Nucleus Software Exports Ltd Management Discussions

of Financial Condition and Results of Consolidated Operations of Nucleus Software Exports Limited And Subsidiary Companies

Forming Part of the Consolidated Financial Statements for the year ended March 31, 2024

Managements discussion and analysis of consolidated 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 the Management perceptions.

The Company has adopted Indian Accounting Standards (Ind-AS) 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 Companies (Indian Accounting Standards) Rules as amended from time to time.

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.

Nucleus Software Exports Limited (Consolidated) includes the parent Company, Nucleus Software Exports Limited (the Company) and its subsidiaries and branches worldwide, collectively referred to as Group.

Overview

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 delivers disruptive Fintech Solutions to 200+ Banks and Financial Institutions across 50 countries supporting Retail Finance, Corporate & SME Finance, Islamic Finance, Automotive Finance, Captive Automotive Finance, Cash Management, Mobile & Internet Banking, Transaction Banking and more. We facilitate over_26 million transactions each day through our globally integrated transaction banking platform. Our lending platform manages_US $500 billion of loans in India alone, and over US $700 billion of loans globally other than India, while enabling 500,000+ users to log in daily.

Our Flagship Products FinnOne Neo? and FinnAxia?_are backed by three decades of Banking and Financial Services domain expertise and an inbuilt AI powered platform to realize the digital transformation goals of financial institutions worldwide.

1. FinnOne Neo?: The next-generation digital lending platform, designed to revolutionize the lending process. FinnOne Neo? is built on an advanced technology platform, empowering financial institutions to streamline their lending operations, enhance customer experiences, and drive business growth.

2. FinnAxia?: An integrated global transaction banking suite, trusted by banks worldwide to optimize their transaction banking processes. With FinnAxia?, financial institutions can efficiently manage their cash management, trade finance, liquidity management, and other transaction banking activities on a single platform, thereby improving operational efficiency, visibility, and enhancing client relationships.

3. PaySe™: The worlds first online and offline digital payment solution, created with the vision to democratize money. This innovative payment solution offers users a seamless and convenient way to conduct digital transactions, both online and offline, facilitating financial inclusion and empowering individuals and businesses.

4. Nucleus Software Services: Our comprehensive suite of services is tailored to assist banks and financial institutions in their digital transformation journey and maintain an optimal technology infrastructure. Through Nucleus Software Services, weofferaholisticapproachtodigitaltransformation, enabling organizations to deliver seamless customer experiences, achieve operational and cost efficiencies, and gain actionable insights to drive strategic decision-making.

Nucleus operates through integrated and well networked subsidiaries in India, Japan, Netherlands, Singapore, USA, Australia and South Africa. Since 1995, product development has been our forte and the

Company has chosen to exclusively develop products and further add value through dedicated Research and Development initiatives.

Strengths

Nucleus Software is a pioneering force in the development and marketing of software products and services tailored explicitly for the Banking and Financial Services (BFS) industry. Our strategic focus on this vertical enables us to craft solutions that harness the latest architecture and technology stack, integrating sophisticated features and functionalities that precisely address the ever-evolving needs of the BFS sector. This niche strategy not only solidifies our position as a leader in the Banking and Financial Services technology landscape but also ensures that we remain at the forefront of industry innovation.

With a rich legacy of over 30 years in intellectual property creation, Nucleus Software has consistently demonstrated unparalleled domain expertise, amounting to a cumulative experience of over 10,000 years. This extensive knowledge base empowers us to anticipate market trends, understand client requirements, and deliver solutions that exceed expectations.

Leveraging our robust product innovation and research and development (R&D) capabilities, we have embarked on strategic initiatives aimed at driving continuous growth and transformation. Our efforts span the creation of new products, expansion of sales and market development initiatives, and the recruitment of top-tier talent to fuel innovation. At the core of our operations lies an unwavering commitment to delivering world-class products that redefine industry standards. This commitment is underscored by our relentless pursuit of perfection and excellence in every aspect of our work. Nucleus Softwares impact extends far beyond borders, as we have successfully transformed the operations of over 200 financial institutions across 50 countries. Our solutions have enabled these institutions to streamline processes, enhance efficiency, and drive sustainable growth. We are immensely grateful for the recognition we have garnered over the years in the form of various accolades, which serve as a testament to our dedication to excellence and innovation.

In essence, Nucleus Softwares journey is characterized by a relentless pursuit of innovation, a steadfast commitment to customer satisfaction, and a transformative impact on the BFS industry worldwide. As we continue to push boundaries and shape the future of banking technology, we remain deeply committed to driving value for our clients, stakeholders, and the global BFS community.

