naapbooks ltd share price Management discussions


MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together with our restated financial statements for the financial year ended on 31st March 2021, 31st March 2020, 31st March 2019 and 31st March 2018 including the notes and significant accounting policies thereto and the reports thereon, which appear elsewhere in this Red Herring Prospectus. You should also see the section titled "Risk Factors" beginning on Page No. 23 of this Red Herring Prospectus, which discusses a number offactors and contingencies that could impact our financial condition and results of operations. The following discussion relates to our Company, unless otherwise stated, is based on restated audited financial statements.

These financial statements have been prepared in accordance with Ind GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditors dated July 16, 2021 which is included in this Red Herring Prospectus under the section titled "Financial Information" beginning on Page No. 113 of this Red Herring Prospectus. The restated financial statements have been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. We do not provide a reconciliation of our restated financial statements to US GAAP or IFRS and we have not otherwise quantified or identified the impact of the differences between Indian GAAP and U.S. GAAP or IFRS as applied to our restatedfinancial statements.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those described under "Risk Factors" and "Forward Looking Statements" beginning on Page Nos. 23 and 18 respectively, and elsewhere in this Red Herring Prospectus

Accordingly, the degree to which the financial statements in this Red Herring Prospectus will provide meaningful information depends entirely on such potential investors level offamiliarity with Indian accounting practices. Our F.Y. ends on March 31 of each year; therefore, all references to a particular fiscal are to the twelve-month period ended March 31 of that year. Please also refer to section titled "Certain Conventions, Use of Financial, Industry and Market Data and Currency Presentation " beginning on Page No. 16 of this Red Herring Prospectus.

BUSINESS OVERVIEW

Our Company was incorporated as "Naapbooks Private Limited" under the provisions of the Companies Act, 2013 vide Certificate of Incorporation dated April 20, 2017 bearing Registration No. 096975 issued by the Registrar of Companies, Ahmedabad, Gujarat. Further, our Company was converted into a Public Limited Company and the name of our Company was changed to "Naapbooks Limited" vide Special Resolution dated December 29, 2020. A fresh certificate of incorporation consequent to conversion into a public limited company was issued to our Company by the Registrar of Companies, Gujarat on January 7, 2021. The Companys Corporate Identity Number is U72900GJ2017PLC096975.

We are a registered DIPP Start-up vide Certificate No: DIPP4092 under Startup India Initiative of Government of India having ISO 9001-2015 and appraised with CMMI 3 Certification. Our vision and mission are amalgamation of our corporate philosophy and our motto of providing next generation IT services.

Our Company is engaged in the business of providing solutions and services related to Web Technologies, Mobile Applications, Internet, Cloud and E-commerce, including design, develop, operate, own, establish and install. Also, analyzing, designing, maintaining, converting, porting, debugging; coding, outsourcing and programming ‘software to be used on computer or any microprocessor-based device or any other such hardware within or outside India.

We have website at www.naapbooks.com. We have built technology and solutions for multiple areas of the business which enables our clients to increase efficiency. We work on exclusive and non-exclusive model with a team of our young managers and executives. We provide dynamic pricing and sector specific approach. Our Company is also engaged in Software Consultancy services.

Naapbooks Limited (NBL) is known for its niche in the domain of IT. We believe in harnessing computing technology to strengthen enterprise and optimize their operations. NBL delivers the best-in-class software solutions with elite teams of software developers and managers. We use innovative technologies to digitalise enterprise business across numerous industries.

NBL ensures that streamlining data for our clients leads to insightful analytics and better decision making. Since the inception of NBL, the team of founders recognized the actual need for automation in the digital area which shapes the future of IT and business operations.

We constantly challenge ourselves to create what others believe is a distant possibility. We believe that the human mind is made for shaping innovation and creating value by empowering our generation with smart systems. We strive towards making excellence a habit that creates smooth and consistent performance a routine worth aspiring for. Reinforced by the proud industry experience earned since 2017, NBL represents efficiency, effectiveness and elegance of client satisfaction by offering the best solution available in the current world.

New technology and creative approach provide the edge to have technological advancements and necessary pace in todays era of Business. Deep understanding of the industry, sound technical expertise and one widow solution - all these factors have led us in achieving a wide client base across industries in various sectors.

