Bodhtree Consulting Ltd Management Discussions.

ANNEXURE I

OVERVIEW

Bodhtree is a CMMI level 5 company which enables enterprises to transform their business using the power of cloud, analytics and digital solutions. In addition, we streamline key business processes by deploying enterprise applications, integrating applications with their IT infrastructure and maintaining them, so that business users can focus on strategic organizational priorities.

While we work with Fortune 500 firms and SMEs across different industries, we o er vertical speci c solutions to address key business challenges of Manufacturing, Healthcare, HiTech, Educational and Government sectors besides others. We are problem solvers with a passion for excellence. We are intellectually curious and highly collaborative. However, against the backdrop of a challenging global economy, we endeavour to adopt new generation technologies and processes in our unique delivery model. Bodhtree has successfully carved a niche for itself by consolidating its approach to IT and ITES (IT enabled services) through sustainable value addition to organizations.

Bodhtree, a global IT Consulting and Product Engineering services provider, o ers technology solutions that address complex business issues and drive transformational growth. As a select partner of industryleading technology providers, Bodhtree delivers best-in-class solutions tailored to meet the needs of our SMB and large-enterprise clients. With extensive domain and IT expertise, our solutions integrate seamlessly within existing IT infrastructures, ensuring optimal business performance and maximized return on technology investments.

The following discussion and analysis should be read in conjunction with the Companys financial statements included in this report and the notes thereto. The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 (‘the Act) (to the extent noti ed) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, and relevant amendment rules issued thereafter. E ective April 1, 2016, the Company has adopted all the Ind AS standards, and the adoption was carried out in accordance with Ind AS 101.

INDUSTRY STRUCTURE AND DEVELOPMENT:

Software and computing technology is transforming businesses in every industry around the world in a very profound and fundamental way. The continued reduction in the unit cost of hardware, the explosion of network bandwidth, advanced software technologies and technology-enabled services are fueling the rapid digitization of business processes and information. Over the past two decades, with the emergence of the internet and inexpensive connectivity, the global delivery model of service delivery has risen to become the preferred model in sourcing of IT services, business process services and research and development services. Traditional business models are being disrupted in every industry with digital and software-based business models. This disruption is characterized by highly desirable user experiences, an extreme scale-of-cost performance that has become available in computing infrastructure and disintermediation of the supply chain. Leveraging technologies and models of the digital era to both extend the value of existing investments and, in parallel, transform and future-proof their businesses is increasingly becoming a top priority for business leaders. This duality to renew existing core businesses and innovate new businesses is the essence of what companies are faced with as strategic imperatives today. Added to this the geo-political movements with neo-nationalist views from some of the developed/developing countries are going to test the established business models of almost all sets of enterprises worldwide.

The renewal of our core business translates to harnessing the the ciency of distributed cloud computing, enabling legacy systems for mobile and sensor access, extracting value out of digitized data, keeping systems relevant and optimizing the costs of building and running technology systems. As businesses look to new areas and new economies, new and intelligent systems are required to be built with next-generation technologies and with exponentially superior cost-bene t performance. The fast pace of technology change and the need for technology professionals, who are highly skilled in both the renewal and new technology areas, are driving businesses to rely on third parties to realize their IT transformation. Several technology solutions and service providers have emerged over the years, offering different models for clients to consume their solution and service offerings:

• Technology consulting companies who take on niche and time-bound projects for their clients

• Global technology outsourcing companies who leverage global talent pool to systematically optimize the IT operations of clients

• Business process management firms who leverage global talent pool to manage the outsourced core business processes of their clients

• Software firms who provide licensed software that enable the automation of business processes

• Specialty platform and Software-as-a-Service companies who provide utility-based models for clients to consume software features

• Data analytics companies who specialize in designing, analyzing and reporting insights from the vast amount of data that corporations are collecting about their customers, operations and markets

• Internal IT departments of the companies themselves usually cost centers for the corporation

The rapid pace at which technology is changing and the need for highly-skilled professionals in both the renewed and new technology areas are driving businesses to rely on third parties to realize their IT transformation. Several technology solution and service providers have emerged over the years, offering different models for clients to consume their solution and service offerings.

