Netlink Solutions (India) Ltd Management Discussions.

1. Industrial Structure and Outlook

Indian e-commerce market has shown tremendous growth in last few years with the recent digital transformation and is expected to increase by more than 50% in the coming years. MSME sector is considered to be the backbone of Indian economy contributing to 45% of the total industrial output of the country. Considering all these factors, the three leading verticals of Netlink Solutions (India) Limited shows immense growth opportunities in near future.

2. Opportunities, Threats, Risk and Concerns

Opportunities

The Company has Software Division. The Software Division is doing well for the Company. We experienced that the electronic media is gradually edging past Print media. The Company cut costs and were looking for right opportunity. The software division has achieved desired results and it opens huge opportunities for momentous growth in near future. The other two divisions, i.e., Exhibition Management attained its objective this year after a gap of two years. Treasury management division also performed well.

Threats, Risk and Concerns:

Being a software and print media Company, Netlink is exposed to specific risks that are particular to its business and the environment within which it operates, including software obsoletion volatility, economic cycle, credit risk and market risk. The most important among them are credit risk, market risk and operational risk. The measurement, monitoring management of risk remains key focus areas for the Company.

Netlink Solutions (India) Limited had, in the year 2018-19, sold Exhibition business containing “Stationery & Write Show, Corporate Gift Show and Houseware and Kitchenware Show” to Messe Frankfurt Trade Fairs India Private Limited. As per the Sale Agreement, the Company is entitled to certain profit sharing arrangement in the Exhibition business for certain period. However, during the year under review, the sale agreement was ratified by the Board with an amendment to extend the validity of the Agreement by two year till 2023 on account of Covid-19 pandemic which forced cancellation of Exhibitions in 2020 and 2021.

3. Segment wise or product-wise performance

The Companys business activity is bifurcated in three segments namely Software Division, Exhibition Management and Treasury Management. Print Media/Info Media couldnt clock any revenue during the year. Accordingly the performance are given below :

Particulars Year Ended March 31, 2022 Year Ended March 31, 2021
Segment Revenue
Software Development 8.05 5.6
Info Media - -
Exhibition Management 41.18 0.51
Treasury 246.28 310.56
Unallocated - -
Total 295.51 316.67
Segment Results
Software Development 1.53 (1.96)
Info Media (12.67) (14.86)
Exhibition Management (17.32) (3.67)
Treasury 245.76 245.76
Unallocated - -
Profit Before Tax 172.35 229.78
Segment Asset
Software Development 2.65 1.63
Info Media 0.29 0.29
Exhibition Management 58.75 73.75
Treasury 1024.39 833.110
Unallocated 43.07 73.310
Total 1129.15 982.09
Segment Liabilities
Software Development 0.16 0.15
Info Media 0.01 0.01
Exhibition Management 0.02 -
Treasury 24.82 25.49
Unallocated 1.5 1.68
Total 26.51 27.33

4. Internal Control Systems and their Adequacy

The Company remains committed to maintain internal control systems and procedures designed to provide reasonable assurance for orderly and efficient conduct of business and security of its assets and for preventing their unauthorized use or disposition and detecting frauds or irregularities, if any.

The Company has laid enormous significance to develop internal control systems relating to all aspects of the business and has well-documented operational plans & policies which are key to any organization for operational efficiency at all levels. The internal control system is designed to ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets.

Additionally, the Statutory Auditors, as a part of the audit process, review IT systems for effectiveness of the controls. The Statutory Auditors also present their observations to the Audit Committee on financial statements including the financial reporting system.

5. Discussion on financial Operational with respect to Performance. Share Capital

The paid up share capital of the company as on 31st March, 2022, stands at Rs. 2,52,92,250 Lakhs divided into 25,29,225 equity shares of Rs. 10/- each fully paid up.

Reserves and Surplus

The Reserves and Surplus is Rs. 849.72 Lakhs as on the end of the financial year 2021-22.

Total Income

The total income during the year was Rs. 291.51 Lakhs.

Profit / Loss

Profit after tax for the year was Rs. 147.88 Lakhs during the year as against the Profit of Rs. 230.57 Lakhs in the previous year.

6. Material developments in Human Resources / Industrial Relations front, including number of people employed.

Our people are our key assets. We have been able to create a work environment that encourages pro activeness and responsibilities. The relationship with employees has been harmonious during the year and the company did not suffer any work loss. The company continues to lay emphasis on developing and facilitating optimum human performance. During the year, the number of on-rolls employees is 5. As on March 31, 2022, there are 5 permanent employees of the Company.

7. Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

Particulars FY 22 FY 21
Debtors Turnover (times) - -
Inventory Turnover (times) - -
Interest Coverage Ratio (times) - -
Current Ratio (times) 29.72 26.44
Debt Equity Ratio (times) - -
Operating Profit Margin (%) - -
Net Profit Margin (%) 50.04% 72.44%
Return on Net Worth (%) 15.63 % 24.07%

As the Company does not have any debt on its balance sheet, Debtors turnover, Debt Equity and Interest Coverage ratios are not applicable and have not been calculated.

The change in Current Ration from 26.44 in previous year to 29.72 in FY 2021-22, Net Profit Margin from 72.44% in previous year to 50.04% in FY 2021-22 and Return on Net Worth (%) from 24.07%in previous year to 15.63 % in FY 2021-22 are due to the reduction in the sales compared to previous year.

CAUTIONARY STATEMENT

Statement in the Management Discussion and Analysis describing the Companys objectives, projections, estimate, expectations on a go “forward looking statements” are within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments within the country, demand and supply conditions in the industry, input prices, changes in government regulations, tax laws and other factors such as litigation and industrial relations.