For further details, see "Our Business" on page 78 of this Red Herring Prospectus

FACTORS AFFECTING OUR RESULT OF OPERATIONS

Except as otherwise stated in the Red Herring Prospectus and the Risk Factors given in the Red Herring Prospectus, the following important factors could cause actual results to differ materially from the expectations include, among others:

Inability to compete effectively may lead to lower market share

We cannot assure you that this industry will continue to grow at this rate in the future. The IT industry in India has just begun few years back and is still in its early stages and may experience slower growth in the future due to various market saturations.

Competition

We face competition in our business from other existing service providers. We provide our services and products in competitive markets and there are many players in the market providing same services like ours, if we are not able to compete with them through our marketing tactics, we might lose our market share in future. We compete with our competitors on a regional basis.

Dependency on limited Number of Customer

Our dependence on limited number of customers for a significant portion of our revenues though we have been increasing our client base year on year.

Our ability to optimize our existing offerings and launch new Products that is useful in office automation

We currently offer a diversified suite of offerings, across Office automation, Securing fintech and Digitalization. Our ability to continue to enhance these offerings and cater to SMEs and corporates, will determine their continued usage of these products. Further, while our Products were initially developed for the Indian market, we will scale this to global audiences and benefitted from sales and revenue generation in global markets. In addition, our ability to identify the right target market for each of our offerings will play a key role in determining how these offerings are received and adopted by users.

Our ability to continue to maximize our operating leverage across our businesses

The performance of each of our business segments is integral to our continued success and future profitability. We expect this to be driven especially by our Office Automation Products and our fintech services. Also, our future growth will depend upon our ability to continue to identify such opportunities, while successfully managing to achieve intended objectives such as revenue enhancement, cost optimization, economies of scale and tapping into new markets

Ability to expand product portfolio while minimizing regulatory risk

We have opted for a strategy focused on near-term profitability rather than investing in brand building and consumer acquisition at scale. Consequently, while we believe that we are currently insulated from regulatory risks associated with this business, we may not be able to fully capitalize on the opportunity presented by this business.

COVID-19 Pandemic

The current outbreak of COVID-19 pandemic and the preventative or protective actions that governments around the world have taken to counter the effects of the pandemic have resulted in a period of economic downturn and business disruption in India, as well as in countries where our customers and suppliers are located. The World Health Organization declared the outbreak of COVID-19 as a public health emergency of international concern on January 30, 2020 and a pandemic on March 11, 2020. The Government of India announced a nation-wide lockdown on March 24, 2020 and imposed several restrictions since then. In view of the nationwide lockdown announced by the Government of India to control the spread of COVID-19, our business operations were temporarily disrupted from March 22, 2020 till April 10, 2020 Since then, we have resumed operations through Work from home policy and started office in a phased manner as per the Government of India and state governments directives. The future impact of COVID-19 or any other severe communicable disease on our business and results of operations depends on several factors including those discussed in the chapter "Risk Factors" beginning on Page No. 23. We are continuing to closely monitor the economic conditions and the effect of COVID-19 and have outlined certain measures to combat the pandemic situation and to minimize the impact on our business.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation of restated financial statements:

The Restated Standalone Summary Statement of Assets and Liabilities of the Company as at March 31, 2021, March 31, 2020, March 31, 2019, and March 31, 2018, and the Restated Standalone Summary Statement of Profit and Loss and restated Standalone Summary Statements of Cash Flows for the year ended on March 31, 2021, March 31, 2020, March 31, 2019, and March 31, 2018 and the annexure thereto (collectively, the "Restated Standalone Financial Statements" or "Restated Standalone Summary Statements") have been extracted by the management from the Financial Statements of the Company for the year ended March 31, 2021, March 31, 2020, March 31, 2019, and March 31, 2018. Restated Summary Statements have been prepared to comply in all material respects with the provisions of Part I of Chapter III of the Companies Act, 2013 (the "Act") read with Companies (Prospectus and Allotment of Securities) Rules, 2014, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("ICDR Regulations") issued by SEBI and Guidance note on Reports in Companies Prospectuses (Revised 2019) ("Guidance Note"). Restated Summary Statements have been prepared specifically for inclusion in the offer document to be filed by the Company with the B SE in connection with its proposed start-up IPO. The Companys management has recast the financial statements in the form required by Schedule III of the Companies Act, 2013 for the purpose of Restated Summary Statements.

