genesys international corporation ltd share price Management discussions


MANAGEMENT DISCUSSION AND ANALYSIS DISCUSSION ON FINANCIAL PERFORMANCE

Industry Overview and Developments

The geospatial industry plays a vital role in todays connected world, providing technologies and solutions that leverage location-based data to address various challenges and opportunities. Geospatial technologies have evolved significantly over the years and their applications have become mainstream across multiple sectors. This industry is witnessing significant developments and innovations across various technology trends. Real-time data, miniaturization of sensors, Geospatial Artificial Intelligence (GeoAI), 3D modelling, automation, LiDAR, Augmented Reality (AR) applications, Big data analytics and cloud computing are driving the future of geospatial technologies. These advancements are expected to continue shaping the industry and unlocking new possibilities for solving complex problems and improving decision-making processes in diverse sectors.

The Geographic Information System (GIS) industry has witnessed remarkable growth globally and the Indian market is no exception. The adoption of GIS technology has been widespread across various sectors, ranging from government and enterprises specially in the areas of urban planning, telecom, disaster management, large scale mapping initiative for land titling, agriculture and logistics. This widespread adoption has been a key driver behind the expansion of the geospatial market in India. In recent times, the COVID-19 pandemic has further accelerated the digital transformation in numerous industries. As businesses and organizations adapted to remote work and changing consumer behaviour, there has been an increased reliance on GIS for spatial analysis, data visualization and decision-making processes. This shift towards digitalization and data-driven approaches has significantly boosted the demand for geospatial technology and solutions.

One of the significant factors contributing to the growth of the GIS industry in India is the integration of GIS with emerging technologies. Artificial intelligence, machine learning and the Internet of Things (IoT) have played pivotal roles in enhancing the capabilities of GIS solutions. By leveraging these technologies, GIS companies are providing advanced solutions that enable real-time data analysis, location-based services and predictive analytics. This integration has opened new possibilities and expanded the potential applications of GIS in various industries, driving the demand for innovative and tailored solutions.

Another noteworthy trend in the Indian geospatial market is the migration from 2D to 3D GIS. The emergence of Digital Twin, which are virtual representations of physical objects or systems in the real-world, has gained popularity for real- time monitoring and simulation. Digital Twin allow organizations to analyse and optimize complex systems, such as urban infrastructure, factories, and supply chains, leading to improved efficiency and resource management. Cloud-based geospatial solutions have also played a transformative role in the industry. Cloud computing has revolutionized data storage, processing, and collaboration, offering greater accessibility, scalability, and cost-effectiveness. Organisations can now access GIS capabilities without the need for extensive on-premises infrastructure, making geospatial technology more attainable for smaller enterprises and startups. Moreover, there is a growing emphasis on open geospatial data and interoperability standards. Governments and organizations are promoting the sharing of geospatial data to foster collaboration, facilitate data exchange and develop innovative solutions. This trend encourages the development of a geospatial data ecosystem that benefits multiple stakeholders, driving innovation and efficiency across various sectors.

Geospatial analytics and big data analysis techniques have also become instrumental in the industrys growth. The ability to process and analyse vast amounts of spatial data in real-time allows organizations to gain quick valuable insights and make data-driven decisions. Geospatial analytics has found applications in urban planning, environmental monitoring, disaster response and market analysis, among others. Furthermore, the industrys focus on environmental sustainability and climate resilience has become prominent. Geospatial technology plays a crucial role in natural resource management, climate change modelling and ecological monitoring. By providing valuable data on environmental changes, GIS contributes to developing sustainable strategies and mitigating the impact of climate-related events.

The geospatial industry in India has received substantial support from government initiatives such as Digital India and the Smart Cities Mission. These programs aim to leverage technology to drive development and improve governance. As a result, GIS technology has been widely implemented in areas such as urban planning, infrastructure development, agriculture, and disaster management. The governments commitment to these initiatives has created a conducive environment for the growth of the GIS industry in India.

The future of the geospatial industry in India looks promising, as organisations across sectors continue to recognize the value of spatial information and invest in GIS technology for their operations. The transformative impact of technology, the integration of emerging technologies and the support of government initiatives will continue to shape the industrys trajectory, creating new opportunities for growth, application, and positive impact on society and the environment. As the geospatial industry continues to evolve and address global challenges, it will play a vital role in driving efficiency, innovation, and sustainability in India and beyond.

Global Geospatial Trends

Global geospatial trends are shaping the future of the industry and influencing various sectors across the world. The demand for real-time geospatial data is increasing rapidly, driven by the need for instant access to information. Mobile geospatial apps and IoT devices generate and analyse data from multiple sources, providing valuable insights for decision-making. Efforts are being made to map the real word with greater accuracy.

GeoAI is gaining momentum as high-performance computing enables real-world problem-solving. AI algorithms are used for feature recognition, image enhancement, and scalable modelling, enhancing user experiences and data analysis. With urbanization on the rise, smart city solutions are gaining prominence. Geospatial technologies, especially sensors, play a crucial role in building efficient and sustainable smart cities, optimizing resources and improving the quality of life for residents.

Digital Twin, models that simulate and predict the performance of assets and processes, are becoming essential for urban planning and infrastructure management. Geospatial technologies, including GIS and remote sensing, support the development of accurate Digital Twin. Machine learning is revolutionizing spatial analysis, identifying patterns and changes quickly and effectively.

