Odyssey Technologies Ltd Management Discussions

Pursuant to Regulation 34(3) and Para B of Schedule V of SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and the amendments thereof, details of the Management discussion and analysis are given below:

Industry structure and development

The IT industry, as it always does, had shown a clustering of its efforts around the latest shiny thing, Artificial Intelligence. Unlike the earlier rushes towards crypto currencies, NFTs and block chains, the AI does yield some results and being an understandable and usable tool at least in its human interface layer, the adoption is wider. However if the long term results will justify its apparently limitless resource appetite remains to be seen.

As we stated last year, AI is already seeing wide adoption in the security attacks. For one, spam mails have ceased to be identifiable by their poor grammar and absurd typos. The present day spam industry looks as if it picks its staff members from Oxford graduates. There are several other places the AI has assisted the spam industry to improve their tools and thereby increase their threat to users from both commercial and personal perspectives.

There were no structural changes of note in the PKI industry. There was one national PKI conference organized by CDAC and an Indocrypt (cryptology conference) event. Your company actively participated in the first and was a primary sponsor for the second one. The Government Agencies and educational and research organizations in the country seemed to center their interest around the threats likely posed by Quantum Computing. We are grateful to the institutions for taking such long-term views as someone should be taking care of the future and if not the Government, then who? At the same time, many of the present day problems of trust and security are aggravating and many problems like email and other internet frauds are growing by leaps and bounds. Except the palliatives offered by the Government and large public and private sector organizations by way of seriously advising and warning the users to be careful, no concrete action can be seen and no solution is advocated.

Your company, for its part, is ready with its own implementations of the standard Post-Quantum algorithms. Anytime these distant threats become a near threat or reality, Odyssey will be able to continue its security services with minimum disruption to itself or customers. Odyssey also has proof of concept implementations of PQC (Post-Quantum Cryptography) to provide sufficient reassurance to our customers. The company also has detailed plans to switch to the PQC algorithms in every one of its products and would be in a position to respond really fast when the threat becomes real. Beyond that the company is not actively engaged in any Quantum or Post-Quantum related original research efforts.

Odyssey stays fast in its commitment to make public key technology usable in everyday applications by everyone here and now and protect against the vulnerabilities which are actually causing losses.

Opportunities and Challenges

Your company has expanded its email security offerings this year and now cover more than 90% of the email services available globally. Such a uniform and easy interface to orchestrate their own security has never been available ever since the invention of the internet email in the late 1970s. While at it we have also substantially brought down the cost per user and Odysseys xorkeesign mail now offers the greatest value and protection.

To further cap its achievements, your company has also successfully implemented digital signatures for short messages for the first time in the world. Offered within the xorkee infrastructure, now users can digitally sign their SMS messages, Whatsapp, Signal or Telegram or any other chat messages and let the intended recipient verify the signatures. Considering the significant business and personal communications that happen through short messaging and the frauds that are perpetrated using the messages as the starting point, this represents a huge step in fighting internet frauds.

Extending the same paradigm, the company also offers a secure way of identifying persons while engaging with them through a telephone call, a video call or even in personal meetings. Considering the AI enabled applications that assist in creating life-like fake identity documents and imitating voices, Odysseys signature based identity is the easiest and least expensive to deploy and use. The company expects to promote this as the ideal identity issuance and management mechanism.

As an endorsement of Odysseys efforts and innovativeness in this area, Odyssey has been granted a patent for the key access mechanism used in xorkee. The patent was applied for by erstwhile Cyberneme Pvt Ltd which has since been merged with your company.

As a further milestone, the company has implemented an enterprise PKI mechanism for one of its customers through its xorkee framework. In terms of resource consumption and complexity this is substantially more economical than the traditional PKI implementations and provably as secure. Considering that the enterprise PKI is a larger market globally compared to the qualified CA market, Odyssey is weighing its options for aggressively pursuing this.

The state government application we discussed in this space last year has matured and has seen a significant growth in the number of signatures per day in the order of about 15000. Another state government also has adopted the model for an initial, limited use.

Odyssey has also secured the order for xorkee based authentication for its internet banking infrastructure from one of its large customers. A few more opportunities similar to this are on the verge of closing.