The restated financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with relevant rules there under and other accounting principles generally accepted in India. The restated financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the restated financial statements are consistent with those followed in the previous year

All assets and liabilities have been classified as current and non-current as per normal operating cycle of the Company and other criteria set out in the Schedule III of the Companies Act, 2013.

b) Revenue recognition:

i. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

ii. Revenue from maintenance contracts are recognised pro rata over the period of the contract as and when services are rendered.

iii. All other income and expenditure are recognised and accounted for on accrual basis.

c) Use of estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

d) Cash and Cash Equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

e) Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit/loss before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

f) Inventories

Inventories are valued at lower of cost and net realizable value, including necessary provision for obsolescence. Cost is determined using the weighted average method. Work in Progress are valued at cost including related overhead costs.

g) Tangible Fixed Assets:

i. An item is classified as Tangible fixed asset only if it satisfies the recognition criteria stated in AS 10 (i.e.) is probable that future economic benefits will flow to the company and the cost of such item could be measured.

Stores and Spares fulfilling the above conditions are also classified as fixed assets. Fixed assets are initially recognized at its purchase price including all costs directly attributable to bring the asset in a ready to use condition. All subsequent cost incurred such as day to day running expenses, repair and maintenance expenses are treated as revenue expenses except when such expenditure satisfied the recognition criteria stated above. Cost Model is followed after initial recognition i.e., Fixed Assets are carried at cost less accumulated depreciation/amortization/impairment.

ii. Depreciation: Fixed assets are depreciated using the Written Down Value method. Useful lives of assets necessary for calculation of depreciation rates are taken as specified in Schedule II of Companies Act, 2013.

iii. Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately.

iv. Capital Work-in-Progress: Projects under which tangible fixed assets are not yet ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable borrowing costs.

h) Intangible Assets:

i. Intangible Assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.

ii. Software Products Developed/Purchased which are held for use in the production or supply of goods and services, for rental to others or for administrative purposes have been recognized as Intangible Assets.

iii. Research Costs are expensed as incurred. Software product development cost are expensed as incurred unless technical and commercial feasibility of the product is demonstrated, future economic benefits are probable, the company has an intention and ability to complete and use or sell the software and the costs can be measured reliably. The costs which can be capitalized include the cost of materials, directs labour, and overhead cost that are directly or indirectly attributable to preparing the asset for intended use.

iv. Intangible assets are amortized on written down value method over their estimated useful life or 5 years, whichever is lower. The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization period is revised to reflect the changed pattern, if any.

v. Intangible Asset under Development: - All Software Development Expenses eligible for capitalization are recognized as "Intangible Assets under Development" until the Software Product is ready for market.

i) Impairment of assets:

The carrying value of assets/cash generating units at each balance sheet date is reviewed for impairment if any indication of impairment exists. If the carrying amount of the assets exceeds the estimated recoverable amount, impairment is recognized for such excess amount. The impairment loss is recognized as an expense in the Statement of Profit and Loss, unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation reserve is available for that asset.

The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.

When there is indication that an impairment loss recognized for an asset (other than a revalued asset) in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss. In case of revalued assets such reversal is not recognized.

j) Investments:

Investments are classified into current and long-term investments. Current investments are stated at lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of long-term investments.

k) Employee benefits:

Wages, salaries, paid annual leave, sick leave and bonuses are accrued in the year in which the services are rendered by the employees. The company does not permit accumulating of unused leaves. The company does not provide any long-term employee benefits except gratuity. The company is not having any defined contribution plan and nor has made any provision for payment of Gratuity

l) Borrowing cost:

Borrowing cost attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

m) Taxation:

The tax expense for the period comprises current and deferred tax. Tax is recognized in Statement of Profit and Loss, except to the extent that it relates to items recognized in the reserves directly. In such cases, the tax is also recognized in the reserves.

- Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.

- Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.

n) Provisions, contingent liabilities and contingent assets:

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present values and are determined based on the best estimate required to settle the obligations at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized in the financial statements and are disclosed in the Notes. A Contingent asset is neither recognized nor disclosed in the financial statements.

o) Earnings Per Share

Basic earnings per share is computed by dividing the profit/loss after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/loss after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The number of equity shares and potentially dilutive equity shares are adjusted for share splits/reverse share splits and bonus shares, as appropriate.

p) General:

Accounting policies not specifically referred to above are consistent with generally accepted accounting principles. Previous Years Figures have been re-grouped/re-arranged where ever necessary