As climate change becomes a pressing concern, geospatial technologies are instrumental in mapping out sustainability plans by visualizing and analyzing important data. Governments and businesses are leveraging GIS to reduce their carbon footprint and make informed decisions. Advanced GIS technologies are helping predict and prepare for natural disasters. Geospatial data is crucial for developing action plans and saving lives during emergency situations.

Cloud computing is becoming increasingly popular, providing seamless data access, distribution, capture, and management. Cloud-based GIS solutions offer scalability and flexibility, allowing businesses to leverage GIS tools on a subscription basis and collaborate easily. Augmented Reality (AR) is an exciting trend in geospatial technology, allowing users to interact with their environment using virtual content. GPS information and geographic datasets support AR applications, offering innovative ways to navigate and interact with surroundings.

LiDAR technology is revolutionizing mapping applications with its high accuracy and support for autonomous vehicles. LiDAR is increasingly used in various industries, such as forestry, urban planning, terrain mapping for landslides, mining and for preparing Detailed Project Reports (DPR) in roads and railway projects. These global geospatial trends highlight the growing importance of location-based data and technologies in driving innovation and solving real-world challenges. As the world becomes more data-driven and interconnected, geospatial technologies will continue to play a critical role in shaping the future of industries, societies, and economies worldwide.

Government Initiative and GIS Industry in India

In India, the government has recognized the strategic importance of geospatial technologies and has initiated various programs and policies to harness the potential of GIS in different sectors. The governments commitment to promoting the geospatial industry has facilitated significant growth and development in this field.

The Second United Nations World Geospatial Information Congress (UNWGIC 2022) was held in October 2022 in Hyderabad. It was hosted by the Department of Science & Technology under the Ministry of Science and Technology, Govt of India and convened by the United Nations Committee of Experts on Global Geospatial Information Management wherein delegates from several member countries participated. The conference focused on the theme "Geo-Enabling the Global Village: No one should be left behind." This theme highlighted the critical role of integrated geospatial information infrastructure and knowledge services in supporting the implementation and monitoring of sustainable development goals, addressing societal well-being, environmental and climate challenges, digital transformation, technological development, and promoting a vibrant global economy.

Government of India has published a National Geospatial Policy (NGP) in December 2022. Indias geospatial policy sets ambitious goals to establish the country as a global leader in the geospatial space. By 2030, the policy aims to achieve high- resolution topographical survey and mapping, with a Digital Elevation Model (DEM) of 5-10 cm for urban and rural areas and 50 cm-100 cm for forests and wastelands. Furthermore, by 2035, it plans to have high-resolution/accuracy Bathymetric Geospatial Data of inland waters and sea surface topography to support the Blue Economy. These targets are part of a comprehensive vision to create a robust geospatial ecosystem for innovation and leverage it to move towards a digital economy. The geospatial data and technology in India are expected to act as agents of transformation, especially in achieving the Sustainable Development Goals (SDGs). The policy aims to reduce dependency on foreign resources and promote domestic startups. With a well-defined institutional framework and milestones for development, India is laying a strong foundation to harness the power of geospatial information for sustainable growth and better decision-making.

One of the key government initiatives is the Digital India program, which aims to transform India into a digitally empowered society and knowledge economy has shown good results. Geospatial technologies play a crucial role in this program, as they provide the foundation for effective planning, decision-making, and service delivery across various government departments and agencies.

The Survey of India, the countrys national mapping agency, has been actively involved in mapping and surveying activities to support various government initiatives. It has played a vital role in mapping rural areas through the SVAMITVA scheme (Survey of Villages and Mapping with Improvised Technology in Village Areas), which aims to provide rural citizens with property documentation and improve land administration. The Digital India Land Records Modernization Program (DILRMP) is a comprehensive initiative sponsored by the Government of India. It merges existing initiatives for computerizing land records and strengthening revenue administration and land records updating. The programs main objectives are to modernize land record management, reduce land disputes, enhance transparency, and facilitate conclusive titles to immovable properties in the country. The major components of the DILRMP include computerizing all land records, digitizing maps, integrating textual and spatial data, conducting surveys and updates and integrating registration processes with the land records maintenance system. The ultimate goal is to establish an Integrated Land Management system that serves as a single window for accessing all components of DILRMP and interlinking them for efficient and effective land record management across the country. Several states have adopted to use modern surveying technologies to do the resurvey projects for updating land records.

The Smart Cities Mission is a flagship government program focused on developing 100 smart cities across the country. Geospatial technologies are essential in this initiative to enable smart urban planning, efficient infrastructure management, and the delivery of citizen-centric services. Programs have been initiated to make the Integrated command and control centres of the Smart cities to be independent through monetisation program which can be sustainable. Geospatial applications hosted in these Control centres are potential avenues for generating revenues through innovative usages.

Moreover, the government has been promoting the use of geospatial data for disaster management and mitigation. By leveraging GIS technology, authorities can predict, mitigate and respond to natural disasters more effectively, saving lives and reducing damage to property and infrastructure.

The Indian geospatial industry has also witnessed significant growth, driven by government policies and investments. Several Indian companies have emerged as global players in the geospatial market, offering cutting-edge solutions and services to domestic and international clients. The industrys growth has led to the creation of jobs and opportunities for skilled professionals in various geospatial domains.

Furthermore, the government has actively engaged with the private sector and academic institutions to foster innovation and research in geospatial technologies. Collaborations between the government, industry and academia have resulted in the development of innovative solutions and applications that address various societal and environmental challenges.

