Graphisads Ltd Management Discussions

India has emerged as the fastest growing economy of the world and its Gross Domestic Product (GDP) has grown by more than 7.5% during the financial year 2023-24. This trend is expected to continue and the GDP is expected grow at the rate of about 7% in current financial too. The COVID-19 pandemic on one hand brought about so much hue and cry in the world while the opportunities on the other hand. Many industries have redefined themselves. For example, the work from home culture has emerged as new way of meeting targets even without attending the office premises itself.

The advertising industry is growing at the rate of around 10% YoY and this pace is expected to be maintained in future too. In this scenario our advertisement industry has various opportunities in hand because digital media as a mode of advertisement has become very vibrant showcase for everyone. We at Graphisads are ready to accept the challenge have geared to equip ourselves with latest technology and promising human talent.

1. Analysis of the performance of the Company

Particulars	Amount in Lakhs (INR)
	F.Y 2023-24			F.Y 2022-23		Percentage Change (Absolute)		Percentage Change (As % of Income/Exp)
	Amount		% of Gross Income/ Exp	Amount	% of Gross Income/ Exp
Total Revenue from Operations (1)	7821.92		99.44	6706.07	99.52	16.64		-00.08
Other Income (2)	44.39		00.56	32.58	00.48	36.25		16.72
Gross Income for the period	7866.31		100.00	6738.65	100.00	16.73		00.00
Components of Expenditure
Cost of Advertisements (3)	5557.88		75.85	4823.15	77.67	15.23		-02.35
Directors Remuneration (4)	60.00		00.82	60.00	00.97	00.00		-15.26
Salary & Wages to Employees (5)	489.98		06.69	359.99	05.80	36.11		15.34
Employees Benefit Expense (Total)	549.98		07.51	419.99	06.76	30.95		10.97
Finance Cost (6)	254.75		03.48	231.83	03.73	09.89		-06.88
Depreciation /Amort ization (7)	68.86		00.94	71.68	01.15	-03.93		-18.59
Other Operating Expenses (8)	896.32		12.23	663.18	10.68	35.15		14.54
Total Expenditure		7327.79	100.00	6209.83	100.00		18.00	00.00
Profit before Tax & Exceptional Items (9)		538.52		528.82			01.83
Prior Period Items		00.60		21.09			-97.16
Profit before Tax		537.92		507.73			05.95
Tax Expenditure for the year (10)		260.18		175.78			48.01
Profit after tax		278.34		331.95			-16.15
Earning Per Share		01.87		02.47			-24.29

Notes:

(1) The Company has registered a reasonable growth in revenue (16.64%). The proceeds of the IPO were available only during last quarter of the year. The management is confident enough and is putting its vigorous efforts to yet further expand the operations of the Company across all the segments and it is getting very positive response from the market. The performance of the Company shall surely be improved in times to come.

(2) The other income mainly comprises of interest from the Fixed Deposits made to secure Bank Guarantees required for various tenders and empanelments. In addition, there is regular sales of scraps and minor income is generated therefrom.

(3) The cost of advertisements has increased in absolute terms which is in line with the increase of revenue from operations. However, the strict cost control measures were taken and the effective cost of advertisements in comparison with the increased operation declined by 2.35%. The management is satisfied to register his and is confident of maintaining this effort for future too.

(4) Although the operations of the Company have increased and there were tremendous efforts and time involvement of directors during IPO process, the Board did not increase the remuneration of directors keeping in view the further requirement of funds.

(5) There was only nominal increase in the salaries of current employees and the increased expenditure on employees benefits indicate the expenditure on new recruitment which is duly indicated by the increased number of employees. However, it should be noted that the increase in this expenditure (36.11%) is more than the increase in revenue from operations. This is because the additional manpower has been inducted to cater for future requirements.

