Ekennis Software Service Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

Ekennis Software Service Limited is at the forefront of delivering IT software training and consultancy services, alongside its thriving printing, designing, and packaging business operated under the brand name MyPerfectPack. The company is dedicated to maintaining high standards in all its offerings, continually pushing to reinvent and re-innovate in a rapidly evolving industry.

The Board of Ekennis believes the growth in business activities is robust, with demand for space expected to remain steady. Ekennis business model is inherently optimistic, focusing on positive outcomes, growth, and sustainability. This forward-thinking approach aims to create value for all stakeholders, including customers, employees, investors, and the wider community. By offering no MOQ solutions, Ekennis empowers startups and mid-size companies to thrive, fostering innovation and supporting economic growth. The printing and packaging industry has experienced significant transformations over the past few decades, driven by technological advancements, evolving consumer demands, and increasing environmental concerns. This industry plays a pivotal role in various sectors, including food and beverages, pharmaceuticals, cosmetics, and electronics, ensuring products are safely contained, effectively marketed, and compliant with regulatory standards.

In conclusion, the printing and packaging industry is poised for continued evolution, driven by sustainability, technology, and customization. Ekennis Software Service Limited, through MyPerfectPack, is well-positioned to lead this charge, offering innovative solutions that cater to the dynamic needs of modern businesses. The trademark application for MyPerfectPack is currently in process with the Registrar of Trademark, underscoring the companys commitment to brand recognition and legal compliance.

2. OPPORTUNITIES AND THREATS

Ekennis Software Service Limited is well-positioned to capitalize on the numerous opportunities in the IT and consulting industry, as well as in the printing and packaging sector through its brand MyPerfectPack, which offers no MOQ solutions to 190 countries.

Ekennis Software Service Limited is committed to navigating these opportunities and threats through strategic planning and continuous adaptation to evolving market dynamics. By offering cutting-edge IT solutions and innovative printing and packaging services through MyPerfectPack, the company aims to create value for its customers and sustain growth. The no MOQ printing and packaging solution to 190 countries exemplifies the companys dedication to flexibility and customer-centric approaches, enabling startups and mid-size companies to thrive globally.

We always look ahead, pushing ourselves to reinvent and re-innovate. Ekennis is dedicated to maintaining high standards in delivering IT software training, consultancy services, and printing, designing, and packaging solutions. With the recent experience and customer demands for MyPerfectPack, the company remains optimistic about its growth and the continued demand for its innovative offerings. Our forward-thinking business model focuses on positive outcomes, growth, and sustainability, aiming to benefit all stakeholders, including customers, employees, investors, and the wider community.

3. OUTLOOK

Our commitment is to offer quality services to our clients and meet their expectations. The company is involved in two primary processes:

1. Software IT Consulting Services, ITProduct/Software Development, and Software Training This area involves several challenges and risks, such as:

• Meeting Customer Expectations: Failure to complete projects on time or provide quality software services can harm our reputation.

• Data Security: Maintaining the security of customer data and confidential information is critical. A data breach can have severe consequences.

• Industry Developments: Keeping up-to-date with ever-changing developments in the IT and software industry is essential for competitiveness. Falling behind can lead to missed opportunities, lower profits, and a loss of clientele.

Despite these challenges, we are dedicated to excellence in all our endeavors, ensuring that our clients receive the best possible outcomes

The business of printing on packaging involves various risks, such as:

1. Supply Chain Disruptions: Material availability can be impacted, causing delays and increased costs.

2. Regulatory Compliance Challenges: Non-compliance can lead to fines and legal issues.

3. Design and Color Inconsistencies: These can affect brand image and customer perception.

4. Evolving Technology: Rapid advancements can render existing equipment obsolete.

5. Intellectual Property Infringements: This can result in costly legal battles.

6. Market Demand Fluctuations: Changes in consumer preferences can affect business stability.

7. Environmental Concerns: Increasing focus on packaging waste can lead to regulatory pressures and require sustainable solutions.

8. Intense Competition: High competition necessitates continuous innovation and improvement.

Given these risks, businesses must adopt adaptable strategies to ensure sustainable growth and effective risk mitigation. At Ekennis, our success is driven by our unwavering commitment to providing high-quality services and expertise to our clients. We invest in training, innovation, and process modernization to ensure our clients receive the best products and services available.