The governments initiatives and support have been instrumental in promoting the adoption of geospatial technologies in India. These efforts have not only contributed to the growth of the GIS industry but have also enabled better governance, improved service delivery, and enhanced decision-making processes across different sectors of the economy. As India continues to embrace digital transformation and data-driven approaches, geospatial technologies will play an even more significant role in shaping the nations future development.

The Indian geospatial industry is transitioning from data-focused to knowledge-oriented and from a service-oriented sector to a solutions-driven one, supported by Government of India geospatial Guidelines and the National Geospatial Policy. The industrys growth is reflected in partnerships, mergers and acquisitions, as well as the rise of new geospatial startups. Forecasts indicate Indias geospatial market will reach around 37.16 thousand crores by 2025, with a CAGR of 10.35 percent between 2022 and 2025. The global pandemic caused a decline in the geospatial export market, but with policy reforms and strategic collaborations, it is projected to grow at a CAGR of 6.5 percent, reaching approximately 14.07 thousand crores by 2025.

Private companies in India in the geospatial sector play a significant role in sectors like telecom, AEC, utilities, electricity, and road consultancy. They have driven Indias growth and development by utilizing geospatial technologies for network expansion, urban development, asset management, risk assessment and infrastructure planning. Their contributions have

been crucial in shaping Indias modern infrastructure, sustainable development and overall progress. Details of few important geospatial sector details are provided below as per the Artha Market report:

Urban Planning and Development: Geospatial data and technologies are essential for well-informed urban development, enabling effective decision-making in zoning, urban planning, and infrastructure management. Satellite images, GIS analytics, navigation systems, and LiDAR surveys are used for land use analysis, infrastructure planning, and 3D modelling. According to Artha report published by the Geospatial Communications and Media, the Indian geospatial technology market for urban development is estimated to be 2.1 thousand crores in 2022, projected to reach 3.4 thousand crores in 2025. GNSS and positioning market expected to grow from 970 crores in 2021 to 1.6 thousand crores in 2025 at a CAGR of 19.68%. GIS and Spatial Analytics market expected to reach 1.13 thousand crores in 2025.

Telecom: Indias telecom industry is the worlds second-largest, with significant growth driven by competitive pricing and improved connectivity. The governments focus on 5G and foreign investments has contributed to the sectors expansion. The geospatial technology market for the utilities sector in India is estimated to be

1.8 thousand crores in 2022, projected to reach 2.8 thousand crores in 2025. The GNSS and positioning market expected to grow from 1.03 thousand crores in 2021 to 1.49 thousand crores in 2025 at a CAGR of 13.12%. GIS and Spatial Analytics market expected to reach 731 crores in 2025.

Electricity: The electricity sector in India has witnessed significant growth, driven by private sector participation and renewable energy initiatives. The governments focus on renewable energy and geospatial technologies has improved infrastructure planning and management. The sectors geospatial technology market is estimated to be 1.8 thousand crores in 2022, projected to reach 2.8 thousand crores in 2025. GNSS and positioning market expected to grow from 1.03 thousand crores in 2021 to 1.49 thousand crores in 2025 at a CAGR of 13.12%. GIS and Spatial Analytics market expected to reach 731 crores in 2025.

Forestry: Forests are essential for biodiversity conservation and geospatial technologies play a crucial role in supporting forestry development and conservation efforts. The geospatial technology market for the forestry sector in India is estimated to be 59.81 crores in 2022, projected to reach 75.7 crores in 2025. The GNSS and positioning market expected to grow from 27.06 crores in 2022 to 42.35 crores in 2025 at a CAGR of 8.17%. Earth Observation market expected to reach 12.35 crores in 2025.

Agriculture and Rural Development: Geospatial technologies are expected to enhance productivity and resource management in Indias agriculture sector, contributing to the overall economy. The geospatial technology market for the agriculture sector is estimated to be 52.39 crores in 2022, projected to reach

67.65 crores in 2025. The Earth Observation market expected to grow from 16.41 crores in 2022 to

22.94 crores in 2025 at a CAGR of 7.61%. GIS and Spatial Analytics market expected to reach 21.13 crores in 2025.

Disaster Management: Geospatial technologies play a crucial role in disaster management, enabling accurate mapping, monitoring, and relief operations. The geospatial technology market for the disaster management sector in India is estimated to be 672.74 crores in 2022, projected to reach 906.90 crores in 2025. The GNSS and positioning market expected to grow from 222 crores in 2022 to 366 crores in 2025 at a CAGR of 18.18%. Earth Observation market expected to reach 285 crores in 2025.

Land Administration: The Land Administration sector is expected to be one of the crucial geospatial markets in India, driven by transformative initiatives like SVAMITVA and land surveying using drones. The geospatial technology market for the sector is estimated to be 1.1 thousand crores in 2022, projected to reach 1.5 thousand crores in 2025.

Supply and Logistics Sector: The supply chain and logistics sector in India play a crucial role in domestic and foreign trade, supported by government initiatives and budgetary allocations. The geospatial technology market for the sector is estimated to be 672.74 crores in 2022, projected to reach 906.90 crores in 2025. The GNSS and positioning market expected to grow from 222 crores in 2022 to 366 crores in 2025 at a CAGR of 18.18%. Earth Observation market expected to reach 285 crores in 2025.

