hcl infosystems ltd share price Management discussions


Focus on reduction of outstanding debt and losses

In the FY 23, the Company continued to focus on its initiatives such as monetization of properties, realization of tax refunds in order to reduce the debt and losses. As a result, the Company prepaid entire external loans, which helped to reduce the finance cost.

In FY 22, we reported revenue from continuing operations of Rs. 69.44 Crores while in FY23 our revenue decreased to

Rs. 31.41 Crores.

Businesses Performance & Highlights

For the purpose of financial reporting, the businesses have been arranged as per the following primary business categories:

Business Category Lines of Business
Distribution Business Residual annual maintenance contracts related to Enterprise Distribution Customers
System Integration and Solutions System Integration projects

The numbers provide a line of business-wise view based on management accounts and are not as per reported segments.

System Integration (SI) & Solutions Business

The SI and Solutions business reported revenue of Rs. 25.74 Crores in FY23 with a focus on project execution and recovery of outstanding receivables from customers. During the financial year, 5 (five) SI projects have come to a close.

Though the business was able to realise Rs. 34.38 Crores from customers, our System Integration and Solutions business continued to face delays in customer acceptance and sign-offs on project completion from certain customers resulting in delays in recovering receivables. Over time the number of contracts that are coming to closure have increased without any considerable progress on release of money against receivables by customers.

As a result, the Company has initiated arbitration proceedings against a number of customers as per the terms of the contracts with them in an effort to obtain final sign-offs and recovery of overdue receivables. Due to multiple legal and arbitration proceedings and legacy issues, significant effort and cost are being incurred on compliance, legal and legacy matters. Hence our legal cost has increased considerably, and other operational costs including manpower costs continue to remain at the existing level for these contracts, thereby incurring higher costs which are increasing our operational losses as reflected in the financials.

During the year, Rs. 1.80 Crores has been provided on account of such receivables.

Distribution Business

In FY23, the Distribution business reported a revenue of

Rs. 5.67 Crores. As stated earlier, as per the direction of the Board, the Distribution business has been scaled down. However, certain maintenance contracts of enterprise distribution customers are still under execution.

Other Updates

In FY 21, the Board and the shareholders of the company had taken a strategic decision to divest the entire shareholding in HCL Infotech Ltd to Novezo Consulting Pvt. Ltd, (Novezo) after certain carve outs. However, despite rigorous and best efforts for closure of the deal, the Conditions Precedents were not fulfilled even after lapse of a considerable period from the date of execution of the Share Purchase Agreement.

The objective and purpose of the transaction completely changed and given that the changed circumstances created a fundamentally different situation which the Parties never envisaged or agreed to in the first place, the Share Purchase Agreement got frustrated as the object and purpose of executing the Share Purchase Agreement cannot be met and has undergone a fundamental change beyond the contemplation of the parties. Accordingly, the Company, in March 2023, issued a letter intimating Novezo that the Share Purchase Agreement has been frustrated. HCL Infotech Limited will continue to be operated in the ordinary course of business.

The Company had initiated a scheme of amalgamation of Digilife Distribution and Marketing Services Limited (DDMS) and HCL Learning Limited (Learning), wholly owned subsidiaries, with and into HCL Infosystems Limited (HCLI). The rationale for this is to consolidate multiple entities into a single entity to simplify the corporate structure and reduce administrative costs. The Scheme of Amalgamation has been approved by the Honble National Company Law Tribunal.

During the FY 23, the Company has sold 4 properties for a total consideration of Rs. 18.73 Crores.