(6) The finance cost increased by 9.89% in absolute terms but has decreased by 6.88% in comparison to increased total expenditure for the year. The finance cost shall reduce in coming financial year because a very substantial part of borrowings has been repaid out of IPO proceeds.

(7) There were no major acquisition of any fixed assets and therefore the expenditure of depreciation has declined by 3.93%.

(8) As indicated by increased revenue, the operations of the company have expanded. To cater for that the other operating expenses have also increased. In addition, there were substantially considerable corporate expenditure (Rs. 197.67 Lakh) on IPO. This increased the total outlay of expenditure during current period. However, the management was able to restrict the pace of increase in line with the increase in revenue.

(9) Despite increase in the revenue (16.64%), the profit before tax (PBT) increased only by marginally by 1.83 %. This was because of one time expenditure (Rs. 197.67 Lakh) on IPO which had to be amortized at once during the current FY itself. This has affected the profit before tax by around 37%. If we disregard this one-time expense in order to assess the performance of the company, the profit before tax have increased by 39.21% which may be considered quite encouraging.

(10) Despite the decrease in PBT the Tax expenditure has increased substantially by 48.10%. This is because certain dues to Micro and Small Enterprises (Rs.393.81 Lakh) have been disallowed due to their non-payment in prescribed time of

45 days. In addition to this the Company had to pay the interest on that amount. This has further affected the PAT adversely. However, these dues have now been paid and the amount which was disallowed will be added back in current years expenditure and corresponding tax benefits will be available to the company in current period.

2. Post IPO work orders and empanelment

The operations of the company got a boost after IPO and it got various important empanelment and work orders thereafter. Few of them are given below:

S. No Awarding Authority	Particulars of work
01 Information, Public Relations & Languages Department, Haryana	Exhibition Pavilion/ Stall from 17th December to 24th December, 2023 for International Gita Mahotsav (IGM) 2023 at Brahm Sarovar, Kuukshera
02 NIFTEM, Ministry of Food Processing and Industries	Organizing and managing Atmanirbhar Bharat Utsav Bharat Mandapam, New Delhi
03 National Backward Classes Finance & Development Corporation	Organise "Shilp Samagam Mela" at Amritsar (Punjab) from 12-21 January 2024 under Ministry of Social Justice & Empowerment, Government of India (MSJ&E, Gol)
04 National Scheduled Castes Finance And Development Corporation	Organise "Aatmnirbhar Bharat Utsav" for Ministry of Social Justice & Empowerment (MoSJ&E), Government of India (DoS, J&E) at Pragati Maidan, New Delhi (03rd January to 10th January, 2024)
05 National Scheduled Castes Finance And Development, Ministry of Social Justice and Empowerment	Organose "Shilp Samagam Mela" at Bangaluru, (1220 January 2024) MiS J & E, Gol
06 Rural Electrification Corporation Limited	Hoarding Allover Rajasthan Ministry of Power, Gol
07 National Fisheries Development Board (NFBD) Hyderabad (Min of Fisheries, Gol)	To make arrangements for the special guests of department fisheries attending Republic Day Parade at kartavyapath
08 Rural Electrification Corporation Limited	Display of Selfie Booth all over Rajasthan (Min of Power, Gol)
09 Rural Electrification Corporation Limited	Display of Selfie Booth all over Bihar (Min of Power, Gol)
10 Software Technology Parks Of India (STPI)	Event or Seminar or Workshop or Exhibition or Expo Management Service - hiring an event management agency for convening the foundation stone laying ceremony of stpi bareilly project
11 National Book Trust (NBT)	Outdoor Media displayes for "New Delhi World Book Fair" (NDWBF) 2024
12 Ministry of Panchayati Raj (Gol)	Republic day event organised at Kartavya Path, India Gate, New Delhi
S. No Awarding Authority	Particulars of work
13 National Scheduled Castes Finance And Development Corporation	Organized event at "Surajkund Craft Mela 2024" of DoSJE, MoS J&E (Gol) at Surajkund, Faridabad, during 2-18 February, 2024
14 Delhi Tourism & Transport Corporation Limited	Execution of Event - Basant Utsav 2024
15 Ministry of Social Justice and Empowerment (Gol)	Organising of Divya Kala Mela at Sabarmati River front, Ahmedabad
16 Directorate of Information, Public Relations, Languages and Culture, Haryana	Organising of Function of Hon,ble Prime Minsiter and Inauguration of AIIMS Hospital at Rewari, Haryana
17 National Scheduled Castes Finance and Develpoment Corporation	Organised "Shilp Samagam Mela" , Ministry of Social Justice & Empowerment, Government of India at Jodhpur, Rajasthan January,2024 for 9 days
18 Directorate of Income Tax	Empanelment of Multi-media agencies for year 2024-25
19 Indian Railway Catering and Tourism Corpn. Ltd. (IRCTC) - North Zone	Empanelment of Event Management Agencies for North Zone.
20 Housing and Urban Development Corpn. Ltd. (HUDCO)	Empanelment of Advertising Agencies for HUDCO Ltd.
21 Pradhan Mantri Fasal Bima Yojna	Empanelment of Multi-media Creative Agencies for 360 Degree Solutions
22 Department of Information Technology & Communication - Government of Rajasthan	Empanelment of firms with Department of Information Technology and Communication (DOIT & C) for one-year period.
23 AU Real Estate - Agarwal Associates Group	Publishing 4 Pager Jacket Ads in Newspapers
24 AU Real Estate - Agarwal Associates Group	Display of Outdoor Media Campaign in Delhi
25 Saya Homes Pvt Ltd	Radio Campaign
26 Saya Homes Pvt Ltd	Display of Outdoor Media Campaigns
27 AU Real Estate - Agarwal Associates Group	Publishing 4 Pager Jacket Ads in Newspapers
28 Alphacorp Development Private Limited	Publishing Display Print ads in Newspapers

