Trejhara Solutions Ltd Management Discussions.


Trejhara Solutions Limited ("Trejhara") financial statements, for the financial year ended March 31, 2019, have been prepared under the historical cost convention, on an accrual basis of accounting, in compliance with the requirements of the Companies Act, 2013, the Generally Accepted Accounting Principles (GAAP) in India and mandatory accounting standards issued by the Institute of Chartered Accountants of India (ICAI). The management of Trejhara accepts responsibility for objectivity and integrity of these financial statements, as well as for various estimates and judgments 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 certain risks and uncertainties, including but not limited to, the risks inherent in Companys growth strategy, 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 reflects Trejhara managements analysis only as on date hereof.


The cloud computing industry continues to see healthy expansion as strong data reflects an increase in sales, adoption and business acceptance. Furthermore, according to Gartner, by 2020, a corporate "no-cloud" policy will be as rare as a "no-Internet" policy is today. Forecasts for global cloud adoption are quite bullish. Forrester believes that businesses will spend about $191 billion on cloud services by 2020, compared to $72 billion in 2014. This projection suggests that the future cloud market will be 20 percent larger than what had previously been forecasted by the firm, which reveals that the sector has entered a "hyper-growth" stage and is displacing on premise setups faster than expected. A key trend shaping the cloud ecosystem over the next several years is the continued prominence and even quicker rise of SaaS, widely expected to show the strongest growth in both revenues and deployments. Other forecasts call on more than $132 billion in sales of SaaS by 2020, or a $50.8 billion revenue in 2018 from SaaS-based business applications alone. While dollar figures differ, usage projections are equally compelling. SaaS services workload is expected to further grow to 69% of total cloud workloads by 2020. SaaS is expected to drive "hyper-growth" phase of Cloud Industry.


The business offerings of Trejhara mainly consists of three segments viz: Interactive Customer Communication (Interact DX), Supply Chain Solutions (Logistics) and Consulting. With the changing technology landscape, we have significantly invested in building new capabilities in each of these offerings. Investment has been done in developing Cloud capabilities (SaaS), Mobile applications, in-built Product Analytics and innovative payment platforms. We have built cloud capabilities in our few digital innovation product lines. Now they are offered as SaaS to many clients and have already seeing a spurt in demand from customer side. The short particulars of our business offerings is as under:

  • Interactive Customer Communication (Interact DX)

Interact DX is a state of the art communication platform, to answer all your businesss correspondence needs with advance features such as multiple tab system, clickable links, multi graphics, interactive graphs, search, sort / filter options, drill down within table / grid control etc. It is a next generation customer experience product suite that enables you to create all forms of customer communication that can be delivered on print, email, mobile and web. The platform can be used to create and curate customer communications such as welcome kits, newsletters, advertisements, bills, statements and receipts. More importantly, these communications can be leveraged for future use not just as information documents, but for interactive engagement.

Interact DX provides following services in its SaaS suite:

• Multi-Channel Publishing

• Consolidated Statements

• Customer Communications (Receipts & Bills)

• Easy-to-use and intuitive customizable toolset

• Integrated Marketing Platform

Supply Chain Solutions (Logistics)

Supply Chain Management product provides end-to- end integrated logistics solutions to its key customers across the globe. It covers all the aspects of Supply Chain Management including Sea & Air Freight, Land Freight & Distribution, Ware-housing, Project logistics, Express logistics, Industry standard SOPs and in-built SCM analytics.

Supply Chain Management Suite provides following services on cloud:

• Warehousing

• Freight Forwarding

• Project Logistics

• Order Management

• Distribution

• Supplier Collaboration & Visibility

  • Consulting

The Company would have consultants and provides bespoke development, Infrastructure management, database management and Analytics services. The Company is constantly focusing on building newer skills and has developed unique skill sets In Cloud, Mobile, Social and Analytics. The group is also helping to internally build strong cloud based platforms.


Cloud computing — a computing model in which users purchase IT resources as a service, allowing them to take a pay-as-you-go approach— has deservedly garnered a lot of attention recently in both the private and public sector. Often referred to as simply "the cloud," cloud computing allows users to access IT resources at any time and from multiple locations, track their usage levels, and scale up their IT capacity as needed without large upfront investments in software or hardware. This increased flexibility and efficiency, and hence 20-30% saving in IT budgets, has been driving the growth of cloud and platform opportunity globally.

