nucleus software exports ltd share price Management discussions

Forming Part of the Standalone Financial Statement for the year ended March 31, 2023

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.

A. Industry Structure and Development

The technology industry has played a pivotal role in shaping the global and Indian business landscape, acting as an elixir for end-user enterprises worldwide. It has not only enabled companies to maintain operations but also facilitated their adaptation to dynamic market forces and evolving customer needs. FY 2023, Indias technology industry experienced remarkable growth, as evidenced by its record-breaking 15.5% increase, reaching $227 billion in revenue, according to NASSCOMs India Annual Technology Performance Report. This growth can be attributed to the successful amalgamation of digitalization and innovation, with platformization and XaaS serving as key drivers in accelerating technology adoption. Moreover, the report highlights the significant contribution of start-ups in scaling up their operations and further propelling industry growth. Another milestone for the industry was the addition of 445,000 professionals to the workforce, pushing the total direct workforce past the 5 million mark. This achievement is a testament to the industrys people-first, employee-centric approach, which facilitated a seamless transition to hybrid work models and the expansion of digital capacity-building programs.

Indias position as a global digital talent hub is further underscored by the fact that one in three employees possesses digital skills. This demonstrates the countrys prowess in nurturing a skilled workforce that aligns with the demands of the digital era. With digital revenue accounting for 30-32% of the nations total revenue, India continues to solidify its position as a leader in the global sourcing market, commanding a 59% share.

These achievements not only validate Indias new technology value proposition but also highlight the industrys role in shaping the broader business landscape. As Nucleus Software continues to navigate this ever-evolving industry, we are well-positioned to capitalize on the digital transformation opportunities that lie ahead and further strengthen our market presence.

B. Company Background

The Company was incorporated on January 9, 1989 as Nucleus Software Exports Private Limited with its registered office at 33-35 Thyagraj Nagar Market, New Delhi, India. Subsequently in October 1994, it was converted into a Public Limited Company. In August 1995, Nucleus made an Initial Public Offer and is currently listed at National Stock Exchange of India Ltd. and BSE Ltd.

Nucleus Software is the leading provider of lending and transaction banking products to the global financial services industry. Its software powers the operations of more than 200 customers in 50+ countries, supporting retail banking, corporate banking, cash management, internet banking, automotive finance and other business areas. Nucleus Software is known for its world-class expertise and innovation in lending and transaction banking technology. The Company flagship products, built on the latest technology are:

_____ FinnOne NeoTM: The next-generation digital lending solution that is built on an advanced technology platform.

____ FinnAxiaTM: An integrated global transaction banking solution used by banks worldwide.

____ PaySeTM: The worlds first online & offline digital payment solution created with an aim to democratize money. Nucleus Software operates through integrated and well networked subsidiaries in India, Japan, the Netherlands, Singapore, USA, Australia and South Africa. Since 1995 product development has been our core strength and the Company has chosen to exclusively develop products and further add value through dedicated Research and Development initiatives.

Over the years we have gained deep experience working closely with Global leaders in the Banking and Financial Services industry. Headquartered in Delhi, India, the Company has seven subsidiaries, as described in table 1 below.

Table 1

Date of Incorporation/

Name of Subsidiary Company


Percentage of Shareholding
February 25, 1994 Nucleus Software Solutions Pte. Ltd., Singapore 100%
August 5, 1997 Nucleus Software Inc. USA 100%
November 2, 2001 Nucleus Software Japan Kabushiki Kaisha Japan 100%
February 3, 2006 Nucleus Software Netherlands B.V. Netherlands 100%
April 21, 2008 Nucleus Software Ltd. India 100%
February 3, 2014 Nucleus Software Australia Pty. Ltd. Australia 100%
February 10, 2015 Nucleus Software South Africa (Pty) Ltd. South Africa 100%

The Company has branch offices in Chennai, Pune and Mumbai in India and in London, Dubai and overseas.

The Singapore subsidiary has a representative office in Jakarta in Indonesia and in Manila in the Philippines. These subsidiaries/branch offices help the Company in providing front-end support to customers and explore new opportunities.

Some notable accolades won over the years are as follows:

Nucleus Software received an award for Annual Report for the Year ended March 31, 2022 from League of American Communication Professionals (LACP). We won the "Platinum Award for Excellence within the Technology- Software industry and "Technical Achievement Award". The Annual Report was also ranked 49th amongst the Worlds Top 100 Annual Reports within the Technology-Software industry by LACP.

