sonata information technology ltd Management discussions

SONATA INFORMATION TECHNOLOGY LIMITED ANNUAL REPORT 2011-2012 MANAGEMENT DISCUSSION AND ANALYSIS MANAGEMENT REVIEW - INDIAN OPERATIONS 1. Revenues Revenue has been increased by 31.78% to Rs.7935.17 million during the year ended 31st March, 2012. a) Products Business: Products Business Group constituted 97.19 % of the turnover of Indian Operations. There has been an increase of 32.06% in the performance during the year ended 31st March, 2012 as compared to the same period in the last year. b) Business Solutions: Business Solutions Group constituted 2.81% of the turnover of Indian Operations. 2. Operating Expenses The operating expenses increased by 10.60% to Rs.600.77 million for the year ended 31st March, 2012 from Rs.543.20 million for the same period last year. 3. EBITDA The operating margin decreased by 82.93% at Rs.30.03 million for the year ended 31st March, 2012 as compared to Rs.175.93 million for the same period last year. 4. Profit After Tax Profit after tax decreased by 214.82% at Rs.-97.38 million for the year ended 31st March, 2012 as compared to Rs.84.82 million for the same period last year. 5. Interest and Borrowings The Interest on borrowings has increased by 148.44% to Rs.125.21 million for the year ended 31st March, 2012 from Rs.50.40 million for the same period last year. The interest is due to utilization of fund-based facilities & bill discounting with banks and inter corporate deposit from holding company in order to meet its working capital requirements. 6. Capital Employed The Return on Average Capital Employed (ROCE) was at 3.12% for the year ended 31st March, 2012 as compared to 13.29% for the same period last year. 7. Net Worth The Return on Average Net worth (RONW) was at -24.51% for the year ended 31st March, 2012 as compared to 21.26% for the same period last year. 8. Receivables Debtors as number of days sales stood at 34 days for the year ended 31st March, 2012 as compared to 55 days for the same period last year. 9. Manpower The total employee strength as on 31st March, 2012 was 126 as compared to 135 as on 31st March, 2011. PERFORMANCE SUMMARY 1. Revenue For the year ended 31st March, 2012 a. Revenue from Products Business was Rs.7711.83 million. b. Revenue from Business Solutions was Rs.223.00 million. 2. EBITDA EBITDA for the year ended 31st March, 2012 was 0.38% of Total Income as compared to 2.92% for the same period last year. 3. Profit After Tax (PAT) a. PAT for the year ended 31stMarch, 2012 was at Rs.-97.38 million as against Rs. 84.82 million for the same period last year. b. Profit Margin at -1.22% as compared to 1.40% for the same period last year.