As at March 31, 2023, the Group has accumulated losses and its net worth has been fully eroded, the Groups current liabilities exceeded its current assets by Rs. 470.41 crores for the period ended March 31, 2023 (March 31, 2022 - Rs. 411.70 crores). The losses are primarily as a result of delayed receipts on certain system integration contracts, historical low margin contracts, large litigations and their costs which are at different stages of progression. The management of the Company, is pursuing strategies which include scale down of loss-making businesses like scaling down of the distribution business, sale of certain non-core properties and reduction in outstanding debts. To ensure the necessary

4 financial support for its operations, the Board of Directors of HCL Corporation Private Limited has approved support in the form of corporate guarantees to banks of Rs. 330.35 crores and interest free unsecured loans of Rs. 355.00 crores to the Company out of total authorized limit of Rs. 1500.00 crores. This had been approved by the shareholders of the Company, vide their resolution dated September 14, 2017. Considering the above support, the Companys management and the Board of Directors have a reasonable expectation that the Group will be able to realise its assets and discharge its contractual obligations and liabilities as they fall due in the near future in the normal course of business. Accordingly, the consolidated financial results have been prepared on a going concern basis.

Despite all these efforts to reduce debt & losses, the Company continues to face very challenging financial conditions . As a consequence, the Company cannot invest in any new businesses or in expanding its current operations and consequently, the business of the Company will continue to contract for the foreseeable future.

COVID – 19 Impact

In evaluating the impact of COVID-19 on its ability to continue as a going concern and the possible impact on its financial position, the management has assessed the impact of macro-economic conditions on its business and the carrying value of its major assets comprising of property, plant and equipment (PPE), trade receivables and other balances recoverable. In this regard, the management has carefully considered the circumstances and risk exposures arising from the COVID-19 situation for developing the estimates based on available information in its assessment of the impact thereof on its financial reporting.

Based on the aforesaid assessment, management believes that the Group will continue as a going concern and will be able to meet all of its obligations as well as recover the carrying amount of its aforesaid assets as of March 31, 2023. The impact assessment of COVID-19 is a continuing process given the uncertainties associated with its nature and duration and actual results may differ materially from these estimates. The Group will continue to monitor any material changes to future economic conditions and any significant impact of these changes would be recognised in the financial statements, as and when these material changes to economic conditions arise.

Business Risks & Mitigation Measures

The performance of our businesses can get affected by various risks posed by the external environment. Your Company continuously revisits the Enterprise Risk Management (ERM) framework and strengthens it to address various risks to our businesses. The risk management programme (ERM) involves risk identification, assessment and risk mitigation planning for strategic, operational and compliance-related risks across business units and functions. Periodic monitoring of risk is done and based on the overall risk performance mitigation action is refined and re-planned. The following table provides a glimpse of some key risks and their mitigation measures which the Company tracks regularly at an overall level (in addition to individual business risks tracked at the individual business level):

