One Point One Solutions Ltd Management Discussions.

1. INDUSTRY OVERVIEW

As per the "Strategic Review 2018: Amplify Digital" study published by NASSCOM (National Association of Software and Services Companies), Indias IT-BPM industry today stands at USD 167 billion market and employs around 4 million people. It continues to be the leader in the global sourcing market with a 55% share. Despite the slowing down in growth rates, the industry has added USD 24 billion revenue since FY2016 and continues to be a net hirer (100,000+ additions in FY2018).

Digital technology is throwing up a new set of opportunities for the technology industry and over the past few years, the business has seen a shift in revenue share (currently, digital share is between 18%-20% and increasing), talent (India accounts for 75% share in global digital talent), business models (partnerships, As-a- Services, etc.), revenue source (IP-led, platforms, cloud) and organizational structure (dedicated BUs, CoEs, etc.).

India is on track to be a Trillion Dollar Digital Economy backed by governments collaborative approach to encourage private sector participation. Increasing access to internet in both urban as well as rural areas, ambitions e-govemance projects, continued focus on skill development and growing digital transactions are some of the indicators of rapid growth of the Indias digital economy.

India remains worlds most preferred location by global MNCs for setting up technology businesses and fostering strong partnerships in niche areas. Digital technology will continue to remain a significant contributor to the industrys revenues.

2. BUSINESS PERFORMANCE

Financial Markets

Like others in the industry. One Point One Solutions Limited (OPOSL) experienced decelerating growth in this area, prompted by declining client spends. Another visible trend this year was the renewed focus on automation and efficiency, especially the use of new technologies like process automation. This technology allows configuring of computer software to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems. The Company is working closely with clients to broaden its service capabilities across new functions, and embed some of these new technologies in our legacy services to remain the most efficient provider.

Digital

In digital business, the Company continued to grow its relationships with emerging clients, while also piloting selected new engagements with larger strategic clients. Analytics services and creative production were two areas where the Company found the most traction with its clients. With the engaging new business partners have helped us expand service offering to encompass a larger part of the digital lifecycle for the clients.

Customer Operations

The Companys BPM business was the fastest growing business during FY 2018-19. Customers have found great value in Companys unique end-to-end value proposition. This includes use of predictive analysis, operational audits, and providing incisive feedback on how to make process more effective while improving the overall experience of clients.

Across each of these three main business areas, OPOSL sees significant opportunities for growth in the future. Of course, the Company will also need to evolve its service offerings substantially to capture this potential, and is working hard towards this.

Infrastructure

In India, OPOSL operates out of four cities, Mumbai, Bangalore, Gurgaon and Indore where Mumbai location held for head office and vital business operations. During the year in review, capacities were augmented in each of the four cities, and at the end of March 2019, the Company as facilities had a total capacity of more than 4000 seats and the centers are functioning at approximately 80% capacity.

During the year, Mumbai head office gone under substantial infrastructural improvement which shows the intent of enhancing the OPOSLfoot print. Moreover, there was still undergoing infrastructural developments on this report date.

Harnessing Talent

Recognizing people development as a key strategic differentiator, the Company continuously invests in enhancing the skills of our workforce. To encourage managers to think differently, industry experts are invited for guest talks. It is believed that exposing managers to industry best practices, trends, and perspectives will yield dividends in the long term. The Company also entered into an agreement with a global eLearning providerto up skill high-potential managers on business, technology, and creative skills.

Furthermore, internal job transfers are a critical aspect of people development and in the year under review, the policy for internal transfers was re-designed to encourage internal movement and meet the talent pipeline needs of the Company.

Analytics being a focus area, the Company continues deploying senior managers for post graduate analytics program. Also, all analytics teams are consistently up skilled on a proprietary framework for generating actionable business insights. Further, during the year, the central knowledge management team set up a fortnightly newsletter with insights curate from the horizontals and verticals, with the goal of enabling frontline managers to deliver actionable insights and not merely analysis.

3. BUSINESS OUTLOOK

The outlook for the business environment remains largely similar to FY 2018-19. OPOSL does not expect any dramatic alterations to the demand environment during FY 2019-20.

The medium to long term outlook presents both challenges and opportunities. As a rapidly growing player in the ITBPM arena, OPOSL is building competencies and making investments across several areas to sustain our growth journey.

