You should read the following discussion in conjunction with our Restated Financial Information as of and for the six months periods ended September 30, 2023 and September 30, 2022, and Fiscals 2023, 2022, and 2021 including the related notes, schedules and annexures. Unless otherwise indicated or the context otherwise requires, the financial information for the six months periods ended September 30, 2023 and September 30, 2022, and Fiscals 2023, 2022 and 2021 included herein is derived from the Restated Financial Information included in this Draft Red Herring Prospectus, which have been derived from our audited financial statements prepared in accordance with Ind AS or Ind AS 34 as applicable and restated in accordance with the relevant provisions of the SEBI ICDR Regulations, Section 26 of Part I of Chapter III of the Companies Act 2013, as amended and the Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the ICAI, as amended from time to time.
Our Fiscal ends on March 31 of each year. Accordingly, all references to a particular Fiscal are to the 12 months ended March 31 of that year. Financial information for the six months periods ended September 30, 2023 and September 30, 2022, is not indicative of full year results and is not comparable with the annual financial information presented in this Draft Red Herring Prospectus.
We have included various operational and financial performance metrics in this Draft Red Herring Prospectus, many of which may not be derived from our Restated Financial Information. The manner in which such operational and financial performance metrics are calculated and presented, and the assumptions and estimates used in such calculations, may vary from that used by other companies in India and other jurisdictions. For the purposes of this section, for certain analyses we have used historical methodologies and internal categorizations to enable a consistent representation of our business. Such information may vary from similar information publicly disclosed by us in compliance with applicable regulations in India. Investors are accordingly cautioned against placing undue reliance on such information in making an investment decision and should consult their own advisors and evaluate such information in the context of the Restated Financial Information and other information relating to our business and operations included in this Draft Red Herring Prospectus.
Certain non-GAAP financial measures and certain other statistical information relating to our operations and financial performance have been included in this section and elsewhere in this Draft Red Herring Prospectus. Such non-GAAP financial measures should be read together with the nearest GAAP measure. See “Certain Conventions, Presentation of Financial,
Industry and Market Data and Currency of Presentation Financial Data Non-GAAP financial measures” on page 15.
Unless otherwise indicated, the industry-related information contained in this section is derived from the Redseer Report. We commissioned and paid for the Redseer Report for the purposes of confirming our understanding of the industry specifically for the purpose of the Offer, as no report is publicly available which provides a comprehensive industry analysis, particularly for our services, that may be similar to the Redseer Report. For further details and risks in relation to commissioned reports, see “Risk Factors Internal Risk Factors Risks Related to Our Business Industry information included in this Draft Red Herring Prospectus has been derived from an industry report exclusively commissioned and paid for by our Company for such purpose. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.” on page 47.
This discussion contains forward-looking statements that involve risks and uncertainties and reflects our current view with respect to future events and financial performance. Actual results may differ from those anticipated in these forward-looking statements as a result of factors such as those set forth under “Forward-Looking Statements” and “Risk Factors” on pages 18 and 26, respectively.
OVERVIEW
We are Indias largest e-commerce enablement Software-as-a-Service (“SaaS”) platform in the transaction processing or nerve centre layer30, in terms of revenue for the financial year ended March 31, 2022 (Source: Redseer Report), that enables end-to-end management of e-commerce operations for brands, sellers and logistics service provider firms. We are also the only profitable company among the top five players in this industry in India during Fiscal 2022 (Source: Redseer Report). We enable our enterprise clients and small and medium business (“SMB”) clients to efficiently manage their entire journey of post-purchase e-commerce operations through a comprehensive suite of SaaS products that include (i) the warehouse and inventory management system (“WMS”); (ii) the multi-channel order management system (“OMS”); (iii) the omni-channel retail management system (“Omni-RMS”); (iv) seller management panel for marketplaces, housed in our platform, Uniware; (v) recently introduced post-order services related to logistics tracking and courier allocation (“UniShip”); and (vi) payment reconciliation (“UniReco”). Additionally, we offer several sub-modules that our customers may use as a part of their routine operations. Our products act as the nerve centre for e-commerce fulfilment operations of our clients, ensuring that the orders received from our clients end customers are processed correctly, efficiently and within timelines as per client needs. Our products aid in streamlining e-commerce operations for our clients and enables us to become a critical part of the supply chain stack of our clients.