EquiPPP- Equity in Public Private Partnerships CSR Initiative

EquiPPP is a platform specially designed to enable scaling up of Social Value Investing and bringing smaller low-visibility but high local-impact projects into the investment radar to truly achieve sab-ka- saath, sab-ka-vikas.

It is a collaborative platform that vitalizes crowd participation in Public-Private Projects and connects Corporates, Citizens, Domain Experts, NGOs and Philanthropists with the Government in socially relevant projects. EquiPPP to Initiate and Participate together on innovative solutions for socio-enables Individuals and Organizations to initiate projects based economic problems.

EquiPPP platform (equippp.com) is developed with the objective of showcasing socially relevant projects and providing analysis and insights to stakeholders in those projects viz. CSR mandated corporates, foundations, NGOs and other contractors executing such projects, local governments and socially aware citizens. The platform is developed and managed by Bodhtree Consulting Limited by as part of its social responsibility activity and run independently by a professional team. EquiPPP enables all corporates to showcase completed and on - going projects on the platform which enhances the visibility of such projects thus boosting outreach and impact.

OPPORTUNITIES AND THREATS:

Our strengths:

We believe our strengths give us the competitive advantage to position ourselves as a leading global technology solutions and services company to solve the strategic challenges of business.

Consulting and domain expertise:

Bodhtree was founded as a product engineering company and continues to deliver world-class product engineering services ranging from application development and maintenance, web development and outsourced product development to QA and managed testing services. Applying agile and scrum-based methodologies, we engage customers in a highly interactive process to develop superior software products on timelines that beat the competition to market at reduced operational costs and risk. As a Salesforce Gold Cloud Alliance Partner, Bodhtree provides the expertise and technology for clients to realize the benefits of cloud compung.

Enterprise services:

Bodhtrees enterprise services include implementation, development, global rollouts, integration, upgrade, and application maintenance and support for Oracle E-Business Suite. We understand your need to keep pace with constant industry changes and can help you standardize your processes, maximize your application performance and transform your business.

Experience and expertise in large-scale outsourcing:

We have developed processes and frameworks for large-scale outsourcing of technology projects that minimize financial and business risk to our clients. Our Global Delivery Model divides projects into components that can be executed simultaneously at client sites and at our development centers in India and around the world. We optimize our cost structure by maintaining the exibility to execute project components where it is most cost-e ective. This is further strengthened with automation, intelligence and collaboration technologies.

Deep client relationships and brand:

We have long-standing relationships with large corporations and other organizations. Our track record in delivering high-quality solutions across the entire software life cycle and our strong domain expertise helps us to solidify these relationships and gain increased business from our existing clients. This history of client retention allows us to showcase and strengthen our brand.

Quality and process execution:

Our sophisticated processes, standards and quality frameworks allow us to continuously optimize service delivery of various engagements on key performance indicators like business value, productivity, quality and cycle-time.

High-quality talent:

We have a strong ecosystem for employee attraction, career development, engagement and retention through a trusted partnership with our stakeholders. Competence development of our workforce has always been our key strategic focus area. We have a culture of performance and innovation in an open and collaborative environment.

Our strategy

Our strategic objective is to build a sustainable organization that remains relevant to the agenda of our clients, while generating pro table growth for our investors. In order to do this, we will apply the priorities of ‘renew and ‘new to our own business and cascade it to everything we do. These translate to the following strategic focus areas:

Build expansive, lasting relationships with our clients by delivering differentiated market offerings: Our strategy is to engage with clients on their large transformative programs, both in traditional IT areas as well as for their new digital business initiatives. We expand existing client relationships by providing them with a broad set of end-to-end service offerings and increase the size, nature and number of projects we do with them. Our specific industry, domain, process, and technology expertise allows us to enable clients transform their businesses with innovative strategies and solutions. We o er an end-to-end suite of high-quality, highly responsive and innovation-led services spanning business consulting, IT services, software platform-based services and business process management. This enables us to partner with our clients on large, multi-year engagements.