Market Outlook

The geospatial market outlook is highly promising, fuelled by several key factors that contribute to its positive trajectory. Geospatial technologies, such as Geographic Information Systems (GIS), satellite imaging, aerial imaging, terrestrial mapping and Global Positioning System (GPS), are witnessing increasing adoption across various industries, as governments and organizations recognize the value of location intelligence in making informed decisions and optimizing processes. The rapid rise of smart cities and urbanization globally is also driving the demand for geospatial solutions. Cities heavily rely on geospatial data for urban planning, infrastructure management, transportation optimization, and overall citizen welfare. The geospatial industry is poised for continuous growth, driven by technological advancements and widespread adoption across diverse industries. It is set to play a crucial role in driving innovation, sustainable development, and data-driven decision- making in the years to come.

Genesys excels in large-scale mapping using advanced LiDAR and optical sensors via both manned and unmanned aerial systems. The company also employs terrestrial mobile mapping systems to map streets. The specialization lies in 3D modelling for diverse sectors like urban planning, rural development, agriculture, forestry, transportation, logistics, and disaster management. These endeavours highlight Genesyss dedication to employing GIS technology to tackle vital challenges within these domains. Through innovative GIS solutions, Genesys empowers organizations to adopt data-driven decision-making. By doing so, the company plays a pivotal role in driving sustainable development across these sectors.

Opportunities and Challenges

The geospatial technology market is ripe with opportunities driven by various trends and industry demands. Firstly, the increasing demand for location-based services has led to the popularity of navigation, ride-sharing, and real-time delivery tracking apps, creating a significant market for geospatial technology providers. There is a growing trend in the existing smart cities to upgrade to 3D GIS in order to increase urban infrastructure efficiency, where geospatial technology plays a pivotal role in planning and implementation, offering innovative solutions to address urban challenges. The integration of geospatial technology with the Internet of Things (IoT) is unlocking new possibilities for real-time location data in IoT devices. This integration is facilitating applications such as asset tracking and smart logistics, expanding the horizons for geospatial technology adoption. Moreover, disaster management and mitigation efforts are increasingly relying on geospatial tools like LiDAR datasets, remote sensing and GIS to prepare for and respond to natural calamities, opening avenues for specialized service providers in this sector. Lastly, the agriculture sector is embracing geospatial technology for precision farming and land administration initiatives. The use of satellite imagery, aerial imagery and GIS in agriculture enhances productivity, resource management and sustainability practices, creating opportunities for geospatial technology companies to cater to this growing demand. With these opportunities emerging across various industries and sectors, the geospatial technology market is set to witness substantial growth and innovation in the coming years. As technologies continue to evolve, the geospatial industry will play an increasingly critical role in shaping a connected and data-driven world.

The geospatial technology market, while offering promising opportunities, also faces several challenges that need to be addressed for sustained growth and success. One of the foremost concerns is data privacy and security, as the integration of personal and sensitive data into geospatial applications raises fears of data breaches and misuse, potentially leading to regulatory issues and loss of consumer trust. Also, at the same time, the Indian geospatial market faces infrastructural and connectivity challenges, especially in remote regions with limited access to high-speed internet and digital infrastructure. Bridging this digital divide is essential to ensure equal access to geospatial solutions across the country.

The markets highly competitive nature is another challenge, with rapid technological disruptions posing a threat to established companies that may struggle to keep pace with emerging trends. Ensuring data quality and accuracy is crucial for geospatial applications, as errors or inaccuracies in mapping or location data can result in costly consequences, including navigational errors and project delays, impacting the reputation of geospatial providers. Furthermore, the availability of robust infrastructure, such as high-speed internet connectivity and advanced hardware, is essential for the successful adoption of geospatial technology. In regions with limited access to such infrastructure, the penetration of geospatial solutions may be slow or restricted. Addressing these challenges effectively will be key to unlocking the full potential of the geospatial technology market and enabling its continued growth and impact across diverse industries.

The skill gap is another risk in the Indian geospatial market. A shortage of skilled professionals with expertise in advanced geospatial technologies and spatial analysis may hinder industry growth and innovation. Addressing this gap through geospatial education and training is crucial for building a skilled workforce.

Risk and Concerns

The Indian geospatial market offers immense potential for growth and impact across various sectors. Addressing the risks and concerns related to regulations, infrastructure, funding, skills, cybersecurity, and public awareness is crucial for realizing this potential. By fostering a supportive regulatory environment, investing in infrastructure and education and promoting responsible practices, the geospatial industry can flourish and play a vital role in Indias development journey.

Cybersecurity is a paramount concern as the geospatial industry heavily relies on digital data and cloud-based services. Implementing robust cybersecurity measures is essential to protect sensitive information from cyber threats and potential data breaches.

Another concern is related to funding and investment. The geospatial industry requires substantial investment in research, development, and infrastructure. Ensuring adequate funding and support for startups and research institutions is vital to drive innovation and competitiveness. Intellectual property and data sharing issues are also a concern. Though there are clear guidelines on data ownership and sharing but it requires adequate campaigns to broadcast the policies to the concerned stakeholders and make them aware of the benefits of the same.

The public perception and awareness of geospatial technologies need improvement. Despite their significance, there may be a lack of understanding among the general public about their potential benefits and applications. Raising awareness and promoting responsible use can enhance public trust and support for the geospatial industry.