The chart below depicts a snapshot of our scale and financial health as of September 30, 2023:
1. Annual Transaction Run-rate is defined as number of order items processed in the most recent quarter of the mentioned reporting period, i.e. quarter ended September 30, 2023, multiplied by 4
2. Warehouse and store with processed orders in the most recent quarter of the mentioned reporting period, i.e. quarter ended September 30, 2023
3. Count of clients represented for the most recent quarter of the mentioned reporting period, i.e. quarter ended September 30, 2023
4. Annual Recurring Revenue (“ARR”) is defined as revenue from contract with customers in the most recent quarter of the mentioned reporting period, i.e. quarter ended September 30, 2023, multiplied by 4
5. Net Revenue Retention (“NRR”) (%) = Given time period revenue of enterprise clients that existed in the comparable previous time period / Revenue of same clients in the previous time period) X 100. NRR calculation excludes any one-time revenue recognised during the period
6. Gross margin % represents the margin generated by the business after deducting the direct costs incurred to serve the clients, divided by revenue from contract with customers, during the six months ended September 30, 2023. Direct costs include server hosting expense, software services and support cost attributable to business operations. For details of reconciliation of Gross Margin %, see “Other Financial information Reconciliation of Non-GAAP Measures Reconciliation of Revenue from contract with customers to Gross Margin and Gross Margin %” on page 243.
As Indias e-commerce industry grows, e-commerce businesses and retailers face significant challenges to scale their operations efficiently (Source: Redseer Report). Some of the major challenges faced by e-commerce businesses, D2C brands and retailers include management of inventory across multiple locations, minimising fulfilment costs, order processing from multiple online and offline channels, management of returns, generation of correct invoices, reconciliation of order payments, enabling shipment tracking for their customers, taxation and other regulatory compliances (Source: Redseer Report). Particularly, brands and retailers are reaching out to the customers through multiple offline channels and online channels (including various marketplaces) to compete in the market (Source: Redseer Report). As the number of these marketplaces and omni-channel practices continues to increase, the demand for e-commerce enablement SaaS products is directly affected (Source: Redseer Report). As businesses scale to process higher numbers of orders for their ecommerce operations, the scale of such challenges also increases exponentially, including keeping inventory updated across all sale channels (marketplace and webstores software), processing orders through the correct warehouse, management of distributed inventory across multiple warehouses and adhering to service-level agreements (“SLAs”) and procedures for respective sales channels (Source: Redseer Report). Given the range of issues, regularly changing business needs and market practices, and the need for sanctity of data across the various stages, customers prefer comprehensive end-to-end transaction processing layer SaaS products (Source: Redseer Report).
Our products are designed and regularly updated to meet these challenges and the business needs of various types and sizes of retail enterprises, both online and offline. We provide a modular suite of products with features developed over years for a variety of uses across industries, including inter alia, inventory management and visibility, management of orders across channels, timely order fulfilment and minimised cancellations, procurement and vendor management and returns management.
Our products are sector and size-agnostic and are designed to meet the business needs of various types and sizes of retail and e-commerce enterprises, both online and offline. Our products are configurable as per client needs, and our clients can use one or more products at a time depending on their needs and configure them to suit their specific workflows. We also have several additional sub-modules, which form part of our SaaS products, that clients can utilize for their business operations including procurement management, invoice management and logistics management. Clients prefer to use a SaaS solution like ours which can continue to develop the technology as per changing market needs and add emerging integrations relevant to their business while they can focus on their business. Our key products are as follows:
(g) Warehouse and Inventory Management System (“WMS”): WMS is designed to meet the dynamic needs of retail and e-commerce businesses operating at different scales in terms of the number of SKUs, facilities, sizes, locations, hours of operations, etc. enabling the warehousing/operations teams of clients to efficiently conduct daily operations such as inward inventory processing, allocation or storage of inventory on designated shelves/racks, picking or retrieving of inventory to process orders, optimize capacity utilisation, pick path optimisation, outward processing, allocation of third-party logistics service provider firms (“Logistics Partners”) and handover to them. Our platform is specially developed to handle e-commerce needs which involves processing orders for individual units instead of bulk inventory, both at the time of shipment and returns. Our WMS supports several advanced features including configuration of workflows as per client needs, distributed inventory management across warehouses, unit-level traceability, integrations with logistics service providers as well as ERP, POS and other systems, audit mechanisms such as cycle counts and management of returned inventory in case of both customer initiated returns (“CIR”) and courier returns (also known as ‘Return To Origin or RTO). During the quarter ended September 30, 2023, WMS was deployed across 8,159 client warehouses of varying sizes. We have an extensive suite of technology and partner integrations, which, till September 30, 2023, comprises 94 Logistics Partner integrations and 11 ERPs, POS and other systems integrations to enable smooth functioning of an integrated supply chain for clients.