A brief on the functionality of our products is given below:

Nucleus Digital Lending Platform

FinnOne Neo? is a Globally acclaimed Digital Lending platform for Retail, Corporate & SME Lending, Microfinance, Islamic Finance, and Automotive finance with Specialized Product Capabilities across multiple Lines of Businesses. FinnOne Neo? enables end-to-end digitization across the lending lifecycle of origination, servicing & collections with sophisticated Content and Collateral Management modules. The Mobility and Channel Modules enable Financial Institutions to offer seamless digital lending via agent facing and end customer offerings. An end-to-end robust digital lending banking suite that empowers financial institutions to improve efficiency, reduce operational costs, and offer a better customer experience in the highly competitive lending and financing space. It enables lenders to adapt to changing market dynamics and regulatory requirements while maintaining a strong focus on customer satisfaction and risk management.

In the increasingly digitised world, integrability and compatibility of a software solution with other software solutions is becoming increasingly critical. Nucleus Softwares FinnOne Neo? has been a front runner in this regard as it carries an incredible number of 480+ out-of-the-box digital APIs in its API stack that facilitate robust, secure, easy, quick, and agile integrations. FinnOne Neo? supports cloud, hybrid and on-premise deployments and can be deployed quickly in partnership with leading cloud providers.

FinnOne Neo? Product Suite Holds

• Customer Acquisition System (CAS)
• Loan Management system (LMS)
• Collections
• Enterprise Content Management (ECM)
• Mobility Apps: mCAS, mApply, mCollect, mServe
• Portal: eApply & eServe
• Sales Assist
• Collateral Management System

The Customer Acquisition System (CAS) module covers the entire customer on-boarding and evaluation process to loan disbursements, for retail and corporate customers, with a multi-channel front end and a solid credit process back end. The Loan Management system (LMS) module takes care of the entire servicing life cycle of a loan including Accounting, Repayment, Special Transaction, Non-Performing Asset Management and Self-Service through multiple channels. The Collections module optimally manages defaulters and possible defaulters, efficiently managing NPAs. The Collaterals Management System (CMS) takes care of the entire collateral life cycle management. The Sales Assist is a specialized loan sourcing channel for sales staff empowering them for super quick and easy loan sourcing. The Enterprise Content Management (ECM) module provides image-based processing capabilities to store and retrieve various contents like document images, letters, communications etc. The FinnOne Neo? Mobility suite is a portfolio of mobile solutions aimed at creating end customer empowerment while digitalizing various lending business processes.

Enabling Impactful Outcomes

2,700 lending product variants in use by customers_ 16 M transactions processed per day_ 1 new loan booked every second_ 100+ customers using Customer Acquisition System_ 95+ customers using Loan Collection System_ 80+ customers using Loan Management System_

FinnOne Neo? for Retail Lending

End-to-end digital lending across entire lifecycle of origination, servicing & collections Nucleus Software is shaping the future of retail lending with its globally acclaimed, award-winning software FinnOne Neo?. Accelerate Go-To-Market - Float innovative, customer-centric products extremely quickly and easily. Easy configurability of business & credit policies_ Unparalleled Omni channel experience - delivers consistent and improved customer experience across multi-channel solutions; helps end customers self-service loans via web, mobile app, WhatsApp, etc. FinnOne Neo? supports both Cloud and On-premise deployments.

FinnOne Neo? for Corporate Lending

Enhanced Agility via Digitizing SME and Corporate Lending Corporate lenders need to incorporate end-to-end digital capabilities, reduce time to market, increase transparency and offer unique customer experience across multiple channels. FinnOne Neo? Corporate is designed to ensure you stay a customer-centred corporate lender._ Our Corporate Lending solution supports multi-branch, multi-product and multi-lingual implementations.

FinnOne Neo? Corporate Lending Solutions allows Financial Institutions to:_ o Unlock Growth – enabling quick and easy creation of new products within multiple lines of businesses for leveraging corporate lending. o Handle Complex Products – integrated and global approach within corporate and SME lending o Achieve Business Agility - a one stop solution for all SME & Corporate lending needs of Financial Institutions: driven by best-in-class roadmap practices._ o Stay Ahead on Technology - advanced technology platform; Cloud ready, Scalable, Secure & Available with a Strong API layer