In addition to the above the Company The Company had been awarded a tender amounting to Rs. 1.80 Cr by "Bharatiya Janata Party (BJP)" for work as Empaneled Agency for Outdoor Campaign for Lok Sabha General Elections- 2024.

The Company successfully executed Outdoor Advertising Campaign for Bharatiya Janata Party (BJP) for the "General Elections- 2024" in the state of Delhi & Punjab.

3. Internal Control System

We at Graphisads have well-established and robust Internal Control Systems, commensurate with the size, scale and nature of its operations. Stringent control systems and processes are in place to monitor and control our operations across the segments. Following points have been duly borne in mind while designing these control systems:

1. It should be ensured that proper accounting records are maintained to identify at every time the revenue, cost, expenses, creditors, debtors, loans & borrowings etc so as there is no slippage in decisions of management with respect to any matter.

2. The financial reporting should be reliably ensured.

3. Operations should be vigilantly and sensibly monitored.

4. The assets of the Company are duly protected from unauthorized use or losses, adequate insurance coverage is in place at all times and compliances with applicable regulations is met.

The Board has appointed Mr. Manish Gupta, Chartered Accountants as the Internal Auditors of the company to ensure adequacy of internal control system, compliance of rules and regulations applicable to the Company and adherence to the management policies. The Internal Auditor has been provided with elaborate terms of reference to have checks and report any short coming, defaults or flaws of any statutory requirements or of general parlance. The Internal Auditor reports to the Audit Committee chaired by an Independent Director of the Board. Internal Audit team conducted yearly audit and the Board is planning to have the Inter Audit report at least twice a year. The Internal Auditor also reviews the operating effectiveness of internal controls. Based on the report of Internal Auditor, reviewed quarterly by the Audit Committee, process owners undertake corrective action in their respective areas and thereby strengthen the controls.

The Board oversees the overall process of risk management throughout the organization. Business Heads and Support Function Heads are also responsible for establishing effective internal controls within their respective functions.