First, the management is developing strong value propositions along new service lines. Second, wherever possible and necessary, OPOSL is reinventing and retuning conventional service lines. Third, we are allocating more funding towards game-changing and disruptive technologies. Fourth, the management is recalibrating its staffing and retraining needs. This is especially important in an environment where revenue growth is getting decoupled from headcount, and it is becoming possible for smaller and smarter teams to bring in greater revenue. Finally, OPOSL is continuously scanning the globe for partnerships and alliances with specialists, niche players and platforms to develop a more holistic service offering for clients.

As we embark on this journey we see immense opportunities for us in the future. As an organization, we will strive towards our aspirations without compromising on our core values. Our outlook for FY19-20 continues to remain strong. We are confident of a strong performance through the year.

4. OPPORTUNITIES, THREATS, RISK AND CONCERNS

Risk management is an integral part of the business. We have outlined the principal risks and uncertainties that could adversely impact the functioning of the Company through their effect on operating performance, financial performance, management performance and overall sustainability. These include, but are not limited to:

Risk Description Risk Impact Risk Mitigation
Macro - economic risk The Company derived substantial portion of its revenues during FY 2018-19 from its business operation which is directly exposed to market risk. Challenging business and economic conditions and travel restrictions in these markets and continued policy changes could enhance cost pressure on clients and thus may affect the Company adversely in a number of ways. The Company may witness a reduction in prices, or the loss of key projects and customers, in turn affecting the financial performance. Broad-based and well diversified business mix across Geographies allow us to minimize the impact on our business.
Cost pressures Many of the Companys contracts are long-term in nature and consequently, the pricing is negotiated, based on prevailing conditions at the time the contract was agreed upon. With the rising trend of salaries, the Company may find it difficult to serve the client at the negotiated price in the future. Increase in employee costs, without corresponding increases in pricing or productivity related improvements would adversely affect the profitability There is a continuous focus on increasing productivity and employee utilization. The Company addresses this risk through various methods including managing the employee pyramid through voluntary and involuntary attritions, automating many processes and leveraging technology. Keeping abreast of market conditions to study the impact on client businesses and analysis of technology advancements that impact consumer behavior are some of the measures that help to improve and favorably position the services provided by the Company to mitigate pricing risks to an extent.
Competition risk New competitors may enter the markets. Likewise, current competitors could decide to focus more on these markets, and thereby intensify the competition. They could also offer new technologies or offer a different service model or offer similar services at reduced prices. Such developments could harm the Companys business and results of operations. In this highly competitive environment, there may be severe impact on margins due to pricing pressures. There is focus on providing higher value and differentiated services. We are also getting into new business models
Legal risks The Company has long term contracts with its customers and services under these contracts are delivered from several offices across Indore, Bangalore, Haryana and Maharashtra geographies. In addition, to deliver on the various service level commitments, the Company also needs to ensure compliance with applicable laws and regulations in those geographies, including but not limited to employment, tax and environmental laws. Additionally, the Company needs to safeguard its own Intellectual Properties against infringement and ensure compliance with third party licenses which are used in its day-today business. The Company has a legal team in place which apart from advising and ensuring documentary safeguards, closely works with business and support functions to enable compliance with contractual and/or regulatory requirements.
Key People risk The BPM industry relies heavily on knowledge management and skilled talent supply. The number of opportunities available in the market, changing needs of a multi-generational workforce and limited supply of employable talent pose a great challenge to retain talented workforce and maintain consistency in performance. The Company strives to continuously strengthen its internal processes to retain critical people and create a war-chest of talent. The company is Enhancing and developing skills of the middle management, Focusing on capability building by providing and developing effective training academies and supporting employee development programs, Carving structured and strong career paths and providing opportunities for growth by way of job enlargements, enrichment of responsibilities and internal job movements; and Carving structured and strong career paths and providing opportunities for growth by way of job enlargements, enrichment of responsibilities and internal job movements and providing effective reward and recognition programs that celebrate success and efforts.
Data privacy and cyber security In a connected world, businesses are extremely vulnerable to cyber-attacks, leading to loss of data and damage to reputation. Business disruption following a major outage event or a failure of our IT systems could cause a disruption in the Companys services, thereby reducing client confidence. The Company has a stringent Cyber Security policy which ensures timely resolution of incidents. The Company also has in place firewalls, data encryption, data backup mechanism, patches etc.
Compliance risks Being a national company, we are exposed to laws and regulations of multiple states. The Company has an in-house compliance team which monitors global compliances. The team receives updates on changes in regulations from specialist consultants and circulates the same internally.
Technological risk The overall business environment continues to witness emerging disruptive technologies. However, clients are seeking to cut additional back-office costs due to continued budget pressures, while suppliers are trying to create additional services and the associated revenues. Technologies such as Cloud Computing, Robotics, Artificial Intelligence, Data Analytics software. Social Media platforms and Process Automation software are being used in the BPM industry to enable businesses to lower costs and be more effective. The Company has developed a wide suite of Business Transformation offerings across areas of Robotics Process Automation, Digital and Analytics as part of its productization initiatives. A combination of domain and process expertise with best- inbreed technology is helping the Company in pursuing significant opportunities.