Material Developments in Human Resources Including Number of People Employed

One of the greatest strengths of our organization is innovation in the field of map making & we have continued to invest in this by bringing in right talent & providing them opportunities to work on cutting edge technologies. We continue to hire both, experienced candidates with GIS domain expertise, as well as fresh graduates from accredited Universities specializing in GIS courses. At the same time we are focused on rewarding employees who go the extra mile, through our rewards and recognition program that runs on quarterly basis. As an organization, diversity remains at the core of our culture. We will continue to focus on hiring & developing diverse workforce. During the year, we hired 383 professionals. Our employee headcount as of 31st March 2023 was 1050 professionals.

Internal Control Systems

The Company maintains an adequate internal control system, which provides, among other things, reasonable assurance of recording the transactions of its operations in all material aspects and of providing protection against significant misuse or loss of Companys assets. The Company uses an Enterprise Resource Planning (ERP) package which enhances the internal control mechanism. The Internal control systems of the Company are effective and adequate, commensurate with the size and complexities of its operations. These are regularly tested for their effectiveness by the statutory as well as the internal auditors. The internal auditors review the adequacy, integrity and reliability of control systems and suggest improvements in its effectiveness. The internal audit team conducts extensive reviews and process improvements identified during the reviews are communicated to the management on an on-going basis. Significant observations made by the internal auditors and the follow-up actions thereon are reported periodically to the Audit Committee of the Board of Directors.

Summary of financial performance:

Genesys International records highest ever yearly Revenue and PAT growth of 50% and 146%.

    • Key Standalone Financial Highlights (FY 2023 – Y-o-Y Basis) oTotal Revenue up 50.24% to 18,635.22 lakhs
      • EBITDA up 99.75% to 6,484.66 lakhs

o PAT up 145.58% to 3,845.94 lakhs

    • Key Consolidated Financial Highlights (FY 2023 – Y-o-Y Basis)
      • Total Revenue up 52.55% to 18,763 lakhs
      • EBITDA up 110.34% to 6,487.07 lakhs

o PAT up 42.25% to 1,907.78 lakhs

    • Other Key Highlights (Standalone)
      • The companys traction on its content program remains strong.
      • Standalone Revenue from 12M FY23 has exceeded full year FY22 revenue by 50.24%
      • Standalone EBITDA in FY23 stood at 6,484.66 lakhs, increase of 3,238.27 lakhs, 99.75% EBITDA Margin for FY23 maintained at 37%
      • Standalone PAT in FY23 stood at 3,845.94 lakhs, y-o-y increase of 145.58%
    • Other Key Highlights (Consolidated)
      • Net Profit attributable to the Genesys (Parent) has increased from 1,341.15 lakhs in FY22 to 1,907.78 lakhs, in FY23 registering an increase of 42% on a y-o-y basis.
      • Genesys has increased its shareholding in A N Virtual World from 66% to 97.73% during the year.
    1. Equity

Equity Share Capital

During the year, the paid-up Capital of the Company increased to 1,887.75 Lakhs at the end of 31st March 2023, as against 1,568.14 Lakhs at the end of 31st March 2022.

During the year, the Company has issued and allotted following securities on a preferential basis to non-promoters:

    • 8,69,565 equity shares at 460/- per share
    • 29,79,975 equity shares at 470/- per share
    • 13,04,345 Convertible share warrants at 460/- per warrant
    • 3,19,145 Convertible shares warrants at 470/- per warrant

The above were approved by the Shareholders in the Extra Ordinary General Meetings (EGM) held on 9th July 2022.

Consequently, the Company received 180.06 Crores from allotment of the equity shares and 18.75 crores from allotment of the convertible share warrants (25% of the said warrants).

Also allotted following equity shares:

    • 279,727 equity shares under ESOP scheme 2020 of 5 each
    • 13,080 equity shares under ESOP scheme 2010 of 5 each
    • 1500,000 equity shares on conversion of compulsory convertible debentures
    • 750,000 equity shares on conversion of share warrant

The authorised equity shares capital of the Company remained unchanged at 2,550.00 Lakhs comprising of 51,000,000 shares of 5 each at the end of 31st March 2023.

    1. Other Equity Securities Premium
    2. On allotment of the equity shares under above mentioned preferential issue and ESOP scheme 2020 and on fresh issue of 58,873 equity shares in AN Virtual World Tech Pvt Ltd (Cyprus), Securities Premium account in the consolidated books increased to 25,732.72 lakhs at the end of March 31, 2023 from 5,265.17 lakhs at the end of previous year. Similarly, in the standalone books, securities premium account at the end of March 31, 2023, stood at 22,060.44 Lakhs compared to 1,581.23 Lakhs at the end of earlier year.

      Retained Earnings

      The Company reported a rise in the Retained Earnings at the end of March 31, 2023, in its standalone financials, from

      9,546.20 lakhs at the end of March 31, 2022 to 12,671,49 lakhs. Movement in retained earnings was primarily on

      account of profit earned during the year.

      In the consolidated financials, the balance in the Retained Earnings increased to 5,959.23 Lakhs at the end of March 31, 2023 from 8,423.84 Lakhs at the end of previous year.

      General Reserve

      No movement is reported in the General Reserve account in the year under reference and it continues to be at,

      2,345.85 Lakhs as at March 31, 2023, in the standalone and as well as consolidated financials, like in the previous

      year.

      Share options outstanding account

      The balance in Share Options Outstanding Account is reported 333.49 Lakhs as at March 31, 2023, as compared to

      118.35 as at March 31, 2022.