(h) Multi-Channel Order Management System (“OMS”): OMS enables clients to efficiently manage their inventory across different demand channels to maximise sales from a common pool of inventory. It automates the syncing of live available inventory across all different locations, allowing our clients to view and process the details of the entire inventory on a single platform. This optimises the logistics costs by (i) minimising the man hours needed to process large volumes of orders across the various integrated channels (including, among others, Marketplaces and, WebStore software, and stores), and (ii) allocation of best-suited location where inventory is stored and Logistics Partners for fulfilling the order as per configurable rules based on various criteria, including, inter alia location, stock availability, demand channel, delivery preference, distance to delivery, managing returned inventory in case of both customer and courier returns and value of order among multiple available options. For the quarter ended September 30, 2023, we had a run-rate31 of processing 763.82 million order items through OMS. Till September 30, 2023, we had plug-and-play integrations with 124 Marketplaces and WebStore software to enable automated flow of order information to be processed through OMS.
(i) Omni-Channel Retail Management System (“Omni-RMS”): Omni-RMS provides an instantaneous and centralized cross-channel order and inventory management solution by merging all offline and online sales channels on one platform. It helps clients make available for sales their physical store inventory, in addition to warehouse inventory, across all sales channels to maximise sales and inventory turnover. It allows our clients to undertake various activities including store pick-up, order online-return offline and vice-versa, routing orders to be fulfilled through the nearest store and store-to-store transfers leading to lower costs, faster deliveries and better experience for end-customers. Apart from a faster delivery experience, Omni-RMS also allows our clients to provide a wider selection of products to their end customers. The solution achieves these capabilities by integrating with POS solutions deployed by clients at their stores. In addition, several marketplaces have also enabled omni-channel capabilities which allows brands and sellers to showcase inventory from different warehouse and store locations on these marketplaces in addition to their own websites. Our integrations with marketplaces also enable this use-case. During the quarter endedSeptember 30, 2023, Omni-RMS aggregated 1,902 stores.
(j) Seller Management Panel for Marketplaces: Seller management panel is designed for marketplace clients to manage dropship 32 operations with their third-party seller base through a single window platform. Through this seller management panel system, third-party sellers on the client marketplace can commit inventory directly on the platform which makes the marketplace aware about which products and what quantity is available in stock for sales. Once the marketplace receives orders for these products from customers, they can be allocated to specific sellers who fulfil and ship the order at their end to complete the delivery. The system allows a marketplace with a diversified set of sellers / vendors to increase product catalogue for their platforms and enables the client to maximise its sales while the orders get fulfilled directly from the seller location, leading to substantial cost and resource savings. During the quarter ended September 30, 2023, our seller panel product collectively managed over 1,619 sellers on behalf of our client marketplaces.
(k) UniShip Recently launched post-order journey solution with shipment tracking, and smart courier partner allocation engine that can be independently integrated for clients. Some webstore software or carts used by clients do not have an extensive capability to handle customer experience during the post-order journey. UniShip allows such clients to display order tracking information to its customers through a white-labelled user interface (UI) for the client, which leads to better customer experience and potentially reduces customer contacts looking for updates for their orders. UniShip also allows clients to accept requests for product returns through a similar user interface (UI). The solution also offers a standalone capability to intelligently allocate a Logistics Partner to a received order based on protocols set as per the requirements of the client inter-alia proximity of the warehouse and the store, type of fulfilment options available, promised delivery time, inventory availability at all locations and value of order, among others. This feature is being offered as a part of UniShip now but is an extension to a feature we earlier only offered as a part of the OMS product. In addition, the product will also allow clients to display reliable delivery promise time to customers on their webstores and apps based on customer pin code, serviceability, SLAs, pricing etc in the future. The solution also allows management of the next course of action on non-delivered orders through a Non-Delivery Report (NDR) which includes details of shipments not delivered to the customer after one or more attempts.