Sl. No. Category Risk Item Risk Description Risk Management Strategy/Update
01 Litigation Sustainability • Non-Cooperation of Client in Project sign off and payments. • The subject is under Arbitration
• Increasing support and finance cost to continuously run the Operations without corresponding collections (BR) • This has shown some positive results in terms of movement in collections as well as a positive movement in Arbitration.
• Arbitration increases the additional cost burden
02 Litigation Operational • Disputed billed receivables due to Project deliverable issues • Contesting the matters on the basis of judicial precedents in the cases
• Case to case basis, strategically handled
• Trying to mitigate the issue of delay based on established precedents. In case, the same does not chart out, we plan to bifurcate our claims with the intent to go ahead with clean claims and forego the time barred claims.
• Provisions are made on a case-to- case basis based on management assessment of the legal cases.
03 Financial Continuity • Continuity challenges in "Going Concern" status • The company continues to derive revenue from ED AMC & SI Projects.
• As of March 31 2023, Groups net worth has been fully eroded • Promoter has been supporting the company from time to time by extending loans and Corporate Guarantees.
04 Operational Financial risk • Delay in getting the IT Refund • Subject is under litigation and is likely to take time
05 Financial Treasury • Treasury Risk – Continuation of BG issued to various customers. • Support from the promoter company in the form of loans and Corporate Guarantees.
06 Operational Human Capital • Loss of human capital in critical operations • Management is continuously exploring alternative sources for resources including outsourcing to address the attrition.
• Retention plans are in place for identified critical resources.
07 Operational Compliances • Legacy litigations in labour cases in HR practices • Cases are being addressed to mitigate the risk for the Company.
08 Operational Compliances • Risk of compliance gaps due to operational scale down, resultant organizational structural changes and attrition of resources • Periodic review of processes and alignment with organizational structure and compliance requirements.
• Risk assessment before delegating the authority.
• The financial authorities delegated are capped, within the framework of
Board approved delegation.
• Stringent exception approval process and close monitoring of adherence to Delegation of Authority and Segregation of Duty.
09 Operational Compliance • Code of conduct (COC) & Ethical issues • Independent Whistle Blower Mechanism
• Strict actions on violations
• Continuous emphasis on the companys Code of conduct policy
• Annual / Quarterly certification on compliance
• Periodic Internal Audit
• Quarterly Statutory Audit
10 Operational Compliance • Retention of key resources as part of HCLs Governance team.
• Risk of shared services agency opting out and continuity issues in the finance & accounting process • Management is evaluating alternative agencies.
11 Outsourcing risks Compliance • Governance in Finance, Accounts, HR and IT function can get complicated with Multiple outsourced vendors (activity/manpower) dependency • Documented SOPs
• Retention of key resources
• Close supervision
• Internal audits
• Statutory audits
12 Operational risks Financial • Legacy data is available in older versions of IT applications and requires specialized skills for extracting data (skill set issue due to organization downsizing) • Data retention requirements for the old legacy application will be reviewed.
• Alternative methods for data availability shall be reviewed considering the data retention requirements of the older applications.
13 Indirect tax Compliance • Authorities claim cannot be foreseen without any time-limit • The relevant data/documents are generally available in Accounts / IDT repository as well as ERP system.
• Document retention policies in the company aligned with the statutory requirements and for open transactions (legally or otherwise)
• Required documents are statutorily maintained as per retention policies
• Wherever required, suitable follow- ups with the parties for necessary documentation / confirmation.
14 Indirect tax Compliance • Actual liability could be more due to unsuccessful trials • The Company has settled high risk cases without payment of interest and penalty under Service tax, Excise and Sales Tax by opting for amnesty schemes, wherever applicable.
• Insufficient funds to meet unsuccessful litigations • Necessary provisions have been made for balance/open high-risk cases in books of account on the basis of IDT assessment and also corresponding amounts deposited with tax authorities to save the interest.
• Risk arising due to adverse decision of Apex Court on controversial issues involving interpretation of Law • High value litigation matters were opined in the companys favour by expert advocates
• In most of the cases except where provision has been created, Indirect Tax team has assessed the cases in consultation with the expert advocates and is of the view that, the company has a fairly good chance of success both on factual as well as technical grounds.
• Examination with the expert consultants and implementation of necessary steps to mitigate the liability, if any, on a case-to-case basis.

Internal Control Systems and their adequacy

The Company has put in place controls commensurate with the size and nature of operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance with corporate policies.

The company has an internal audit function designed to review the adequacy of internal control checks in the system which covers all significant areas of the Companys Operations such as Accounting and Finance, Procurement, Business Operations, Statutory compliances, IT Processes, Safeguarding of Assets and their protection against unauthorized use, among others. The Internal Audit function performs the internal audit of the Companys activities based on the internal audit plan, which is reviewed each year and approved by the Board Audit Committee. The Audit Committee reviews the reports submitted by internal auditors. Suggestions for improvements are considered and the Audit Committee follows up on corrective action. Disciplinary action is taken, wherever required, for non-compliance to corporate policies and controls.

Human Resource Development

As of March 31, 2023, the employee strength of the Company stood at 179, while on March 31, 2022, it was

208. Besides full-time employees, the Company also engaged with over 62 associates for various short-term projects across different timelines during the year. The reduction in headcount was due to organizational rightsizing.