Nucleus Software received "IBSi Global Fintech Innovation Awards 2023" for Most Effective Digitization/Paperless Initiative – Best Project Implementation for Mirae Asset Financial Services

Nucleus Software earned the "IBSi Global Fintech Innovation Awards 2023" under category Best Transaction Banking implementation for BRAC Bank Ltd

Nucleus Software was awarded the "Best Technological Innovation in Payments (B2B)" award at the Seamless Middle East 2020__conference in Dubai

Nucleus Software received first position at the "Corporate Governance and Sustainability Vision Awards 2021", held by Indian Chamber of Commerce

Nucleus Software received an award for the Annual Report (for FY 20-21) from League of American Communication Professionals (LACP). We also won the "Platinum Award for excellence within the Industry for FY 2020-

21 - Technology-Software and the Technical Achievement Award" for overall excellence in the art and method of Annual Report communications.

FinnOne Neo has been recognized as the "#1 Leader in the Lending Solutions Category in the Indian Domestic Sales League Table 2019" and recognized as "#2 Leader in the Lending Solutions Category in the Global Sales League Table 2019" by IBS Intelligence.

FinnOne Neo also wins the "Best Lending Implementation" award for the project at Roha Housing Finance in the IBS Intelligence FinTech Innovation Awards 2019. Powered by our solution, RattanIndia Finance wins the Celent Model Bank Award 2020 for Retail Lending powered by FinnOne Neo

Our Annual Report FY19-20 won the Platinum Award for excellence within the Industry - Technology-Software and a ranked amongst the top 100 Annual Reports worldwide by League of American Communications Professionals LLC (LACP).

Nucleus Software received an award in Mid Corporate Segment-for Excellence in IT & IT Enabled Services, at SME Business Excellence Awards, 2019, organized by Dun & Bradstreet Information Services India Pvt. Ltd (D&B).

"Best Lending Technology Implementation of the Year" award at the BFSI Innovative Technology Awards 2018 for project Lending on cloud for Sai Point Finance with FinnOne Neo.

Received an award in Mid Corporate Segment-for Excellence in IT/ITES Sector, at SME Business Excellence Awards, 2017 organized by Dun & Bradstreet Information Services India Pvt. Ltd (D&B).

Annual Report for the Year Ended March 31, 2017 won the Platinum Award for Excellence within the Technology Software industry and ranked 7th amongst the Worlds Top 100 Annual Reports within the Technology-Software industry and by the League of American Communications Professional (LACP).

bob Finance and FinnOne win The Banking Technology Award 2016, bob Finance AG, a financial service company in Switzerland deployed Nucleus Softwares FinnOne for offering an innovative and completely digitized loan service. This implementation won The Banking Technology Award 2016 - Highly Commended for Best Use of IT in Lending.

C. The Way Forward

Despite the challenges presented by unpredictable global events and economic downturns, the technology landscape is poised for significant growth and expansion. The industry continues to innovate, driven by technological advancements and evolving consumer preferences. According to the Forbes report, 2023 will witness significant developments in key areas such as artificial intelligence, machine learning, blockchain technology, digital banking, mobile payments, cybersecurity, fraud prevention, open banking, and API integration. These trends have the potential to revolutionize the financial sector, offering customers more personalized, convenient, and secure services.

Looking ahead, Nucleus Software is well-positioned to capitalize on the growing demand for digital solutions in the financial sector. The increasing digitization in banking and lending is driving the need for advanced software platforms that can support these services while ensuring the highest levels of security and compliance.

Additionally, the Company is poised to benefit from the rising trend of open banking and API integration, which presents new opportunities for innovation and collaboration within the industry. Nucleus Softwares expertise in this area will enable it to assist clients in navigating this complex landscape and seize the emerging opportunities it offers. Our product suites are enabled with over 520 APIs, providing extensive flexibility and agility. Furthermore, Nucleus Softwares focus on leveraging emerging technologies such as artificial intelligence, data analytics, and machine learning will empower it to deliver even more personalized and efficient services to its clients, further strengthening its competitive position in the market.

Overall, Nucleus Softwares strong reputation, deep expertise, and commitment to innovation make it a compelling choice for businesses seeking to stay ahead of the curve in the rapidly evolving financial services industry. With a solid business outlook, the Company is well-positioned for growth and success in the years to come.

D. Company Management

An active and well-informed Board is necessary to ensure the highest standards of corporate governance. At Nucleus, a well-qualified Board consisting of ten members manages the Company. Five Board members are Non-Executive Independent Directors including two women Directors, and the other five are Executive Directors, including one woman director. All Independent Directors, with their diverse knowledge and expertise, provide valuable contribution in the deliberations and decisions of the Board, maintainingtherequisiteindependence.Itdevelops and promotes the vision, culture and values of the Company and provides entrepreneurial leadership to the Company within a framework of prudent and effective controls. Only a strong global team can drive excellent performance especially in a challenging business environment. During the year, the focus was an continously improving and strengthening the leadership team and fostering a unique performance culture at Nucleus. Your Company lays high emphasis on continuouslearningandgrowthforeveryindividual.