5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Our Company believes that values are vital for the overall success of business. Thus our companys values are clearly defined, constantly reinforced and reviewed as they are essential for the long term growth of the company. The Company has in place an adequate system of Internal Controls which commensurate with the nature of business and size of its operations. The system is designed to adequately ensure that financial and other records are reliable for preparing financial statements and for maintaining accountability of assets. The Company has a strong and independent internal audit function which carries out regular internal audits to test the design, operations, adequacy and effectiveness of its internal control processes and also to suggest improvements and upgrades to the management. M/s. K. Venkatachalam & Associates, Chartered Accountants, have carried out the internal audit for the financial year 2018-19 based on an internal audit plan, which is reviewed each year in consultation with the statutory auditors (Vinod Kumar Jain 8c Co.) and the Audit Committee. The internal audit process is designed to review the adequacy of internal control checks and covers all significant areas of the Companys operations.

The Company has an Audit Committee of the Board of Directors, the details of which have been provided in the corporate governance report.

The Audit Committee reviews audit reports submitted by the internal auditors. Suggestions for improvement are considered and the audit committee follows up on the implementation of corrective actions. The committee also meets the Companys statutory auditors to ascertain, inter alia, their views on the adequacy of internal control systems in the Company and keeps the board of directors informed of its key observations from time to time.

Protune KS Aiyar Consultants Pvt. Ltd. Chartered Accountants, have also independently audited the Internal Financial Controls over Financial Reporting as on March 31, 2019 and have opined that adequate internal controls over financial reporting exists and that such controls were operating effectively.

6. RECOGNITION & AWARDS

Skoch Award - The Skoch Awards celebrate human excellence and are agents of change in Indian society. The Awards are based on the philosophy of spearheading positive socio-economic changes through recognizing persons who have contributed immensely to salutary transformations in society and governance by displaying exemplary leadership abilities. They are the highest independently instituted civilian honors in India. Since 2003, when these were instituted, the Skoch Awards have become the only independent benchmark of best practices in India in the fields of governance, finance, banking, technology, corporate citizenship, economics and inclusive growth. These salute individuals, highlight projects and focus institutions that go the extra mile to make India a better nation. The Awards are conferred on the mighty and the ordinary alike.

Pursuant to Regulation 30 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are pleased to inform you that One Point One Solutions Limited has won following two awards from the Skoch Group:

1. SKOCH- NSE AWARD - MSME Excellence Silver.

2. SKOCH ORDER-OF-MERIT-SILVER for Qualifying amongst TOP-200 MSMEs in India.

7 REVENUE GROWTH

The Company has witnessed strong revenue growth of 26.23% Y-o-Y. The revenue for the Company is driven by focus on a well-diversified business and geography portfolio.

8. CONSOLIDATED FINANCIAL PERFORMANCE

The financial statements of your Company are prepared in compliance with the Companies Act, 2013 and Accounting Standards (AS). The Groups consolidated financial statements have been prepared in accordance with the principles and procedures for the preparation and presentation of consolidated accounts as set out in the AS 21 on Consolidated Financial Statements. The following discussion and analysis should be read together with the consolidated financial statements of the Company for the financial year ended 31st March, 2019.