FinnOne Neo? for Islamic Finance

Interest Free Banking Governed by Sharia Principles_ Islamic Finance holds a significant share in the global banking space. The $2.2 Trillion Islamic finance industry is expected to expand its reach beyond the current nine core markets which contribute 93% of total Islamic Finance. Nucleus Software has been at the centre of innovation in Islamic Finance for the last two decades. Our Islamic Finance solution offers end-to-end digitization across customer onboarding, servicing to delinquency management and is backed with digital channels and data driven decision making._ Our solutions help provide seamless Sharia compliant banking experience to end customers and help offer tailored products rapidly, across every channel at an optimised cost. Solution Overview:_ FinnOne Neo? Supports End-to-End Islamic Finance journey

Customer Acquisition System: Provides complete workflow and decision management for onboarding._

Finance Management System: Specialized tool to manage finance lifecycle for onboarded assets._

Collections Management System: Manages the entire strategy and execution for collections of delinquent assets._ Our solution supports wide variety of Line of Businesses and Islamic contracts with deep functional expertise enabling continuous improvement.

FinnOne Neo? for End-to-end Automotive Finance Platform

Leading the charge, FinnOne Neo? for auto finance propels lending businesses into an agile, scalable, and transparent realm. This robust digital lending solution serves as a cornerstone for overseeing the entire loan lifecycle, from seamless customer onboarding to expeditious loan disbursals, offering an adaptable framework for accelerated growth, expanded horizons, and heightened profitability. Manages Dealership

Network & Relationships Efficiently. Enhanced product designed to cater equipment, automobile, Electric Vehicles, and charging station financing needs_ FinnOne Neo? for Automotive Finance holds:

• Origination Module
• Leasing Module
• Servicing Module
• Collections Management Module

FinnOne Neo? for Captive Automotive Finance - Financing and Leasing Excellence FinnOne Neo? for Captive Automotive Finance provides all the capabilities that market leaders need to prosper – from new and lease products financing, to channel support and sophisticated workflows for streamlined operations. The solution ensures that standard business processes can be easily implemented across multiple countries, creating a centrally driven yet localized setup with enhanced efficiency, reduced cost, and simplified management. Changes can be introduced quickly and across multiple geographies to ensure that the agility required for business needs is matched by system flexibility. It offers easy adaptability to regulatory changes and Automated dealer commission & subsidies to effectively manage dealer relationships. A unique combination of personalized, rules-driven automated processes, digital outreach and real-time decisioning_ ensures revenue growth. The system supports risk based pricing strategy and provides Integrated support for Residual Value calculations

Nucleus Transaction Banking Platform

FinnAxia? is a comprehensive Transaction Banking suite designed that revolutionizes the way businesses manage their Transaction Banking operations. FinnAxia? allows banks to empower their enterprise customers with digital solution to impeccably manage their working capital and cashflows. The suite encompasses advanced technological capabilities to achieve operational excellence with faster time-to-market, total transparency and straight through processing across geographies and jurisdictions. With its easy-to-integrate, focussed modules for financial supply chain management, cash management, payments and receivables management, e-trade finance, and liquidity management, FinnAxia? is backed by Nucleus expertise in product innovation and commitment to delivering future-proofed fintech solutions. FinnAxia? 8.5 enables corporates to make informed decisions on their cash position and enables cash forecasting capabilities for the banks corporate customers, providing enriched intelligent reporting.

Our Global Payments solution enables banks to leverage our APIs to serve their corporate customers with a single stop solution platform, which complies with central bank regulations on LEI (Legal Identity Identifier) to regulate high value payments. Our Global Receivables solution enables banks to help corporates collect FCY inward payments and comply with NPCI DDI PGP encryption guidelines. Centralized control using virtual accounts enriched with faster reconciliation provides an enhanced view of cash positions, hence eliminating trapped liquidity.

• FinnAxia? Product Suite Holds
• Global Receivables
• Global Payments
• Global Liquidity Management
• Virtual Account Management (VAM)
• Financial Supply Chain Management (FSCM) and Electronic Invoice Presentment and Payment (EIPP)
• e-Trade Finance
• Electronic Bill Presentment and Payment (EBPP)
• Digital Compass – Corporate Front End Channel

Enabling Impactful Outcomes

Global payments & receivables: Comprehensive solution for Mandate registration and direct debit transactions for corporates. Fully integrated with NPCI.