Your Company offers a comprehensive package of learning and development opportunities in technology, processes, functional domain, our products, and leadership training. _ Focus on leadership development for young leaders and mid-level managers continue through our flagship programs – LEAD (Leadership Engagement Action & Development) and YLP (Young Leaders Program). These programs are based on our Core Values and have contributed immensely towards building the organizational culture, individual effectiveness, and leadership competencies.


The increasing adoption of digital banking and lending solutions presents significant opportunities for Fintech companies like Nucleus Software. As more consumers and banks shift towards digital platforms, there is a growing demand for innovative and user-friendly software solutions that were previously unavailable. Nucleus Software is well-positioned to capitalize on this trend by providing advanced software platforms that support digital banking and lending services while ensuring the highest levels of security and compliance. Additionally, emerging technologies such as artificial intelligence and machine learning offer opportunities to enhance credit risk assessments and improve the efficiency and accuracy of financial services.

While the Fintech industry is poised for growth, it also faces certain threats that need to be addressed. The industry is becoming increasingly crowded, with more competition for customer acquisition in 2023. Traditional banks and financial institutions are also entering the digital space, creating a competitive landscape for Fintech companies. To mitigate this threat, Nucleus Software needs to continue differentiating itself by delivering superior software solutions and maintaining its reputation for excellence and innovation.

Another potential threat is the risk of cybersecurity breaches. With more financial transactions taking place online, Fintech companies need to invest in robust security measures to protect customer data and maintain their trust. Nucleus Software recognizes the importance of cybersecurity and is committed to implementing stringent security protocols to safeguard sensitive information. Moreover, the Fintech industry is subject to regulatory scrutiny as it disrupts the traditional financial sector. Navigating complex regulatory frameworks and complying with evolving regulations require ongoing efforts and resources. Nucleus Software is dedicated to ensuring compliance with regulations and proactively adapting to regulatory changes to operate within legal boundaries.

Additionally, Fintech companies could face challenges in an economic downturn, as consumers and businesses become more cautious with their spending. This may lead to a decrease in demand for financial services. To mitigate this threat, Nucleus Software will focus on enhancing its product offerings, exploring new markets, and strengthening customer relationships to weather potential economic challenges.

In summary, while the Fintech industry presents significant opportunities for growth, it also comes with certain threats. Nucleus Software is well aware of these challenges and is committed to leveraging opportunities,addressingthreats,andcontinuously innovating to maintain its competitive edge in the dynamic financial services landscape.


According to NASSCOM Insights, the COVID-19 crisis has amplified the existing challenges faced by traditional banking business models. Factors such as revenue pressure, low profitability due to low-interest rates and high capital levels, stricter regulations following the previous financial crisis, and increasing competition from shadow banks and new digital entrants have become more pronounced.

The pandemic has accelerated the adoption of digital ecosystems, with more individuals incorporating electronic payment systems into their daily lives. Traditional financial services are undergoingatransformationthroughdigitalization.

Consequently, banks are facing greater pressure to become "digital-first" businesses and compete with established service providers.

By the end of 2023, many banks are expected to transition into pure technology businesses, leveraging their extensive customer bases and distribution networks to offer digital solutions. This transformation highlights the importance of partnering with the right company to successfully execute digital strategies. Nucleus Software has consistently been the preferred choice of banks, and we continue to be at the forefront of providing comprehensive solutions.

Our end-to-end product suites, FinnOne Neo™ and FinnAxia™, can be seamlessly deployed on both Cloud and On-premise platforms, delivering optimized value to our customers. We understand the evolving needs of the banking industry and remain committed to empowering banks with cutting-edge technology solutions.

Through our strategic partnerships and innovative approach, Nucleus Software is well-positioned to drive the digital transformation of the banking industry and remains the trusted partner for banks seeking to enhance their competitiveness in the digital era. With our strong track record, robust product suite, and customer-centric approach, we are confident in our ability to deliver value and support our clients growth and success.


These are discussed in detail in the Risk Management chapter provided later in this Annual Report.


Internal control systems are a set of policies, processes and procedures put in place to help achieve the strategic objectives of an organization.

