Synoptics Technologies Ltd Management Discussions

The Management of Synoptics Technologies Limited is pleased to present the Management Discussion and Analysis Report (MDAR) for the financial year ending March 31, 2024, in accordance with the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations 2015.

Synoptics Technologies Limited is an offering solutions in the areas of IT Infrastructure like connectivity to the Branches, Supply, implementation, and support of the network equipment needed to run the IT setup like routers, switches, etc. It designs solutions for customers who need to put their applications on Cloud, as well as application migration, and managing the setup in the cloud. IT Security solutions like firewall installation and management. Data Centre design and solution with newer technology to optimize the investment and use less space and power and with clearly defined outcomes

This report aims to provide a comprehensive analysis of the companys performance, industry dynamics, operational highlights, and future outlook. This outlook is based on assessment of current business environment. It may vary due to future economic and other developments both in India and Abroad.

It contains financial highlights but does not contain the complete financial statements of the Company. It should be read in conjunction with the Companys Audited Financial Statements for the year ended on March 31, 2024.

Forward looking statement - Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the Company describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events.

The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company assumes no responsibility to publicly amend, modify or revise forward looking statements, on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include changes in government regulations, tax laws, economic developments within the country and such other factors globally.

1. COMPANY OVERVIEW

Our Company was incorporated as Synoptics Technologies Private Limited under the provisions of the Companies Act, 1956 vide certificate of incorporation dated October 15, 2008 in Mumbai. Subsequently, our Company was converted into a Public Limited Company pursuant to Shareholders Resolution passed at the Extra Ordinary General Meeting of the Company held on July 03, 2018 and the name of our Company was changed from "Synoptics Technologies Private Limited" to "Synoptics Technologies Limited" vide a fresh Certificate of Incorporation dated July 19, 2018. On July 13, 2023, our Company got Listed on NSE Emerge Platform.

We are an IT Services company offering solutions in the areas of IT Infrastructure like connectivity to the Branches, Supply, implementation and support of the network equipments needed to run the IT setup like routers, switches etc. We design the solution for customers who need to put their

applications on Cloud. We help for the application migration and manage the setup in the cloud. IT Security solution like firewall installation and management. Data Centre design and solution with newer technology to optimize the investment and use less space and power and with clearly defined outcomes. Synoptics helps enterprise, small businesses and Government in their Digital journey with various use cases of specific industry verticals with our technology led and innovation driven approach. We are currently operating across India and with a team of 584 employees. We have the ability to provide our B2B (Business to Business) customers with a blend of optimal functionality, value for money, commitment and flexibility (coupled with on-site support across India).

2. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian economy demonstrated resilience in 2023, emerging as one of the fastest growing major economies globally. According to the International Monetary Funds World Economic Outlook Update (January 2024), Indias GDP growth rate stood at 6.8% in 2023, outpacing major economies like the United States and China.

This growth was driven by robust domestic demand, government initiatives to boost manufacturing, and a strong services sector. The Indian IT industry, a significant contributor to the countrys economic growth, witnessed a remarkable performance in 2023. According to NASSCOMs Strategic Review 2024, the Indian IT industrys revenue grew by 7.8% in

2023, reaching $245 billion. This growth was fueled by the increasing demand for digital transformation services, cloud computing, and emerging technologies such as artificial intelligence and data analytics.

The industrys export revenue, which accounts for a significant portion of its overall revenue, grew by 9.2% in 2023, reaching $181 billion. This growth was driven by the continued demand for Indian IT services from global markets, particularly in the areas of digital transformation, cloud computing, and cybersecurity. The Indian IT industrys domestic revenue also witnessed a strong growth of 5.6% in 2023, reaching $64 billion. This growth was driven by the increasing adoption of digital technologies by Indian businesses across various sectors, including banking, financial services, retail, and manufacturing.

Looking ahead, the Indian IT industry is expected to maintain its growth trajectory in 2024. NASSCOM forecasts the industrys revenue to grow by 7.5% in 2024, reaching $263 billion. This growth is expected to be driven by the continued demand for digital transformation services, cloud computing, and emerging technologies, as well as the industrys focus on upskilling and reskilling its workforce to meet the evolving market demands.

However, the industry faces challenges such as talent shortages, increasing competition from global players, and the need to adapt to rapidly changing technologies. Additionally, the industrys ability to navigate global economic uncertainties and geopolitical tensions will be crucial in shaping its future growth trajectory.

3. SEGMENT - WISE OR PRODUCT- WISE PERFORMANCE

The Company at present is engaged in the Information Technologies Services which constitutes a single business segment. In view of above, primary and secondary reporting disclosures for business/ geographical segment as envisaged in AS -17 are not applicable to the Company.

We offer our customers a comprehensive range of Managed IT Services and Solutions. Our Go-to- Market (GTM) strategy and Market Positioning: For internal purpose, we have classified our customers as below:

• Shifting focus from being an IT Services organization to technology organization.

• Standardizing and productizing offerings.

• GTM focus on Small and Medium Businesses.