(l) UniReco - Recently launched integrated solution to automate reconciliation of payments received from different sales channels for our clients. The solution tries to ensure that payment is received for each successful online transaction, validates correctness of various charges, such as logistics charges and commissions and tally if the product has been received in the warehouse in case of returns. The automated solution allows clients to focus on business activities and minimise resource wastage and loss due to process-led errors.
Our products also enable plug-and-play integrations that seamlessly connect other critical components of a clients supply chain stack, such as their own apps/websites, marketplaces, logistics service providers, point of sales systems and financial/ERP systems for automated data exchange and for exchanging critical operating instructions with sales systems and financial/ERP systems of our clients to enable end-to-end automation. We have an extensive suite of technology and partner integrations, which, till September 30, 2023, comprises 124 Marketplaces and WebStore integrations, 94 Logistics Partner integrations and 11 ERPs, POS and other systems integrations.
We have been recognised as a ‘Notable Vendor in the report titled “Asia/Pacific Context: Magic Quadrant for Warehouse Management Systems” published by Gartner in 2023, 2022, 2021 and 2020. For 2023, we have been honoured with the ‘Best Technology Implementation in a Warehouse award at the Warehouse and Supply Chain Leadership Awards, organized by Krypton. We were also recognized with the ‘Best Product for Supply Chain/Warehouse Management award at the International
SaaS Awards program. We have been listed as a part of the Order Management System (OMS) Landscape by Forrester in 2022, awarded the ‘Innovation Technology Provider of the Year for Omnichannel for 2022 by Alden Global Value Advisors and NASSCOM, the ‘E-commerce Solution Provider of the Year award in 2022 at the Industry of Retail & eCommerce Summit,
‘IMC Digital Technology Award in the ‘IT Product category award in 2021 by the IMC Chamber of Commerce and Industry, and the Best Warehouse Management Solution Provider for the year award by and Alden Global and NASSCOM in 2021. We have also been recognised and included in the “Critical Capabilities for Warehouse Management Systems report published by Gartner in 2021. Additionally, we received ‘Best Order Management Software recognition in 2021 and ‘Top Order Management System in 2020 by GoodFirms and the accolade for Best E-Commerce upply Chain Technology Solutions Provider at the Warehousing Excellence Award organised by the Institute of Supply Chain Management in 2019.
We have been able to create a large, growing base of marquee clients across the retail and e-commerce landscape in India as well as consistently onboard new clients in international geographies. Our clients, inter alia, include D2C brands, brand aggregator firms, traditionally offline brands, e-commerce retailers, marketplaces, third-party logistics and fulfilment players and SMBs. Our clients belong to various sectors including fashion (apparel, footwear, accessories), electronics, home and kitchen, FMCG, beauty and personal care, sports and fitness, nutrition, health and pharma as well as third-party logistics and warehousing.
Our client base has grown over the years.
The following tables provides data of the number of items processed by our client through our platform, our existing enterprise and SMB clients during the mentioned time periods indicated therein:
Particulars |
For the six-months | For the six months | For Fiscal 2023 | For Fiscal 2022 | For Fiscal 2021 |
| ended September | ended September | ||||
| 30, 2023 | 30, 2022 | ||||
| Number of items processed | 349.14 | 256.68 | 565.69 | 410.25 | 217.44 |
| (in million) | |||||
Particulars |
For the quarter | For the quarter | For the quarter | For the quarter | For the quarter |
| ended September | ended September | ended March 31, | ended March 31, | ended March 31, | |
| 30, 2023 | 30, 2022 | 2023 | 2022 | 2021 | |
| Enterprise clients | 743 | 567 | 672 | 470 | 288 |
| SMB clients | 2,830 | 3,101 | 3,009 | 2,404 | 1,867 |
We classify our clients into two broad categories, namely, enterprise clients and SMB clients, based on their revenue generated from the usage of our products, i.e. number of order items processed outwards. We offer three different subscription plans for our products, i.e., standard plan, professional plan and enterprise plan with usage-linked pricing. Clients using the enterprise plan have a monthly minimum commitment in terms of number of items processed and pay corresponding fee in advance, while charges for transactions over and above the minimum commitment are billed at the end of the month, while clients on standard and professional plans, mainly consisting of e-commerce retailers and upcoming businesses, are categorised in the SMB segment. Each plan offers different levels of services and features which are suitable for different client needs. While medium to large enterprise clients require a wide range of solutions as they have multiple locations, multiple users and complex needs for solutions, SMB clients usually require a limited range of solutions as they have compact fulfilment operations, single locations and relatively fewer users. Details of our subscriptions plans is as follows:
? Standard Plan: This plan allows clients to manage only one facility, and less than 1,00,000 SKUs. It offers basic return management and can be used by up to three users. It largely focuses on small retailers, who are often managing their e-commerce business along with their offline business.