      During the year under review, 279,727 Equity Shares of 5 each, were allotted to the eligible employees and 50,000 options equivalents to the same number of equity shares, were cancelled / lapsed, under Employee stock options scheme 2020 and 13,080 equity share of 5 each, were allotted to the eligible employees under Employee stock options scheme 2010.

      During the year, the Compensation Committee of the Board of Directors has granted 195,000 stock options in October 2022 to the eligible employees, in terms of Companys ESOP Scheme- 2022. Further the Compensation Committee of the Board of Directors has also granted 100,000 Stock Options in December 2022 to its eligible employees under the Companys ESOP Scheme- 2022. One stock option grant represents one equity share of 5/- each.

      As the Options were granted by the parent company, there was no separate impact under this head in the consolidated books.

      Special Economic Zone Re-Investment Reserve

      This reserve has been created out of the profits of eligible SEZ units in terms of the provisions of Section 10AA(1)(ii) of the Income-tax Act, 1961. This reserve is to be utilized by the Company for acquiring new plant and machinery for the purpose of its business in the terms of Section 10AA(2) of the Income-tax Act, 1961.

      In FY 2022-23, 1,526.49 Lakhs (previous year 435.56 lakhs) has been transferred from Retained Earnings to this reserve account.

      Further, during FY 2022-23 854.34 Lakhs (previous year 21.58 lakhs) has been utilized for acquiring new plant and machinery out of the reserve created in FY 2021-22.

    Above reserve is appearing in the parent companys books and as such, therefore, there is no additional impact of the

    same in consolidated financials.

    Capital Reserve

    Capital Reserve account remained same at the end of FY 2022-23 at 1,735.06 Lakhs, compared to earlier year in standalone financials whereas in consolidated financials capital reserve stands at 1894.13 lakhs as compared to previous year 1735.06 lakhs.

    Foreign Exchange Fluctuation Reserve

    Foreign Exchange Fluctuation reserve arising out of consolidation of financials of the group, amounted to ( 1005.29 Lakhs) and ( 1713.18 Lakhs) as of March 31, 2023 and March 31, 2022, respectively.

    Others Reserve

    Other Reserve includes Share application money pending allotment remains at 2.61 lakhs as at 31 March 2023 in both

    standalone and consolidated financials.

  1. Financial Liabilities
      1. Borrowings:
      2. Borrowings primarily include loan from financial institution, vehicle loan from bank and others; and working capital

        facility from the bank

        Borrowings in the nature of vehicles loans are secured by the assets purchased. Similarly, working capital facility from the bank is secured by book debts, all moveable and immovable assets of the company, current and future.

        During the year 2022-23, borrowings have increased on account of addition of vehicle loans, on account of loan

        form financials institution and increased utilization of working capital facility, compared to the previous year.

        In standalone financials, borrowings, both current and non-current together, amounted to 3,238.47 Lakhs and

        1,142.34 Lakhs as of March 31, 2023 and March 31, 2022, respectively.

        Similarly, in consolidated books, total borrowings amounted to 3,238.47 Lakhs and 2,019.66 Lakhs as of March 31, 2023 and March 31, 2022 respectively.

      3. Provisions:
      4. Provisions include liability on account of Compensated Absences and Gratuity for the employees. In the standalone

        and consolidated financials, current and non-current provisions together, is reported at 997.51 Lakhs and

        826.01 Lakhs as of March 31, 2023 and March 31, 2022, respectively.

      5. Trade Payables
      6. There has been a rise in the trade payable at the end of 2022-23 compared to the earlier year. Such increase is primarily attributable to increased volume of business, etc. Trade payables reported at 2,032.84 Lakhs as at March 31, 2022; has risen to 2,153.13 Lakhs at the end of March, 2023, in the standalone financials. Trade Payables represents amounts payable to the suppliers of the Company for day to day functioning.

        In consolidated financials, trade payables amounted to 2,222.74 Lakhs and 2,398.40 Lakhs as of March 31, 2023 and March 31, 2022, respectively.

        Both in the standalone and consolidated financials, as at March 31, 2023, Trade Payable includes 25.97 lakhs (Previous year: 8.44 lakhs), due and payable to micro and small enterprises, registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME).

      7. Other Current Financial Liabilities & Lease Liabilities

    Other Current Financial Liabilities primarily include capital creditors, finance lease obligations, unclaimed dividend,

    and other payables.

    Other payables include liability arising out of contractual obligations within the Company (employees and others) and outside (vendors/service providers and others).

    In the standalone financials, other current financial liabilities are reported at 2,230.95 Lakhs as at March 31, 2023, as against 2,154.94 Lakhs as at March 31, 2022. The rise in other current financial liabilities is due increase in the balance of other payables.

    On a consolidated basis, other current financial liabilities amounted to 2,231.32 Lakhs and 2,155.04 Lakhs as of March 31, 2023 and March 31, 2022, respectively.

    Lease liabilities, which include operating and finance lease, current and non-current put together, are reported at

    693.29 Lakhs at the end of 2022-23, as against 630.37 Lakhs in the earlier year, in both, standalone as well

    as consolidated financials.

  2. Other Current Liabilities
  3. Other Current Liabilities include statutory dues payable and advance received from customers. Statutory dues include PF payable/GST payable/ TDS payable etc. Other current liabilities stood at 306.91 Lakhs as of March 31, 2023 in the standalone financials of the Company as against 259.22 Lakhs as at March 31, 2022.