4. Human Resources Review

The management of Graphisads always endeavors to attract, induct and retain the best-in-class employee human resource of the industry and nurturing an environment that promotes inclusive growth and drives thought leadership of business and its vertical across all segments and objectives. With this objective in place, we have in place a comprehensive human resource development strategy which addresses all its key aspects.

We at Graphisads promote gender equality in recruitment and remuneration fixing process and emphasize on performance-based compensation packages to attract and retain the talent.

We always value the talent and performance and therefore put on record our employees through rewards & recognition and several best-in-class employee initiatives.

We believe that continuity training is the only tool to equip our workforce with latest functional, managerial, technical and technologies enabling them to move and grow with trend of industry and therefore we have a comprehensive on-line and of line training programme in place.

Graphisads always endeavors to provides a workplace environment that is safe, hygienic, humane and upholds the dignity and integrity of its workforce whereby the morale of our human resource has always remained high. We have the vibrant POSH Committee in place which is always vigilant towards any cause of women and strive always to mitigate all risks of any chances of sexual harassment at workplace

The POSH Committee has held four programmes of awareness towards cause of women workforce of the company through the year.

We at Graphisads plan and have various entertainment and stress release programme and for that we had provide staff and family tours for our employees.

5. Opportunities and Threats

In todays dynamic business environment which is filled with rapid change of technology, government policies, mounting competitive threats and constant new entrants into market, makes it challenging to sustain and handle the intricacies and provide competitive solutions to its clients. We face competition from domestic and international Companies. We foresee this competition to continue to grow as the demand for advertising and monetizing solutions increases. Further we believe that our competition also depends on several factors which include changing business framework, market competition at cut-to-cut rates, changing information technology policies and frame works, difficult to retain skilled staff etc. We currently operate nationally from our offices in the National Capital of the Country. We believe that we can extend our marketplace platform through nationwide expansion to help automate and improve advertising for buyers and sellers PAN India. We intend to grow our market share in our existing national market.

Graphisads may be exposed to a range of external as well as internal risks that can have an impact on its performance. In order to efficiently manage these, we have built a strong risk management framework which includes identification of the identified risks, its impact and our mitigation strategy. Any of these risks could adversely affect our business, operating results, financial condition, and prospects.

The risk factors and our strategy to mitigate that is given below:

Threats, Risks & Concerns

Graphisads may be exposed to a range of external as well as internal risks that can have an impact on its performance. In order to efficiently manage these, we have built a strong risk management framework which includes identification of the identified risks, its impact and our mitigation strategy. Any of these risks could adversely affect our business, operating results, financial condition, and prospects.

The risk factors and our strategy to mitigate that is given below:

Risk Factor	Risk Description	Risk Mitigation Plan
Business Continuity Risk	Unforseen natural hazards, force majeure and other hazards may impact business operations	We at Graphisads recognize this risk very sensibly. The COVID-19 pandemic has taught us a lesion and learning from there we have strengthen our Business Continuity Plan (BCP) that addresses disruptions which could be faced by operations and work force at large. We have Standard Operating procedures in place to mitigate such situations. We already have Work from Home policy in place, event specific succession planning and the related contingency plans.
Market Risk	Prospective clients may reduce their marketing budgets or change their dependencies on different mode of advertisement. This may be due to economic conditions or general market trends.	We at Graphisads are consistently vigilant towards any such proactively track the markets we operate in. Any deviation observed in such trends is discussed with internal departments and clients and corrective measures are immediately taken.
Technological Changes	The technological changes are permanent in nature. So this may impact our business too. We use many software and data servers which are driven on technology, internet and are subject to outside threats. This may at time impact the deliveries of our services.	We are taking up continuity training to the concerned staff, the data safety is ensured through back-ups and softwares are regularly updated and latest anti-virus softwares are used at all times. Also we have an alternate contingency plan in place to meet any such contingency.
Credit Risk	Our clients may fail to pay the dues in time and this may not only impact the liquidity position for current operations but also the expansion plan of the Company.	We have a dedicated team for follow up of receivables. The department heads are themselves made responsible to follow up the clients and report to the management in time in case of any delays are there so that the alternate plans are made effective to reduce the risk of any adverse effect on operations of the Company.
Liquidity Risk	Any threat to the liquidity could be a risk factor	Our finance department always have credit lines in accordance with the required needs. We mostly prefer at least one OD/CC facility in force to meet any such contingency. We are very much comfortable with the debt service ratio so as any additional credit facility may be taken at the time of requirements. Also we are always regular in payment of our dues to financial institutions and therefore the company is always handy in taking additional credit facilities.