Virtual account management: Complete virtual account management enabling Financial Institutions to manage different accounts virtually achieving liquidity without the need for multiple physical accounts._ Liquidity management: Manage all types of complex liquidity requirements ranging from Multi-banking Cash Concentration (MBCC), notional pooling, Intercompany loans and interest optimization and Hybrid pooling._

Nucleus Software Services

Offers banks and financial institutions a holistic approach to digital transformation, a crucial role in digital transformation of organizations by delivering seamless customer experiences, operational and cost efficiencies, and actionable insights. This division leverages a broad spectrum of disruptive digital services like Cloud Services, Application Modernization, Data Engineering / Virtualization & Analytics, Robotic Process Automation (RPA), Infra Services and more. This division has been very active in delivering solutions covering Modern banking, Self Service Onboarding Capabilities,

Straight Through Processing, Data Virtualization, Data Modelling, RPAs, Chatbots, Machine Learning to name a few, including be-spoke services for enterprise level solution implementations. The Services wing has operations in India, Southeast Asia, Japan, Middle East, and Europe focussing on

1. Data Engineering & Analytics

2. Application Modernization

3. Cloud Services

4. Infra Services

Enabling Impactful Outcomes

• 70% reduction in customer applications closure time_
• 200+ Applications, 10 Verticals and 15 Countries_
• Achieved 86.5% operational efficiency by implementing RPA for a top Japanese NBFC
• Facilitated the Digital transformation of a Large Asian bank by developing open banking APIs as per central bank guidelines.
• Accomplished Process Automation of the Risk Evaluation Management system for a large regional bank in Europe.

Nucleus Financial Inclusion Platform

PaySe™ enables small ticket transactions at remote locations over a secure and reliable platform. Financial Institutions can achieve easy digital onboarding of rural borrowers as well as achieve cost optimisation through automated business processes. PaySe™ is an offline and online digital cash solution designed to democratize finance and offers efficient and comprehensive digital onboarding. Financial Institutions can capture customer data, verify documents, conduct KYC/AML checks and create customer accounts while in offline mode to onboard customers in remote areas with no internet connectivity. PaySe™ has an inbuilt innovative digital payment solution in the form of a digital wallet to make payments using smart phones instead of cash or cards when completely offline.

PaySe™ platform overview - 100% secure, eliminates frauds & data breaches across

• Digital on-boarding
• Digital payments
• Digital loan disbursement & collection
• Digital charts of account
• Digital credit scoring engine
• MIS & analytics

We are thrilled to update that last FY 2022-23, we have been awarded a total of three patents for our first as well as Indias first offline and online Financial Inclusion platform, "PaySe^TM". Our first patent aims to revolutionize electronic transactions; creating and innovating technology to power secure, efficient, and low-power short-range communication systems. Our second patent unlocks the future of digital payments with innovative wireless digital wallet technology, thus making transactions simpler, faster, and more secure, both offline and online. Our third patent underscores the uniqueness and ingenuity embedded in PaySe^TM, highlighting its groundbreaking approach to targeted electronic transactions within the financial system. The invention discloses a digital wallet having electronic cash stored therein, wherein the electronic cash is allocated with a pre-defined specific purpose. This digital wallet can carry targeted electronic transactions with various users and transaction terminals in a financial system. PaySe™ is Indias first Digitally Compliant Cash Solution, Compliant with RBI PPI guidelines (Approved by RBI for PPI license)

FINANCIAL PERFORMANCE

Consolidated financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (the ‘Act) and other relevant provisions of the Act.

The Company has seven subsidiary companies, all of which are wholly owned. 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 (Consolidated) including performance of subsidiaries of Nucleus Software, discussed in this chapter. This consolidated presentation is more relevant for understanding the overall performance of the group especially as intercompany transactions are eliminated being contra. ii) Nucleus Software Exports Limited (Standalone), which excludes the performance of subsidiaries of the Company has been discussed in the earlier part of this Annual Report.

The consolidated financial results are as below:

For the Year Ended March 31,	2024	% of Revenue	2023	% of Revenue	Growth (%)
Revenue From Operations	826.45	100.00	634.46	100.00	30.26
Expenses
a) Employee benefit expense	491.06	59.42	393.99	62.10	24.64
b) Operating and other expenses	114.99	13.91	83.70	13.19	37.38
c) Finance costs (Bank charges)	0.95	0.11	1.02	0.16	(7.11)
Total Expenses	607.00	73.45	478.71	75.45	26.8
Operating Profit (EBITDA)	219.45	26.55	155.75	24.55	40.90
Depreciation	14.55	1.76	18.73	2.95	(22.32)
Operating Profit after Interest and Depreciation	204.90	24.79	137.02	21.60	49.55
Other Income	50.90	6.16	34.06	5.36	49.44
Profit Before Tax	255.80	30.95	171.08	26.96	49.52
Taxation	64.20	7.77	43.29	6.82	48.30
Profit After Tax	191.60	23.18	127.79	20.14	49.94
Other Comprehensive Income	1.96	0.24	8.01	1.26	(75.52)
Total Comprehensive Income for the year	193.56	23.42	135.80	21.40	42.54

Revenue from Operations

Our revenues from software development comprise of income from fixed price and time and material contracts. Revenue from fixed price contracts comprising of license, related customization and implementation is recognized in accordance with the output method based on percentage completion. Revenue from time and material contracts is recognised as the services are rendered. 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, revenue from operations is 826.45 crore, as compared to 634.46 crore for the previous year.