NOTES ON RECONCILIATION OF RESTATED PROFITS

Reconciliation of Restated Profits is stated as follows:

Reconciliation of Audit Profit & Restated Profit
For the year ended March 31,
Particulars 2021 2020 2019
Net Profit After Tax as per audited accounts but before adjustments for restated accounts: 47.05 32.40 14.15
(Short)/Excess Provision of Deferred Tax (0.12) 0.08 (0.43)
(Short)/Excess Provision of Income Tax Provision (0.01) (0.04) 0.38
(Short)/Excess Finance Costs - - (0.32)
Net Adjustment in Profit and Loss Account (0.13) (0.13) (0.38)
Net Profit After Tax as per Restated Accounts: 46.93 32.44 13.78

Explanatory notes to the above restatements made in the audited financial statements of the Company for the respective years:

I. Adjustments having impact on Profit:

a. Income Tax Expense: - Income Tax Expense has been recalculated as per the applicable rates and provision had been adjusted accordingly. Interest Expense on Income Tax has been re-classified as Finance Cost instead of Income Tax Expense.

b. Deferred Tax Benefit: - Deferred Tax has been recalculated at normal tax rate applicable during the relevant year and expense/income has been adjusted accordingly

c. Finance Cost: - Interest Expense on Income Tax has been re-classified as Finance Cost instead of Income Tax Expense.

II. Adjustments having no impact on Profit:

a. Material Regrouping:

Appropriate regroupings have been made in the Restated Summary Statements, wherever required, by a reclassification of the corresponding items of income, expenses, assets, liabilities and cash flows in order to bring them in line with the groupings as per the audited financial statements of the Company, prepared in accordance with Schedule III and the requirements of the Securities and Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations, 2018 (as amended).

RESULTS OF OUR OPERATIONS

(Amount f in lacs)

For the year ended March 31,

STr‘ Particulars No. 2021 % of Total Income 2020 % of Total Income 2019 % of Total Income
A INCOME
Revenue from Operations 271.33 99.96 225.12 99.91 221.18 99.99
Other Income 0.12 0.04 0.21 0.09 0.02 0.01
Total Income (A) 271.45 100 225.33 100 221.2 100
B EXPENDITURE
Development Expenses 72.28 26.63 16.84 7.47 103.26 46.68
Employee Benefit Expenses 77.69 28.62 87.42 38.80 50.55 22.85
Finance costs 6.73 2.48 11.44 5.08 2.4 1.08
Depreciation and Amortization Expense 18.78 6.92 20.64 9.16 16.17 7.31
Other Expenses 30.59 11.27 45.16 20.04 30.21 13.66
Total Expenses (B) 206.07 75.91 181.5 80.55 202.59 91.59
C Profit before extraordinary items and tax (A - B) 65.38 24.09 43.83 19.45 18.61 8.41
Extraordinary items 0 0 0
D Profit before tax 65.38 24.09 43.83 19.45 18.61 8.41
Tax Expense:
(i) Current Tax 15.93 5.87 13.26 5.88 5.65 2.55
(ii) Deferred Tax 2.52 0.93 -1.87 -0.83 -0.82 -0.37
E Total Tax Expense 18.45 6.80 11.39 5.05 4.83 2.18
F Profit for the year/ period (D-E) 46.93 17.29 32.44 14.40 13.78 6.23

Main Components of our Profit and Loss Account Income

Our total income comprises of revenue from operations and other income.

Revenue from Operations

Revenue from operations mainly consists of revenue from IT Services and IT solutions Expenditure

Our total expenditure primarily consists of Employee Benefit Expenses, Development Expenses, Finance Cost, Depreciation & Amortisation and Other Expenses.

Employee Benefit Expenses

Employee benefit expense includes Salary & wages, Directors Remuneration, PF/ESI Contribution, Employee Group Insurance and Staff Welfare Expenses etc.

Finance Cost

Its basically interest expenses and other borrowing costs.

Depreciation and Amortization Expense

We recognize Depreciation and Amortization expense on a Written down value Method (WDV method) as per the rates set forth in the Companies Act, 2013 as applicable.

Other Expenses

Other expenses primarily include Advertisement & Publicity, Auditors Remuneration, Books & Periodicals, Cloud Charges, Conveyance Expenses, Electricity Expense, Forex Fluctuation, Insurance Expenses, Internet Expense, Compliance Cost, Office Expenses, Office Maintenance & Taxes, Postage and Courier, Printing & Stationary, Professional Fees, Refreshment Expenses, Rent, Repair and Maintenance, Software Expenses, Telephone Expenses, Traveling Expenses

Provision for Tax

The provision for current taxation is computed in accordance with relevant tax regulation. Deferred tax is recognized on .timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.