Internal Control System

We at Graphisads have well-established and robust Internal Control Systems, commensurate with the size, scale and nature of its operations. Stringent control systems and processes are in place to monitor and control our operations across the segments. Following points have been duly borne in mind while designing these control systems:

1. It should be ensured that proper accounting records are maintained to identify at every time the revenue, cost, expenses, creditors, debtors, loans & borrowings etc so as there is no slippage in decisions of management with respect to any matter.

2. The financial reporting should be reliably ensured;

3. Operations should be vigilantly and sensibly monitored;

4. The assets of the Company are duly protected from unauthorized use or losses, adequate insurance coverage is in place at all times and compliances with applicable regulations is met.

The Board has appointed CA Manish Gupta Chartered Accountants on Date 22.02.2024 as the Internal Auditors of the company to ensure adequacy of internal control system, compliance of rules and regulations applicable to the Company and adherence to the management policies. The Internal Auditor has been provided with the elaborate terms of reference to have checks and report any shortcoming, defaults or flaws of any statutory requirements or of general parlance. The Internal Auditor reports to the Audit Committee chaired by an Independent Director of the Board. Internal Audit team conducted yearly audit and the Board is planning to have the Inter Audit report at least twice a year. The Internal Auditor also reviews the operating effectiveness of internal controls. Based on the report of Internal Auditor, reviewed quarterly by the Audit Committee, process owners undertake corrective action in their respective areas and thereby strengthen the controls.

The Board oversees the overall process of risk management throughout the organization. Business Heads and Support Function Heads are also responsible for establishing effective internal controls within their respective functions.

Our Universal Service Process

1 Client Consultation and Strategy Development:

(1) Meet with the client to understand their advertising goals, target audience, budget, and overall marketing strategy.

(2) Determine which advertising channels (newspaper, outdoor, events, digital, etc.) are best suited for the clients objectives.

(3) Develop a comprehensive advertising strategy that outlines the various components of the campaign.

2 Creative Brief and Conceptualization:

(1) Create a creative brief that summarizes the campaign objectives, target audience, key messages, and design preferences.

(2) Brainstorm and conceptualize creative ideas for each advertising channel.

(3) Develop concepts for newspaper ads, outdoor billboards, event themes, radio and TV scripts, digital content, and more.

3 Creative Design and Content Creation:

(1) Design visually appealing and impactful creatives for various platforms, keeping in mind the specific requirements of each medium.

(2) Generate engaging content for radio and TV scripts, online advertisements, and other relevant materials.

(3) Ensure consistent branding across all creatives.

4 Media Planning and Buying:

(1) Identify the best media outlets for each channel (newspapers, outdoor spaces, radio stations, TV networks, online platforms, etc.).

(2) Negotiate with media vendors to secure ad placements and spaces at optimal rates.

(3) Develop a media schedule that specifies when and where each advertisement will be displayed or broadcast.

5 Production and Execution:

(1) Produce and print collaterals such as brochures, flyers, banners, and other promotional materials.

(2) Coordinate the production of audiovisual (AV) content, including TV and radio commercials.

(3) Execute outdoor advertising installations and oversee event planning and execution.