Good controls encourage operational efficiency and compliance with laws and regulations, as well as minimizing the chance of errors, theft and fraud. At the same time internal controls also enhance the reliability and accuracy of accounting data. The Company has an Internal Control System commensurate with the size, scale and complexity of its operations. This has been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies. The management assessed the effectiveness of the Companys internal control over financial reporting (as defined in Regulation 17 of SEBI Regulations 2015) as of March 31, 2023.

M/s ASA & Associates LLP, the statutory auditors of the Company, have audited the financial statements included in this annual report and have issued an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting. The Board of Directors has also appointed M/s Varma & Varma Chartered Accountants as Internal auditors as recommended by the Audit Committee with a well-defined internal audit scope. The Internal Auditor reports to the Chairman of the Audit Committee and presents significant audit observations to the Audit Committee. Based on the report of the Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The CEO/CFO certification provided elsewhere in this report also places responsibility on the CEO and CFO to continuously ensure adequacy of our internal control systems and procedures.


Nucleus HR function focuses on creating a conducive work environment that fosters collaboration and promotes individual growth. Our vision is "To be a culturally strong organization". With a strong culture, all our associates understand what is required of them and act in accordance with the core values. Culture is the underlying fabric that holds our organization together. Since the fabric is strong, we endure even major challenges. The rapidly evolving landscape of the IT industry calls for continuous adaptation, and your Company is committed to keeping pace with the technological advancements and evolving employee needs.

As part of broader efferts to address high rate of attrition in the industrys great resignation wave, your Company made significant strides in providing a satisfying work environment for its customers and employees alike.

Your Company continuously review and improvise the policies for attracting and retaining talent. The policies are aligned to the implicit and explicit needs of Company employees.


The Company has adopted Indian Accounting Standards (IndAS) with effect from April 1, 2017 (transition date being April 1, 2016) pursuant to notification issued by Ministry of Corporate Affairs dated February 16, 2015 notifying the Companies (Indian Accounting Standards) Rules, 2015. Accordingly, the financial results have been prepared in accordance with Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder. The financial statements are prepared in accordance with the Companies (Accounting Standards) Rules, 2015, notified under section 133 of the Act and other relevant provisions of the Act. Accounting policies have been consistently applied except where a newly issued accounting standard, if initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Management evaluates all recently issued or revised accounting standards on an ongoing basis.

The Company has seven subsidiary companies, all of which are wholly-owned subsidiaries. The Company discloses stand-alone audited financial results on a quarterly and annual basis, consolidated un-audited financial results on a quarterly basis and consolidated audited financial results on an annual basis. The financial results of the Company have been discussed in this report in two parts: i) Nucleus Software Exports Limited (Standalone) which excludes the performance of subsidiaries of the Company, discussed in this chapter and ii) Nucleus Software Exports Limited (Consolidated) including performance of subsidiaries of Nucleus Software, and has been discussed in the later chapters of this report.

Standalone financial results are as below:

(Rs in crore)

For the Year Ended Mar 31,

2023 % of Revenue 2022 % of Revenue Growth (%)

Revenue from Operations

584.73 100.00 448.06 100.00 30.50


a) Employee benefit expense 338.37 57.87 335.88 74.96 0.74
b) Operating and other expenses 89.30 15.27 75.77 16.91 17.86
c) Finance costs 0.77 0.13 0.39 0.09 97.44

Total Expenses

428.44 73.27 412.04 91.96 3.98

Operating Profit (EBITDA)

156.29 26.73 36.02 8.04 333.90
Depreciation 17.06 2.92 13.23 2.95 28.95

Operating Profit after Interest and Depreciation

139.23 23.81 22.79 5.09 510.93
Other Income 34.16 5.84 34.07 7.60 0.26

Profit Before Tax

173.39 29.65 56.86 12.69 204.94
Taxation 43.02 7.36 14.76 3.29 191.46

Profit After Tax

130.37 22.29 42.10 9.40 209.67
Other Comprehensive Income 6.94 1.19 (11.18) (2.50) 162.07

Total Comprehensive Income for the Year

137.31 23.48 30.92 6.90 344.08

Revenue from Operations

Our revenues from software development comprise of income from time and material and fixed price contracts. Revenue from time and material contracts is recognised as the services are rendered and revenue from fixed price contracts comprising of license, related customization and implementation is recognised in accordance with the output method based on percentage completion. Revenue from annual technical service contracts is recognized on a pro rata basis over the period in which such services are rendered. During the year, the revenue from operations is Rs584.73 crore, against Rs448.06 crore for the previous year.

Revenue from Products

We are a Product Company and derive most of our revenues from Products and related services. Categorized under revenue from "Products", it comprises of license fee, revenue from customization and implementation of products and postproduction maintenance support. Product revenue for the year is Rs 537.68 crore, 92% of the total revenue, against Rs 410.00 crore, 92% of total revenue, in the previous year.