We are dedicated to continuous growth and improvement, confident that our customercentric approach will enhance customer satisfaction and loyalty. Our goal is to become the leading provider in our industry and make a lasting impact on our clients success.

4. VALUE CREATION

Net worth of the company increased from Rs.500.89 Lacs to Rs. 500.96 Lacs (Consolidated) and from Rs. Rs.501.58 Lacs (Standalone) to Rs. 502.15 Lacs as at March 31, 2024.

5. EKENNIS?S FINANCIAL PERFORMANCE

a) Analysis of Statement of Profit and Loss

• Total income: Total income of the Company stood at Rs. 292.58 Lakhs (Standalone) and Rs. 300.46 (Consolidated) during the year under review as compared to Rs. 648.46 Lacs (Consolidated and Standalone) and Rs. in the previous year.

• Operating profit: Operating profit or EBITDA stood at RS. 29.52 Lakhs (Consolidated) and RS. 30.06 (Standalone) during the year under review as compared to RS. 128.83 Lakhs (Consolidated) and RS. 129.53 (Standalone) in previous year.

• Depreciation: Depreciation for the year under review stood at RS. 21.89 Lakhs (both Consolidated & Standalone) as compared to RS. 14.18 Lakhs in the previous year.

• Finance costs: Finance costs for the year under review stood at RS. 3.95 Lakhs (both Consolidated & Standalone) as compared to RS. 3.02 Lakhs in the previous year.

• Other Income: Other Income for the year under review stood at RS. 20.31 Lakhs (Consolidated) and RS. 20.09 Lakhs (Standalone) as against RS. 15.59 Lakhs in previous year for both.

• Net profit: Net profit for the year under review stood at RS. 0.03 Lakhs (Consolidated) & 0.58 Lakhs (Standalone) compared to RS. 77.70 Lakhs (Consolidated) and RS. 78.39 Lakhs (Standalone) in previous year.

• Net worth: The net worth of the Company stood at RS. 500.96 Lakhs (Consolidated) & Rs. 502.15 Lakhs (Standalone) as on 31 March, 2024, compared to RS. 500.89 Lakhs (Consolidated) & Rs. 501.58 Lakhs (Standalone) as on 31 March, 2023. The net worth comprised paid-up equity share capital amounting to RS. 140 Lakhs as on 31 March, 2024, (14,00,000 Equity shares of RS. 10, each fully paid up) and other Equity being RS. 360.96 Lakhs (Consolidated) & RS. 362.15 Lakhs (Standalone).

• Loan profile: The total long-term Borrowings of the Company stood RS. 0.00 Lakhs (NIL) for the year under review as on 31 March, 2024 and for the previous year it stood at RS. 7.08 Lakhs.

• Total assets: Total assets of the Company during the year under review stood at RS. 570.55 Lakhs (Standalone) & RS. 569.36 Lakhs (Consolidated) as on 31 March, 2024 compared to RS. 612.97 Lakhs (Standalone) and Rs. 612.40 Lakhs (Consolidated) in FY 2022-23.

• Inventories: Inventories stood at RS. 39.67 lakhs during the year under review as compared to RS. 24.02 Lakhs in FY 2022-23. Inventories comprised raw materials and consumables.

• Current liabilities: Current liabilities stood at RS. 48.72 Lakhs (both Consolidated & Standalone) comprising trade payables of RS. 25.26 Lakhs and Other current Liabilities Rs. 22.19 Lakhs and Short-Term Provisions of RS. 1.28 Lakhs compared to Rs. 84.57 Lakhs (Consolidated) and Rs. 84.45 (Standalone) Lakhs in previous year.

6. SEGMENT-WISE PERFORMANCE

As on March 2024, Company has made reporting for its two business segment, the Consolidated details of same is tabulated below: -

Particulars	Year to date figures for the year ended on 31/03/2024 (Standalone)	Year to date figures for the year ended on 31/03/2024 (Consolidated)
	Audited	Audited
Segment Revenue
(a) Manpower Supply Services	142.29	142.29
(b) Printing & Packaging	130.01	137.86
Segment Results
(a) Manpower Supply Services	81.73	81.85
(b) Printing & Packaging	-47.23	-47.77
Less:
Unallocable Income	20.29	20.29
Unallocable Expenses	50.69	50.69
Profit Before Tax	4.10	3.68
Less: Tax Expenses	3.65	3.65
Profit for the Period	0.45	0.03
Segment Assets
(a) Manpower Supply Services	54.18	54.42
(b) Printing & Packaging	132.45	132.45
(C) Unallocated	383.92	383.92
Total Segment Assets	570.55	570.79
Segment Liabilities
(a) Manpower Supply Services	31.84	31.84
(b) Printing & Packaging	33.74	33.74
(C) Unallocated	2.82	2.82
Total Segment Liabilities	68.40	68.40

