SKP Securities Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

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

Most business activities of the company are regulated by the Securities and Exchange Board of India (SEBI). The 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, regional entities, small local entities, individuals and fintech platforms. Industry is gradually getting consolidated towards 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 and overall improvement in performance over the year across its verticals, during Financial Year 2024.

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 Ind-AS can have a meaningful impact on companys bottom line, beyond reasonable control of the management, as witnessed during FY20. As we were coming out of Covid-19 Pandemic, which posed a very different kind of risk for health of its employees and their families and business continuity, the war in Europe is causing business and market disruption, the kind of which we have not witnessed in recent decades; it still continues.

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 and macro-economic challenges are at a heightened level. Some experts have opined that 2024 is likely to be a VUCA year - volatile, uncertain, complex and ambiguous. 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 FY25. These challenges could stem from the broader VUCA environment, including geopolitical tensions, macroeconomic fluctuations, regulatory changes, and other factors.

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 2024, the Company had 49 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 workplace. 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 0.22 to 0.60, primarily due to increase in Margin Funding provided to debtors which was a strategic decision taken by the Management, as this has resulted in increase in interest from such clients.

ii) Interest Service Coverage Ratio: Interest Service Coverage ratio has decreased from 14.84 to 38.28 due to repayment of term loan and efficient fund management and increase in EBIDTA as compared to previous year.

iii) Current Asset Ratio: Current Asset ratio has increased from 2.04 to 2.68 due to higher Current Assets and also repayment of Bank loan.

iv) Debt Equity Ratio: Debt Equity Ratio has decreased from 0.83 to 0.65 due to increase in profitability and repayment of term loan.

v) Operating profit margin and Net Profit margin: Both the margin have increased due increase in topline and keeping the cost under contol.

vi) Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof. Return on Net worth has increased from 9% to 21% due to increase in Profit.

	For and on behalf of the Board of Directors
	Naresh Pachisia	Nikunj Pachisia
Date: 27th April 2024	Managing Director	Executive Director
Place : Kolkata	DIN : 00233768	DIN : 06933720