DB International Stock Brokers Ltd Management Discussions

[As per Regulation 34(3) and Schedule V of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015]

GLOBAL ECONOMY

In Financial Year 2025-26, the global economy witnessed moderate and uneven growth, with gradual easing of inflation across major economies. Central banks in advanced economies maintained a cautious stance, with limited rate cuts during the year. Growth remained constrained by geopolitical tensions, trade realignments, and residual effects of earlier monetary tightening.

Global financial markets remained relatively stable, supported by improved liquidity and resilience in sectors such as technology and clean energy. However, uncertainties related to geopolitical developments and global trade continued to pose downside risks.

INDIAN FINANCIAL MARKET

The Indian financial market remained resilient during Financial Year 2025-26, supported by stable macroeconomic fundamentals, controlled inflation, and steady policy environment. Credit growth remained healthy, driven by infrastructure, capital goods, renewable energy, and services sectors.

Banking and financial services institutions continued to focus on asset quality and prudent lending. Government-led capital expenditure and private sector participation supported investment activity. Overall, investor sentiment remained positive, backed by regulatory stability and domestic demand.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Indias financial sector continued to remain a key pillar of economic growth, comprising Banking, Insurance, Capital Markets, NBFCs, Mutual Funds, Pension Funds, and a rapidly expanding fintech ecosystem, with total managed assets estimated to exceed Rs.430-450 lakh crore in Financial Year 2025-26.

India has sustained its global leadership in digital payments, with the Unified Payments Interface (UPI) continuing to account for a significant share of real-time transactions worldwide. During the Financial Year 2025-26, UPI transactions recorded an estimated growth of 35-40% in volume and 25-30% in value, supported by increasing adoption, merchant penetration and on-going international expansion initiatives led by the RBI and NPCI.

The Government of India continues to focus on economic expansion through infrastructure spending, financial inclusion, and policy reforms aimed at enhancing private sector participation and consumer demand. The Banking, Financial Services and Insurance (BFSI) sector remains a significant contributor to economic activity, supported by improved asset quality, stable credit growth, and strong capitalization levels across financial institutions.

The mutual fund industry maintained its growth trajectory with Assets under Management (AUM) reaching approximately Rs.73.73 lakh crore as of March 31, 2026, driven by sustained inflows, particularly in equity-oriented schemes and SIP investments. The insurance sector also witnessed steady growth, supported by increased awareness and penetration.

Indian capital markets in Financial Year 2025-26 reflected a mixed but resilient performance

rather than a clear, broad-based upswing. Benchmark indices such as the BSE Sensex and Nifty 50 experienced phases of volatility and relatively modest gains, with periods of correction driven by global uncertainties, commodity price fluctuations and foreign investor outflows.

Despite these headwinds, strong participation from domestic institutional investors (DIIs) and steady underlying economic fundamentals helped support the market and prevent deeper declines. The overall market capitalization of listed companies showed gradual expansion over the period, indicating continued investor confidence, albeit with caution.

Overall, Financial Year 2025-26 can be characterized as a transitional phase marked by resilience, intermittent weakness, and selective growth, rather than a consistently strong upward trend.

Primary market activity remained robust, with continued momentum in IPO issuances and healthy investor participation. Broking Companies are increasingly diversifying their offerings across the financial services value chain, including wealth management, advisory and digital investment platforms.

Overall, the Indian financial ecosystem remains strong and well-positioned for long-term growth, supported by structural reforms, digital innovation, and increasing investor participation.

OPPORTUNITIES AND THREATS:

Opportunities:

• Strong Leadership and Management: The business is efficiently led by a competent and skilled team of professionals, best in industry, professionals designated as senior managerial personnel/Key managerial personnel and young specialists. We also have highly qualified and experienced members in our team responsible for formulating business strategies and growth plans.

• Growing Retail Investor Base: Increasing financial awareness, ease of account opening through digital KYC and rising disposable incomes have led to a surge in retail participation in equity markets. This provides significant scope for expanding the Companys client base and transaction volumes.

• Diversification of Financial Services: The Company can expand into allied services such as wealth management, portfolio advisory services, mutual fund distribution, insurance products and margin funding, thereby creating multiple revenue streams.

• Favorable Regulatory Initiatives: Regulatory reforms aimed at improving transparency, investor protection, and ease of doing business, strengthen investor confidence and contribute to long-term market growth.

• Strategic Partnerships and Alliances: Collaborations with fintech firms, financial institutions, and technology providers can help the Company to expand its reach, improve service offerings, and gain access to innovative solutions.

Threats:

Amongst the several threats to the stock broking industry is fast-paced technological advancement which in turn is leading to heightened competitive pressure from fintech startups that disrupt traditional business models. Regulatory hurdles in the form of new laws or changes in existing laws may attract increased costs and pose non-compliance threats. Investor

confidence is subject to market volatility and economic growth. Amidst growing global instability, revenue stream faces increased risks. With rapid technological development, cyber security threats are becoming common place necessitating the need for increased investment in technology. Shifts in investors behavior such as a move towards passive investing or digital trading platforms create new threats to business.

SEGMENT-WISE / PRODUCT-WISE PERFORMANCE

The Company primarily operates in the stock broking and allied financial services segment. Revenue streams include brokerage income, commission income, and income from value-added services.

