lex nimble solutions ltd share price Management discussions

a. Industry Structure and developments:

The company provides services mainly in IT sector and Quality certifications like CMMI (Capability Maturity Model Integration) and ISO. CMMI models provide guidance for developing or improving processes that meet the business goals of an Organization.

The IT services are mainly being provided to the Parent Company Lex Nimble Solutions Inc. and the quality certifications & the relevant trainings will be provided across the world.

Software technology is transforming the businesses in every industry around the World. But in these times of pandemic and lock downs, technology has become the center-stage to continue the operations of the various businesses, hence the global market for ITservices continuous to be proliferated.

b. Opportunities and Threats:

Strengths:

Experienced Management team Location Efficient Employees

Weakness:

Rapid technological changes makes the technology obsolete Human attrition rate Increased Dependence on IT Network

Opportunities:

Expansion of target markets

Knowledge of emerging technologies Enhancing of functional efficiency Reduction in Expenses

Threats:

High Competition Technology changes Security Risks Regulatory changes

The company is putting maximum efforts to capitalize on business opportunities and further except a better outlook in the coming years.

c. Segment-wise or Product-wise Performance:

IT development/Consulting, IT staffing, support services / payroll and accounting services: Income from these services, contributes majorly to the total turnover of the Company amounting to Rs. 4.3182 Cr in the financial year 2022-23.

Quality Certification/Consulting and Training: The income from this segment contributed well to the Companys total operational income in the financial year 2022-23. The company is continuously aspiring for improving the market base globally for this segment in turn to improve the segmental income.

d. Outlook:

The significant weaknesses the IT industry is facing now is due to the fall in the economy, as a lot of companies are forced to ask their employees to work from home (remotely) keeping in the account of the public health concerns. Due to this, there is a massive loss in opportunity for many companies who have international dealers. Initially the spread of this deadly virus has caused a lot of tech conferences to get cancelled, which could have been a great partnership opportunity for many companies to expand their horizons. A few of the meetings were shifted to teleconferences, but this wont have the same reach, and the conference attendees will not be able to have the networking opportunity as they would be attending the actual conference. Due to the cancellation of these major tech conferences, there is an estimated loss of US$ 1 Billion. The main reason for this increase in the economy for this industry is the increased demand for software and social media platforms which helps to continue the workflow. The economy will also blossom because, during these crises, people understood the importance of the internet and technology as this is helping us stay safe and pandemic has also opened a lot of new opportunities in the IT Sector.

e. Risks and Concerns:

As one of the fastest-growing industries, the software sector is constantly opening its doors to the dangers that come with untested innovation. The major technological risks to be

Faced by IT industry are artificial intelligence, cyber threats and a work force shortage. Though we have installed adequate systems in place for safety of information and our systems, we cannot rule out risk of breach, theft and fraud as we grow and diversify. We do intend to place adequate insurance and backup mechanisms for protection and recovery of data. The other concern of risk is sourcing of business opportunities in the global markets for ISO certifications and CMMI Appraisals. The business segments in which the company operates are man centric hence employee retention cost is one of the concerns for the smooth running of business.

Exchange rate fluctuations are also a point of concern for the business, since the major customers are located in USA. Global economic, political and social conditions such as fiscal and monetary policies, inflation etc. which are beyond our control, also effect the performance of the business.

f. Internal control systems and their adequacy:

The Company has implemented proper system for safeguarding the operations/business of the company, through which the assets are verified and frauds, errors are reduced and accounts, information connected to it are maintained in such a way, which helps in timely completion of statements. The company has adequate systems of internal controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information.

The company gets internal audit and verification done at regular intervals. The requirement of having internal auditor compulsory by statute in case of listed company shall further strengthen the internal control measure of the company.

g. Discussion on financial performance with respect to operational performance:

The total gross revenue from operations of the company during the financial year 2022-23 was Rs. 4,31,82,798/- against the total revenue of Rs. 4,53,54,187/- in the previous financial year 2021-22.

The total expenses of the Company during the financial year 2022-23 were Rs.3, 96, 01,660 /- against the expenses of Rs. 4, 54, 59,873/- in the previous financial year 2021-22.

The profit after tax is Rs. 81, 34,097/- for the financial year 2022-23. h. Material developments in Human Resources / Corporate Relations front including no. of people employed:

The company always imparts expert training in the respective field and develops Human resource capabilities. The employee efforts have direct stake in the business prospectus of the organization. The employees have extended a very productive cooperation in the efforts of the management to carry the company to greater heights. The company has undertaken employees development initiatives, which has very positive impact on the morale and team spirit of the employees. The appraisals and other welfare measures ensure healthy corporate relations. The total no.of employees as on 31.03.2023 are 20.

i. Details of significant changes in Key financial ratios:

S. No.	Ratios	For the FY	For the FY
		2022-23	2021-22
1.	Debtors Turnover Ratio	13.74	16.02
2.	Current Ratio:	35.4	0.92
3.	Debt Equity Ratio:	0.05	0.05
4.	Operating Profit Margin Ratio:	0.21	0.14
5.	Net Profit Margin Ratio:	0.16	0.11
6.	Return on Net Worth Ratio:	0.06	0.04