Our Global Delivery Model provides scale, quality, expertise and cost and time-to-market advantages to our client projects. The model enables us to perform work at the location where the best talent is available and where it makes the best economic sense with the least amount of acceptable risk. Over the last 30 years, we have developed our distributed execution capabilities to deliver high-quality and scalable services. This scalable infrastructure complements our ability to deliver project components that are executed round the clock and across time zones enabling us to reduce project delivery times.

Enhance our operational processes for agility and optimal cost: We periodically assess the the ectiveness of our organization structure and processes to optimize it for alignment with our strategic objectives and agility. Attract and retain a global, diverse, motivated and high-performing employee base-Our employees are our biggest assets. To meet the evolving needs of our clients, our priority is to attract and engage the best talent in the right locations with the right skills. We o er our employees challenging work assignments, benchmarked compensation and a collaborative, productive work environment. Our performance management system is objective and rewards performance. We invest substantially in employee engagement to motivate employees and encourage social communication and collaboration. Teaching and learning are central to the Bodhtree culture. Our investments in our Global Education Center and in creating various learning opportunities for our employees help them stay abreast of new developments in software technologies, spur innovation and build a lifelong career at Bodhtree. We are guided by our value system which motivates our attitudes and actions. Our core values are Client Value, Leadership by Example, Integrity and Transparency, Fairness and Excellence

We will deploy our capital in making business acquisitions that augment our expertise, complement our presence in certain market segments and accelerate the execution of our strategies. We leverage alliances that complement our core competencies. We partner with leading technology software and hardware providers in creating, deploying, integrating and operating business solutions for our clients. We have also expanded the scope of our collaborations to encompass universities and research organizations. We have an innovation fund to tap into innovation networks of early-stage companies and universities to gain access to new thinking and business models.

Our competition

We experience intense competition in traditional services and see a rapidly-changing marketplace with new competitors arising in new technologies who are focused on agility, exibility and innovation. We typically compete with other technology service providers in response to requests for proposals. Clients often cite our industry expertise, comprehensive end-to-end solutions, ability to scale, superior quality and process execution, Global Delivery Model, experienced management team, talented professionals and track record as reasons for awarding us contracts. In future, we expect intensi ed competition. In particular, we expect increased competition from firms that strengthen their o shore presence in India or other low-cost locations, firms that o er technology-based solutions to business problems and from firms incumbent in market segments that we have recently entered.

We believe that the principal competitive factors in our business are:

• The ability to keep pace with ever-changing technology and how they apply to customer requirements

• The ability to increase the scale and breadth of service offerings to provide one-stop solutions for customer needs

• The ability to articulate and demonstrate long-term value to existing and potential customers

• The ability to attract and retain high-quality management, technology professionals, and sales personnel

• The ability to the ectively integrate global execution capabilities to deliver high-quality, seamless, scalable, cost-e ective services

• A proven track record of performance excellence and customer satisfaction

• The financial strength to be able to invest in personnel and infrastructure to support the evolving demands of customers

• High ethical and corporate governance standards to ensure honest and professional business practices and protect the reputation of the Company and its customers.

FUTURE OUTLOOK ON RISKS AND CONCERNS:

This section lists forward-looking statements that involve risks and uncertainties. Our actual results could di er materially from those anticipated in these statements as a result of certain factors. Our outlook, risks and concerns are as follows:

• Our revenues and expenses are di cult to predict and can vary significantly from period to period, which could cause our share price to decline.

• We may not be able to sustain our levels of pro tability due to multiple reasons, including but not limited to, higher cost of doing business in certain key markets such as the U.S. on account of increased investments in onsite development centers

• The economic environment, pricing pressures, and decreased employee utilization rates could negatively impact our revenues and operating results.