Revenue from Various Geographies

Your Groups parent 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. We operate in seven main geographical segments: India, Far East, South East Asia, Europe, Middle East, Africa and Australia, which represent the reportable segments. These segments are based on location of customers of the Company.

For the year, around 47% of revenue was derived from overseas. The graph below presents a geography-wise distribution for the year as well as the previous year.

Revenue from Products and Services

Our Revenues are further disaggregated into Products and Services. "Products", comprises of license fee, revenue from customization and implementation of products and postproduction maintenance support. Product revenue for the year is 711.40 crore, 86.08% of the total revenue, against 536.93 crore, 84.63% of total revenue, in the previous year. Software services rendered by the Company 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. Revenue from Software projects and services revenue for the year is 115.05 crore, 13.92% of the total revenue, against 97.53 crore, 15.37% of the total revenue in the previous year.

EXPENSES

Employee Benefit Expense

Employee benefit expenses include salaries paid to employees globally which have fixed, variable and incentives components; provision for retirement benefits, contribution to provident fund and expense on staff welfare activities. The employee benefit expenses have increased by 24.64% to 491.06 crore, 59.42% of revenue against 393.99 crore crore, 62.10% of revenue in the previous year.

For the Year Ended March 31,	2024	% of Revenue	2023	% of Revenue	Growth (%)
Salaries	449.72	54.42	359.52	56.67	25.09
Contribution to provident and other funds	27.63	3.34	22.58	3.55	22.35
Gratuity expense	6.24	0.76	5.96	0.94	4.70
Staff welfare	7.47	0.9	5.93	0.94	26.09
Total Employee Benefit Expenses	491.06	59.42	393.99	62.10	24.64
Revenue	826.45	100.00	634.46	100.00	30.26

Operating and Other Expenses

Operating and other expense primarily consist of expenses such as travel to execute work at client site and for other sales and Marketing activities, IT expenses, Outsourced technical service expense, Cost of software purchased for delivery to clients, Power and fuel, 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 115.94 crore, 14.03% of revenue for the year, increased by 36.85% in comparison to 84.72 crore, 13.35% of revenue in the previous financial year.

For the Year Ended March 31,	2024	% of Revenue	2023	% of Revenue	Growth (%)
Outsourced technical service expense	5.96	0.72	4.56	0.71	30.87
Cost of software purchased for delivery to clients	0.38	0.05	0.63	0.10	(39.29)
Travel expense	15.25	1.84	8.33	1.31	83.10
Power and fuel	3.44	0.42	2.99	0.47	15.19
Rent	2.18	0.26	1.30	0.20	68.49
Rates & Taxes	0.42	0.05	0.22	0.03	85.64
Repair and maintenance	4.66	0.56	4.48	0.71	4.02
Legal and professional	17.02	2.06	14.19	2.24	19.98
Directors remuneration	3.21	0.39	2.43	0.38	32.00
Conveyance	0.69	0.08	0.54	0.08	28.99
Communication	1.50	0.18	1.55	0.24	(3.64)
Training and recruitment	4.31	0.52	4.55	0.71	(5.27)
Information technology expenses	33.74	4.08	25.43	4.01	32.67
Provision for doubtful debts/advances/other current assets	1.25	0.15	0.46	0.07	171.82
Commission to channel partners	0.90	0.11	0.70	0.11	27.89
Conference, exhibition and seminar	6.19	0.75	2.48	0.39	149.90
Advertisement and business promotion	2.77	0.34	1.43	0.22	93.32
Insurance	1.36	0.16	1.52	0.24	(10.91)
Withholding tax charged off	5.62	0.68	2.98	0.46	88.51
Finance Cost	0.95	0.12	1.02	0.16	(6.71)
Miscellaneous expenses	2.01	0.24	1.18	0.18	69.26
Contribution to CSR Activities	2.13	0.26	1.75	0.27	21.74
Total Operating and Other Expenses	115.94	14.03	84.72	13.35	36.85
Revenue	826.45	100.00	634.46	100.00	30.26

The Increase in Operating and other expense for FY 2024 from FY 2023 is primarily due to higher Traveling Expenses, Information Technology Expenses, Conference Exhibition & seminar expenses.