DISCLAIMER

Certain statements made in this report relating to the Companys objectives, projections, outlook, estimates, etc. may constitute ‘forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ from such estimates or projections etc., whether expressed or implied. Several factors including but not limited to economic conditions affecting demand and supply, government regulations and taxation, input prices, exchange rate fluctuation, etc., over, which the Company does not have any direct control, could make a significant difference to the Company operations. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise. Readers are cautioned not to place undue reliance on any forward-looking statements. The Management Discussion and Analysis (MD&A) should be read in conjunction with the Companys financial statements included herein and the notes thereto. Information provided in this MD&A pertains to HCL Infosystems Limited and its subsidiaries on a consolidated basis unless otherwise stated.

FINANCIAL COMMENTS ON CONSOLIDATED OPERATIONS FOR THE YEAR ENDED MARCH 31, 2023

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

The Management Discussion and Analysis on Financial performance relates to Consolidated Financial statements of the Company and its subsidiaries. This should be read in conjunction with the financial statements and related notes to the consolidated accounts for the year ended March 31, 2023.

RESULTS OF OPERATIONS

Particulars FY 23 FY 22
Revenue 31.41 69.44
Cost of sales (18.67) (45.66)
Gross margin from continuing operations 12.74 23.78
Employee benefits expense (20.39) (26.67)
Administration, selling and others (61.68) (68.18)
Depreciation and amortization expense (0.58) (1.47)
Gain on foreign exchange fluctuation 0.99 0.80
Provisions/liabilities no longer 10.91 19.06
required written back
Operating Profit/(loss) from continuing (58.01) (52.68)
operations before doubtful debts
provision
Provision for doubtful debts and (4.13) (31.07)
other current assets
Interest income on discounted receivables 0.47 2.44
Investment & other Income 11.02 19.24
Finance costs (1.93) (13.70)
Profit/(loss) before exceptional items and tax from continuing operations (52.58) (75.77)
Exceptional Items gain/ (loss) 13.84 101.51
Tax expense (0.05) (1.22)
Profit/(loss) after tax from continuing operations (38.79) 24.52
Other comprehensive income 0.40 0.45
Total comprehensive income/(loss) for the year (38.39) 24.97

Revenue

Consolidated Revenues decreased to Rs. 31.41 Crores in FY 23 as compared to Rs. 69.44 Crores in FY 22. The decline in revenue is majorly in System Integration business.

Gross Margin

Gross Margin was Rs. 12.74 Crores in FY 23 as against Rs. 23.78 Crores in FY 22

Employee Benefits Expense

Employee Benefits Expense was Rs. 20.39 Crores in FY 23 as against Rs. 26.67 Crores in FY 22 due to reduction in headcount in FY 23.

Administration, Selling and Other Expenses

Administration, Selling & other expenses were Rs. 61.68 Crores in FY 23 as against Rs. 68.18 Crores in FY 22. The details of administration, selling & other expenses is as follows:

Particulars FY 23 FY 22
Legal, Professional and Consultancy Charges* 25.09 27.36
Technology Cost 3.40 4.17
Outsourcing cost 1.14 2.21
Rates and Taxes 2.72 6.93
Retainership Expenses 7.15 8.40
Bank Charges 2.08 2.07
Rent 0.73 1.34
Travelling and Conveyance 1.03 0.73
Office Electricity and Water 0.55 1.04
Net provision for Input Tax Credit** 13.12 8.98
Others 4.67 4.95
Total 61.68 68.18

* We are pursuing legal options by invoking arbitrations to recover our dues from customers. This is leading to high legal cost as reflected in legal ,professional and consultancy expenses (FY 23-Rs. 17.33 crores and FY 22- Rs. 16.13 crores) ** The unutilised /accumulated GST ITC has been provided for in books of accounts (FY 23- Rs. 13.12 crores and FY 22-

Rs. 8.98 crores) to the extent Company does not foresee business opportunities in near future wherein amount can be utilised and against amount outstanding for those particular locations where GST registration has been surrendered.