• Currency uctuations and declining interest rates may a ect the results of our operations.

• Wage pressures in India and the hiring of employees outside India may prevent us from sustaining some of our competitive advantage and may reduce our profit margins.

• Any inability to manage our growth could disrupt our business, reduce our pro tability and adversely impact our ability to implement our growth strategy.

• We may not be able to provide end-to-end business solutions for our clients, which could lead to clients discontinuing their work with us, which in turn could harm our business.

Intense competition in the market for technology services could a ect our pricing, which could reduce our share of business from clients and decrease our revenues.

A large part of our revenues is dependant on our top clients and the loss of any one of our major clients could significantly impact our business.

Our success depends in large part upon our management team and key personnel, and our ability to attract and retain them.

• Our failure to complete xed-price and xed-timeframe contracts, or transaction-based pricing contracts, within budget and on time, may negatively a ect our pro tability.

• Our engagements with customers are typically singular in nature and do not necessarily provide for subsequent engagements.

• Our client contracts are often conditioned upon our performance, which, if unsatisfactory, could result in lower revenues than previously anticipated.

• Our work with governmental agencies may expose us to additional risks.

• Disruption in services due to failure in communication network, system failures, virus attacks or breach of cyber security, could negatively impact our operations and ability to provide our services and solutions, which could result in client dissatisfaction and a reduction of our revenues.

• We may be liable to our clients for damages caused by the disclosure of con dential information, system failures, errors or unsatisfactory performance of services.

• We may be the subject of litigation, which if adversely determined, could harm our business and operating results.

• Our insurance coverage may not be adequate to protect us against all potential losses to which we may be subject, and this may have a material adverse effect on our business.

• We are investing substantial cash assets in new facilities and physical infrastructure, and our pro tability could be reduced if our business does not grow proportionately.

• We may be unable to recoup investment costs incurred in developing our software products and platforms.

• We may engage in acquisitions, strategic investments, strategic partnerships or alliances or other ventures that may or may not be successful.

• Goodwill that we carry on our Balance Sheet could give rise to significant impairment charges in the future.

• The markets in which we operate are subject to the risk of earthquakes, foods, tsunamis, storms and other natural and man-made disasters.

• The safety of our employees, assets and infrastructure may be a ected by untoward incidents beyond our control, impacting business continuity or reputation.

• Negative media coverage and public scrutiny may divert the time and attention of our Board and Management and adversely a ect the prices of our equity shares.

• Actions of activist shareholders may adversely a ect our ability to execute our strategic priorities, and could impact the trading value of our securities.

• Given that our employees in the United States, Europe and other jurisdictions are working on visas, any restrictions on immigration may a ect our ability to compete for and provide services to clients in these jurisdictions, which could hamper our growth or cause our revenues to decline and impact pro tability.

• New and changing corporate governance and public disclosure requirements add uncertainty to our compliance policies and increase our costs of compliance.

• Increased regulation in the industries in which our clients operate could harm our business, results of operations and financial condition.

• Our net income would decrease if the Government of India reduces or withdraws tax benefits and other incentives it provides to us or when our tax holidays expire, reduce or terminate.

• In the event that the Government of India or the government of another country changes its tax policies in a manner that is adverse to us, our tax expense may materially increase, reducing our pro tability.

• Changes in the policies of the Government of India or political instability may adversely a ect economic conditions in India generally, which could impact our business and prospects.

• Our international expansion plans subject us to risks inherent in doing business internationally.

• Our ability to acquire companies organized outside India depends on the approval of the Reserve Bank of India and / or the Government of India, and failure to obtain this approval could negatively impact our business.

• Indian laws limit our ability to raise capital outside India and may limit the ability of others to acquire us, which could prevent us from operating our business or entering into a transaction that is in the best interests of our shareholders.

• Sales of our equity shares may adversely a ect the prices of our equity shares.