ANALYSIS

RESULTS OF OPERATIONS

The following table gives an overview of consolidated financial results of the Company:

Particulars Year Ended 31st March 2019 Year Ended 31st March 2018 Variations in %
(Amount) (Amount)
Revenue from Operations 15270.88 12098.47 26.23%
Other Income 0.37 15.31 -97.58%
Total 15271.25 12113.78 26.07%
Less: Operating Expenses 13998.86 10674.27 31.15%
Less: Other Expenses 60.30 269.48 -77.62%
Profit Before Tax 1212.09 1170.03 3.59%
Less: Tax 215.26 226.01 -4.76%
Net Profit After Tax 996.83 944.02 5.59%

Revenue

The Companys revenue from operations grew by 26.23% to Rs. 15,270.88 lakh in FY2018-19 from Rs. 12,098.47 lakh in FY2017-18. Growth was recorded across major geographies.

Other Income

Other income for FY 2018-19 was at Rs. 0.37 lakh as compared to Rs. 15.31 lakh in FY 2017-18. Other income primarily comprises of interest on bank deposits and dividend from debt oriented mutual funds. Reduction in other income is primarily on account of Redemption of investment in Mutual funds in FY 2017-18, which was appropriately accounted in previous year itself.

Operating expense

Operating expense comprises of Employee Cost, Administration Expenses and Depreciation 8c Amortization. The total operating expenses increased to Rs. 13,998.86 lakh in the year under review from Rs. 10,674.27 lakh in the previous year.

Employee benefits expense

Employee benefits expense includes salaries which have fixed and variable components, contribution to retirement and other funds and staff welfare expenses. Employee benefits expense in relation to operating revenue was 53.62% in FY 2017-18 at Rs. 6486.85 lakh, which has now increased to 59.98% in FY 2018-19 at Rs. 9160.65 lakh.

Operating Profit

Operating Profit during year under review is Rs. 1272.02 lakh which has declined by 10.69% as compared to Rs. 1424.20 lakh in previous year. Whereas Net Profit After Tax (PAT) during the year increased to Rs. 996.83 lakh from Rs. 944.02 lakh in the previous year registering a growth of 5.59%.

Expenditure:

Detailed analysis of expenses is as follows.

Particulars Year Ended 31 "March, 2019 (Amount) Year Ended 31*March, 2018 (Amount) Variations in %
Operating Expenses
1) Employee Benefits Expense 9160.65 6486.85 41.22%
2) Administration Expenses 3254.12 3198.60 1.74%
3) Depreciation & Amortization 1584.09 988.83 60.20%
Total Operating Expenses (A) 13998.86 10674.27 31.15%
Other Expenses
1) Financial Cost 60.30 264.37 -77.19%
2) Other Expenses 0 5.1 -100.00%
Total Other Expenses (B) 60.30 269.47 -77.62%
Total Expenses (A)+(B) 14059.16 10943.75 28.47%
Profit Before Tax 1212.09 1170.03 3.59%
Less: Tax 215.26 226.01 -4.76%
Net Profit After Tax 996.83 944.02 5.59%

Administration expenses

Administration expenses include Rent paid, Travel and Repairs and Maintenance expense. Electricity charges, printing expense and such other office related expenses.

In year under review. Administration Expenses have gone up to Rs. 3254.12 lakh compared to last years figure of Rs. 3198.60 lakh due to increase in working of the company.

Depreciation and Amortization expense

Depreciation & Amortization Cost have increased to Rs. 1584.09 lakh from previous years amount of Rs. 988.83 lakh, thus marking variation of 31.15%. This is mainly due to addition of new assets under various blocks of Fixed Assets.

Other Expenses

Other Expenses include Finance Cost as major component cost to the company at Rs. 60.30 lakh compared to last years cost of Rs. 264.97 lakh. Finance cost has decreased by 77.19% due to repayment of debt during the year.

The Consolidated Total Expenses increased by an average rate of 28.47% from Rs. 10943.75 lakh in the previous year to Rs. 14059.16 lakh in the year under review.

Income Tax Expense

Income tax expense comprises of current tax, net change in the deferred tax assets and liabilities in the applicable FY period and minimum alternate tax credit. The Companys consolidated tax expense (including deferred taxes) reduced to Rs. 215.26 lakh in the year under review from Rs. 226.01 lakh in the previous year which is largely due to complete utilization of MAT credit and recognition of deferred tax assets.

There was a deferred tax credit Rs. 149.14 lakh in FY2018-19 compared to a deferred tax charge of Rs. 106.97 lakh in FY2017-18.

