Global Economy
The world witnessed a remarkable recovery from the pandemic during FY
2022-23. However, sticky inflation, geopolitical tensions and recent financial sector
turmoil have impacted economic growth. Global inflation is moderating and is projected to
decelerate from 8.8% in 2022 to 6.6% by end of 2023 and 4.3% in 2024 as per IMF World
Economic Outlook, January 2023. This is expected to restore growth oriented monetary and
fiscal stance in due course, resulting in a more normalized global growth and outlook.
Indian economy
Indias economy demonstrated a fair degree of resilience to global
headwinds in FY 2022-23, remaining one of the fastest-growing major economies in the
world, with GDP growth of~7.2%. A conducive domestic policy environment and the
Governments focus on structural reforms have kept Indias economic activity
robust despite the gloomy global outlook. A combination of rising disposable income, easy
availability of credit and moderate increase in interest rates due to the stabilizing
inflation trajectory will bode well for economic growth going forward.
Industry Overview
Fast-evolving technology landscapes, dynamic economic environments and
the emergence of digital business has created a need for enterprises to look for a partner
to advise, design and execute their technology transformation and support programs. Large
multinational enterprises are engaging global IT Services companies who can deliver high
quality service on a global scale and at competitive costs. 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. In this period, service
providers have gained technological expertise, domain competency and delivery capability
by either developing organically or by acquiring companies with these competencies. Large
multinational enterprises are engaging global IT Services companies to deliver high
quality service on a global scale and at competitive costs. We believe the IT Services
industry has significant growth potential.
Business Overview
We are one of the IT services globally. We combine the business
knowledge and industry expertise of our domain specialists and the technical knowledge and
implementation skills of our delivery team leveraging our products, platforms,
partnerships and solutions in our development centers located around the world.
We develop and integrate innovative solutions that enable our clients
to leverage IT to achieve their business objectives at competitive costs. We use our
quality processes and global talent pool to deliver ‘time to development
advantages, cost savings and productivity improvements.
Our IT Services business provides a range of IT and IT-enabled services
which include digital strategy advisory, customer centric design, technology consulting,
IT consulting, custom application design, development, re-engineering and maintenance,
systems integration, package implementation, global infrastructure services, analytics
services, business process services, research and development and hardware and software
design to leading enterprises worldwide. The vision for our business is “To earn our
clients trust and maximize the value of their businesses by providing solutions that
integrate our deep industry insights, our Annual Report 2022-2023 leading technology and
best-in-class execution”. We seek to emphasize our core values of being passionate
about our clients success, treating each person with respect, being global and
responsible, and maintaining unyielding integrity in everything we do. The markets we
serve are undergoing rapid changes due to the pace of developments in technology,
innovation in business models and changes in the sourcing strategies of clients. Pressures
on cost-competitiveness, an uncertain economic environment and immigration restrictions
are causing clients to develop newer business models. On the technology front, digital
business has changed the nature of demand for IT services. Development of advanced
technologies such as cloud based offerings, big data analytics, mobile applications and
the emergence of social media is making technology an integral part of the business model
of our clients. In addition to the Chief Information Officer, newer stakeholders such as
Chief Marketing Officer, Chief Digital Officer and Chief Risk Officer play a key role in
shaping the technology roadmap of our clients. These trends on newer business models,
emerging technologies and sourcing patterns provide us with significant growth
opportunities.
INDUSTRY STRUCTURE & DEVELOPMENT
The Indian IT industry growth was normal during the year
However, in the course of the last decade, Indias IT software industry
has scripted one of the most amazing success stories by contributing very substantially to
Indias flourishing forex reserves and to employment, alongwith radically altering the
countrys image and standing amongst nations.
OPPORTUNITIES & THREATS
IT, when appropriately used, has proven to be of immense benefit in
increasing efficiency, cutting costs, improving decision- making and providing better
customer service. There are document case studies on how IT has helped reduce inventories,
cut down time-to-market, and generally improved the bottom-line of companies.
As an enabler and enhancer, IT is clearly a major productivity too.
Indias software expertise has helped foreign companies and countries to become more
competitive. So far, most of this has been to companies / counties that are not in direct
competition with Indian companies or India. It would, indeed, be ironical if Indian
software expertise were to enhance a competitors productivity, and help it overtake
Indian companies. (Source: NASSCOMM report)
SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE
The company offers end to end solution for public areas, enterprise
segment and the SOHO segments.
Risk and Concerns
Technology Obsolescence
CENTERAC manages potential operational risks by adopting continuous
technological up gradation of technologies and systems.
Intellectual Property
Although the Company takes adequate precautions to protect its
Intellectual Property(IP), it faces the risk of others using and gaining from its IP.
Insurance
The Company needs to consider insurance of its assets and operations
against a wide range of risks as part of its overall risk management strategies. The
management is now considering the same.
Internal Controls
CENTERAC has proper and adequate system of internal controls to ensure
that all assets are safeguarded, and protected against loss from unauthorized use or
disposition, and that transactions are authorized, recorded and reported correctly.
The internal control systems are supplemented by an extensive programme
of internal audits, reviews by management, and documented policies, guidelines and
procedures. The internal control systems are designed to ensure that the financial and
other records are reliable for preparing financial statements and other data, and for
maintaining accountability of assets.
Discussion on Financial Performance with respect to operational
performance.
During the financial year under review, the Company has earned revenue
from operations Rs.132.66 Lakhs as compared to no earnings from operations in previous
years. The Company has incurred a loss of Rs.1.54 Lakhs as compared to the previous
years Loss of Rs. 20.52 lakhs.
Material Development in Human Resources/Industrial Relations:
Company hires the best talent from anywhere in the country to attract
the best people that it needs for its services. The Company has well designed training
programme to take care of the training needs of the professionals to keep them abreast of
the new technologies changes.
The Company enjoys healthy relations with its customers, investors,
employees, banks, and various state and central government departments. To offer the most
cost-effective solutions to the overseas existing clients and also to capture new clients,
the Company also recruits highly skilled technical persons from reputed institutes.
KEY RATIOS:
In accordance with the SEBI (Listing Obligations and Disclosures
Requirements) (Amendment) Regulations, 2018, the Company is required to give details of
significant changes (change of 25% or more as compared to the immediately previous
financial year) in Key sector-specific financial ratios.
Ratios |
2022-23 |
2021-22 |
Debtors Turnover |
7.44 |
|
Inventory Turnover |
|
|
Interest Coverage Ratio |
0.67 |
|
Current Ratio |
3.97 |
0.49 |
Debt Equity Ratio |
(4.96) |
(1.36) |
Operating Profit Margin (%) |
2.13 |
|
Net Profit Margin (%) |
|
|
Return on Net Worth (%) |
|
|
Change in Return on Net Worth:
The net worth of the company is in negative Rs. (14.80)/- Lakhs as
compared to previous years of Rs. (16.78)/-
Cautionary Statement
Statements in the Management Discussion and Analysis describing the
Companys objectives, projections estimates, and exceptions may be "forward looking
statements" within the meaning of applicable laws and regulations. These statements
are based on certain assumptions and expectations of future events. Actual results may
differ materially from those expressed or implied. Important factors that could make a
difference to the Companys operations include economic conditions affecting demand/
supply and price conditions in the domestic and overseas markets in which the Company
operates, changes in the Government regulations, tax laws and other statutes and other
incidental factors. The Company assumes no responsibility to publicly amend, modify or
revise any forward looking statements, on the basis of any subsequent developments,
information or events.
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