? Professional Plan: The professional plan focuses on growing retail businesses, with up to two facilities and up to 3,00,000 SKUs with enhanced return management. It also enables clients to manage purchases along with SKU-level barcoding, and inward logistics and can be used by up to nine users.
? Enterprise plan: This service is often used by large enterprises, with multiple warehouses and managing larger number of monthly orders. It offers all the features of standard and professional plans and can be configured based on clients business requirements which also includes plug-and-play integration with clients existing ERPs. It also enables companies to manage vendors, advance the level of warehouse operations, and go omnichannel by integrating their stores on our products.
The following table provides data of the percentage contribution by our existing enterprise and SMB clients to the revenue from contract with customers of our Company as of and for the dates indicated therein:
Percentage of revenue from contract with customers |
for the period/year ended |
||||
Particulars |
For the six-months ended September 30, 2023 | For the six-months ended September 30, 2022 | For Fiscal 2023 | For Fiscal 2022 | For Fiscal 2021 |
| Enterprise clients | 87.95% | 85.12% | 86.42% | 82.87% | 85.09% |
| SMB clients | 12.05% | 14.88% | 13.58% | 17.13% | 14.91% |
For the six-month period ended September 30, 2023, September 30, 2022, and Fiscals 2023, 2022 and 2021, our revenue from contract with customers from enterprise clients was 4,49,335.44 thousand, 3,46,374.76 thousand, 7,78,275.51 thousand, 4,89,224.65 thousand and 3,40,420.61 thousand, respectively, registering a CAGR of 51.20% during the fiscal 2021 23 period. For the six-month period ended September 30, 2023, September 30, 2022, and Fiscals 2023, 2022 and 2021, our revenue from contract with customers from SMB clients was 61,576.60 thousand, 60,554.25 thousand, 1,22,302.76 thousand, 1,01,097.28 thousand and 59,665.57 thousand, respectively, registering a CAGR of 43.17% during the fiscal 2021 23 period. Consequently, for the six-month period ended September 30, 2023, September 30, 2022, and Fiscals 2023, 2022 and 2021 our revenue from contract with customers was 5,10,912.03 thousand, 4,06,929.00 thousand, 9,00,578.27 thousand, 5,90,321.93 thousand and 4,00,086.19 thousand, respectively. We have seen instances where our existing SMB clients have upgraded into enterprise level subscriptions due to our upselling efforts. We have a high net revenue retention (“NRR”)33 ratio from our clients, representing consistent growth in revenue from contract with customers from existing clients. For details of our operating metrics, please see, “Our Business Certain Financial Performance Metrics” on page 128.
Since Fiscal 2023, we have increased our focus on expanding our international client base and had 46 enterprise clients during the quarter ended September 30, 2023, in 6 countries primarily in South East Asia and Middle East. Correspondingly, our international client base was 40 enterprise clients during the quarter ended March 31, 2023, compared to 22 enterprise clients during the quarter ended March 31, 2022 and 12 enterprise clients during the quarter ended March 31, 2021.
The majority of our clients are located in India, revenue from contract with customers (India) is 4,94,393.42 thousand out of revenue from contract with customers of 5,10,912.03 thousand, which constitutes 96.77% of revenue from contract with customers during the six months ended September 30, 2023. For details of Revenue from contract with customers within India and outside India and its percentage to the Revenue from contract with customers, see “Other Financial Information Other Reconciliations - Details of Revenue from contract with customers within India and outside India and its percentage to the Revenue from contract with customers” on page 244. For the six-month period ended September 30, 2023, September 30, 2022, and Fiscals 2023, 2022 and 2021, our revenue from contract with customers (outside India) was 16,518.61 thousand, 8,857.29 thousand, 24,634.71 thousand, 7,446.00 thousand and 4,945.00 thousand, respectively, registering a CAGR of 123.20% during the fiscal 2021 23 period. This accounted for a small share of our overall revenue during such periods.