Odyssey, has also been reducing its legacy product engagements and the support services to the barest minimum. This is done without impacting Odysseys existing customer implementations and by gently directing the new requirement flow towards xorkee enabled offerings - as in the case of the enterprise PKI mentioned earlier.

Odyssey retains a high level of confidence that neither the political and economic uncertainty surrounding the world or the threats posed by AI or speculation about Quantum Cryptography will in any way impact its plans. If anything, many of them may actually help.

Product-wise performance

A major portion of the companys revenue still accrued from the legacy products. xorkee and related services saw reasonable user adoption but the revenue from them is still under 5%.

The total revenue for the year was 272.57 million rupees. 81.25% of the revenue came from product related services and 16.45% from product licenses. The balance came from software exports.

Of the service revenue, 3.2 % came from Pay As You Go services, 11.4% from customization and implementation and the rest from Annual Maintenance, onsite services and xorkee subscription.

The product revenue is composed of 78.21% from Snorkel and Crypta, 4.89% from Certrix and eSign, 4.29% from Xorkee and 12.61% from AltaSigna as well as a number of variants of AltaSigna like the NPCI eMandate application.

Outlook

The companys outlook for the current year has significantly improved. Having phased out most of the legacy offerings, it is free to bring single minded focus into the xorkee services.

The addition of multi-client email signing coupled with the globally unique message signing and digital identification services will certainly push your company to occupy a significant portion of this market domain.

Risks and Concerns

As outlined above, the realization of quantum threats would be one of the biggest risks facing the company. The company has made adequate preparations for shifting its products to the post-quantum algorithms . However, the risks posed by the quantum technology to the broad business, network and commercial environments cannot really be quantified. For instance, while we know that the crypto-currencies shall suffer the biggest upset, the extent is unknown at this point of time. The fallout of these upheavals in the environment will certainly impact the companys business and plans. At this juncture, the company is preparing itself to respond to any fallout as quickly as possible.

The attacks on the various infrastructural components both by private and state-sponsored attacks continues to be another risk factor and is further accentuated by the global political uncertainty. We continue to strengthen and depend on our operational processes to make our operations resilient.

The company has increased the number of sales and marketing personnel during the year and has further plans to enhance during this year. Training the force and extending the companys reach within the market continues to be a challenge.

Regulatory measures in the country and outside also can be a matter of concern.

Internal Control Systems

Internal control systems continued to function as effectively as in the past. Top management and the Board of Directors and the Committees thereof continue to be actively involved in ensuring that all controls work as intended.

Financial and Operations Performance

There is a revenue growth of 3.51% with the operating profit margin at 18.53%. The total expenditure during the year was Rupees 242.35 million against 224.47 million last year which was due to the jump in employee benefits expense coupled with the increase in sales promotion expense. The PBT for the year stays at 58.28 million as against 59.76 million last year, a marginal decrease of 2.47%. The tax provision is proportionately lower this year at 14.97 million instead of the last years 15.28 million. This has resulted in the net profit of 43.31 million as against 44.48 million last year, a marginal decrease of 2.61%.

The cost of manpower stood at 192.80 million compared to 175.73 million last year, and continues to be the major cost component for the company.

The Company has identified the following as key financial ratios.

Ratios where there has been a significant change from FY 2023-24 to 2024-25 are explained below:

Increased current ratio is caused by increase in current assets during the year, significant portion of which is held in short term Bank deposits.

The debt-equity ratio and the debt service coverage ratio are not applicable to the Company since there are no borrowings. Research and Development

The companys research efforts are instrumental in bringing so many innovations in a highly complex area of technology and making them usable by non-technical users and protecting against most of the perils of the digital internet. Odyssey continues to invest in R & D as a primary activity.

Human Resources Development

There were one hundred and seventy one employees in the rolls of Odyssey. Last year the figure stood at one hundred and seventy eight. The attrition levels were under control. This has also had the effect of increasing the companys expenditure by way of a raised median compensation. The company feels that it should keep up the increased investment in its developmental resources to fully exploit the opportunities available to it at this juncture.

The detailed report on Corporate Governance for the financial year April 1, 2024 to March 31, 2025 as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ["SEBI Listing Regulations"] is set out below.