frontier informatics ltd Management discussions

A. Industry Structure and Development

IT Business of most Indian Software Development companies can be classified into Onsite Consulting Services, Offshore Software Services, Product Sales and IT Enabled Services. While Onsite Consulting Services has witnessed a steady growth, Offshore Software business has experienced a significant change either through Dedicated Development Centers for overseas partners or Joint Ventures. We have a global presence, deep domain expertise. The product sales of Indian companies in the international markets has been miniscule, whileIT enabled services business has seen a strident growth from more than a decade. The future direction clearly favors Offshore Software Services and lT-enabled Services.

XTGlobal Infotech Limited is a Public Listed Company, incorporated and domiciled in India and has its Registered Office at Hyderabad, Telangana, India. It has a primary listing on BSE Limited (BSE).

B. Opportunities a. Offshore Software Maintenance and Enhancements b. IT Enabled Services/BPO Operations c. Increased IT spending within India d. Technology Development

The Company has established adequate internal control systems and procedures both in financial and operational areas that are commensurate with the size and nature of the business of the Company. The constitution of Audit Committee with independent non executive Directors is instrumental in ensuring mainly the following: Oversight of Companys financial reporting process and the disclosures of its financial information to ensure that the financial statements are correct, sufficient and credible. Reviewing with management the annual financial statements before submission to the Board, focusing primarily on any changes in accounting policies, compliances with accounting standards etc. Discussion with the senior management to ensure adherence to the internal Control systems and processes. To ensure that appropriate controls are established and are effective throughout every software development project and conforming to Software Engineering Practices.

C. Threats, Risks and Concerns

1. Competition from countries like China and European Countries in the medium to long term.

2. Large international companies establishing their own subsidiaries instead of depending on Indian Companies.

3. Countries like USA bringing in legislation regarding VISA and work permits discourage hiring of resources from other countries.

4. Impact of COVID Pandemic

In spite of certain negative factors in the international markets, company believes that there are enough global opportunities to be tapped. Countries like China will take a few more years before they can provide wide ranging Software Services of high quality. Company intends to concentrate on Offshore opportunities in Software Maintenance and IT enabled services space as well as computer education and training in the coming few years. D. Outlook

The management is planning to make reasonable business in the areas of Offshore IT consulting put more marketing efforts to secure Business. The company is looking for strategic business acquisitions to enhance business opportunities and to gain operational synergy. The company is making endeavours to improve the financial strength of the company by raising funds through issue of Equity shares on preferential basis. The company is also striving hard to secure business opportunities in domestic market, USA and Middle East. To achieve this objective, the company hired marketing experts. The company was not able to raise finances due tothe losses incurred by the company over the past few years, which have reduced the company to negative net worth. Your directors are contemplating various measures for improving the strength of the balance sheet and toenable the company to raise investment and other form of funding. E. Risk and Concerns

The changing situation in USA and Europe may lead to more restrictions on offshore projects and stringent norms for Onsite Consulting services. F. Strategy

XTGlobal has successfully navigated through multiple technology cycles over the last few years, pivoting and adapting each time to build relevant new capabilities through organic talent development and helping our clients realize the benefits of emerging technologies. Our responsiveness, agility and adaptability to change have been core to our longevity. Customer-centricity is at the core of XTGlobal strategy, organization structure and investment decisions. The philosophy has been to expand and deepen customer engagements by continually looking for new areas in the customers business where we can add value, proactively invest in building newer capabilities, and launch new offerings to participate in those opportunities. G. Internal control system and their adequacy

The Company has established adequate internal control systems and procedures both in financial and operational areas that are commensurate with the size and nature of the business of the Company. The constitution of Audit Committee with independent non executive Directors is instrumental in ensuring mainly the following:

1. Oversight of Companys financial reporting process and the disclosures of its financial information to ensure that the financial statements are correct, sufficient and credible.

2. Reviewing with management the annual financial statements before submission to the Board, focusing primarily on any changes in accounting policies, compliances with accounting standards etc.

3. Discussion with the senior management to ensure adherence to the internal Control systems and processes.

4. To ensure that appropriate controls are established and are effective throughout every software development project and conforming to Software Engineering Practices.

H. Discussion on financial performance with respect to operational performance

Financial statements are prepared under the Historical Cost Convention in accordance with the Indian Generally Accepted Accounting Principles and the provisions of the Companies Act, 2013.

The current scenario in the company is one wherein dynamic changes are the name of the game. There is a constant monitoring and improvement of systems and operations in the company. Appropriate actions both internally and externally are initiated to improve the prospects. Turnaround Management is initiated to revive thecompanys fortune by pulling together all the available resources for materializing all the available opportunities.

As indicated in the below table, XTGlobal has made an impressive turnaround in the year ended March, 2023, making a profit of Rs 835 Lakhs. This indicates a new beginning that involved a planned strategy of taking inmore resources and working on financially viable projects during the year as well as strategizing on opportunitiesand investments with a focus on revenues.

The financial performance of the company over the years are as under:

Sl. No.	Financial Year	Profit/Loss (Rs. ln Lacs)	Sl. No. Financial Year	Profit/Loss (Rs. ln Lacs)
1	Year ending March 2014	-25.16	6 Year ending March 2019	2.87
2	Year ending March 2015	-25.82	7 Year ending March 2020	230.63
3	Year ending March 2016	-48.23	8 Year ending March 2021	315.3
4	Year ending March 2017	-20.13	9 Year ending March 2022	667.19
5	Year ending March 2018	-31.63	10 Year ending March 2023	835.67

I. Material development in human resources/Industrial relations front, including number of people employed.

Human Resource Development is a key area for growth and smooth functioning of any organization. The management recognized two major areas, which will lead to achieve this goal, namely, creating good working environment and imparting continuous training in latest technologies. Continuous up gradation of skills plays a key role in employees retention and job satisfaction and company has taken adequate measures in this regard.

The company has cordial relations with its employees and staff. Efforts of the company are well recognized in India as well as abroad.

J. Key ratios*

S. No.	Ratio	FY 2022-23	FY 2021-22
1	Debtors turnover ratio	350.46	71.52
2	Inventory Turnover ratio	Not Applicable	Not Applicable
3	Interest coverage ratio	3.98	5.76
4	Current ratio	0.31	0.41
5	Debt equity ratio	0.13	0.18
6	Operating margin (%)	33.61%	32.13%
7	Net Profit margin (%)	12.63%	13.07%

*On standalone basis Cautionary Statement

Statements in this management discussion and analysis describing the companys objectives, projections, estimates, expectations might be considered forward looking statements and actual results could differ materially from those expressed or implied. Factors which could make a significant difference to the Companys operationsinclude demand supply conditions, market prices, input component costs and availability, changes in Government regulations and tax laws besides other factors such as litigations, over which the Company may not have any control.

		For and on behalf of
	Board of Directors of XTGlobal Infotech Limited
Place: Hyderabad
Date: 05th September, 2023
	SD/-	SD/-
	K V A. Narasimha Raju	Vuppuluri Sreedevi
	Director	Whole-time Director
	DIN: 08835460	DIN: 02448540