Depreciation

Depreciation was Rs. 0.58 Crore in FY 23 as against Rs. 1.47 Crores FY 22.

Provisions/Liabilities no longer required written back

Provisions/Liabilities no longer required written back were

Rs. 10.91 Crores in FY 23 as against Rs. 19.06 Crores in FY 22.

Operating Profit/ (Loss) from continuing operations before Doubtful Debts provision

Operating Profit/ (Loss) from continuing operations before Doubtful Debts provision was Rs. (58.01) Crores in FY 23 as against Rs. (52.68) Crores in FY 22. Operating loss is higher in FY 23 mainly on account of scaling down of businesses resulting in reduction in gross margin by Rs. 11.04 Crores as compared to FY 22. Though there is reduction in indirect expenses in comparison to previous year, same has been offset by one time GST ITC provision of Rs. 7.75 Crores.

Share Purchase Agreement (SPA) for sale of the entire shareholding held by HCL Infosystems Limited in HCL Infotech Limited to Novezo Consulting Pvt. Ltd. was frustrated during the year and was intimated in March 2023. The unutilised /accumulated GST ITC of HCL Infotech Limited has been provided for in books of accounts to the extent Company does not foresee business opportunities in near future wherein amount can be utilised.

Provision for Doubtful Debts and other Current Assets

Provisions for doubtful debts and other current assets were

Rs. 4.13 Crores in FY 23 as against Rs. 31.07 Crores in FY 22, mainly in System Integration business. Provision for doubtful debts and other current assets created due to inordinate delays with certain customer acceptances and payments thereof.

Investment & Other Income

Investment & other income was Rs. 11.02 Crores in FY 23 as against Rs. 19.24 Crores in FY 22.

FY 22 Investment and other income was higher mainly on account of receipt of interest income from Income tax authorities of Rs. 12.76 Crores.

Finance Costs

Finance costs was Rs. 1.93 Crores in FY 23 as against Rs. 13.70 Crores in FY 22, mainly due to substitution and repayment of external borrowings in FY 23. The Company had availed interest free loan from promoter entity as on 31st March 2023 of Rs. 355.00 Crores which is the main reason for reduction of finance cost.

Exceptional Items

Gain from Exceptional items was Rs. 13.84 Crores in FY 23 as against Rs. 101.51 Crores in FY 22 (net gain on sale of properties)

Profit/ (Loss) after Tax from continuing operations

Profit/ (Loss) after Tax from continuing operations was

Rs. (38.79) Crores in FY 23 as against Rs. 24.52 Crores in FY 22.

FY 22 profit was higher primarily due to higher Gain from Exceptional items in FY 22 (Rs. 101.51 Crores in FY 22 as against Rs. 13.84 Crores in FY 23) offset by lower provision for doubtful debts and other current assets in FY 23 (Rs. 4.13 Crores in FY 23 as against Rs. 31.07 Crores in FY Rs.

FINANCIAL CONDITION

Particulars March 31, 2023 March 31, 2022
ASSETS
Non-current assets 218.59 211.97
Current assets 284.18 272.38
Assets held for sale 3.13 6.90
Total 505.90 491.25
EQUITY AND LIABILITIES
Net worth (253.50) (215.11)
Non-current liabilities 1.68 15.38
Current liabilities 757.72 690.98
Total 505.90 491.25

Non-Current Assets

Non-current assets were Rs. 218.59 Crores as at March 31, 2023 as compared to Rs. 211.97 Crores as at March 31, 2022. The details are as follows:

Current Assets

Current assets were Rs. 284.18 Crores as at March 31, 2023 as compared to Rs. 272.38 Crores as at March 31, 2022. The details are as follows:

• Inventories were Rs. 0.39 Crore as at March 31, 2023 as compared to Rs. 0.51 Crore as at March 31, 2022.