6 Digital Marketing and Social Media:

(1) Create and manage digital advertising campaigns across various online platforms, including social media, search engines, and display networks.

(2) Develop compelling content for social media channels to engage the target audience.

(3) Monitor and optimize digital campaigns based on real-time analytics.

7 Monitoring and Analysis:

(1) Regularly track the performance of each advertising campaign, collecting data on reach, engagement, conversions, and other key metrics.

(2) Analyze the data to determine the effectiveness of each advertising channel and adjust strategies as needed.

8 Reporting and Client Communication:

(1) Prepare detailed reports outlining the results of each campaign, including insights and recommendations for improvement.

(2) Present the reports to the client and discuss the outcomes of the advertising efforts.

(3) Maintain open communication with the client throughout the process, addressing any questions, concerns, or adjustments.

9 Feedback and Optimization:

(1) Gather feedback from the client and stakeholders on the overall campaigns success and areas for improvement.

(2) Use feedback and performance data to refine future campaigns and enhance the agencys strategies.

10 Project Closure:

(1) Ensure all contractual obligations with media vendors are fulfilled.

(2) Complete final invoicing and financial settlements with the client.

(3) Archive campaign materials and data for future reference.

Particulars of Employees

1. Details of top employees in terms of remuneration drawn as per provisions of section 197(12) of the act read with rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

S. No.	Name and Age of the Employee	Designation of the Employee	Remuneration paid (Amount in Rs.)	Nature of employment whether contractual or otherwise	Qualifications and experience of the employee	Date of commencement of employment	The percentage of equity shares held by the employee within the meaning of clause (iii) of sub-rule (2) of rule 2 of Companies (Appointment and Remuneration) Rules, 2014	Whether any such employee is a relative of any director or manager of the company and if so, name of such director or manager
01	Nil	N/A	N/A	N/A	N/A	N/A	N/A	N/A

2. Details pertaining to remuneration as required under section 197(12) of the Companies act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Name of Director/ KMP and designation	Remuneration of Director/KMP for financial year 2023-24(in Rs. Lacs)	Median remuneration of employees (in Rs. Lacs)	Ratio of remuneration of each Director/KMP to median remuneration of employees	% increase in Remuneration of each director CFO, CEO, CS or Manager
Mr. Deepak Bahuguna, WTD	7.56	2.56	2.95	8.62
Mr. Shobharam Dhama, CS	9.20	2.56	3.59	N/A
Mr. Anil Rustagi, CFO	15.00	2.56	5.89	8.70
Sh. Mukesh Kumar Gupta, CMD	30.00	2.56	11.72	Nil
Mr. Alok Gupta, WTD	30.00	2.56	11.72	Nil

3. The percentage increase in remuneration of Key Managerial Personnel (KMP) in the financial year and comparison of the remuneration of each Key Managerial Personnel (KMP) against the performance of the Company:

Name of key Managerial Personnel (KMP)	% increase in Remuneration
Sh. Mukesh Kumar Gupta, CMD	Nil
Mr. Alok Gupta, WTD	Nil
Mr. Deepak Bahuguna, WTD	8.62
Mr. Anil Rustagi, CFO	8.70
Mr. Shobharam Dhama, CS	N/A

4. The percentage increase in the median remuneration of employees on the rolls of the Company in the financial year:

Median Remuneration in current year (in Rs. Lacs)	Median Remuneration in Previous year (in Rs. Lacs)	% increase
2.56	2.32	10.34

5. The Number of permanent employees on the rolls of company:

There a 100 regular employees on the rolls of Company as on 31st March, 2024.

6. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Increase in salary of Key Managerial Personnel	8.60
Increase in salary of employee (other than Key Managerial Personnel)	27.69

*Note: While Calculating Increase in salary of Key Managerial Personnel and other employees, those who joined and resigned during the year is excluded.

7. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms that remuneration is as per the remuneration policy of the Company.