Revenue from Projects and Services

Software services rendered by the Company, classified under this segment, typically consist of development of software to meet specific customer requirements. These services consist of application development & maintenance, testing, consulting and infrastructure management services with a strong banking domain focus. Software projects and services revenue for the year is Rs 47.05 crore, 8% of the total revenue, against Rs 38.06 crore, 8 % of the total revenue, in the previous year.

Revenue from Various Geographies

Your Company is incorporated in India and caters to customers situated all across the globe and hence significant part of the revenue is derived from international sales. For the year 43% revenue was derived from overseas. The graph below presents a geography-wise distribution for the year as well as the previous year.


Employee Benefit Expense

Employee benefit expense includes salaries paid to employees in India, with fixed, variable and incentives components; provision for gratuity and compensated absence, contribution to provident fund and expense on staff welfare activities. The employee benefit expenses have increased by 0.74 % to Rs 338.37 crore, 57.87% of revenue against Rs 335.88 crore, 74.96% of revenue in the previous year. The increase is primarily due to increase in employee compensation.

(Rs in crore)

For the Year Ended March 31,

2023 % of Revenue 2022 % of Revenue Growth
Salaries 307.78 52.64 311.19 69.45 (1.10)
Contribution to provident and other funds 19.36 3.31 15.51 3.46 24.80
Gratuity 5.96 1.02 4.51 1.01 32.10
Staff welfare 5.27 0.90 4.67 1.04 12.95

Total Employee Benefit Expenses

338.37 57.87 335.88 74.96 0.74


584.73 100.00 448.06 100.00 30.50

Operating and Other Expenses

Operating and other expense including finance cost primarily consist of expenses on travel to execute work at client site and for other related activities, cost of software purchased for delivery to clients, bandwidth and communication expense, infrastructure charges, expenses on account of brand building activities, training and recruitment costs, legal and professional charges, repairs and maintenance charges, insurance, provision for doubtful debts, contribution to CSR activities and others.

Operating and other expenses at Rs 90.07 crore, 15.40% of revenue for the year, an increase of 18.30% against

Rs 76.15 crore, 17.00% of revenue in the previous year.

(Rs in crore)

For the Year Ended March 31,


% of Revenue

2022 % of Revenue Growth

Outsourced Technical Service Expense



16.32 3.64 (23.96)

Cost of software purchased for delivery to clients



1.03 0.23 (38.83)




0.95 0.21 714.89

Power and fuel



2.67 0.60 7.12




0.34 0.08 60.69

Rates &Taxes



1.18 0.26 (85.10)

Repair and maintenance



3.86 0.86 5.28

Legal and professional



6.61 1.48 (22.08)

For the Year Ended March 31,


% of Revenue


% of Revenue Growth
Remuneration to Non-Executive Directors




0.37 47.00




0.08 24.68




0.24 6.98
Information technology expenses




4.10 37.76

Provision for doubtful debts/advances/other current assets




0.29 55.51
Commission to channel partners




0.10 50.38
Training and recruitment




0.55 66.72
Conference, exhibition and seminar




0.03 1721.04

Advertisement ,business development and promotion




0.22 29.69




0.09 204.31
Finance Cost




0.09 97.75
Sales & marketing fee




1.95 (13.30)
Withholding tax charged off




0.55 -
Business Management & Consultancy Expenses




0.32 -
Miscellaneous expenses




0.20 26.83
Contribution to CSR activities




0.45 (13.71)

Total Operating and Other Expenses




17.00 18.30





100.00 24.03

Finance cost includes bank charges and fee for issuance of bank guarantees.

The Company has setup Nucleus Software Foundation, a trust for the purpose of undertaking CSR activities of the company. During the year, the Company contributed Rs 1.75 crore towards CSR activities of the Foundation. The details of CSR initiatives undertaken by the Foundation has been provided in a separate section in the Annual Report.

Operating Profit (EBITDA)

Operating Profit of Rs 156.29 crore, 26.73 % of revenue against Rs 36.02 crore, 8.04% of revenue in the previous year.


Depreciation on fixed assets is Rs 17.06 crore, 2.92% of revenue for the year against Rs 13.23 crore, 2.95% of revenue in the previous year.

Other Income

Other Income includes MTM gain on Mutual Fund investments, interest on fixed deposits and bonds, others and capital gains on the sale, redemption, maturity of investments, gain on foreign currency.

