1. OVERVIEW:
Trejhara Solutions Limited ("Trejhara") financial statements
have been prepared in accordance with Indian Accounting Standards ("Ind AS") as
prescribed under Section 133 of the Companies Act, 2013 ("the Act"), read with
the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time, and
other provisions of the Act to the extent notified and applicable. The management of
Trejhara for the objectivity and integrity of these financial statements, as well as for
various used therein. The estimates and judgments relating to the financial statements
have been made on a prudent and reasonable basis in order that the financial statements
reflect in a true and fair manner, the state of affairs and operations. The
forward-looking statements contained herein are subject to uncertainties, including but
not limited to the risks inherent in the Companys growth strategy, the external
economic and business environment, and other risk factors stated in this report. The
readers are cautioned not to place undue reliance on the forward-looking statements, which
reflect Trejhara managements as on date hereof.
2. DEVELOPMENTS IN THE EXTERNAL ENVIRONMENT INDUSTRY TRENDS AND
DEVELOPMENTS:
The global economic slowdown is expected to persist throughout 2023 and
2024 as geopolitical uncertainties and a rise in central bank policy rates to fight
inflation continue to weigh on economic activity. The consequent weak demand has impacted
all sectors, including IT and logistics sectors. The Indian economy, which continues to be
the fastest-growing economy, is better placed compared to its global peers.
The IT services industry in India is in the early phase of a multi-year
technology upcycle, with spending on digital transformation earlier planned for the next
decade now being compressed into a 3-5-year period. Enterprises are spending on technology
to not only reduce costs but also to enhance their business models and stay relevant to
their customers.
The global supply chain management (SCM) market, including cloud-based
deployment projects, is expected to grow at a healthy CAGR of more than 12% over the next
ten years. There is immense potential benefit from new-age supply chain management
solutions as businesses recover from the financial crisis and position supply chains as
enablers of revenue and margin growth. In the quest to eliminate supply chain costs and
streamline supply chain communications, the supply chain management has emerged as a
tactical operational tool. Increasing demand for SCM solutions from both large enterprises
and small and medium enterprises (SMEs) and growing awareness about the benefits offered
by SCM solutions, including supply chain optimisation, forecasting accuracy, and waste
minimisation are expected to fuel demand for the SCM solutions across the world. The
demand in India is estimated to witness tremendous growth over the next decade.
Indias supply chain and logistics sectors are among the largest globally. The sector
has the potential to grow multifold.
3. TREJHARA BUSINESS OFFERINGS:
Trejhara is a technology products and solutions provider that helps
enterprises accelerate digital innovation, securely and efficiently. We employ domain and
technology experts across Asia, Middle East, Africa, North America and Europe. We have
been consistently recognized amongst the top 100 technology solutions providers. Our
products are focused on helping organizations accelerate their digital footprint and
customer experience through interactive presentation and offline analytical capabilities.
We target our customers, partners, dealers, and agents for their needs and goals.
Interact Dx – Our customer communication management product
suite is an innovative platform in the digitization domain that satisfies ever-evolving
demand for technology. It provides comprehensive interactive personalized communication,
including audio and video technology across multiple segments globally, such as banking,
insurance, telecom, utility, and retail. Multilingual communications such as bills,
statements, targeted advertisements, policy kits, welcome kits, receipts, loyalty/rewards,
KYC forms, advisory, and notifications are delivered through this platform across multiple
channels such as email, web, mobile, print, and kiosk.
SCMProFit – Our logistic solution allows us to streamline
and enhance logistics operations by improving efficiency and optimizing working capital.
Take control of the supply chain by streamlining and enhancing logistics operations and
gaining an unfair edge over competitors.
We provide our services and solutions in different segments such as
warehousing, freight forwarding, project logistics, manufacturing, distribution, supplier
collaboration, and visibility.
4. OPPORTUNITIES AND THREATS:
Over the years, Trejhara has invested in innovation, created world
class IP-based offerings, and built a strong team of domain and technology experts across
various geographies globally. We have proven capabilities with our matured products that
are also cloud-enabled, and that makes us a formidable player in the market, which is
expected to grow rapidly. The businesses are focussed on strengthening supply chain
management with an aim to improve operational efficiencies and reduce costs. Trejhara has
also launched a specialised supply chain enablement solution for small and medium
enterprises (SMEs), which is projected to gain traction as it can provide scalability,
flexibility, and cost efficiency to the SMEs. The pace of digitisation and got traction
post-pandemic is expected to further accelerate in the future and businesses are focussing
their budget spend on technologies and solution which can enhance their offerings and
customer experience. The market for all our offerings is rapidly growing, and with the
increased demand environment, Trejhara is best placed to tap opportunities and witness
strong growth in the coming years.
