Ganges Securities Ltd Management Discussions.

Economic Overview

Indian Economy continues to deliver strong growth backed by International Monetary Fund (IMF) projection of India being the worlds fastest growing economy posed to grow at 7.4% in this 3 scal. Indias growth is lifted by good performance by sectors like agriculture, construction & manufacturing as well as fading e3 ects of the demonetisation initiative and implementation of GST. Indias structural reform in recent past and implementation of GST will help to reduce internal barrifiers to trade and will also increase efficiency and tax compliances.

Recent developments in the banking sector, including stricter non-perfoforming loan resolution processes and large-scale fraud scandals in public sector banks , pose a sizeable downside risk to growth. However, Bank recapitalization is expected to enhance the performance of Banking sector.

Industry Structure and Developments

The Government of India has introduced several reforms to liberalise, regulate and enhance the industries. India has a divfiersi3 ed Financial sector undergoing rapid expansion, both in terms of strong growth of existing Financial services 3 rms and new entities entering the market. The sector comprises of commercial banks, insurance companies, non-banking Financial companies, cooperatives, pension funds, mutual funds and other smaller Financial entities. However, the Financial sector in India is predominantly a banking sector with commercial banks accounting for more than 64 per cent of the total assets held by the Financial system.

Indias equity market turnover has increased significantly in recent years. RBI has allowed 100 per cent foreign investment under the automatic route in ‘other Financial services. The Government of India has taken various steps to deepen the reforms in the capital markets, including simpli3 cation of the Initial Public OF er (IPO) process which allows Qualified Foreign Investors (QFIs) to access the Indian bond markets along with the great opportunity for Indian regulators to make the market attractive for foreign investors.

Digital Space is growing very rapidly, although the penetration is very low.

Financial includeusion has been one of the de3 ning aspects of policy making in India over the past few years. Millenials are getting into formal Financial sector than ever before. Slowly but surely Indians from the hinterland have come to own a slice of the countrys Financial system. The Securities and Exchange Board of India (SEBI) has allowed exchanges in India to operate in equity and commodity segments simultaneously, starting from October, 2018.

At a time when most economies in the world are moving at a sluggish pace, India, by contrast, is seen as a refoforming economy with the prospect of strong long-term growth.

Despite uncertainty in the global economies coupled with domestic challenges pertaining to slow progress on certain crucial reforms and the delay in anticipated economic recovery, the Indian market outperfoformed the emerging markets.

Opportunities and Threats

Your Company being an Investment Company, seeks opportunities in the capital market. The unpredictability in the stock indices in the Financial year under report represents both an opportunity and challenge for the Company. The present government is also supportive of business growth and for the purpose amended many Acts and introduced new laws like The Insolvency and Bankruptcy Code, 2016, amendments in Companies Act, 2013, making effective Goods and Service Tax for doing business easy in India and thereby attract foreign investment, relaxing FDI in many sectors and other steps to grow the economy by the government creates optimistic business environment.

However, the management took possible steps to cash in on various opportunities and at times also observed closely, market forces which may lead to the erosion of investments.

Performance

The Company operates in single segment which is to invest, deal etc in securities. Consequent to the Composite Scheme of Arrangement sanctioned by the Honble National Company Law Tribunal, Allahabad Bench vide Order dated 2nd March, 2017 and after completion of all the formalities with respect to listing of equity shares in BSE Ltd (BSE) and National Stock Exchange Ltd (NSE) as per relevant laws and regulations, the Equity shares of the Company have been listed with BSE and NSE and the trading permission have been received with effect from 28th July, 2017.

The businesses of the Company are carried out by its wholly-owned subsidiaries. Uttar Pradesh Trading Company Limited is a Non Banking Financial Company registered with RBI and primarily engaged in investment activities and whereas the other wholly owned subsidiary Cinnatolliah Tea Limited is engaged in Tea Business.

The Company aims to create sustainable vision to grow the business and make long-term strategic investments in various new ventures promoted by the Company and its subsidiaries.

Outlook

Indian economy remained 3 flexible and showed positive growth in many parameters despite the disruption due to enactment of demonetization and implementation of Goods & Service Tax. Global growth is showing signs of inching up and should aid the growth of Indian economy. The macro economic conditions of India have been the best in recent times and we see the same continuing in 2018, however there may be some challenges along the way.

The potential of Indian Stock market is unlimited. The new measures adopted by government are positive to the growth of capital market. In the forthcoming year, the Company envisages to identify new avenues of business activities and make use of opportunities available, besides strengthening its present operations.

The stronger rupee reflects the rise in interest from foreign investors. The stock market in India is in great shape for almost 2 years now. The sizzling share market has lured the average Indian saver as gold and real estate failed to give exciting returns.

Experts believe that in the near future with record FII inflows, soaring investments in mutual fund, low interest rates and a strong rupee against dollar, the outlook in the markets is expected to remain positive.

Risks and Concerns

Your Company follows a risk management process for identification, categorization and prioritization of various risks like operational, financial, legal and other business risks. The Chief Financial Officer aided by the Internal Auditor reviews the effectiveness of the process at regular intervals and reports the same to the Audit Committee and the Board of Directors.

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks Identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The Company is mainly exposed to market risks in the form of reduction in value of its investment and fall in return due to dip in the investee companys performance. The Company is also exposed to functuation of economy and industry cycle.

The Audit Committee periodically reviews the efficacy of Internal Financial Control Systems and risk mitigation process.

Internal Control Systems and their Adequacy

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

The Company has an adequate system of internal control implemented by the management towards achieving efficiency in operations, optimum utilization of resources and effective monitoring thereof and compliance with applicable laws. The adequacy of the internal control system is reviewed by the Audit Committee of the Board of Directors. The efficacy of the internal checks and control systems are verified by the Internal Auditors as well as the Statutory Auditors. The Audit Committee reviews the internal audit plan, adequacy and effectiveness of the internal control system, significant audit observations and monitors the sustainability of remedial measures.

Your Board believes that appropriate procedures, controls and monitoring assessment procedures are in place and considered adequate.

Discussion on Financial Performance with Respect to Operational Performance.

The Financial performance of the Company for the Financial year 2017-18 is described in the Directors Report under the head "Financial Performance".

Material Developments in Human Resources

Steps have been taken to inculcate a performance-oriented culture by focusing and laying more emphasis on the performance management system. It has been your Companys endeavour to attract talent from the most reputed institutions to meet the requirements of various functions. The Company will strengthen its operative sta3 s as and when need arises.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys outlook, objectives, projections, estimates and expectations may be ‘forward looking statement within the meaning of applicable laws or regulations. Actual results may differ from those expressed or implied. Important factors that could make a differences to the Companys operations differences changes in Government regulations and tax-regime, economic developments within India and abroad, Financial markets, etc. The Company assumes no responsibility in respect of forward-looking statements that may be revised or modi3 ed in future on the basis of subsequent developments, information or events. The Financial statements are prepared in accordance with the provisions of the Companies Act, 2013 (the Act) and comply with the Accounting Standards noti3 ed under Section 133 of the Act read with the Companies (Accounting Standards) Rules, 2006. The management has used estimates and judgments relating to the Financial statements on a prudent and reasonable basis, in order that the Financial statements reflect in a true and fair manner, the state of Affairs and Profit/ loss for the year. The narrative on our Financial condition and result of operations should be read together with our audited consolidated Financial statements and the notes to these statements included in the Annual Report.