• Financial Assets were Rs. 254.77 Crores as at March 31, 2023 as compared to Rs. 196.38 Crores as at March 31, 2022. The details are as follows:

• Other Current Assets were Rs. 29.02 Crores as at March 31, 2023 as compared to Rs. 75.49 Crores as at March 31, 2022. * In an Appeal under the Arbitration & Conciliation Act filed by MTNL (in CWG Project), an adhoc amount of Rs. 120.21 Crores has been released by the Honble High Court of Delhi to HCL Infotech Limited against a Bank Guarantee which is included in bank balances as at March 31, 2023.

Net Worth

The Net-worth of the company was Rs. (253.50) Crores as at March 31, 2023 as against Rs. (215.11) Crores as at March 31, 2022.

Non-Current Liabilities

Non-current liabilities were Rs. 1.68 Crores as at March 31, 2023 as compared to Rs. 15.38 Crores as at March 31, 2022 mainly due to decrease in non-current borrowings by Rs. 13.83 Crores.

Current Liabilities

Current liabilities were Rs. 757.72 Crores as at March 31, 2023 as compared to Rs. 690.98 Crores as at March 31, 2022. The details are as follows:

Financial Liabilities

(iii) Other Financial Liabilities includes Employee benefits payable, Deposits, Interest accrued but not due on borrowings, etc.

Other Current Liabilities includes amount received on account of MTNL CWG project (refer note given above under head current assets), deferred revenue, advances received from customers, statutory dues payable, etc.

Net Borrowings

Net borrowings were Rs. 118.80 Crores as at March 31, 2023 as compared to Rs. 232.80 Crores as at March 31, 2022.

Particulars March 31, 2023 March 31, 2022
Borrowings 355.01 414.04
Less : Cash, Bank & Investments 236.21 181.24
Net Borrowings 118.80 232.80

CASH FLOW STATEMENT

A summary of cash statement is given below:

Particulars FY 23 FY 22
Opening balance of cash and cash equivalents 21.88 38.82
Net cash flow from operating activities 73.57 100.70
Net cash flow from investing activities (15.21) 20.78
Net cash flow from financing activities (61.88) (138.62)
Effect of foreign exchange on cash and cash equivalents 1.39 0.21
Cash and cash equivalents at the end of the year 19.75 21.88

Figures in brackets indicate cash outflow.

Cash flow from operations

In FY 23, the Company generated Rs. 73.57 Crores from operations as against Rs. 100.70 Crores in FY 22.

Particulars FY 23 FY 22
Operating profit before changes in operating assets and liabilities (53.78) (56.54)
Changes in operating assets and liabilities 116.01 100.56
Cash generated from operations 62.23 44.02
Net tax refund/(paid) 11.34 56.68
Net cash generated/(used) in operating activities 73.57 100.70

Cash flow from investing activities

In FY 23, the Company used Rs. 15.21 Crores from investing activities as compared to cash generation of Rs. 20.78 Crores in FY 22. The cash utilization in FY 23 was mainly comprised of purchase of current investments Rs. 291.00 Crores, Investment in Bank Deposits Rs. 112.27 Crores, purchase of property, plant & equipment Rs. 0.43 Crore offset by proceeds from sale of current investments Rs. 347.62 Crores, proceeds from sale of properties Rs. 33.69 Crores, Interest income

Rs. 4.76 Crores and movement in margin money account Rs.

2.42 Crores as against FY 22 mainly comprised of receipt of business consideration on sale of investment in subsidiaries

Rs. 15.80 Crores, proceeds from sale of properties Rs. 139.92 Crores, Interest income Rs. 1.91 Crores utilised by purchase of current investments Rs. 95.63 Crores, Investment in Bank Deposits Rs. 40.92 Crores, purchase or property, plant & equipment Rs. 0.20 Crore and movement in margin money account Rs. 0.10 Crore.