The Company has set up Nucleus Software Foundation, a trust for the purpose of undertaking CSR activities of the company. During the year, the Company contributed 2.13 crore towards CSR activities to the trust. The details of CSR initiatives undertaken by the trust has been provided in a separate section in the Annual Report.

Operating Profit (EBITDA)

Operating Profit is at 219.45 crore, 26.55% of revenue against 155.75 crore, 24.55% of revenue in the previous year.

Depreciation & amortization

Depreciation & Amortization on fixed assets was 14.55 crore, 1.76% of revenue for the year, against 18.73 crore, 2.95% of revenue in the previous year.

Other Income

Other Income represents MTM gain on mutual fund investment, interest on fixed deposits and bonds and capital gains on the sale of investments.

For the Year Ended March 31,	2024	2023
Dividend on investment	0.44	0.50
Interest income	15.53	7.35
Net Gain / (Loss) on foreign currency	0.28	3.78
Net gain on sale of investments	0.75	1.00
MTM gain on mutual fund investment	31.66	19.91
Others	2.24	1.52
Total	50.90	34.06

Other income for the year is 50.90 crore, against 34.06 crore in 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 0.28 crore against gain of 3.78 crore in the previous year. Foreign Exchange continues to be volatile, as depicted in the below mentioned chart.

The Company follows a well-defined policy of hedging close to receivables through Forward Contracts which are designated as Highly Probable forecast transactions. The Company has a conservative approach and does not speculate in foreign currency markets. Forwards are held to maturity and regular reporting and monitoring systems are in place including quarterly updates to the Audit Committee. Currency-wise revenues for the year along with a comparison for the previous years are as follows:

Currency	FY24	FY23
INR	52.98%	52.06%
SGD	5.58%	7.29%
USD	30.49%	30.71%
GBP	2.55%	0.89%
JPY	1.20%	1.27%
CHF	0.01%	0.01%
SAR	0.07%	0.00%
MYR	1.01%	1.01%
AUD	3.38%	2.89%
EUR	1.04%	1.26%
AED	1.40%	1.95%
ZAR	0.21%	0.55%
QAR	0.08%	0.11%
Total	100.00%	100.00%

Taxation

It represents a provision for corporate & income taxes determined in accordance with tax laws applicable in countries where the Company and subsidiaries operate.

For the Year Ended March 31,	2024	2023
- Current Tax Expense	57.50	42.21
- Deferred Tax Credit (net)	6.70	1.08
Total	64.20	43.29

Total effective tax for the year is 25.10% of Profit Before Tax, in comparison to 25.30% of Profit Before Tax for the previous year.

Profit After Tax

Our profit after tax for the year is 191.60 crore, 23.18% of revenue, against 127.79 crore, 20.14% of revenue, previous year. This age of competition necessitates overall revenue growth, earned in an optimal cost environment. We remain committed to achieving higher productivity and generate better margins. Our sales and marketing efforts are focused on increasing our customer base and hence the market share, which would ultimately yield better realizations. Emerging markets across the world will continue to provide stability and growth would be led by larger engagements and value offerings.

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 5.51 crore, against 3.85 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 (3.43) crore net after Tax, against 3.04 crore net after Tax in the previous year. c) Effective portion of gains and loss on hedging instruments in a cash flow hedge, net – when a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of derivative is recognized in OCI. For the year it is (0.08) crore net after Tax, against 0.05 crore net after Tax in the previous year. d) Exchange difference on translation of foreign operations. For the year it is (0.04) crore, against

1.07 crore in the previous year.

Total other comprehensive income for the year is 1.96 crore, against 8.01 crore in the previous year.

Share Capital

The Paid-Up Share Capital of the Company, as on March 31, 2024, is 2,67,73,324 equity shares of 10 each, as compared to 2,67,73,324 equity shares of 10 each as on March 31, 2023.

Subsidiaries

The Company has seven subsidiary companies, all over the world, all of which are wholly-owned. Its gross investment in Paid-up Share Capital of the Subsidiaries as on March 31, 2024 is as per the below table.