(Rs in crore)

For the Year Ended March 31,

2023 2022
Dividend 0.50 1.38
Interest income 7.31 9.74
Net Gain / (Loss) on foreign currency 3.96 1.33
Profit on sale of investments 1.00 0.95
MTM gain or (loss) 19.88 18.83
Others 1.51 1.84


34.16 34.07

Other income for the year is Rs 34.16 crore against Rs 34.07 crore for the previous year.

Foreign Exchange Gain/ (Loss)

Foreign Exchange Gain (Loss) includes gain (loss) from translation of current assets and liabilities at quarter end rates, those arising from realization/payments of receivables/payables. During the year, the Company had a foreign exchange gain of Rs 3.96 crore against Rs 1.33 crore for the previous year. We conduct significant portion of our business transactions in currencies other than the Indian Rupee. Nearly forty eight percent percent of our revenue is denominated in foreign currency, predominantly the US Dollar, while majority of our expenses are in the Indian Rupee and therefore the Company is exposed to continuing risk of foreign exchange fluctuation. The exchange rate between the rupee and the U.S. dollar has changed substantially in recent years and may fluctuate substantially in the future. The exchange rate movement during graph same as standalone depicted in the below mentioned chart.


Current tax represents the provision for Indian income tax on the profits of the Company as calculated in accordance with the provisions of the Income Tax Act 1961. Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods, accordance with accounting standards. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date.

(Rs in crore)

For the Year Ended March 31,

2023 2022
- Current Tax Expense 41.90 12.86
- Deferred Tax Credit (net) 1.12 1.90


43.02 14.76

Total effective tax for the year is 7.36% of revenue, in comparison to 3.29% of revenue for the previous year.

Profit After Tax

Our profit after tax for the year is Rs 130.37 crore, 22.29% of revenue against Rs 42.10 crore, 9.40% of revenue, during the previous year.

Other Comprehensive Income (OCI)

Other comprehensive income represents a) Equity instruments through OCI – this is primarily on account of fair valuation of investment for which the company has made an irrevocable option to present the same in the OCI. For the year it is Rs 3.85 crore, against Rs (2.71) crore in the previous year. b) Remeasurements of the defined benefit plans – consist mainly of remeasurements gain/losses on our defined benefit plans. For the year it is Rs 4.06 crore, against Rs (11.06) crore in the previous year. c) Effective portion of gain (loss) on hedging instruments of effective cash flow hedges, net – when a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of derivative is recognised in OCI. For the year it is Rs 0.05 crore net after Tax, against Rs (0.19) crore net after Tax in the previous year. Total other comprehensive income for the year is Rs 6.94 crore, against Rs (11.18) crore in the previous year.

Share Capital

Share Capital of the Company consists of Equity Share Capital. The paid-up share capital as on March 31, 2023 is 26,773,324 equity shares of Rs 10 each.

Retained Earnings

(Rs in crore)


2023 2022

Opening balance

433.67 600.78
Add: Profit for the year 130.37 42.10
Less : Appropriations _ _
Interim dividend / Final dividend paid (18.74) (17.42)
Buyback of Equity shares 2021 - (151.11)
Transaction tax on Buyback of Equity shares 2021 - (32.40)
Remeasurement of the defined benefit plans, net 3.04 (8.28)

Closing balance

548.34 433.67

Reserves and Surplus

Movement in the components of reserves and surplus is as below:

(Rs in crore)

As at March 31,

2023 2022
Capital Reserve 0.89 0.89
Retained Earnings 548.34 433.67
General reserve - -
Capital redemption reserve 5.61 5.61

Other Comprehensive Income

_ _

Hedging Reserve

0.13 0.08

Equity instrument through other comprehensive income

6.15 2.30


561.12 442.55

Property, plant and equipment and Intangible assets

As at March 31, 2023, Net carrying Amount of Property, Plant and Equipment and Intangible assets is Rs 25.52 crore against Rs 37.53 crore as on March 31, 2022.

(Rs in crore)

As at March 31,

2023 2022

Gross Carrying Amount

_ _
Freehold land 0.34 0.34
Plant and equipment 5.18 5.14
Building 16.58 16.58
Office and other equipment 1.65 1.53
Computers 38.05 37.89
Vehicles 3.64 3.20
Furniture and fixtures 2.09 2.09
Software 20.93 19.82


88.46 86.59
Less; accumulated depreciation 62.94 49.06

Net Carrying Amount

25.52 37.53

Changes in the carrying value of Right of use Assets

(Rs in crore)

As at 31 March 2023

As at 31 March 2022


Building Lease hold land Cars Total Building Lease hold land Cars Total
Opening balance 0.71 5.13 - 5.84 3.08 5.21 - 8.29
Additions 6.77 - 0.77 7.54 - - - -
Amortisation 2.34 0.08 0.05 2.47 2,37 0.08 - 2.45