Cash flow from financing activities

In FY 23, the Company used Rs. 61.88 Crores for financing activities (mainly for loan repayment and interest payment) as against cash used of Rs. 138.62 Crores in FY 22.

SEGMENT PERFORMANCE Segment Revenue

Particulars FY 23 FY 22
- Hardware Products and Solutions 25.74 60.96
- Distribution 5.67 8.48
Less : Intersegment Eliminations - -
Total 31.41 69.44

Hardware Products and Solutions

Hardware Products & Solution business comprise of large system integration projects to government customers. Segment revenue in FY 23 was Rs. 25.74 Crores as against

Rs. 60.96 Crores in FY 22.

Segment PBIT in FY 23 was Rs. (32.50) Crores as against

Rs. (30.48) Crores in FY 22.

Segment assets were Rs. 248.95 Crores as at March 31, 2023 as against Rs. 170.26 Crores as at March 31, 2022 and Segment liabilities were Rs. 351.40 Crores as at March 31, 2023 as against Rs. 225.47 Crores as at March 31, 2022. There is increase in segment assets and segment liabilities in FY 23 as compared to FY 22 mainly due to amount received on account of MTNL CWG project (refer note given above under head current assets).

Distribution

The distribution segment consists of Residual annual maintenance contracts related to Enterprise Distribution Customer. This business has been gradually scaled down starting from FY 21.

Segment revenue in FY 23 was Rs. 5.67 Crores as against

Rs. 8.48 Crores in FY 22. Revenue primarily includes Enterprise Distribution AMC revenue.

Segment PBIT in FY 23 was Rs. 1.80 Crores as against Rs. 2.45 Crores in FY 22.

Segment assets were Rs. 105.46 Crores as at March 31, 2023 as against Rs. 100.78 Crores as at March 31, 2022 and Segment liabilities were Rs. 30.18 Crores as at March 31, 2023 as against Rs. 24.16 Crores as at March 31, 2022.

Learning

Segment revenue in FY 23 and FY 22 was Nil.

Segment PBIT in FY 23 was Rs. (0.07) Crore as against Rs. 0.51 Crore in FY 22.

Segment assets were Rs. 0.91 Crore as at March 31, 2023 as against Rs. 0.79 Crore as at March 31, 2022 and Segment liabilities were Rs. 0.78 Crore as at March 31, 2023 as against

Rs. 0.59 crore as at March 31, 2022.

KEY FINANCIAL RATIOS

Particulars FY 23 FY 22
Debtors Turnover (Days) 295.16 146.26
Inventory Turnover (Days) 4.53 2.70
Current Ratio (times) 0.38 0.39
Operating Profit Margin (%) -184.70% -76.71%
Net Profit Margin (%) -123.48% 35.64%

• Debtors Turnover days were at 295.16 as at March 31, 2023 as against 146.26 as at March 31, 2022 due to lower revenue on account of scaling down of business.

• Inventory Turnover days were 4.53 as at March 31, 2023 as against 2.70 as at March 31, 2022 mainly due to lower revenue in FY 23.

• Debt Equity Ratio was negative as at March 31, 2023 and March 31, 2022 due to negative Net-worth.

• Operating Profit Margin was at (184.70%) as at March 31, 2023 as against (76.71%) as at March 31, 2022 mainly on account of lower revenue due to scaling down of businesses resulting in reduction in gross margin by Rs. 11.04 Crores as compared to FY 22. Though there is reduction in indirect expenses in comparison to previous year, same has been offset by one time GST ITC provision of Rs. 7.75 Crores (refer note given above under head Operating Profit/ (Loss) from continuing operations before Doubtful Debts provision).

• Interest coverage was negative on account of negative EBIT in FY23 & FY22.

• Net Profit Margin was (123.48%) for FY23 as against 35.64% for FY22 majorly due to higher gain on property sale in FY22.