ERP Soft Systems Ltd Management Discussions

ANNEXURE IV

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:
2023-24	212.84	1170.59
2022-23	308.28	2,355.80
Growth%	(30.95)	(50.31)
Income:
2023-24	9.40	17.39
2022-23	7.44	31.22
Growth%	212.84	1170.59

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, 2024, the Company employed 10 employees, of which 7 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	2023-24	2022-23	Details of significant changes along with detailed explanations therefore
Debtors turnover ratio	6.04 Times	7.60 Times
Inventory turnover ratio	Nil	Nil
Interest coverage ratio	Nil	Nil	Since there is an increase in Trade Receivables
Current ratio	9.28 Times	5.61 Times
Debt equity ratio	Nil	Nil
Operating profit margin (%)	6.29%	2.51%	There is a dip in Direct Cost
Net profit margin (%)	6.39%	3.20%	Increase in PADT

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 0.96 % 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.

	For and on behalf of the Board
	ERP Soft Systems Limited
	Sd/-	Sd/-
	K. Parvathi Reddy	D. Sarojanamma
	Managing Director	Director
Place: Chennai
	(DIN: 00827258)	(DIN: 05208974)
Date: 03.07.2024