7. HUMAN RESOURCES/ INDUSTRIAL RELATIONS

The company maintains a cordial relationship with its employees by creating a positive work environment, focusing on improving productivity and efficiency. With a team of qualified and dedicated personnel, we strive for the better performance of our operations and processes. Constant training is our focus, aiming to develop and hone the skill sets and competency levels of employees in line with business standards and requirements.

We firmly believe that well-trained manpower at every level provides a true competitive advantage in our business, and hence, we invest substantial resources in training. Additionally, our endeavor is to offer fair and reasonable compensation to our employees based on market benchmarks. We also emphasize career development, employee wellbeing, and work-life balance, understanding that a satisfied and motivated workforce is key to sustained success.

8. QUALITY MANAGEMENT SYSTEM

Your Company is certified for Quality management system. The Company is MSME Sustainable (ZED) Certified. It ensures Zero Defect Zero Effect (ZED) practices. Your Company is making continuous efforts for improvement in the processes, Quality Management Systems (QMS) and skill building.

9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The company has established an extensive system of internal controls to ensure optimal utilization and protection of resources, accurate reporting of financial transactions, and compliance with applicable laws, regulations, internal policies, and procedures. This internal control system is regularly reviewed by the Audit Committee and is supported by well-documented policies and guidelines. These measures ensure the reliability of financial records and other data, facilitating the accurate preparation of financial statements and reports.

10. DETAILS OF SIGNIFICANT CHANGES IN KEY RATIOS

In Accordance with SEBI (Listing obligation and disclosure requirement regulations), 2018, The Company is required to give details of significant Changes:

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Sl. „ . , Particulars No.	Numerator	2024	2023	Reason for Movements
	Denominator
i. Current Ratio	Current Assets	7.97	4.83	Reason for Movement is not required to be disclosed
	Current Liabilities
ii. Debt-Equity Ratio	Debt	0.00	0.30	Reason for Movement is not required to be disclosed
	Equity
iii. Return on Equity Ratio	Profit After Tax	0.00	0.56	This Ratio is decreased due to decrease in profit after tax
	Average Shareholder?s Equity
Trade Receivables iv. turnover ratio (in times	Net Credit Sales	5.98	13.81	This Ratio is increased due to decrease in Credit Sales
	Average Trade Receivables
Trade payables turnover ratio (in times)	Purchase of Services & Other Expenses	15.25	15.56	This Ratio is increased due to increase in Average Creditors
	Average Trade payables
Net capital turnover ratio vi. (in times)	Turnover	0.8	1.96	This Ratio is decreased due to decrease in turnover with a slight increased level of working capital
	Working Capital
vii. Net profit ratio	Profit After Tax	0.21	12.39	This Ratio is decreased due to lower profits during the year
	Total Sales
Return on Capital employed	Operating Profit	0.02	22.53	Reason for Movement is not required to be disclosed
	Total Capital Employed
Debt Service Coverage ix. Ratio	Net Operating Income	0.71	22.31	This Ratio is improved due to repayment of Debts.
	Total Debt Service
Interest Service Coverage x. Ratio	EBIT	2.07	37.98	This Ratio is decreased due to lower EBIT.
	Interest Expenses

11. CAUTIONARYSTATEMENT

Statements in this report describing the Companys objectives, expectations, or forecasts may be forward-looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in these statements. Key factors that could impact the Companys operations include economic conditions affecting demand, supply, and pricing in both domestic and international markets, changes in government regulations, tax laws, other statutes, and various external variables. The Company assumes no obligation to publicly amend, modify, or revise any forward-looking statements based on subsequent developments, information, events, or otherwise.

12. DISCLOSURE OF ACCOUNTING TREATMENT

The Company has followed the same accounting treatment as prescribed in the relevant Accounting Standards while preparing the Financial Statements.