Closing balance

5.14 5.05 0.72 10.91 0.71 5.13 - 5.84

The following is the movement in lease liabilities during the year ended 31 March 2023

( Rs in crore)


As at 31 March 2023 As at 31 March 2022
Opening balance 0.77 3.26
Additions 7.19 -
Finance cost accrued during the Year 0.50 0.20
Payment of lease liabilities (2.58) (2.53)
Rent concession on lease liability (0.03) (0.16)

Closing balance

5.85 0.77

The Company has applied expedient to one of its lease contracts and accordingly an amount of Rs 0.03 cr (previous year ended 31 March 2022 Rs 0.16 cr) for rent concession has been recorded in the Interim Standalone Statement of profit and loss.


Investments of the Company can be categorized as per the following:

i) Non-current investments totaling Rs 313.79 crore as on March 31, 2023 against Rs 208.48 crore as on March 31, 2022.

a. Investment In subsidiaries -The investment of the Company in the Equity Share capital of its subsidiaries stood at Rs 14.85 crore .

(Rs in crore)

2023 2022
Nucleus Software Solutions Pte. Ltd., Singapore 1.63 1.63
Nucleus Software Inc., USA 1.63 1.63

Less: Provision for diminution in value of investment in Nucleus Software Inc., USA

(1.63) (1.63)
Nucleus Software Japan Kabushiki Kaisha, Japan 0.41 0.41
Nucleus Software Netherlands B.V., Netherlands 4.89 4.89

Less: Provision for diminution in value of investment in Nu- cleus Software Netherlands B.V., Netherlands

(4.89) (4.89)
Nucleus Software Limited, India 11.94 11.94
Nucleus Software Australia Pty. Ltd., Australia 0.55 0.55
Nucleus Software South Africa (Pty.) Limited, South Africa 0.32 0.32


14.85 14.85

b. Investment in equity shares of a listed company at FVOCI - Rs 6.40 crore.

c. Investment in bonds (quoted)– Rs 34.63 crore.

d. Investment in mutual funds (quoted)) – Rs 124.00 Crore

e. Investment in mutual funds (unquoted) – Rs 133.91 crore.

ii) Current Investments and Bank Balances

Current Investments of Rs 226.06 crore as on 31st March 2023, as per below table.

Investment in Mutual Funds (Unquoted)

(Rs in crore)


As on March 31, 2023

Mutual Funds at Fair Value through Profit or Loss(FVTPL)

Aditya Birla Sun Life Arbitrage Fund -Direct Plan – Growth 6.99
Aditya Birla Sun Life Money Manager Fund - Direct Plan - Growth 32.26
DSP Low Duration Fund - Direct Plan – Growth 34.00
HDFC Money Market Fund - Direct Plan – Growth 23.77
HDFC Ultra Short term Fund - Direct Plan – Growth 17.57
ICICI Prudential Money Market Fund - Direct Plan - Growth 34.88
Nippon India Arbitrage Fund - Direct Plan – Growth 14.29
Tata Arbitrage Fund- Direct Plan – Growth 3.40
Tata Treasury Advantage Fund - Direct Plan - Growth 6.50
UTI Arbitrage Fund - Direct Plan – Growth 5.77
UTI Money Market Fund - Direct Plan – Growth 15.66


Investment in bonds (quoted)

Bonds securities at Amortised cost

8.35% NHAI Tax Free Bonds 2023 5.10
8.01% IIFCL Tax Free Bonds 2023 10.30
8.23% IRFC Tax Free Bonds 2024 5.40
8.51 HUDCO Tax Free Bond 2024 5.17

Investment in Preference Shares (quoted)

Preference shares at Amortised cost

17.38% IL&FS Financial Services Ltd. ( Preference Shares - 2021) 1.00
Less: Expected Credit Loss on investment (1.00)
16.46% Infrastructure Leasing & Financial Services Ltd. (Preference Shares - 2022) 5.01
Less: Expected Credit Loss on investment (5.01)
7.50% Tata Capital Ltd. (Preference Shares - 2024) 5.00

Aggregate amount of investment


As of March 31, 2023 Bank Balances stood at Rs 33.41 crore as against Rs 35.34 crore as on March 31, 2022. (Rs in crore)

As at March 31,

2023 2022

Balances with Bank

_ _
Balances with scheduled banks 16.49 6.88
Balance with non scheduled banks in current accounts 0.39 0.29

Balances with scheduled banks in deposit accounts with original maturity of less than 3 months

15.92 7.96
Balances with scheduled banks in earmarked accounts 0.32 0.34
Balances with scheduled banks in deposit accounts 0.29 19.87