		As at March 31, 2024		As at March 31, 2023
Name of Subsidiary Company _	Currency _	In foreign Currency	Eqv. (in crore)	In foreign Currency	Eqv. (in crore)
Nucleus Software Solutions Pte. Ltd. Singapore	SGD	6,25,000	1.63	6,25,000	1.63
6,25,000 equity shares of SGD 1 each
Nucleus Software Inc., USA	USD	3,50,000	1.63	3,50,000	1.63
10,00,000 shares of US$ 0.35 cents each
Nucleus Software Japan Kabushiki Kaisha, Japan	JPY	1,00,00,000	0.41	1,00,00,000	0.41
200 equity shares of JPY 50,000 each
Nucleus Software Netherlands B.V., Netherlands	Euro	7,50,000	4.89	7,50,000	4.89
7,500 equity shares of Euro 100 each
Nucleus Software Limited, India	INR	-	16.94	-	11.94
1,50,00,000* equity shares of 10/- each
Nucleus Software Australia	AUD	1,00,000	0.55	1,00,000	0.55
1,00,000 Equity share of 1 AUD each
Nucleus Software South Africa (Pty.) Limited	ZAR	6,12,000	0.32	6,12,000	0.32
10 Equity shares of ZAR 61,200 each
Total			26.37		21.37

Note*: Nucleus Software Exports Limited (Parent Company) has invested additional 5 crore into the Equity Shares capital of Nucleus Software Limited, a Wholly Owned Subsidiary Company during FY 23-24

The profits/losses of the Subsidiary Companies are fully reflected in the consolidated accounts of the Company and Subsidiaries.

Other Equity

The movement in the components of Other Equity is as below:

Particulars	Opening Balance as on April 1, 2024	Additions/ (Deletions) during the year	Closing Balance as on March 31, 2023
General Reserve	-	-	-
Capital Reserve	0.89	-	0.89
Capital Redemption reserve	5.61	-	5.61
Retained Earnings	729.47	161.40	568.07
Hedging Reserve	0.04	(0.09)	0.13
Foreign Currency Translation Reserve	3.00	(0.04)	3.04
Equity instrument through other comprehensive income	11.66	5.51	6.15
Total	750.67	166.79	583.89

As at March 31, 2024, Net carrying Amount of Property, Plant and Equipment and Intangible assets are 36.15 crore against 25.78 crore as on March 31, 2023.

As at March 31,	2024	2023	Inc/Dec (%)
Gross Carrying Amount	_	_	_
Freehold land	0.34	0.34	-
Leasehold improvements	0.14	0.14	-
Buildings	24.23	16.58	46.14
Plant and equipment	9.69	7.15	35.62
Computer equipment	43.69	38.97	12.11
Vehicles	2.68	3.65	(26.72)
Furniture and fixtures	2.61	2.17	20.11
Software	21.64	20.94	3.35
Total	105.03	89.94	16.76
Less; accumulated depreciation	68.88	64.16	7.31
Net Carrying Amount	36.15	25.78	40.25

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP as deemed cost for all the items of property, plant and equipment and Intangible assets.

Investments

a. Non-current investments

totaling 321.17 crore as on March 31, 2024 against 298.94 crore as on March 31, 2023.

i) Investment in equity shares of a listed company at FVOCI - 11.91 crore

ii) Investment in tax free bonds at amortised cost - 34.00 crore.

iii) Investment in target maturity funds at amortised cost – 132.88 Crore

iv) Investment in mutual funds at Fair value through profit or loss (FVTPL) – 142.38 crore.

b. Current investments, Cash and Bank Balances

The Company continues to remain debt-free and we believe that cash generated from operations and reserves and surplus are sufficient to meet our obligations and requirements towards capital expenditure and working capital requirements.

As of March 31, 2024 the cash and bank balances (including fixed deposits) stood at 73.95 crore against 51.11 crore on March 31, 2023, current investments are 327.62 crore on March 31, 2024 against 226.32 crore on March 31, 2023.

Total cash and current investments are thus at 401.57 crore on March 31, 2024 against 277.43 crore as on March 31, 2023.

As at March 31,	2024	2023
Cash	-	-
Balances with Bank
In Current Accounts	38.61	34.53
In Deposit accounts with original maturity of less than 3 months	7.20	15.96
In Deposit accounts with original maturity of less than 12 months	27.87	0.30
Balances in earmarked accounts	0.27	0.32
Current Investments	327.62	226.32
Total	401.57	277.43

Operating Cash Flow

As a part of the financial policies, the Company believes in maintaining high level of liquidity as it provides immense support against contingencies and uncertainties.

Our net cash flow from operating activities before working capital changes is 228.44 crore for the financial year against 164.59 crore in the previous year. After considering working capital changes, operating cash flow is 222.03 crore against 49.84 crore.

Operating cash flow is today considered a better measure of operations of the Company than the net profits as it measures the cash generated by the operations and our net cash flow from operating activities before working capital changes has increased this year from 164.59 Crore to 228.44 Crore. This is primarily due to higher profits during the year, Profits before tax for FY 23-24 is 255.80 Crore and for FY 22-23 171.08 Crore.