An easy way to categorize cloud computing is by the type of service provisioned as under. Note that the specific firms may offer a range of services falling across multiple categories, and that many other cloud providers offer similar products.

Software-as-a-service (SaaS) enables a user to remotely access software applications from a cloud provider. The client may do so from different locations or devices, and the experience in this instance generally involves logging in and gaining access to some form of software interface. Prominent examples include Microsofts Office 365 web-based e-mail and scheduling products, or Salesforce.coms customer relationship management offerings.

Users of platform-as-a-service (PaaS) solutions gain virtual access to programming resources and tools, provided and controlled by the cloud vendor that enables them to develop their own web applications. These applications are hosted through the vendors cloud infrastructure. Googles App Engine and Red Hats OpenShift are examples.

Finally, infrastructure-as-a-service (IaaS) enables users to virtually access more foundational computing resources to support their operations. Among other potential IaaS offerings, a vendor may provide file storage, processing power, or networking-related services. Some examples would be Amazon Web Services Elastic Compute Cloud (EC2), VMwares vCloud Air, or IBMs SoftLayer.

With most of the Global organizations going for "Cloud First" strategy, all the above listed cloud offerings are shaping the IT industry globally. In such a scenario, traditional IT services companies which are able to transition their offerings to cloud based services stands good chance of riding the growth wave.

Trejhara has well established Cloud product lines and established customers, Trejhara stands a good chance of riding the wave of Cloud Adoption across the world. Trejharas Cloud business already has an access to many fortune 500 customers through various product portfolio. Key industries to target for this business will be Telecom, Banks and Financial Institutions, Manufacturing, Utility and Logistics industry. With a focused approach in these industry, we are confident of gaining this opportunity.

The IT industry is fiercely competitive and Trejhara, like all vendors in the market, is subject to the inherent challenges, risks, and uncertainties over the normal course of business. A fluctuating geographic demand and constantly changing economic conditions, the company is susceptible to variations in our operational results and our financial performance. To limit the companys exposure to unavoidable and unforeseen factors, the Trejhara Executive Management team has employed disciplined risk management strategies to deliver the highest returns possible to our shareholders and customers.


The chief risks and uncertainties facing the companys business include:

  • The global economic outlook is subdued owing to various factors which may impact discretionary spending at organisations and strain IT spend. This may lead to the slowdown in the IT industry on the medium term.
  • 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 offerings and 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 Trajhara 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, to launch newer, more relevant product offerings to market and secondly, by improving upon its customer-centricity to be the partner of choice in areas such as digital innovation and Cybersecurity.
  • 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 Trejhara share of customers budget. The most effective strategy has been to focus on providing exceptional customer experience and adopt a model of coowing the customers business objectives and rally to deliver, 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.


The cloud computing industry will continue to grow exponentially in coming years. After demerger, Trejhara will focus on the growth of the businesses and will invest in the technologies to upgrade its offerings in the competitive market. Currently, the market outlook is positive and with the focused management Trejhara is well positioned to seize the opportunity for the growth and expansion.


Revenue from operations

Our revenues are derived from information technologies & consultancy services and sale of software licenses. During the year, the total revenue from operations was Rs. 7,722.93 Lakhs against 8,751.32 Lakhs for the previous year.

Operating and other expense

Our operating and other expense comprises of Software licenses and material costs, 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 Rs. 3,859.17 Lakhs as against Rs. 5,325.59 Lakhs in the previous year.

Earnings before interest, taxes, depreciation and amortization (EBITDA) excluding other income.

During the year, our operating Profit was Rs. 1,614.66 Lakhs as

against Rs. 1,447.46 Lakhs on 31 March 2018.

Depreciation and amortization expense

Depreciation on Property Plant & Equipment(PPE) and

Intangible Assets was Rs. 95.62 Lakhs for the year as against

Rs. 224.12 Lakhs during the previous year. As percentage of revenue, depreciation was 1.24 % and 2.56 % for the year and previous year respectively.