33.41 35.34

Operating Cash Flow

Our net cash flow from operating activities before working capital changes is Rs 166.31 crore for the financial year, against Rs 42.73 crore in the previous year. After considering working capital changes, operating cash flow is Rs 51.92 crore against Rs 56.41 crore in the previous year. To summarize the Companys liquidity position, given below are a few ratios:

As at March 31,

2023 2022
Operating cash flow as % of revenue 8.88% 12.59%
Cash and Equivalents as % of assets 30.88% 45.79%
Cash and Equivalents as % of revenue 44.37% 71.54%
Current investments as % of assets 26.90% 40.74%
Current investments as % of revenue 38.66% 63.66%

Trade Receivables

Our trade receivables (net of provision) as on March 31, 2023 are Rs 160.00 crore against Rs 74.07 crore on March 31, 2022. The age profile of the debtors (net of provision) is given below:

As at March 31,

2023 2022
Less than six months 92.70% 90.18%
Between 6 months and 1 Year 7.12% 9.05%
More than 1 Year 0.18% 0.77%

Loans and Other Financial Assets

Loans and Other Financial assets have been classified into Non Current and Current based on their period of realization.

(Rs in crore)

As at March 31,

2023 2022

Non – Current

Staff Loans 0.25 0.19
Loan to subsidiary credit impaired 3.82 3.82
Security deposits 1.88 0.74
Long-term bank deposits 25.66 10.20


31.61 14.95


Staff Loans 0.50 0.18
Security deposits 0.28 1.95
Mark-to-market gain on forward contracts 0.17 0.11
Expenses recoverable from customers 0.14 -
Other recoverable from subsidiaries - 0.02
Unbilled revenue 4.73 1.84


5.82 4.10

Total Loans and Other Financial Assets

37.43 19.05

Security Deposits, utilised primarily for hiring of office premises and staff accommodation, amounts to

Rs 1.88 crore as on March 31, 2023 against Rs 0.74 crore as on March 31, 2022. Long term bank deposits amounting to Rs 25.66 crore as on March 31, 2023 include deposits held with bank for maturity more than 12 months from balance sheet date.

Other Assets

Other Assets represents income tax asset, Employee advances, Service income accrued but not due, Balances with Government authorities, Supplier and capital advances, prepaid and deferred expenses. Other assets have been classified into Non Current and Current based on their period of realization.

(Rs in crore)

As at March 31,



Non – Current

Capital advances


Employee advances


Prepaid expenses







Service income accrued but not due


Employee Advances


Prepaid Expenses


Contract Cost



Balances with Government authorities



Supplier advances



Deferred Expenses






Total Other Assets



Current Liabilities

(Rs in crore)

As at March 31,

2023 2022

Financial liabilities

Lease Labilities 1.98 0.77
Trade Payables 11.22 11.44
Unpaid dividends 0.32 0.34
Payable for purchase of fixed assets - 0.21
Employee payable 26.51 37.66

Other current liabilities

Advances from customers/Advance Billing 83.59 57.44
Deferred Revenue 60.16 82.56
Statutory dues 23.29 12.57

Short term provisions

Compensated absences 3.66 3.91
Provision for Tax 12.15 0.03


222.88 206.93

Current liabilities represent trade payables, short-term provisions, other financial liabilities and other current liabilities. As on March 31, 2023 the Current liabilities are Rs 222.88 crore (Rs 206.93 crore as on March 31, 2022).

Trade payables represent the amount payable for providing goods and services and are Rs 11.22 crore as on March 31, 2023 against Rs 11.44 crore as on March 31, 2022.

Statutory dues are the amounts accrued for taxes deducted at source by the Company, staff provident fund, employee state insurance liabilities, GST, etc. As on March 31, 2023 it is Rs 23.29 crore against Rs 12.57 crore as on March 31, 2022.

Short term provisions for leave encashment and taxes are those for which liability is expected to arise in near future. A sum total of all these short-term provisions as on March 31, 2023 are Rs 3.66 crore against Rs 3.91 crore as on March 31, 2022.

Non-Current Liabilities

Non-Current Liabilities as on March 31, 2023 were Rs 29.48 crore against Rs 23.78 crore as on March 31, 2022. The break-up of non-current liabilities at the year-end is given below:

(Rs in crore)

As at March 31,

2023 2022

Financial liabilities

Lease liabilities 3.87 -
Non-current provisions 23.08 23.40
Deferred tax liabilities 2.53 0.38


29.48 23.78

A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provision for Leave encashment represents provisions made by the Company based on actuarial valuation.