Managements discussion and analysis of the financial condition and results of operations include forward looking statements based on certain assumptions and expectations of future events. The Company cannot assure that these assumptions and expectations are accurate. Although the Management has considered future risks as part of the discussions, future uncertainties are not limited to Management perceptions.
1. COMPANY OVERVIEW:
The Company is principally engaged in the business of Business Process Outsourcing which is the only reportable segment.
ITIL has been broadening and deepening customer relationships by continually looking for new opportunities and newer areas in their businesses to add value, proactively investing in building newer capabilities, reskilling its workforce and launching newer services, solutions, products and platforms to address those opportunities The Company is actively looking for expansion opportunities in various sectors which are technology enabled in order to drive growth for the Company.
2. OPPORTUNITIES AND CHALLENGES
While there may be some challenges ahead with the advent of automation, Ai, ML tools, your company operates in a niche data processing segment which is customised data processing for its clients, thus is able to navigate through the challenges posed by automation in the IT industry.
Your Company has also developed insight into the market segment of financial content and has developed relationships with its customers, which are well known and respected American Corporations to main business continuity.
3. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE
The Company is principally engaged in the business of Business Process Outsourcing which is the only reportable segment. The Company has earned INR 249.91 lakhs as Revenue from operations.
The Continual growth in the Indian sector is necessary to give necessary support to the industry. The Company is making all effort to accelerate the growth of its business. It expects to improve its position in the market by focusing in the technologically advanced and more profitable Product and market segment and working aggressively in the area of productivity, efficiency and cost reduction.
5. RISKS AND CONCERNS
Legal, Regulatory and Compliance Risk
The risk that arises from non-compliance to national, state, local and foreign laws relating to various aspects of business operations that could lead to financial exposure and reputational risk to the organization.
The risks such as taxation risks, foreign currency risk, credit risks arising from normal course of business
Risk of Geo-political situations impacting business and employee safety
Talent & Culture Risk
A highly motivated and skilled resources are a backbone of the organization. Effective and efficient people management helps business gain a competitive advantage. A risk that could arise if organizations fail to hire and manage resources appropriately.
Employee work place Environment, Health and Safety Risk
Providing a healthy and safe working environment will improve employee productivity, retention and avoid any
reputational impact. It will also help business gain a competitive advantage.
Strategic & Market Risk
Strategy supports value creation for our clients and accelerates growth. Growth by focusing on identified markets and sectors will provide best in class solutions. The risk of not aligning with our strategic objectives may impact growth, market share and profitability.
Technology & Innovation Risk
Our capability to invent new technology solutions while keeping pace with rapidly changing technology and service offering needs of clients. Failure to do so will result to loss of client and revenue.
Third Party/Supplier Risk
Our inability to identify and govern suppliers/partners that provides products and/or services and have access to privileged information, can lead to contractual, legal and regulatory risks incase of a breach.
Risk of not being able to identify and respond to new and evolving risk scenarios can catch an organization off-guard and lead to contractual and reputational impact.
6. INTERNAL CONTROL SYSTEMS:
The Company has adequate internal control systems in place with reference to the financial statements. The Audit Committee of the Board periodically reviews the internal control systems with the management, Internal Auditors and Statutory Auditors and the adequacy of internal audit function, significant internal audit findings and follow-ups thereon. There are no adverse observations having material impact on financials, commercial implications or material non-compliance which have not been acted upon.
The Company has also implemented Quality Management System (QMS) and has got itself registered under ISO 9001:2015 Standard-QMS certified.
7. FINANCIAL PERFORMANCE & OPERATIONS:
Your Company is operating as IT enabled service provider and is a content provider to the securities and financial research industry. Companies Data Management techniques enable organizations to leverage their operations and help them reduce costs and turnaround time.
Your Company has also developed insight into the market segment of financial content and has developed relationships with its customers, which are well known and respected American Corporations. During the year, the total operational revenue was INR 249.91 Lakhs as compared to INR 264.22 Lakhs in previous year. Your Company is also exploring new business opportunities in other areas in information technology services and is in the process of developing software application solutions for proprietary products. During the year, the total income of the Company was INR 330.89 Lakhs compared to INR 483.06 Lakhs in previous year.
8. ASSOCIATE COMPANY AND CONSOLIDATED STATEMENTS:
Your Company has one associate company i.e. "Entecres Labs Private Limited" (ELPL). During the year, total consolidated revenue of the ELPL has increased to INR 830.72 Lakhs from INR 539.40 Lakhs of the previous year and its net profit after tax has increased to INR 31.41 Lakhs from INR 18.03 Lakhs in the previous year. The Consolidated Financial Statement of your Company for the financial year 2022-23, is prepared in compliance with applicable provisions of the Companies Act, 2013, Indian Accounting Standard and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Consolidated Financial Statements have been prepared on the basis of audited financial statements of the Company, its associates, as approved by their respective Board of Directors. Pursuant to sub-section (3) of section 129 of the Act, the statement containing the salient features of the financial statement of Companys associate is given as AOC -1. Brief particulars about the business of the Associate Company are as follows:- Entecres Labs Private Limited (ELPL) is the brainchild of a group of research engineers along with some professors and educationalists. The Company core business is to promote STEM education (STEM stand for Science, Technology, Engineering, and Mathematics) among students at an earlier age. Apart from India, it also has presence in various countries including Japan, Korea, UAE, Singapore, Maldives, Sri Lanka, Bangladesh, Nepal and Malaysia. The investment has allowed your Company to enter the education sector and explore new opportunities for growth in education and technology sector.
9. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS, INCLUDING NUMBER OF PEOPLE EMPLOYED:
The human resource plays a vital role in the growth and success of an organization. The Company has maintained cordial and harmonious relations with employees. During the year under review, various training and development workshops were conducted to improve the competency level of employee with an objective to improve the operational performance of individuals. The Company has built a competent team to handle challenging assignments and projects. The Company has 24 permanent employees as on March 31,2023.
10. DETAILS OF SIGNIFICANT CHANGES:
Debtors Turnover ratio
Interest coverage ratio
Debt equity ratio
Operating Profit Margin
Net Profit Margin %
Return on Net worth %
P E Ratio
Reason for significant change:
Revenue from Operations & other Income: The Revenue has decreased in the current year. Other Income has also reduced mainly due to conservative approach adopted to avoid & limit our exposure to volatility & sensitivity in the Financial Markets.
Debt Equity Ratio: The debt equity ratio has increased as the Company has availed vehicle loan during the year.
Trade Receivable Turnover Ratio: There is decrease in revenue in the financial year 2022-23.
The Interest coverage ratio has become negative as compared to the previous year.
The net profit margin has decreased as compared to last previous year due to decrease in revenue from operations and other income.
The earnings per share have gone down from INR 3.51 to INR (1.29). The negative EPS is mainly because of decrease in revenue.
Details of any change in Return on Net Worth as compared to the immediately previous financial year:
The return on net worth i.e. the return on shareholders equity has gone down from 9.31% to -3.50%. However, the managements contention is that it the Ind AS affect wherein the notional losses of current investments have been factored in.