COMPARISON OF THE FINANCIAL PERFORMANCE Fiscal 2021 compared with Fiscal 2020 Revenue from Operation:

During the FY 2020-21 the revenue from operation of the company increased to Rs.271.33 Lacs as against Rs.225.12 Lacs in the FY 2019-20, representing an increase of 20.53% of the revenue from operation. This increase was mainly due increase in sales of services.

Other Income

Other Income was Rs.0.12 lacs in 2020-21 as against Rs.0.21 lacs in 2019-20.

Total Expenses

The total expenditure including depreciation, interest and tax amount, for the FY 2020-21 has increased to Rs.224.52 Lacs as against Rs.192.89 Lacs in FY 2018-19. This increase was mainly due to higher costs.

Development Expenses

The Development Expense for the FY 2020-21 has increased to Rs.72.28 Lacs as against Rs.16.84 Lacs in the FY 2019-20, representing an increase of 329.22%. The increase in development expenses was mainly due to higher development charges.

Employee Benefit Expenses

The Employee Benefits Expense for the FY 2020-21 has decreased to Rs.77.69 Lacs as against Rs.87.42 Lacs in the FY 2019-20, representing a decrease of 11.13%. The decrease in employee expenses was mainly due to low remuneration to directors.

Finance Expenses

The finance cost of the company for the FY 2020-21 has decreased to Rs.6.73 Lacs as against Rs.11.44 Lacs in the FY 201920, representing a decrease of 41.17%. due to decrease in bank charges and interest on unsecured loans.

Depreciation and Amortisation

Depreciation and Amortisation of assets of the company for the FY 2020-21 has decreased to Rs.18.78 Lacs as against Rs.20.64 Lacs in the FY 2019-20, representing a decrease of 9.01%.

Other Expenses

Other Expense for the FY 2020-21 has decreased to Rs.30.59 Lacs as against Rs.45.16 Lacs in the FY 2019-20, representing a decrease of 32.27%. The decrease in other expenses was mainly due to lower electricity expenses, office expenses, office maintenance expenses, lower rent expenses and lesser travelling expenses.

Profit/ (Loss) before Tax

The restated Profit before Tax for FY 2020-21 has increased to Rs.65.38 Lacs as against Rs.43.83 Lacs in the FY 2019-20. The increase in profit before tax was 49.17% from the FY 2019-20 was due to the increase in revenues.

Profit/ (Loss) After Tax

The restated Profit after Tax for FY 2020-21 has increased to Rs.46.98 Lacs as against Rs.32.44 Lacs in the FY 2019-20. The increase in profit after tax was 44.67% from the FY 2019-20 was due to the higher Profit before tax.

Fiscal 2020 compared with fiscal 2019

Revenue from Operation:

During the FY 2019-20 the revenue from operation of the company increased to Rs.225.12 Lacs as against Rs.221.18 Lacs in the FY 2018-19, representing an increase of 1.78% of the revenue from operation. This minor increase was mainly due Covid scenario and non-closure of projects thus there was small revenue increase in revenue from operations.

Other Income

Other Income was Rs.0.12 lacs in 2019-20 as against Rs.0.21 lacs in 2018-19 Total Expenses

The total expenditure including depreciation, interest and tax amount, for the FY 2019-20 has decreased to Rs.192.89 Lacs as against Rs.207.42 Lacs in the FY 2019-19, representing an decrease of 7.00% from the FY 2018-19. This Decrease was mainly due to Cost effectiveness and decrease in development expenses during the FY as mentioned in revenue from operation above.

Development Expenses

The Development Expense for the FY 2019-20 has decreased to Rs.16.84 Lacs as against Rs.103.26 Lacs in the FY 2018-19, representing a decrease of 83.69% from the FY 2018-19. The decrease in development expenses was mainly due to increase in inhouse capabilities by the company and decrease in outsourcing of work.

Employee Benefit Expenses

The Employee Benefits Expense for the FY 2019-20 has increased to Rs.87.42 Lacs as against Rs.50.55 Lacs in the FY 201819, representing an increase of 72.93% from the FY 2018-19. The increase in employee expenses was mainly due to increase in inhouse capabilities by the company.