5. RISKS AND CONCERNS:
The chief risks and uncertainties facing the companys business
include:
Keeping pace with a rapidly advancing technology landscape: The
technology landscape is evolving at a rapid pace, and digital technologies are fast
gaining adoption. The digital consumer is leading this change. For Trejhara to maintain
its ability to stay competitive in the marketplace, we need to invest significantly to
keep our offeringsand talent in alignment with market and client expectations. All
industry players face the same challenges. Customer attrition and failure to attract new
business may result if Trejhara is not able to maintain its current level of innovation
and product and service level execution. Trejhara aims to adopt a positive and proactive
stance by doing two things firstly, by launching newer, more relevant product offerings to
market and secondly, improving upon its customer choice in areas such as digital
innovation and Cybersecurity.
Attracting and retaining talent is critical for any organization.
Trejharas success depends on its ability to attract and retain skilled resources and
leaders. The loss of key resources, especially to competitors, could materially impact our
business. We adopt a risk-reward model for all our top management and managers, thereby
creating additional incentives for them to drive the Companys objective forward.
The worldwide IT sector is expected to witness healthy growth for
the next few years. However, the pace of growth faced headwinds in recent years due to
disruptions in the economic environment driven by high inflation, currency depreciation in
some countries, and the threat of recession as a consequence of these factors. If these
factors subsist for a longer duration, the economic growth may slow down further and have
an adverse impact on businesses. The management is conscious of these risks and would
reorient its strategies to deal with the consequent impact on the Company.
In an increasingly digitised world, businesses are exposed to various
security threats, particularly concerning IT security and cyber security. Such risks, if
they materialise, have the potential to impact service continuity for customers and cause
other disruptions that can attract huge costs. The incidents of cyberattacks have
increased multifold, and businesses are required to recognise these risks and devise
response strategies to deal with the same. At Trejhara, the management regularly reviews
such risks and has put in place the necessary framework to mitigate them.
Increasing competition: Trejhara faces strong competition in the
markets and industries it serves. Its biggest vertical of focus financial services has
strong competitors who seek to win over Trejharas share of customers budget.
The most effectivestrategy has been to focus on providing an exceptional customer
experience, and adopt a model of co-owning the customers business objectives, and
rally to deliver and exceed them.
Dependence on key personnel: Trejhara operations are dependent upon
the companys ability to attract and retain highly skilled individual contributors
and managers. The loss of key individuals, especially to one of our competitors, could
materially impact our business. We adopt a risk-reward model for all our top management
and managers, thereby creating additional incentives for them to drive the companys
objectives forward.
6. RESEARCH AND DEVELOPMENT:
At Trejhara, through consistent and healthy spending on research and
development (R&D), we have built a strong IP-based product portfolio that is enhanced
and upgraded in order to enhance the customer experience. We maintain a healthy allocation
of funds for R&D, but at the same time, we also encourage innovation and have a team
of resources and an environment that encourages the development of newer products and
offerings that can be disruptive and ahead of the market. R&D is a continuous process,
and Trejhara has a skilled and experienced team of resources involved in research and
development. The investment in R&D is expected to remain at healthy levels.
7. OUTLOOK:
The market outlook for all our offerings is positive as more and more
businesses, including small and medium enterprises (SMEs), are turning towards
digitisation and automation. Our existing offerings are robust, and we have also launched
a new solution, which together place us in a strong position in this rapidly growing
market. We are also focussed on enhancing our sales and marketing capabilities and have
signed key partnerships that shall boost our presence in existing markets and expand our
reach in newer territories. Our company has a strong clientele with marquee names, and we
are expecting to make healthy additions to the same. There is a healthy pipeline for all
our offerings, and there are healthy additions to the order books with visibility to make
some more additions in the coming quarters. The future outlook remains robust.
DISCUSSION ON CONSOLIDATED FINANCIAL PERFORMANCE WITH RESPECT TO
OPERATIONAL PERFORMANCE
Revenue from Operation
Our revenues are derived from sale of software services and product
licenses. During the year, the total revenue from operations was 6,874.96 Lakhs against
5,837.28 Lakhs for the previous year.
Operating and Other Expense
The operating and other expense comprises of Software Services Charges,
Administration and other general functions, travelling, communication, legal and
professional charges, rent, repairs and maintenance, recruitment and training and other
allocated infrastructure expenses.
During the year, the operating and other expense were 2,113.49 Lakhs
as against 1,650.19 Lakhs in the previous year.
Employee Benefit Expenses
During the year, the Employee Cost was 3,260.35 lakhs as against
2,739.88 Lakhs in the previous year
Earnings before interest, taxes, depreciation and amortization (EBITDA)
excluding other income.