    In the consolidated financials, other current liabilities reported at 306.96 Lakhs and 261.77 Lakhs as of March 31, 2023 and March 31, 2022, respectively.

  4. Property Plant & Equipment & Intangibles assets
  5. During the year 2022-23, following assets were procured by the Parent Company.

    ( in Lakhs)

    Particulars 31-Mar-23 31-Mar-22
    Aircraft 350.65 -
    Computer Hardware 934.84 171.29
    Furniture & Fixtures 6.05 3.95
    Office Equipment 58.12 37.81
    Vehicles 654.01 134.77
    Electrical Installation - 51.23
    Leasehold Improvement 5.58 37.25
    Camera Equipment 2,034.28 177.12
    Computer Software 334.33 119.39
    Total 4,377.86 732.81

    Consequently, gross block in the books of the Parent Company increased to 15,917.90 Lakhs at the end of March, 2023 as against 11,929.19 Lakhs in the previous year.

    Similarly, gross block in the consolidated financials were reported at 33,465.34 Lakhs and 28,276.85 Lakhs at on March 31, 2023 and March 31, 2022, respectively.

    Deductions to gross block

    During the year FY 2022-23, the Company has disposed of some assets from its gross block amounting to 389.15 In FY 2021-22, no assets were disposed of.

    Assets disposed of included parts of furniture & fixtures, office equipment, rights of use premises, etc. in current year.

  6. Financial Assets
    1. Investments
    2. Current Investment represents surplus funds of the Company parked with mutual funds that can be recalled at short notice. Non-current investments, on the other hand, primarily represent investments in debentures and equity shares of other entities, including subsidiary company.

      In consolidated financials, non-current investments are reported as Nil, as of March 31, 2023 as well as in March 31, 2022 due to elimination / diminution in value of investment in subsidiary and other entity.

      As at 31 March 2022, the Companys Subsidiary, viz. A N Virtual World Tech Limited, Cyprus, had impaired intangible asset. As a result, the Company had impaired 8,569.79 lakhs on its investment in the said subsidiary. Additionally, the Company had made an impairment provision of 1,469.09 lakhs on loan given to its step-down subsidiary, viz. Virtual World Spatial Technology Private Limited, India.

      However, management believes that the new Geospatial policy augers well for the business and its content strategy. Substantial traction is expected in this space for the Group.

      During the year, the Company has acquired 850,329 fully paid-up equity shares of A.N. Virtual World Tech Limited, Cyprus. Consequently, the Company owns 97.73% of A.N. Virtual World Tech Limited, Cyprus.

      Consequently, in standalone financials, non-current investment is reported at 13,334.79 Lakhs as at March 31, 2023, representing Parent Companys investment in the subsidiary Company. Similarly, non-current investment at the end of March 31, 2022, was reported at 5,935.39 Lakhs.

      In the standalone as well as consolidated financials, Current Investment were 5,114.12 Lakhs as at March 31, 2023, as against 599.97 Lakhs as at March 31, 2022; the increase of 4,514.15 lakhs is represented by temporary placement of unutilized funds in mutual funds.

    3. Trade Receivables
    4. Trade Receivable balance in the standalone financials has gone up by 71.57% growth at the end of 2022-23 at

      8,432.20 lakhs from 4,914.60 lakhs at the end of earlier year. The increase is attributable to the increase in the operating revenue of the company in 2022-23.

      In the consolidated financials, trade receivables net of provision for doubtful debt, amounted to 8,321.94 Lakhs and 4,914.60 Lakhs as of March 31, 2023 and March 31, 2022, respectively.

      As per IND AS 109, the company uses the Expected Credit Loss (ECL) model to assess any required allowances; and uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues.

    5. Cash and Bank Balance
    6. Cash & cash equivalent and other bank balance including the balance in deposit and margin money accounts collectively stood at 1,596.14 Lakhs as at March 31, 2023, as compared to 2,191.46 Lakhs as at March 31, 2022, in standalone financials. All bank related balances are being maintained with scheduled banks.

      In consolidated financials, similar balances collectively stood at 1,799.35 Lakhs as at March 31, 2023, as compared to 2,196.73 Lakhs as at March 31, 2022.

      The bank balances include both Rupee accounts and foreign currency accounts.

    7. Loans
    8. During the year, the parent company has granted fresh loan of 100.00 lakhs to the step-down subsidiary. Consequently, loan to step down subsidiary balance as at March 31, 2023, is reported at 75.31 lakhs as against

      Nil due to impairment carried out in March 31, 2021.

      Loan includes loan granted to its employee which amounts to 37.40 Lakhs ( 40.40 lakhs in previous year), recoverable / adjustable against the salary.

    9. Other Financial Assets

    Other non-current financial assets include Earnest Money Deposits given for business purposes, to government

    / other agencies and include security deposits given for various utility services and to landlords to secure rented premises, margin money for bank guarantee for a period exceeding 12 months, etc.

    Other non-current financial assets are reported at 264.66 Lakhs as at March 31, 2023, compared to 240.93 Lakhs as at March 31, 2022 in standalone financials. In consolidated book, the same was reported at 264.91 Lakhs as at March 31, 2023 and 241.15 Lakhs as at March 31,2022.

    Other current financial assets include unbilled revenue, export incentive receivable, interest accrued and deposits.

    In standalone financials, other current financial assets are reported at 7,783.74 Lakhs as at March 31, 2023, as compared to 4,420.81 Lakhs as at March 31, 2022.

