erp soft systems ltd Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS

1. a. Industry structure and developments:

Software and computing technology is transforming businesses in every industry around the world. The management pursue huge growth in cloud, analytical and engineering IT Services and ERP Soft will be able to take advantage of this trend.

b. Opportunities and Threats:

We believe our strengths give us the competitive advantage to solve the strategic challenges of business.

c. Segment–wise or product-wise performance

Rs. in lakhs

Particulars	Standalone	Consolidated
Revenue:
2022-23	308.27	2355.80
2021-22	233.00	1472.80
Growth%	32%	59%
Income:
2022-23	7.44	31.22
2021-22	6.93	20.20
Growth%	7%	54%

d. Outlook, Risks and concerns:

Presently the outlook is very promising. Our success depends largely upon our highly-skilled technology professionals and our ability to hire, attract, motivate, retain and train these personnel. Our revenues are highly dependent on clients primarily located in the United States. New and changing corporate governance and public disclosure requirements add uncertainty to our compliance policies and increase our costs of compliance.

e. Internal control systems and their adequacy:

The system of internal control has been established to provide reasonable assurance of safeguarding assets and maintenance of proper Accounting Records and its accuracy. The business risks and its control procedures are reviewed frequently. Systems audit is also conducted regularly to review the systems with respect to Security and its Adequacy. Reports are prepared and circulated to Senior Management and action taken to strengthen controls where necessary.

f. Discussion on financial performance with respect to operational performance:

Refer to the Boards report for the summary of the financial performance

g. Material developments in Human Resources / Industrial Relations front, including number of people employed.

Our employees are our most important assets. We believe that the quality and level of service that our professionals deliver. As at March 31, 2023, the Company employed 11 employees, of which 8 were professionals from United States involved in service delivery to the clients, including trainees. The key aspects of our HR practice include recruitment, training and development, and compensation.

h. Details of changes in key financial ratios, along with detailed explanation thereof

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, including:

RATIOS:

Particulars	2022-23	2021-22
Debtors turnover ratio	7.6 Times	5 Times
Inventory turnover ratio	Nil	Nil
Interest coverage ratio	Nil	Nil
Current ratio	5.61 Times	4.6 Times
Debt equity ratio	Nil	Nil
Operating profit margin (%)	2.51%	-4.25%
Net profit margin (%)	3.20%	-2.97%

j. Details of any change in return on net worth as compared to the immediately previous financial year along with a detailed explanation thereof: There is -0.03% change on return on net worth as compared to the immediately previous financial year.

2. Disclosure of Accounting Treatment:

The Company has not carried out any treatment different from that prescribed in Accounting Standards.

ANNEXURE – V(a)

A table containing the particulars in accordance with the provisions of Section 197 (12) of the Act, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

1. The ratio of remuneration to each director to the median remuneration of the employees of the company for the financial year.

Name of the	Total Remuneration	Ratio to median
Director	(Amount in Rs.)	remuneration
Kallrupali Parvathi Reddy	6,00,000	2.85:1

2. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year

Name	Designation	Remuneration		Increase/
		(Amount in Rs.)		(Decrease) %
		FY 2022-23	FY 2021-22
Kallurupali Parvathi Reddy	Managing Director	Rs 6,00,000	Rs 6,00,000	Nil
Ila Raveendra Babu	CFO	Rs 8,40,000	Rs 7,20,000	16.67%
Shivangi Choudhry	Company Secretary	Rs 1,86,000	Rs 1,80,000	3.3%

3. The percentage increase in the median remuneration of employees in the financial year

Particulars	Remuneration		Increase/ (Decrease)%
	FY 2022-23	FY 2021-22
Median Remuneration of all the employees per Month*	17,500	26,500	(33.96%)

*Employees who have served for whole of the respective financial years have been considered.

4.

Particulars	Number
The number of employees on the rolls of the company as on March 31, 2023	4

5. 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 details if there are nay exceptional circumstances for increase in the managerial remuneration

Particulars	Increase/
	(Decrease) %
Average percentage increase in the remuneration of all Employees*	(13.7)
(Other than Key Managerial Personnel)
Average Percentage increase in the Remuneration of Key Managerial Personnel	9.09

*Employees who have served for whole of the respective financial years have been considered.

6. Affirmation that the remuneration is as per the remuneration policy of the company.

The Company is in compliance with its remuneration policy.