Silver Touch Technologies Ltd Management Discussions

(A) Industry structure and developments.

The Journey over the past few years have been eventful, starting with supply-chain disruptions in the aftermath of the pandemic, the Russia-Ukraine war that triggered a global energy and food crisis, and a considerable surge in inflation, followed by globally synchronized monetary policy tightening.

The global GDP is estimated to have grown at 3.2% in CY 2023, lower than 3.5% in CY 2022, led fears of a hard recession. Yet, despite many global predictions the world avoided a recession, the banking system proved largely resilient, and major emerging market economics did not suffer sudden stops. Economic growth has been stronger than expected in the second half of 2023 in the United States, and several major emerging market and developing economics. However the rising momentum was not felt everywhere, with notably subdued growth in the euro area, reflecting weak consumer sentiment, the lingering effects of high energy prices, and weakness in interest-rate-sensitive sectors.

Unmet revenue expectations have ushered in a new wave of pragmatism where maintaining a healthy profit margin has become pivotal for corporations due to the uncertain macro-outlook. In extreme cases, organizations, due to the uncertain macro-outlook. In extreme cases, organizations resorted to cost-cutting measures, such as reducing headcount and cutting discretionary spending including IT services.

Organizations taking a more rational approach are simply shifting the emphasis of ongoing IT project towards, cost control, efficiencies and automation while curtailing IT initiatives with longer ROIs. Global technology spending on Enterprise software and IT services was close to the US$2.3 trillion mark in CY 2023, with IT services growing at 6.1% YoY to US$1.4 trillion.

STTL has a notable global footprint and a fore-runner in digital innovation, has been an integral part and an active partner in this ambitious plan committed to transforming millions of lives. With over more than two decades of committed drive in IT, STTL is able to offer an unparalleled single eye view of macro solutions and its perspective is markedly well rounded.

STTL is equipped to provide end-to-end IT solutions and services, helps businesses of different verticals and horizontal lines thrive by integrating end-user computing, virtualization, networking and resilient IT infrastructure in conjunction with professional security services. The companys vast range of technical and service delivery expertise assists in driving value driven and customer centric IT solutions to industry.

The companys solutions are highly in demand as they combine Business Intelligence & Machine Learning, Managed Services & Cloud Solutions. Meanwhile, with its Big-Data knowhow, which is the fuel of 21st Century, Information technology insights and rich industry specific knowledge, and expertise is positioned to enable businesses to use innovation to leverage growth.

(B) Business Segments at a glance

• Software Services

• E-Governance Solutions

• System Integration

• SAP Solutions (S4 HANA/R3/B1)

• Enterprise Mobile Applications

• Digital Transformation

(C) Opportunities and Threats

Major Opportunities for the Company are as follows:

• Rise in new geographical markets of Different cities of the India and all over the world.

• Increase in Emerging T echnologies such as Block chain, AI, ML

• Increase of IT-Automation in all the sectors

• Long experience of the promoters in the industry;

• End-to-end ICT solution under a single umbrella

• We follow the Quality standards (CMMI Maturity Level 5 Certification) which are followed by leading IT companies.

• Provide flexibility & transparency to work as an extension IT arm of the customer.

• Track Record of successful execution of projects.

• Experience across various Industry Vertical.

Major Threats/ Challenges to the Company are as follows:

• Technology Dependency

• Integration with various Technology

• Manpower Retention

• Competition

• Cyber attacks

• Disruption and Uncertainty in Business due to Covid-19 pandemic or any other uncertainty due to Act of God.

(D) Risk management

STTLs Board of Directors and executive management promote a risk-intelligent and risk-aware environment to protect stakeholders, safeguard operations and people, ensure quality delivery of services to its clients, and build transparency in the business. Our Enterprise Risk Management integrated structure minimizes risk and maximizes performance with a comprehensive strategy that identifies and manages internal and external risks, and ensures compliance with due care and diligence. This approach combines strategic and operational practices to support the risk-enabled decision making intrinsic to supporting STTLs business objectives and its culture.