During the year under review, the Company focused on strengthening its core broking operations while enhancing client acquisition through digital channels. Performance across segments remained aligned with market trends, with increased participation in equity and derivatives segments.

OUTLOOK, RISKS AND CONCERNS

Outlook:

The long-term outlook for the Indian capital markets remains positive, supported by strong economic fundamentals, increasing domestic investments, and policy support. The Company aims to leverage technology, expand its client base, and enhance service offerings to sustain growth.

Risks and Concerns:

• Market risks due to volatility in equity markets;

• Regulatory risks arising from changes in compliance requirements;

• Operational risks including system failures and cyber threats;

• Dependence on market volumes for revenue generation.

The Company continues to implement risk management strategies to mitigate these challenges. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established adequate internal control systems commensurate with the nature and size of its operations. These systems ensure:

• Safeguarding of assets;

• Accuracy and reliability of financial reporting;

• Compliance with applicable laws and regulations.

Internal audits are conducted periodically, and necessary improvements are implemented based on audit findings. The Audit Committee regularly reviews the effectiveness of internal controls.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial performance of the Company is closely linked to market activity and investor participation. During the year, the Company witnessed fluctuations in revenue corresponding to market conditions.

Operational efficiency was maintained through cost optimization and technology-driven processes.

Profitability was impacted by competitive pricing pressures and regulatory costs, while efforts were made to diversify income streams.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company recognizes human resources as a key asset and continues to invest in employee development and engagement.

• The Company maintains healthy industrial relations across all levels;

• Training programs are conducted to enhance employee skills, particularly in digital platforms and compliance;

• The total number of employees stood at 74 as on the end of the financial year.

RISK MANAGEMENT AND MITIGATION

Socio-Economic Risk

The economic and political environment significantly impacts the financial sector. Financial services companies, in particular, often bear the brunt of downturns in economic growth or unfavorable political events. Its a dynamic landscape that requires constant vigilance and strategic planning.

To mitigate these risks and ensure the continued robustness of our business operations, we rely on our diversified service offerings, longstanding customer relationships and deep connections with all stakeholders. These strengths allow us to effectively insulate ourselves against risks to a particular segment. We are also committed to closely monitoring any foreseeable changes in the macro environment, including government regulations, exchange rates and political stability, to proactively adjust our strategies as needed.

Regulatory Risk

Given the highly regulated nature environment in which we operate, strict adherence to the rules and regulations enforced by various governing bodies is paramount. Non-compliance or misinterpretation of these regulations may lead to severe consequences.

Our team of highly experienced professionals diligently monitors changes in the regulatory landscape. This proactive approach ensures that we not only comply with all applicable existing laws but also promptly adapt to newly introduced or modifications made in existing laws. This continuous awareness allows us to initiate timely and appropriate responses.

We are fully committed to comply with all applicable rules, circulars and notifications. Our internal audit team is dedicated to ensure strict compliance with all acknowledged best practices, policies and regulatory requirements.

Business Risk

Our business operations are significantly influenced by events occurring in both domestic and international equity, debt, currency and financial markets. Changes in the domestic and global macroeconomic environment also pose a risk to our business and we face the risk of imitation of our services and strong competitive pressure.

To mitigate these risks and to ensure effective and efficient business operations, we employ robust risk management techniques for our trading activities. These include instruments, strategies

position and trading limits for trading departments, business divisions and individual traders. We also conduct periodic stress testing and rigorous cash management.

All our business operations are governed by strategically devised policies, operational processes and systems. Periodic Audits are conducted to ensure our policies and procedures remain relevant and robust. We are deeply committed to the effective management of our internal control system, client margin requirements, risk management and stakeholder relationships.

Competition Risk

The financial services industry is currently experiencing significant growth, which has also led to increased competitive pressure from both domestic and international entities. We are also observing a substantial surge in innovation, particularly driven by the expansion of technology firms venturing into retail financial services.

In this dynamic environment, our unique and extensive range of offerings, coupled with our focus on cutting-edge technology and in-depth research and development, allows us to effectively differentiate ourselves from our competitors. We believe this strategic approach enables us to create a sustainable advantage and evolve successfully with the changing market conditions.

Operational Risk

Our business operations face significant risks from internal and external factors related to people, processes and systems.

To mitigate these risks, we strictly comply with all applicable laws, statutes, operational procedures and systems. We have also implemented a maker/checker mechanism to enhance operational efficiency and effectiveness. Furthermore, we conduct periodic audits to safeguard our business operations. The real-time monitoring of client-level risk situations, coupled with timely risk mitigation measures, helps us maintain a robust business environment.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

CAUTIONARY STATEMENT

Forward-looking statements are made in this Management Discussion & Analysis report based on various assumptions and projections of future events over which DB (International) Stock Brokers Limited has no control. DB (International) Stock Brokers Limited makes no assurances as to their accuracy or that they will be realized. Actual outcomes may differ significantly from those stated or

suggested. Demand, supply, global economic and geopolitical changes, government regulatory and tax framework, market liquidity and other macroeconomic factors may have an impact on DB (International) Stock Brokers Limiteds activities.