Finance Expenses

The finance cost of the company for the FY 2019-20 has increased to 11.44 Lacs as against Rs.2.40 Lacs in the FY 201819 due to increase in loan during the period.

Depreciation and Amortisation

Depreciation and Amortisation of assets of the company for the FY 2019-20 has increased to Rs.20.64 Lacs as against Rs. 16.17 Lacs in the FY 2018-19 due to increase in Assets of the company during the period.

Other Expenses

Other Expense for the FY 2019-20 has increased to t45.16 Lacs as against t30.21 Lacs in the FY 2018-19, representing an increase of 49.48% from the FY 2018-19. The increase in other expenses was mainly due to increase in inhouse capabilities by the company.

Profit/ (Loss) before Tax

The restated Profit before Tax for FY 2019-20 has increased to t43.83 Lacs as against t18.61 Lacs in the FY 2018-19. The increase in profit before tax was 135.51% from the FY 2018-19 was due to the increase in inhouse capabilities by the company.

Profit/ (Loss) After Tax

The restated Profit after Tax for FY 2019-20 has increased to t32.44 Lacs as against t13.78 Lacs in the FY 2018-19. The increase in profit after tax was 135.41% from the FY 2018-19 was due to the increase in inhouse capabilities by the company.

CASH FLOWS

(Amount in Rs. lacs)

For the year ended March 31,

Particulars 2021 2020 2019
Net Cash from Operating Activities 83.39 13.15 39.60
Net Cash from Investing Activities (113.73) (11.61) (48.31)
Net Cash flow from Financing Activities 28.54 (3.63) 12.92

Cash Flows from Operating Activities

Net cash from operating activities for year ended 31st March, 2021 was at Rs.83.39 lacs as compared to the Profit before Tax at t65.38 lacs.

Net cash from operating activities for year ended 31st March, 2020 was at t13.15 lacs as compared to the Profit before Tax at t43.83.

Net cash from operating activities for Year ended 31st March 2019, was at Rs.39.60 lacs as compared to the Profit before Tax at Rs.18.60 lacs.

Cash Flows from Investment Activities

As the company is in growth stage and we have been focusing on enhancing inhouse capabilities for delivering better results, we have been investing in Fixed assets and developing intangible assets.

Cash outflow from Investment activities for year ended 31st March, 2021 was at Rs.113.73 lacs because of investments in assets.

Cash outflow from Investment activities for year ended 31st March, 2020 was at Rs.11.61 lacs because of investments in assets.

Cash outflow from Investment activities for Year ended 31st March 2019, was at Rs.48.31 lacs.

Cash Flows from Financing Activities

As the company is in growth stage and we have been focusing on enhancing inhouse capabilities for delivering better results, we have been financing our cash flows from loans and Sale of Shares.

Net Cash flow from Financing activities for year ended 31st March, 2021 was at Rs.28.54 lacs which have been raised through Preferential Allotment of shares to the tune of 24.99 lacs and net 10.27 lacs of borrowings for investments in assets.

Net Cash outflow from financing activities for Year ended 31st March 2019, was at Rs.3.63 lacs due to higher finance costs paid.

Net Cash flow from financing activities for Year ended 31st March 2019, was at Rs.12.92 lacs.

OTHER MATTERS

1. Unusual or infrequent events or transactions

Except as described in this Red Herring Prospectus, during the periods under review there have been no transactions or events, which in our best judgment, would be considered unusual or infrequent.

2. Significant economic changes that materially affected or are likely to affect income from continuing Operations

Other than as described in the Section titled "Financial Information " and chapter titled "Managements Discussion and Analysis of Financial Conditions and Results of Operations", beginning on Page No. 113 and 116 respectively of this Red Herring Prospectus, to our knowledge there are no significant economic changes that materially affected or are likely to affect income from continuing Operations.

3. Known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations

Other than as described in the chapter titled "Risk Factors" and "Managements Discussion and Analysis of Financial Conditions and Result of Operations", beginning on Page No. 23 and 116 respectively of this Red Herring Prospectus, best to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our company from continuing operations.

4. Future relationship between Costs and Income

Other than as described in the chapter titled "Risk Factors" beginning on Page No. 23 of this Red Herring Prospectus, best to our knowledge there are no factors, which will affect the future relationship between costs and income or which are expected to have a material adverse impact on our operations and finances.