We anticipate that our strategy to focus on expansion in various geographies that are in the early phases of e-commerce growth coupled with our ability to quickly adapt to localisation needs of our product and a good initial response from these markets will help us expand the customer base and revenue from international geographies in the future. With a diverse clientele and presence across various industry verticals, both nationally and internationally, we have a strong national and an evolving global footprint.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Growth of e-commerce industry
While Indias eCommerce industry is growing, eCommerce businesses and retailers face significant challenges to scale their operations efficiently. Some of the major challenges faced by eCommerce businesses and retailers include management of inventory across multiple locations, minimising fulfilment costs, order processing from multiple online and offline channels, management of returns, generation of correct invoices, taxation and other regulatory compliances.
In order for the universe of e-commerce transactions to grow, users, sellers and suppliers operating on e-commerce platforms must continue to adopt new and alternative ways of conducting commerce, purchasing goods and services and exchanging information, such as through the internet and mobile devices.
As such, our business and operations are significantly dependent on the growth of the e-commerce ecosystem in India, coupled with a rise in the volume of transactions. As our clients scale to process higher numbers of orders for their ecommerce operations, our business and operations will continue to grow. Demand for our SaaS platform-based services has benefited from the growth of Indias GDP and the e-commerce industry in particular. Demand for our products is correlated with the growth of the e-commerce segment in India, which will be driven by several demand side factors, including the growing internet user base, increasing participation of lower-tier cities, diversification of product categories, and changing consumer behaviour (Source: Redseer Report).
As our clients scale to process higher numbers of orders for their ecommerce operations, the scale of such challenges also increases exponentially, including keeping inventory updated across all sale channels (marketplace and web stores), processing orders through the correct warehouse, management of distributed inventory across multiple warehouses and adhering to SLAs and procedures for respective sales channels. Our products are designed to meet these challenges and the business needs of various types and sizes of retail enterprises, both online and offline. We provide a modular suite of products with features developed over years for a variety of uses across industries, including inventory management and visibility, management of orders across channels, timely order fulfilment and minimised cancellations, procurement and vendor management and returns management.
Our product offerings are sector and size-agnostic and are designed to meet the business needs of various types and sizes of retail enterprises, both online and offline. Our products enable plug-and-play integrations that seamlessly connect other critical components of a clients supply chain stack, such as their own app/website, marketplaces, logistics service providers, point of sales systems and financial/ERP systems for automated data exchange and exchanging critical operating instructions with such systems to enable extensive automation. We also have several additional sub-modules that clients can utilize for their business operations including procurement management, invoice management and logistics management. Our products help our clients maintain robust and streamlined post-purchase e-commerce operations while allowing them to connect with other technologies and partners in their supply chain in a holistic manner. For details, see “Our Business Overview” on page 122.
Our future operating results will depend on numerous factors affecting the development of ecommerce, which may be beyond our control. These factors include the rate of growth of personal computers, tablets, mobile devices, internet and broadband usage and penetration, extant laws, regulations and policies governing ecommerce, consumer confidence in ecommerce, media publicity regarding ecommerce, concerns on online data privacy and general economic conditions globally and in particular India.
Our ability to develop existing products and introduce new products
The attractiveness of our products and solutions depends on our ability to innovate our comprehensive suite of products. To remain competitive, we must continue to develop and expand our products and develop new products to meet the needs of our clients. We must also continue to enhance and improve our data analytical capabilities, platform interface and technology infrastructure. These efforts may require us to develop internally, or to obtain licenses for, increasingly complex technologies. In addition, new products and services and technologies developed and introduced by competitors could render our products and services obsolete if we fail to upgrade existing products, services and technologies.
If we fail to develop, introduce, acquire or incorporate new features, functions or technologies timely and effectively, our products may lose appeal, be rejected or experience delayed acceptance by the market. Consequently our business, financial performance, cash flows and prospects could be materially and adversely affected. For details, please see “Risk Factors Internal Risk Factors - We provide a comprehensive suite of products. If we fail to develop new products and innovate our products, our business, operating results, financial performance, cash flows and prospects may be materially and adversely affected” on page 26. Therefore, our ability to anticipate trends in our clients needs and develop solutions that cater to those needs will play a significant role in our continued success, results of operations and cash flows.