To summarise the Companys liquidity position, given below are few ratios based on consolidated figures:

As at March 31	2024	2023
Operating Cash Flow as % of revenue	26.86	7.86
Cash and Equivalents as % of assets	36.05	31.74
Cash and Equivalents as % of revenue	48.59	43.73
Current investments as % of assets	29.41	25.89
Current investments as % of revenue	39.64	35.67

Trade Receivables

Our trade receivables (net of provision) as on March 31, 2024 are 166.16 crore, against 174.63 crore as on March 31, 2023.

The age profile of the debtors (net of provision) is given below:

As at March 31,	2024	2023
Less than six months	95.65%	92.82%
Between 6 months and 1 Year	4.18%	7.02%
More than 1 Year	0.17%	0.16%

Loans and Other Financial Assets

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

As at March 31,	2024	2023
Non – Current
Loans Receivables considered good	0.39	0.25
Security deposits	2.44	2.42
Long-term deposits	97.44	25.66
Total	100.27	28.33
Current
Loans Receivables considered good	0.46	0.50
Security deposits	1.00	0.65
Mark-to-market gain on forward contracts	0.06	0.17
Expenses recoverable from customers	0.17	0.14
Total	1.69	1.46
Total Loans and other Financial Assets	101.95	29.79

Security Deposits, utilized primarily for hiring of office premises and staff accommodation, amounts to 2.44 crore as on March 31, 2024 against 2.42 crore as on March 31, 2023. Long term deposits amounting to 97.44 crore as on March 31, 2024 include deposits held with bank/financial institutions 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.

As at March 31,	2024	2023
Non – Current
Advance Tax	12.74	10.39
Capital Advances	7.98	0.38
Prepaid Expenses	0.90	1.41
Total	21.62	12.18
As at March 31,	2024	2023
Current
Service income accrued but not due	22.77	13.79
Employee Advances	0.45	0.20
Prepaid Expenses	11.15	9.42
Contract cost	0.34	0.17
Balances with Government authorities	0.07	0.33
Supplier advances	7.46	5.91
Deferred Expenses	0.11	0.09
Total	42.35	29.91
Total Other Assets	63.97	42.09

Current Liabilities

Current liabilities represent trade payables, short-term provisions, other financial liabilities, and other current liabilities. As on March 31, 2024 the Current liabilities are 295.34 crore against 233.01 crore as on March 31, 2023

As at March 31,	2024	2023
Financial liabilities
Lease Liability	2.78	2.39
Trade Payables	16.46	12.28
Unpaid dividends	0.27	0.32
Payable for purchase of fixed assets	0.25	-
Employee payable	45.56	32.48
Other current liabilities
Advances from customers/	87.50	83.41
Advance Billing
Deferred Revenue	118.15	60.15
Statutory Liabilities	18.92	24.62
Short term provisions
Compensated absences	4.90	4.81
Provision for asset retirement obligations	0.22	0.21
Income tax	0.33	12.34
Total	295.34	233.01

Trade payables represent the amount payable for providing goods and services and are 16.46 crore as on March 31, 2024 against 12.28 crore as on March 31, 2023. Advances from customers as on March 31, 2024 are 87.50 crore against 83.41 crore as on March 31, 2023. These consist of advance payments received from customers, for which related costs have not been yet incurred or product license delivery is a later date. Deferred revenue represents the advance invoicing for annual maintenance charges for which services are to be rendered in the future. As of March 31, 2024 it is 118.15 crore against 60.15 crore as on March 31, 2023. Employee Payables includes the provision for Bonus, accrued salaries, incentives and retention bonus payable to employees.

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, 2024 it is 18.92 crore against 24.62 crore as on March 31, 2023. Short-term provisions for Compensated absences and taxes are those for which liability is expected to arise in the near future. Sum of all these short-term provisions as on March 31, 2024 are 5.45 crore against 17.35 crore as on March 31, 2023.

The Company has made contributions to Nucleus Software Employees Group Gratuity Assurance Trust, which has made further contributions to Employees Group Gratuity Scheme of Life Insurance Corporation of India.

Non-Current Liabilities

Non-Current Liabilities as on March 31, 2024 are 41.24 crore against 30.51 crore as on March 31, 2023. The break-up of non-current liabilities at the year-end is given below:

	2024	2023
Financial liabilities
Lease Liability	1.81	3.87
Deferred Tax liability	8.03	1.98
Long-term Provisions
Compensated absences	20.02	14.77
Gratuity	11.35	9.86
Asset retirement obligation	0.03	0.03
Total	41.24	30.51

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.

The Company based on actuarial valuation determines provision for Compensated absences.