efficiency. A notable reduction in debt levels, coupled with a strong focus on cost management, has contributed positively. While certain financial metrics experienced fluctuations, the Companys underlying operational strength and strategic initiatives position it well for future growth and enhanced shareholder value. Through effective project management, delivering exceptional advertising campaigns on time and nurturing strong client relationships, we have significantly increased client satisfaction, secured repeat business and benefited from positive referrals.

h) Material developments in Human Resources

Our agency has maintained a stable team of nine employees throughout the year. This continuity has fostered a strong team dynamic, enabling us to leverage our collective expertise and experience. Our dedicated team has remained steadfast in their commitment to delivering high-quality work and building strong client relationships.

i) Significant Changes in the Key Financial Ratios

For and on behalf of the Board