SKP Securities Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

Your Company is primarily engaged in Stock Broking and Depository Participant Services, Distribution of Investment Products, Investment/Merchant Banking and Corporate Advisory Services, serving a cross section of society viz. institutional investors, corporates, family businesses, professionals and retail investors.

Most business activities of the company are regulated under Securities and Exchange Board of India (SEBI). Our industry comprises of boutique entities like your Company, multinational/ private/public sector banks and bank promoted entities, large multinational and domestic entities with nationwide presence including fintech platforms, regional entities, small local entities and individuals. Industry is gradually getting consolidated towards relatively larger and fintech players. However, boutique bespoke personalized value-add and relationship-based entities, like your company, also have a niche.

OPPORTUNITIES AND THREATS

A growing economy, leading to higher investible surplus with families, growing financialization of household savings, leading its way to a growing pool of investments managed by institutional investors and corporate sectors growth, provide growing business opportunities for the Company. However, it is encountering game changing technological, regulatory, taxation and competitive disruptions.

BUSINESS REVIEW

Your Company has witnessed a satisfactory growth to its highest-ever income and overall improvement in performance across most verticals, during Financial Year 2025.

RISK AND CONCERNS

Risks are integral to financial markets. However, it has been SEBIs continuous endeavor to reduce risks, even for service providers like your Company. As already mentioned, the Company encounters risks posed by game changing technological, regulatory, taxation and competitive disruptions. Investments made by your Company face market-related risks. Marked-to-market valuation of investments in compliance with Accounting Standards can have a meaningful impact on companys bottom line, beyond reasonable control of the management, as witnessed during FY20. Global macro-economic, geo-political and tariff related challenges are causing business and market disruption and have the potential of escalating.

Your Company is proactively addressing the challenges and risks inherent in its business environment while leveraging its strengths to foster growth. It has a diversified bouquet of service offerings to a cross section of customer base. Superior risk management measures have been put in place to reduce risk in broking business. Prudent asset allocation and selection of investment products in line with time horizon, dilutes risks in proprietary investments. A comprehensive risk evaluation methodology and processes for early identification and mitigation of all kinds of risks are also in place.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The scope of work for Internal Auditors, which is reviewed and expanded as required, addresses issues related to internal control systems particularly those related to regulatory compliance and risk management. Pre-audit and post-audit checks and reviews ensure that audit observations are acted upon. Audit Committee of the Board of Directors reviews the Internal Audit Reports and adequacy of internal controls and makes suitable recommendations regularly.

FINANCIAL PERFORMANCE

A snapshot of financial performance is furnished in the Report of Board of Directors.

FUTURE OUTLOOK

Amidst the stated risks mentioned above, geo-political, macro-economic and tariff-related challenges are at a heightened level. While the overall outlook remains positive in the long term, its acknowledged that there might be short to medium-term challenges to navigate through during Financial Year 2026. These challenges could stem from the broader VUCA environment.

HUMAN RESOURCE MANAGEMENT

We are committed to make SKP a preferred place to work with a career growth oriented professional environment and a sense of ownership. As at 31st March 2025, the Company had 55 employees.

PREVENTION OF SEXUAL HARASSMENT

As a good corporate citizen, SKP is committed to a gender friendly workplace. It seeks to enhance equal opportunities for men and women, prevent/stop/redress sexual harassment at workplace and institute good employment practices.

SKP maintains an open door for repartees and encourages employees to report any harassment or other unwelcome and offensive conduct. The Company has a policy for prevention, prohibition and a committee for redressal of complaints/grievances on sexual harassment of women at work place. The policy is communicated to all employees in an appropriate and meaningful manner.

DETAILS OF SIGNIFICANT CHANGES (i.e. 25% OR MORE AS COMPARED TO IMMEDIATELY PRECEDING FINANCIAL YEAR) IN KEY FINANCIAL RATIOS ALONG-WITH DETAILED EXPLANATION THEREOF:

i) Debtor Turnover Ratio: Debtors turnover ratio increased from 4.65 times in 2023-24 to 6.08 times in 2024-25, an increase of 29.73% which was due to better credit management.

ii) Interest Service Coverage Ratio: Interest Service Coverage ratio has decreased from 38.28 times in 2023-24 to 16.84 times in 2024-25, a decrease of 56%, due to higher quantum of borrowing particularly for providing Margin Trading Facility to clients. It is pertinent to note that interest income from Margin Trading Facility has increased by 30%.

iii) Debt Service Coverage Ratio: Debt Service Coverage ratio has decreased from 33.47 times in 2023-24 to 1.30 times in 2024-25, a decrease of 96%, despite increase in EBIDTA but due to increase in quantum of borrowing particularly for providing Margin Trading Facility to clients.

For and on behalf of the Board of Directors	Naresh Pachisia	Nikunj Pachisia
Date: 10th May 2025	Managing Director	Executive Director
Place : Kolkata	DIN : 00233768	DIN : 06933720