• The price of US dollar value of any dividends we declare may be negatively a ected by uctuations in the US dollar to Indian rupee exchange rate.

OVERVIEW OF OPERATIONS:

During the year under review the Company reported operating profit of Rs. 1248.51 Lakhs. The Company reported profit primarily due to the measures brought in by the management to reduce operational costs without compromising the ability to earn and grow further. Your company is uniquely positioned to benefit immensely in the years to come with so many levers getting available for achieving growth. There are so many customers in your companys installed base getting a set of services in one or two focus areas of Bodhtree. As we start to push other focused areas offerings to these installed base of customers, and as we start new areas of services into Bodhtrees offerings these existing customers are expected to contribute more top line growth for this current scal year and beyond.

Bodhtree has started to rechristen itself as Systems Integrator (SI) in the market place, and thereby opening new areas of growth. With partnerships and collaborations getting into the strategy mix of Bodhtrees preparedness, this approach of SI to the market is expected to provide favorable results. Your company is already a strategic partner with renowned market players like Salesforce.com, Tableau, and the likes and the push to strengthen these relationships is also focus. Also, Bodhtree is continuing to foster similar relationships with other upcoming technology players.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The members are informed that the Company has been accredited with quality standards of ISO 9001:2008, ISO 27001:2005 and CMMI Level 5. Apart from this, the Company has adequate internal controls commensurate with the size and operations.

Periodical internal quality audits and management review meetings ensure successful implementation of the Quality Management System. The ISO 9001: 2008 and ISO 27001:2005 compliance will seamlessly integrate all the intra and inter-departmental activities of the organization, simultaneously ensuring the ective monitoring of the operations of the organization. Surveillance audit for continuation of ISOfficerti cation will be conducted by external auditors.

In addition, the Company has appointed Independent Internal Auditors to carry out the internal audit on a regular basis. The internal audit is supplemented by external audit, and periodic review by the Management.

DISCUSSION ON FINANCIAL PERFORMANCE:

During the financial year 2018-19, the Company has achieved revenue of Rs. 116.29 Crores and net profit of Rs. 8.06 Crores/- on a standalone basis compared to the previous year net profit of Rs. 4.30 Crores.

The Basic and Diluted Earnings per share of the Company as on 31 March, 2019 is Rs. 4.04 and 4.04 on a standalone basis.

The Paid up Share Capital of the Company as on 31 March, 2019 is Rs. 19,95,82,360/- comprising of 1,99,58,236 Equity Shares of Rs. 10/- each fully paid-up.

HUMAN RESOURCES:

Your Company has rationalized its human resources the ectively. The approach of the Company has been to nurture talent and inculcate a sense of belonging amongst its personnel. The Company provides an environment which encourages initiative, innovative thinking and rewards performance. The Company ensures training and development of its personnel through succession planning, job rotation, on- the-job training and various training programs and workshops.

RATIO ANALYSIS:

Particulars FY 2018-19 FY 2017-18 Change % Reasons for change
Debt equity Ratio 0.21 0.48 56.25 % Decreased due to repayment of debt
Operating Profit Margin 15.86 10.81 46.72% Increased due to increase in turnover and reduction in operational costs
Net Profit Margin 6.99 3.87 80.62 % Increased due to increase in turnover and reduction of expenditure
Return on equity 25.03 14.95 67.42% Increased due to favourable increase in pro ts against the last year.

CAUTIONARY STATEMENT:

Statements in the "Management Discussion and Analysis" describing the Companys objectives, estimates, expectations or projections may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results could di er materially from those expressed or implied. Important factors that could make a di erence to the Companys operations include: Government regulations, patent laws, tax regimes, economic developments within India and countries in which the Company conducts business, litigation and other allied factors.

Place: Hyderabad For and on behalf of the Board
Date: 14.08.2019
L N Rama Krishna. K Rajesh
Managing Director Director
DIN: 03623543 DIN: 02727491