Prime Securities Ltd Management Discussions

A) Industry Structure & Developments

Prime Securities is part of the financial services sector that includes Non-Banking Finance Services, Insurance, and Capital Markets. We are a Category-1 Merchant Banker licensed by the Securities and Exchange Board of India (SEBI). In addition, our subsidiary Prime Research and Advisory Limited is a Corporate Insurance Agent licensed by the Insurance Regulatory and Development Authority of India ("IRDAI").

Global Economic Trends

The current shifts in global trade are indeed significant, reminiscent of the transformative period following the Bretton Woods agreement. As trade norms evolve, service providers like Prime must adapt to meet the changing needs of businesses.

Key Challenges and Opportunities:

- Adaptability: Service providers need to be agile, responding quickly to new regulations and market demands.

- Skill Enhancement: Developing

sharp skills is crucial to navigate the complexities of cross-border transactions and capital flows.

- Proactive Strategy: Converting threats into opportunities requires a forwardthinking approach, leveraging technology and innovative solutions.

- Global Collaboration: Building strong partnerships and networks can help mitigate risks and capitalize on emerging trends.

Potential Impact on Businesses:

- Increased Costs: Disruptions and restrictive measures may lead to higher costs for businesses, affecting their bottom line.

- Supply Chain Disruptions: Changes in trade policies and regulations can impact supply chains, leading to delays and inefficiencies.

- New Opportunities: However,

these changes can also create new opportunities for businesses that are prepared to adapt and innovate.

Prime?s Role:

As a service provider, Prime can play a crucial role in helping businesses navigate these changes by:

- Providing Expert Guidance: Offering insights and expertise on navigating complex trade regulations and policies.

- Developing Innovative Solutions: Creating new products or services that address the evolving needs of businesses.

- Building Strong Partnerships:

Collaborating with other

businesses and organizations to create a robust network that can withstand disruptions.

By embracing these challenges and opportunities, Prime can position itself for success in a rapidly changing global trade landscape.

Opportunities

Prime has initiated on a few fronts to ensure a transformative landscape of its

business. The steps include foray into Wealth and Asset management business; a set up in the UK and the UAE and a service provider for fintech based lenders

The robust pipeline of assignments, the multiple areas of new initiatives and set up in new geographies- all augur well for the future.

B) Risks and Concerns

The business has to meet with engagement, training and retaining talent. Prime has increased its talent-pool to a level unseen in the past. It will be useful to have robust HR policies to make them backbone of our prosperity

C) Internal Control Systems & Their Adequacy

Your Company?s Internal Control System and procedures were reviewed during the year and systems and procedures were corrected wherever found to be inadequate to the Company?s size, the nature of its business and the business environment. The internal control systems lay down the policies, authorisation and approval procedures.

We have enhanced controls over management of funds, cash and operations for conducting operations on hybrid model of work from office and home. All transactions are done on a dual control basis that assures greater safety for our operations. We have also strengthened the scope of internal audit to specifically focus on transaction tracking. We are leveraging all available digital tools to run our operations securely.

The adequacy of the internal control systems has been reported by the auditors under the Companies (Auditor?s Report)

Order, 2003.

D) Discussion on financial performance with respect to operational performance

The Consolidated Revenues of the Company were RS8,940 lakhs for the financial year under review as against previous year RS6,664 lakhs. Consolidated Profit after Tax including Comprehensive Income was at RS5,068 lakhs as compared to RS2,921 lakhs. Operating profit margins was 48.64% as against 32.05% for the previous year. At the same time, cash and cash equivalents, including investments having maturities in excess of three months, have increased from RS14,754 lakhs to RS19,655 lakhs, reflecting an improved operational performance.

We make suitable provisions for any receivable outstanding for more than 60 days.

We have nurtured our investee companies in the start up and early business stages with further emphasis on their exposure to the world of investors. The efforts, backed by growth shown by these companies will have a multiplier effect on the values and is reflected in Other Comprehensive Income

Your Company operates in only one segment, financial advisory services. We are debt free and have no interest expense.

Overview of Operations

As explained, Company has made a number of new efforts to expand and sustain the impressive growth seen in the last few years

E) Material development in Human Resources / industrial relations front, including number of people employed

We continue to grow our pipeline of transactions in the corporate advisory business and add people as needed. We believe our team is optimally staffed at this time.

F) 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

G) Details of any change in return on net worth as compared to the immediately previous financial year along with a detailed explanation thereof

In the current financial year, it has been observed that the Return on Net Worth (RoNW) has increased from 13.05% to 21.18%. RoNW is a profitability indicator that measures the returns generated by a company on its shareholders? equity. The increase in RoNW is primarily due to increase in Company?s profitability owing to following factors:

- Increased revenues during the year.

- Lower legal, professional fees and travelling expenses.

- Unrealised gain on financial instruments on fair value changes.

Cautionary Statement

Statements in this Management Discussion & Analysis describing the Company?s 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 Company?s operations include economic developments in the country and improvement in the state of capital markets, changes in the Government regulations, tax laws and other status and other incidental factors.