Profit before Tax

Profit before tax increased by 3.59% to Rs. 1,212.09 lakh in FY2018-19 from a profit before tax of Rs. 1,170.03 lakh in FY2017-18. Profit before tax in FY2018-19 is 7.94% of the income, as compared to 9.67% of the income in FY2017-18.

Profit after Tax

As a result of the foregoing, profit aftertax increased by 5.59% to Rs. 996.83 lakh in FY2018-19 from profit after tax of Rs. 944.02 lakh in FY2017-18. Profit after tax in FY2018-19 was 6.53% of the income, as compared to 7.80% of the income in FY2017-18.

ii. FINANCIAL CONDITION

Share Capital

The company has only one class of shares - equity shares of par value of Rs. 10 each. The Authorized share capital of the Company was 20,000,000 equity shares as on March 31, 2019. The issued, subscribed and paid up capital was Rs. 1671.65 lakh of equity shares of Rs. 10 each in the year under review. During the year, shareholding pattern of the company has been altered, thus Reconciliation of the shareholding pattern and amount outstanding at the beginning and at the end of the reporting period are depicted below in tabularform.

Category of Shareholder

As at 31st March, 2019

As at 31st March, 2018

Number of shares held % holding in that class of shares Number of shares held % holding in that class of shares
Promoter and Promoter Group Individual :
Akshay Chhabra 5115300 30.6009% 4965300 29.7036%
Neyhaa Akshay Chhabra 100 0.0006% 100 0.0006%
Any Other (Specify): Body Corporate
Tech World wide
Support (P) Ltd. 5,000,000 29.9106% 5,000,000 29.9106%
Total Shareholding of Promoter and Promoter Group (A)
Public (B) 6,601,100 39.4885% 6,751,100 40.3858%
Total (A+B) 16,716,500 100.00% 16,716,500 100%

Details of shares held by each shareholder holding more than 5% shares:

Category of Shareholder

As at 31st March, 2019

As at 31st March, 2018

Number of shares held %holding in that class of shares Number of shares held

%holding in that class of shares

Equity shares:-
Tech World wide Support (P) Ltd. 5,000,000 29.91% 5,000,000 29.91%
Mr. Akshay Chhabra 5,115,300 30.6009% 4,965,300 29.70%
HSBC Small Cap Equity Fund 580,000 3.4696% 942,000 5.6352%
Yes Bank Limited 918,000 5.4916% 940,000 5.6232%
Pantomath Stock Brokers Private Limited 1,556,000 9.3082% 296,000 1.7707%

Reserves and Surplus

The reserves and surplus of the Company increased to Rs. 6073.93 lakh in the year under review from Rs. 5116.82 lakh in the previous year. Increase in other equity is primarily from:

Addition of consolidated retained earnings by Rs. 996.83 lakh during the year.

Reduction on account of distribution of dividend Rs. 33 lakh pertaining to dividend and Rs. 6.7 lakh pertaining to dividend distribution tax.

a. Other non-current liabilities and current liabilities:

Particulars 2018-19 2017-18
Non-current liabilities
(a) Long Term Borrowings 53.08 7.18
(b) Deferred Tax Liabilities (Net) 109.86 259.01
(c) Long-term Provisions 26.23 12.52
189.17 278.71
Current liabilities
(a) Short Term Borrowings 919.09 0
(b) Trade Payable 838.95 468.37
Other Current Liabilities 1748.77 1196.82
(d) Short Term Provisions 54.65 27.03
3561.46 1692.22

Above table summarizes the consolidated liability side of Balance Sheet, which can be further elaborated as follows:-

Borrowings

• The long-term borrowings increased from Rs. 7.18 lakh as at 31st March, 2018 to Rs. 53.08 lakh as at 31st March, 2019.

• The short-term borrowings increased from Rs. 0 as at 31st March, 2018 to Rs. 919.09 lakh as at SI^March, 2019.

• These funds have been utilized for acquisitions made during the year and other working capital requirements.

Trade payables

• Trade payables consist of payables towards purchase of goods and services and stood at Rs. 838.95 lakh as at 31March, 2019 which has significantly increased from Rs. 468.37 lakh as at 31March, 2018.

Provisions

• Long Term Provision has increased by Rs. 13.71 lakh which belongs completely to provision made for gratuity liability.