• Developing international business.

• Setting up offshore Centre of Excellence (CoE) for cloud migration.

• Software outsourcing (cloud native apps) as a mature Line of Business.

• Focus on high profitability, recurring and SaaS based deals.

• Lean and thin organization based on tech competencies and remote delivery of the solutions across the globe.

• Digital Marketing as a key driver for the generation of the leads and building up brand in to tech space.

Managed IT Services and solutions services consist of the solution as follows:

• IT Networking Solution

• LAN and WAN Solution

• Software based networking.

• Datacenter Solution

• IT Security

• Data backup and recovery

• Cloud Architecture

4. INTERNAL CONTROL SYSTEM

Our company has put in place standard operating procedures that ensure effective and transparent internal controls for efficient delivery of services. As part of the Corporate Governance Report, CFO certification is provided, for assurance on the existence of effective internal control systems and procedures in the Company. The Audit Committee of the Board oversees the internal audit function. The Audit Committee is regularly apprised by the internal auditors through various presentations. The internal audit function provides assurance to the Board that a system of internal control is designed and deployed to manage key business risks and is operating effectively.

We have been refining our management methodologies by way of periodical reviews so as to realign our tactics to meet the changes on the ground. The Company has adopted policies and procedures for ensuring orderly and efficient conduct of the business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The internal control system is commensurate with the nature of business, size and complexity of operations and has been designed to provide reasonable assurance on the achievement of objectives, effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations. Financial discipline is emphasized at all levels of the business and adherence to quality systems and focus on customer satisfaction is critical for the Company to retain and attract customers and business and these are followed rigorously.

5. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

For the year ended March 31, 2024, our business performance in terms of revenue witnessed a moderate growth. This was true at both Standalone and Consolidated level.

On consolidated basis, the Company registered a total revenue (including other income) at ^ 4341.66 Lakhs, for the year 2024 as compared to ^ 5124.04 Lakh in financial year 2023. Company registered Profit After Tax at ^ 600.67 Lakhs in financial year 2024 as against ^ 663.09 Lakhs in financial year 2023.

On standalone basis, the Company registered a total revenue (including other income) at ^ 4342.21Lakhs, for the year 2024 as compared to ^ 5123.72 Lakh in financial year 2024. Company registered Profit After Tax at ^ 600.37 Lakhs in financial year 2024 as against ^ 662.50 Lakhs in financial year 2023.

6. OPPORTUNITIES, THREATS, RISKS AND CONCERNS:

As is normal and prevalent for any business, the Company is likely to face competition from large scale imports. There can be risks inherent in meeting unforeseen situation, not uncommon in the industry. Changes in technology may render our current technologies obsolete or require us to make substantial capital investments. Company is fully aware of these challenges and is geared to meet them. Company also recognizes the risks associated with business and would take adequate measures to address the associated risks and concerns. Some of these factors include competition from multinational Companies etc.

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

Your Company firmly believes that its human resources are the key enablers for the growth of the Company and important asset. Hence, the success of the Company is closely aligned to the goals of the human resources of the Company. The Company aims to develop the potential of every individual associated with the Company as a part of its business goals. The Company focuses on providing individual development and growth in a work culture that ensures high performance and remains empowering. The Company has employed over 581 strong and dedicated workforce travel abreast of the latest trends.

8. KEY FINANCIAL RATIOS

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018, the Company is required to give details of significant changes (Change of 25% or more as compared to the immediately previous year) in key sector specified financial ratio.

PARTICULARS	STANDALONE			Reason for Variation
	F.Y. 24	F.Y. 23	Variation
Current Ratio	2.74	2.07	0.67	Current Assets increased more than Current Liabilities. Current Assets increased on account of Cash & Equivalents and Other Current Assets while Current Liabilities remained Constant.
Debt-equity ratio	0.31	0.86	-0.55	Borrowings decreased on account of repayments and dependency on short term funding
Debt service coverage ratio	2.26	1.07	1.19	EBITDA Increased more than the total debt service. Decrease in Long Term Borrowing was compensated by increase in Finance cost and current maturities of LTB
Return on equity ratio	0.13	0.30	-0.17	Profits decreased mainly due to reduction in Export Service sale; while Average Total Equity increased compared to the previous year.
Inventory turnover ratio	8.37	9.30	-0.93	While Inventory Consumption decreased; average inventory increased significantly due to market conditions.
Trade receivables turnover ratio	2.33	3.24	-0.91	Revenue from operations decreased while average trade receivables increased. Au contraire, trade receivables for FY23 decreased from FY22 resulting in turnover ratio.
Trade payables turnover ratio	6.46	4.40	2.6	Adjusted expenses increased while average trade payables increased.
Net capital turnover ratio	1.55	3.48	-1.93	Revenue from operations decreased more compared to average working capital
Net profit ratio	0.14	0.13	0.01	Increase is marginally
Return on capital employed	0.14	0.20	-0.06	Profits decreased due to reduction in the revenue while average capital employed increased