Other Income

Other Income primarily consists of interest income, dividend income, Foreign exchange fluctuation gain and other miscellaneous income. Other income for the year was Rs. 621.55 Lakhs compared to Rs. 47.65 Lakhs for the previous year.

Tax expense

Current tax expense was Rs. 246.27 Lakhs as against Rs. 153.25 Lakhs for the previous year.

Profit before tax (PBT)

Net Profit / (Loss) before tax from Continue Operations for the year was Rs. 1,546.75, i.e.20.03% of revenue, Rs. 746.00 lakhs, i.e. 8.52% of Revenue for the previous year.

Profit after tax (PAT)

Net Profit / (Loss) after tax from Continue Operations for the year was Rs. 1,229.23 Lakhs, i.e. 15.92% of revenue, Rs. 718.40 Lakhs, i.e. 8.21 % of Revenue for the previous year.


Equity as at 31 March 2019 increased to Rs. 40,613.24 Lakhs as compared with Rs. 39,007.37 Lakhs as at 31 March 2018.

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 2019 was Rs. 5,795.48 Lakhs as against Rs. 8,046.60 as at 31 March 2018.

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 Rs. 1,914.76 Lakhs from

Rs. 4,087.84 lakhs on 31 March 2018 to Rs. 6,002.61 Lakhs on 31 March 2019.

Property, Plant and Equipment (PPE), Intangible Assets and Intangible Assets under development

The Net Block of PPE, Intangible Assets and Intangible

Assets under development increased by Rs. 611.27 Lakhs from

Rs. 11,086.85 Lakhs as on 31 March 2018 to Rs. 11,698.12 Lakhs on 31 March 2019.

Non-current Investments (Net)

There was no movement in non current investments.

Other Non-Current Assets (Financials and Non Financials)

There was an increase in Long-term loans and advances from

Rs. 9,956.64 on 31 March 2018 to Rs. 9,836.81 Lakhs on 31 March 2019.

Trade receivables

Trade receivables as on 31 March 2019 was Rs. 2,969.86 Lakhs against Rs. 4,140.16 Lakhs on 31 March 2018. 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 2019 were Rs. 64.29 Lakhs as against Rs. 70.34 Lakhs in the previous year.

Key Financial Ratios

Sr no. Ratio FY 2019 FY 2018
1 Debtors Turnover Ratio 2.17 2.14
2 Current Ratio 3.0 2.8
3 Debt Equity Ratio* 0.1 0.2
4 Interest Coverage Ratio 2.6 2.3
5 Operating profit margin* 29.45% 25.23%
6 Net Profit Margin* 15.9% 8.2%
7 Return on Net Worth* 3.0% 1.8%

*Significant, as defined under the amended SEBI (LODR) Regulations i.e. over 25% compared to previous year.

Debt Equity : This is on account of decrease in debt.

Operating / Net Profit Margin: Profit Margin was increased due to higher revenue growth, improved operational efficiencies.

Return on Net Worth: RONW has increased due higher revenue growth, improved operational efficiencies and using companys resource proficiently .

Internal control systems and their adequacy.

Your Company has placed considerable emphasis and efforts on internal control systems. On the Finance part, the internal checks and balances are augmented by a formal system of internal audit. The Audit Committee of the Board reviews and will continue to review the adequacy and effectiveness of the internal control systems and suggest improvements for strengthening them. We also have a well-defined delegation of power with authority limits for approving revenue as well as expenditure.

The Company has reappointed M/s D. Kothary & Co. Chartered Accountant to oversee and carry out internal audit of the Companys activity. The audit is based on an internal audit plan,

which is reviewed each year in consultation with the statutory auditors (Bajrang Paras & Co, Chartered Accountants) and the audit committee. The planning and conduct of internal audit is oriented towards the review of controls in the management of risks and opportunities in our Companys activities. The internal audit process is designed to review the adequacy of internal control checks in the system and covers all significant areas of our operations such as software delivery, accounting and finance, procurement, employee engagement and IT process. Safeguarding of assets and their protection against unauthorized use are also a part of these exercise.

We have an audit committee, the details of which are provided in the Corporate Governance Report which reviews audit reports submitted by the auditors of our Company. The committee also meets our Companys statutory auditors to ascertain their views on the adequacy of internal control system in the Company and keeps the board of Directors informed of its major observation from time to time.