Silver Touch Technologies Ltd Management Discussions.

(A) Industry structure and developments.

In FY 2018, the global market for software and services is estimated to have grown to $1.3 Trillion. Within that, outsourced IT-BPM services grew by 2.6% over the prior year. IT Services is estimated to have grown by 2.4% year on year, driven by digital demand, while Business Process Management (BPM) grew by 4% over the prior year on account of greater implementation of automation. Overall, the industry is estimated to employ more than 3.9 million people.

IT services segment has a 52% share, followed by BPM and ER&D and packaged software (19% each) and hardware (9%).

The industry comprises 16,000+ firms that offer the complete range of services. With a presence of over 4,750 start-ups. India is the 3rd largest start-up ecosystem in the world.

(B) 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 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

(C) Segment-wise performance.

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

Particulars Standalone Consolidated
F.Y.2017-18 F.Y.2016-17 F.Y.2017-18 F.Y.2016-17
Segment Revenue
a) Domestic 1,57,32,34,833 1,10,77,99,606 1,57,78,52,833 1,07,26,82,028
b) Export 6,70,41,477 7,82,72,722 14,57,25,045 15,69,56,290
Total 1,63,90,76,310 1,18,60,72,327 1,72,35,77,878 1,22,96,38,318
Less: Inter Segment Revenue - - - -
Net Sale/Income from Operations 1,63,90,76,310 1,18,60,72,327 1,72,35,77,878 1,22,96,38,318
Segment Results before Tax and Interest from each segment
a) Domestic 18,84,00,479 11,16,18,478 19,09,41,751 12,08,21,669
b) Export 1,35,84,135 1,00,22,596 2,49,38,869 1,73,07,981
Total 20,19,84,614 12,16,41,074 21,58,80,621 13,81,29,650
Less: i) Interest 82,32,347 2,14,05,256 82,74,093 2,14,12,225
ii) Other unallocable Expenditure 6,47,19,486 5,16,68,424 8,17,00,801 6,97,12,112
Add: i) Other unallocable income 92,69,738 1,26,63,012 93,12,787 1,26,63,012
Total Profit before Tax 13,83,02,519 6,12,30,406 13,52,18,513 5,96,68,325

(D) 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.

(F) Internal control systems and their adequacy.

The Company is well equipped with 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

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

Total Revenue:

• Half Year ended March, 2018 grew by 64.59% to Rs 87.95 Crores compared to Rs.53.43 Crores in Half Year ended March, 2017

• FY 18 grew by 37.67%to Rs. 165.02 Crores compared to Rs. 119.87 Crores in FY 17

EBITDA:

• Half Year ended March, 2018 grew by 32.17% to Rs 10.55 Crores compared to Rs.7.98 Crores in Half Year ended March, 2017

• FY 18 grew by 30.66%to Rs. 17.81 Crores compared to Rs. 13.64 Crores in FY 17

Profit After Tax:

• Half Year ended March, 2018 grew by 62.25% to Rs 5.39 Crores compared to Rs.3.32 Crores in Half Year ended March, 2017

• FY 18 grew by 103.04% to Rs. 8.55 Crores compared to Rs. 4.20 Crores in FY 17

(H) 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.

During the year Company has granted ESOPs to the eligible employees, the details of which are separately provided as a part of this Report.

The Company also have 19 apprentice trainees for its various departments during the year to provide them the technical training.

As at March 31, 2018 there were total 1358 Nos. of employees on the role of the Company. During the year we added 344 new hires

Disclosure of Accounting Treatment:

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