• Shortterm provision increased from Rs. 27.03 lakh as at 31st March, 2018 to Rs. 54.65 lakh as at 31st March, 2019 such increase fully belongs to subsidiary balance sheet.

Deferred Tax Liability

• Deferred Tax Liability has reduced to Rs. 109.86 lakh from 259.01 lakh. This total difference of Rs. 149.15 lakh further bifurcated between OPOSL and its subsidiary Silicon Softech India Ltd. for Rs. 95.27 lakh and Rs. 53.87 lakh respectively. Reduction in Deferred Tax liability is mainly due to recognition of Deferred Tax Asset. r

b. Non-current assets:

Particulars 2018-19 2017-18
Non-current assets
(a) Fixed assets
(i) Tangible assets 4134.28 3308.67
(ii) Intangible assets 793.29 907.16
(b) Capital Work-in-Progress 2024.44 0.00
(c) Goodwill on Consolidation 14.33 14.33
(d) Investment 0.00 0.00
(e) Long-Term Loans and Advances 597.23 602.91
Total 7563.57 4833.07

Above table pertains to Non-Current Assets which can be further elaborated asfollows:-

Fixed Assets

The net block of tangible assets, intangible assets and capital work-in-progress amounting to Rs. 6952.01 lakh as of 31st March, 2019 as compared to Rs. 4215.83 lakh of 31st March, 2018, resulted in a net increase of the assets to the extent of Rs. 2736.18 lakh. This is majorly due to addition of Rs.4320.26 lakh offset by depreciation charge for the year amounting to Rs. 1584.09 lakh.

Goodwill

Goodwill represents the excess of purchase consideration over net assets of acquired subsidiaries. Goodwill on consolidation continues at Rs. 14.33 lakh.

c. Current Assets:

Particulars 2018-19 2017-18
Current assets
(a) Trade receivables 3465.12 3376.48
(b) Cash and Bank Balance 194.77 405.30
(c) Short-Term Loans and Advances 272.75 144.55
Total 3932.64 3926.34

Current Assets table clearly shows the increase in liquidity holding of the organization.

Trade Receivables

The trade receivables have increased from Rs. 3376.48 lakh as at 31st March, 2018 to Rs. 3465.12 lakh as at 31st March, 2019 mainly due to increase in business. These debtors are considered good and realizable. The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates and general economic factors which could affect the Companys ability to settle claims. Provisions are generally made for all debtors outstanding for more than 180 days as also for others, depending on the managements perception of the risk. The Company constantly focuses on reducing its receivables period by improving its collection efforts.

Shortterm loans and advances

Short Term Loans 8c Advance increased by Rs. 128.20 lakh from Rs. 144.55 lakh as at 31st March, 2018 to Rs. 272.75 lakh as at 31st March, 2019, majorly includes prepaid expenses 8c advance paid to suppliers.

Cash and Bank Balance

Cash balance represents balance in cash with the Company to meet its petty cash expenditures. The bank balances include balance maintained in current accounts with various banks. The cash and bank balance as of 31st March, 2019 was Rs. 194.77 lakh as compared to Rs. 405.30 lakh as of 31st March, 2018.

d. Liquidity and Capital Resources

The Company needs cash to fund the technology and infrastructure requirements in its operation centers, to fund its working capital needs, to pay interest and taxes, to fund acquisitions and for other general corporate purposes. The Company funds these capital requirements through variety of sources, including cash from operations, short and long-term lines of credit and issuances of share capital. As of 3151 March, 2019, the Company had cash and cash equivalents of Rs. 194.77 lakh.

The Companys summarized statement of consolidated cash flow is set forth below:

Particulars FY 2018-19 FY 2017-18
Net Cash flow from Operating activities 4148.75 929.14
Net Cash flow from/ (used injlnvesting activities (4310.96) (2210.05)
Net Cash flow (used in)/ from Financing activities (48.31) 1560.59
Cash and cash equivalents at the beginning of the year 405.29 125.61
Cash and cash equivalents at the end of the year 194.77 405.29

Operating Activities

Net cash generated from the Companys operating activities in FY2018-19 amounted to Rs. 4148.75 lakh. This consisted of net profit after tax of Rs. 996.83 lakh and a net upward adjustment of Rs. 1864.95 lakh relating to various non-cash items and non-operating items including depreciation of Rs. 1584.09 lakh; net increase in working capital of Rs.1658.08 lakh; and income taxes paid of Rs. 371.12 lakh. The working capital change was due to increase in operating assets by Rs. 211.15 lakh and increase in operating liabilities by Rs. 1869.24 lakh.