During the year, our operating Profit was 1,501.12 Lakhs as against
1,447.21 Lakhs for the previous year.
Depreciation, Amortisation and Impairment Expenses
The Depreciation ,Amortisations and Impairment on Property Plant &
Equipment (PPE) and Other Intangible Assets and Right to Use Assets was 8871.82 Lakhs
for the year as against 123.38 Lakhs during the previous year. As percentage of revenue,
it was 129.05 % and 2.11 % for the year and previous year respectively. It was higher on
account of Impairment of 8,625.72 on Intangible assets under development pertaining to
one of subsidiary.
Other Income
Other Income primarily consists of interest income, dividend income,
Foreign exchange fluctuation other miscellaneous income. Other income for the year was
61.47 Lakhs compared to 203.81 Lakhs for the previous year.
Tax expense
Current tax expense was 332.01 Lakhs as against 292.32 Lakhs for
the previous year. Deferred tax Credit was 514.39 lakhs as against 19.71 lakhs for the
previous year.
Profit/ (Loss) before tax (PBT)
Net Profit/ (Loss) before tax for the year was (30,095.25) lakhs as
against 1,368.91 lakhs for the previous year.
Profit/ (Loss) after tax (PAT)
Net Profit/ (Loss) after tax for the year was (29,912.87) Lakhs as
against 1,096.30 Lakhs for the previous year
Equity
Equity as at 31 March 2023 decreased to 19,828.55 Lakhs as compared
with 47,533.08 Lakhs as at 31 March 2022.
Short-term and Long-term borrowing including Current maturities of
long-term borrowings
The total short-term and long-term borrowing as at 31 March 2023 was
1,844.28 Lakhs as against 2,407.93 as at 31 March 2022.
Trade Payable and other current liabilities excluding Current
maturities of long-term borrowings
The total Trade Payable and other current liabilities (financial and
Non-Financials) Increased by 2,491.65 Lakhs from 10,862.28 lakhs on 31 March 2022 to
13,353.94 Lakhs on 31 March 2023.
Property, Plant and Equipment (PPE), Intangible Assets and Intangible
Assets under development
The Net Block of PPE, Right of Use Assets, Intangible Assets and
Intangible Assets under development decreased by 7,302 Lakhs from 14,883.73 Lakhs as
on 31 March 2022 to 7,581.73. Lakhs on 31 March 2023.
Non-current Investments (Net)
There was no cash Sale-Purchase in non current investments.
Other Non-Current Assets (Financials and Non Financials)
There was a increase in Long-term loans and advances from 10,330.62
on 31 March 2022 to 11,295.62 Lakhs on 31 March 2023.
Trade receivables
Trade receivables as on 31 March 2023 was 1,740.77 Lakhs against
2,510.57 Lakhs on 31 March 2022. In the opinion of management, all the Trade receivables
are good, recoverable and necessary provision has been made for debts considered to be bad
and doubtful. The level of receivables is normal and is in tune with business requirements
and trends.
Cash and cash equivalents
The cash and bank balances lying with the company as on 31 March 2023
were 154.66 Lakhs as against 72.97 Lakhs in the previous year.
Key Financial Ratios |
|
|
|
|
Ratio |
31-03-2023 |
31-03-2022 |
Change in % |
Reasoning |
1 Debtors Turnover Ratio |
3.23 |
2.41 |
34.48% |
Increase is mainly because
the proportion of increase in revenue from Operation is more than increase in receivable |
2 Current Ratio |
1.23 |
3.2 |
-61.60% |
Decrease is mainly because of
decrease in Current Assets. |
3 Debt Equity Ratio |
0.09 |
0.05 |
83.61% |
Increase due to repayment of
borrowings and loss in current year profit |
4 Interest Coverage Ratio |
7.04 |
9.45 |
-25.49% |
Decreased on accounts of
proportion of Increase in Interest Expenses is more than increase in Profit |
| 5 Operating profit margin |
31.40% |
35.60% |
-11.68% |
There is no significant changes |
6 Net Profit Margin- |
435.10% |
18.80% |
-2416.70% |
Ratio is negative due to net
loss on account of Exceptional Loss in the current year. |
7 Return on Net Worth |
NA |
NA |
NA |
Ratio is not calculated due to
net loss after tax in current financial year |
8. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Directors Report section in the Annual Report discusses the
adequacy of our internal control system and procedures.
9. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS
FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:
The Employees are critical assets for the Company. Trejhara has built a
strong team consisting of domain experts. Our personnel policies are focused on creating
an environment which will derive best returns for the organization as well as the
concerned employees. The Company had strengthened its workforce by employing 262 permanent
employees as compared to 224 employees in the preceding year.
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