    Similarly, on consolidated basis, other current financial assets amounted to 7,805.23 Lakhs as at March 31, 2023, as compared to 4,418.85 Lakhs as at March 31, 2022.

  7. Other Assets
  8. Other assets include Other Current Assets and Other Non-Current Assets, which in turn include capital advances, prepaid expenses.

    Capital advances, as the name suggests, include amount paid in advance on capital account. Other advances represent staff advances and advances to creditors.

    Other non-current assets amounted 836.44 Lakhs as at March 31, 2023, compared to 24.06 Lakhs as at March 31,

    2022 in both standalone and consolidated financials.

    Similarly, other current assets amounted 1,165.99 Lakhs as at March 31, 2023, as compared to 539.35 Lakhs as at March 31, 2022. On a consolidated basis, other current assets amounted 1,299.75 Lakhs as at March 31, 2023, as compared to 669.85 Lakhs as at March 31, 2022.

  9. Deferred Tax Assets/Liabilities
  10. Tax impact arising out of timing difference between the book profit and the taxable profit is known as deferred tax.

    Deferred tax assets arise when the amount of tax has either been paid or has been carried forward but it has still not been acknowledged in the statement of income. The actual value of the deferred tax asset is generated by comparing the book income with the taxable income. The biggest advantage of the deferred tax asset is that it causes the companys tax liability to go down in the future.

    Deferred tax liabilities, on the other hand arise when a companys current tax liability is less, which it would eventually pay in the future.

    On a standalone basis, deferred tax assets are reported at 2,688.88 Lakhs as at March 31, 2023, compared to

    2,730.90 Lakhs as at March 31, 2022.

    Similarly, on a consolidated basis, deferred tax assets amounted 2,690.34 Lakhs as at March 31, 2023, as compared to 2,732.58 Lakhs as at March 31, 2022.

    Deferred tax assets also include MAT credit to the tune of 2,195.12 Lakhs as at March 31, 2023 and 2,108.62 Lakhs as at March 31, 2022.

  11. Income Tax Assets / Liabilities
  12. Income Tax Assets, net of provision, include Advance Income Tax. Income tax assets amounted to 166.91 Lakhs in reported standalone and consolidated financials as at March 31, 2023, compared to 349.34 Lakhs as at March 31, 2022.

    Income Tax Liabilities amounted to 123.06 lakhs in reported standalone and consolidated financials as at March 31,

    2023 compared to 23.58 as at March 31, 2022.

    Income and Expenditure

  13. Income( in Lakhs)
  14. Particulars

    Standalone

    Consolidated

    2023

    2022

    % Change

    2023

    2022

    % Change

    Revenue

    17,991.20

    11,962.92

    50.39%

    18,112.85

    11,962.92

    51.41%

    The Company derives revenue principally from technology services provided to clients from various industries. There has been a rise in the revenue of the Company during 2022-23 compared to that of 2021-22.

    The increase in revenue is primarily attributable to the increase in the volume of business from existing and new customers.

  15. Other Income
  16. In the standalone financials, other income for fiscal 2022-23 primarily includes income from investments of 295.40 Lakhs, foreign exchange gain (net) of 314.39 Lakhs and 34.23 Lakhs on account of income on miscellaneous counts.

    During the previous year, other income primarily included income from investments of 154.20 Lakhs, a foreign exchange gain (net) of 145.79 Lakhs, and 141.13 Lakhs on account of miscellaneous income.

    On a consolidated basis, other income for fiscal 2022-23 primarily includes income from investments of 281.13 Lakhs, foreign exchange (net) of 314.39 Lakhs and 54.63 Lakhs on account of miscellaneous income.

    During the previous year, in consolidated books, other income primarily included income from investments of 45.28 Lakhs and a foreign exchange (net) of 145.79 Lakhs and 145.82 Lakhs on account of miscellaneous income.

  17. Expenditure

Operating expenses of the Company primarily consist of employees benefit expenses, project expenses, depreciation and amortization, finance costs, and other expenses.

In the books of the Parent Company, cost of sales for the year 2022-23 accounted for 77% of revenues, compared to 87% during the previous year; consequently, there has been an increase in the operating profit of the parent company in the current year. In consolidated financials, cost of sales accounts for 90% of revenues in 2022-23, compared to 95% during the previous year.

In Accordance with The Sebi (Listing Obligations and Disclosure Requirements 2018) (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 Financial Ratios

Sr. No. Key Financial Ratios *

FY-23

FY-22

% Change

1 Debtors Turnover 2.70 2.74 -0.04
2 Inventory Turnover NA NA -
3 Interest Coverage Ratio 31.92 -53.22 85.14#
4 Current Ratio 3.54 2.09 1.44
5 Debt Equity Ratio 0.07 0.06 0.01
6 Operating Profit Margin (%) 0.33 0.24 0.09
7 Net Profit Margin (%) 0.21 -0.71 0.92
8 Return on Net worth 2.47 1.64 0.83

* Ratios are based on Standalone Financials

# Improved due to impairment impact on previous year.

CAUTIONARY STATEMENT

Certain statements made in the Management Discussion and Analysis Report may constitute ‘forward-looking- statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections, etc., whether express or implied. Several factors could make a significant difference to the Companys operations. These include climate and economic conditions affecting demand and supply, government regulations and taxation, natural calamities, etc. over which the Company does not have any direct control.