Investing Activities

In FY2018-19, the Company expended Rs. 4310.95 lakh cash for its investing activities. These investing activities included capital expenditure of Rs. 4320.26 lakh, including fixed assets purchased and replaced in connection with the Companys operation centers in India. During the year, company received interest amounting to Rs. 9.30 lakh

Financing Activities

In FY2018-19, net cash used in financing activities amounted to Rs. 44.98 lakh. This comprised of proceeds of long term borrowings of Rs. 45.89 lakh, repayment of interest amounting to Rs. 61.20 lakh and distribution of dividend of Rs. 33 lakh.

Cash Position

The Company funds its short-term working capital requirements through cash flow from operations, working capital overdraft facilities with commercial banks, medium-term borrowings from banks and other commercial financial institutions. As of 31st March, 2019, the Company had cash and bank balances of Rs. 194.77 lakh as compared to Rs. 405.30 lakh as of 31st March, 2018.

e. Financial Ratios

Following are ratios for the current financial year and their comparison with preceding financial year:

Sr. No. Ratio Description 31 "March, 2019 31 "March, 2018
1. Debtors Turnover (times) 4.46 4.51
2. Interest Coverage Ratio 21.10 5.43
3. Current ratio 1.10 2.32
4. Debt Equity ratio 0.13 0.0011
5. Operating margin (%) 8.33% 11.77%
6. Net profit margin (%) 6.53% 7.79%
7. Return on Equity (%) 12.87% 13.91%

Analysis:

• Debtors Turnover ratio indicates the companys efficiency to collect its trade receivables. The debtors turnover ratio is almost same as on 31st March, 2019 at 4.46 compared to 4.51 as on 31st March, 2018.

• Interest Coverage ratio is a financial ratio which determines how well company can pay interest on outstanding debts. The interest coverage ratio has increased from 5.43 as on 31st March, 2018 to 21.10 as on 31st March, 2019, this indicates interest payments on outstanding debts are completely covered by EBIT and company is financial secured.

• Current ratio is a useful test of short term debt paying ability of business. The current ratio as on 31st March, 2019 is 1.10, which indicates that company has sufficient short term funds for repaying short term liabilities.

• Debt equity ratio is a financial ratio that compares companys total debts to total equity. A lower debt to equity ratio usually implies more financially stable business. Thus, a debt equity ratio of 0.13 as on 31st March, 2019 indicates that the company is financial stable.

• Operating Margin ratio is a profitability ratio for measuring revenue left after all operational expense. It indicates the efficiency of the company in utilizing its resources. The operating margin is 8.33% as on 31st March, 2019.

• Net Profit margin indicates the net income made by the company with total sales achieved. The Net profit margin is 6.53% as on 31st March, 2019.

• Return on equity shows that the company is able to utilize the funds of investors and earn 12.87% profit on such investment.

1. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company believes that employees are the core key to our success. A fundamental tenet of our management philosophy is to invest in our employees, and enable them to develop new skills and capabilities which benefit them as well as the Company.

The organization grew to more than 4000 employees during FY 2018-19. To promote employee welfare, we organized camps for blood donation, eye check-up and health check-up. These initiatives received an overwhelming response from employees across locations.

We believe that we are heading in the right direction on our journey to become a work place where employees trust who they work for, take pride in what they do and enjoy the company of the people they work with. In FY 2018-19, we will continue to look for ways to best harness the potential of our resources through various people management interventions including skilling people on digital, robotics and machine learning.

2. MANAGEMENT PROJECTION, ESTIMATION AND POINT OF VIEWS:

Cautionary Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be forward-looking statements; within the meaning of applicable securities laws and regulations. Actual results could defer materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments within the country demand and supply conditions in the industry, changes in Government regulations, tax laws and other factors such as litigation and labor relations. Readers are advised to exercise their own judgment in assessing risks associated with the Company, inter-alia, in view of discussion on risk factors herein and disclosures in regulatory filings, as applicable.