As part of business continuity management, STTL has established a response oriented policy for mitigating various risks and plan to oversee its global response and monitor the pandemic situations in the locations where it operates.

While navigating the matters, your Companys response plan was actively in effect throughout the year to continually oversee its response around five key focus areas: safeguarding employees, minimizing impact to clients, reducing the financial impact to STTL, maintaining supply chain resilience, and providing support to the communities in which STTL operates. Crisis governance was guided by your Companys executives crisis management team, advice from the Board, and engagement with external experts to bring best-in-class capabilities to ensure business continuity with by the optimum utilization of resources for the betterment of all stakeholders of STTL. Your Company apply the following strategies for mitigating its risk such as Risk Avoidance, Risk Reduction, Risk Sharing, Risk Retention.

(E) Segment-wise performance.

The Geographical Segment wise standalone and consolidated financial performance of the Company during the Year is as follows:

(F) Outlook, Risks and concerns

This section lists forward looking statements that involve risk and uncertainties. Our actual results could differ materially from those anticipated in this statements as a result of certain factors. Our Outlook, Risks and Concerns are as follows:

1. Our revenues could be significantly affected if the governments in countries in which our Customers or business partners are based, restrict companies from outsourcing work to nondomestic corporations.

2. Our Companys success depends largely upon its skilled professionals and its ability to attract and retain these personnel. The Industry where our Company operates is a highly employee intensive industry.

3. Significant security breaches in our computer systems and network infrastructure and fraud may impact our business.

4. Exchange rate fluctuations in various currencies in which we do business may negatively impact our business, financial condition and results of operations.

5. Changes in market trends and consumer preferences and increase in competitors that are largely beyond our control may affect our business, financial condition, results of operations and prospects.

6. Changes in Government regulations may adversely affect our business operations.

7. Changes in taxation policies may affect our business operations & results of Operations.

(G) Internal control systems and their adequacy.

The Company is well equipped and robust system of internal control with an adequate internal financial controls. The companys Audit Committee has established an Internal Financial Control Policy to ensure that the financial and other sensitive information of the Company is safeguarded from any kind of leaks or unwarranted disclosures. The Company has a continuous monitoring mechanism, which enables it to maintain adequate standards of the control system, and helps in managing defaults, if any, in timely manner.

(H) Discussion on financial performance with respect to operational performance.

Financial Performance FY24 Comparison: Year-on-Year There is significant improvement in the financial performance of the company compared to last year. The total turnover of the company in FY 2023-24 is increased by 35 % from Rs. 15,484.61 lacs of previous year to Rs. 20,925.03 lacs. The Net profit after Tax of the company is also increased significantly by 75% from Rs. 905.54 lacs to Rs. 1582.74 lacs. Whereas Profit before tax increased by almost 67 % to Rs. 2129.14 lacs compared to previous year of Rs. 1273.09 lacs.

(I) Material developments in Human Resources / Industrial Relations front, including number of people employed:

The Company considered their employee as the most important assets. The Company always believes in the ideology of team building and Employees welfare.

The Company also have 24 apprentice trainees for its various departments during the year to provide them the technical training.

As at March 31, 2024 there were total 715 Nos. of employees on the role of the Company. During the year we added 146 new hires.

(J) Disclosure of Accounting Treatment:

In the Preparation of Financial Statements Company has followed the treatment as prescribed by the Accounting Standards.

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

During the year under review, there were significant changes in key financial ratios as provided under -

• Debt Service Coverage Ratio by 1028.02% due to increase in loan, there is change in ratio.

• Net Profit Ratio by 28.65% due to increase in Sale of services which is marginal, there is change in ratio.

• Inventory Turnover Ratio by 36.64% due to stock remains negligible compared to sales, there is change in ratio.

• Trade payable ratio by 62.36% due to payable remains negligible compared to purchase, there is change in ratio.

• Return on Equity Ratio by 54.29%, due to increase of Sale of services which is marginal.

• Return on Capital Employed Ratio is increased by 40.42% due to improve in return on equity.