Expansion of India business through client retention
Our relationship with our clients is core to our business. We had 743 enterprise clients and 2,830 were SMB clients as of the quarter ended September 30, 2023.
We aim to continue growing our operations in India by adding new enterprise clients and SMB clients, as well as increasing revenue from our existing clients with whom we have established recurring relationships. We invest significant resources in understanding the needs and trends of our clients and markets through research and development efforts. This helps us to have a unique perspective that we can use to improve our offerings and platform for them. Our ability to attract new clients, our marketing efforts to attract new clients and maintain existing clients, depends in large part on our ability to continually enhance and improve our service offerings, timing of development, integrations, and capabilities we offer, our continued market acceptance, successfully develop new features, integrations, and capabilities to enhance our services to meet requirements of our clients, in a timely manner or at all, and our ability to identify use cases for our existing features and capabilities that are attractive to different categories of clients.
As we continue to focus on expanding our client base for our products, we have been and will continue upgrading and optimizing our platform to address our clients evolving business requirements. The long-term growth and future success of our business largely depends on the ability of our products to adapt to more business scenarios and deliver measurable benefits to our clients. We believe we have a substantial opportunity to grow our client base and our ability to establish and strengthen client relationships and expand the scope of our India business will be an important factor in our future growth.
Growth of our international business
We started expanding our international client base systemically in Fiscal 2023 and have since signed up 46 enterprise clients in 6 countries primarily across South East Asia and Middle East as of the quarter ended September 30, 2023. For the six month period ended September 30, 2023, September 30, 2022, and during the Fiscals 2023, 2022 and 2021, our revenue from contract with customers (Outside India) was 3.23%, 2.18%, 2.74%, 1.26%, and 1.24% of our revenue from contract with customers, respectively. For details of Revenue from contract with customers within India and outside India and its percentage to the Revenue from contract with customers , see “Other Financial Information Other Reconciliations Details of Revenue from contract with customers within India and outside India and its percentage to the Revenue from contract with customers” on page 244. We will continue to expand our business in these geographies. We have selected these countries as focused markets due to the fast-growing nature of their e-commerce markets as well as several other growth factors including developed organised retail sector, increasing popularity of D2C brands and limited availability of similar technology companies (Source: Redseer Report).
We aim to grow in these markets primarily through light-touch product implementation approach and utilisation of local support. We believe that our strategy to focus on expansion in various geographies that are in the early phases of e-commerce growth coupled with our ability to quickly adapt to local needs of our product and a good initial response from these markets will help us expand the client base and revenue from international geographies in the future. For details, please see “Our
Strategies - Drive expansion in current international markets and expand our global footprint over time”.
Our ability to expand our presence in international geographies and grow our business there will have a significant impact on our future results of operations, financial performance and cash flows. For the six-month period ended September 30, 2023, September 30, 2022, and Fiscals 2023, 2022 and 2021, our revenue from contract with customers (Outside India) was
16,518.61 thousand, 8,857.29 thousand, 24,634.71 thousand, 7,446.00 thousand and 4,945.00 thousand, respectively, registering a CAGR of 123.20% during the fiscal 2021 23 period. For details of Revenue from contract with customers within India and outside India and its percentage to the Revenue from contract with customers , see “Other Financial Information
Other Reconciliations Details of Revenue from contract with customers within India and outside India and its percentage to the Revenue from contract with customers” on page 244.
Cost-effectiveness of our business and operating leverage
Our profitability depends on the cost-effectiveness of our integrated platform. In order to maintain the competitiveness of our products and enhance our profit margins, we must continuously control our costs and improve our operating efficiency.
Our management also places a great emphasis on cost control and improving operating efficiencies, especially in light of the upgrading of our solutions, technology and expanding our product suite. Our products and technology and data intelligence capabilities have enabled us to establish scale in the majority of our product offerings and ensure synergies across product offerings.
We believe that we have significant operating leverage in our operations, and as the scale of our business grows further, we will be better able to absorb fixed expenses, increase resource utilisation, enhance employee efficiency and improve our profitability, while maintaining service speed and reliability. Our products require limited costs to scale and launch additional service offerings. As of September 30, 2023, we had a team of 76 members for technology and product development. In addition, our employee benefit expenses for the six months period ended September 30, 2023 and September 30, 2022, and in
Fiscals 2023, 2022 and 2021 were 3,45,193.32 thousand, 2,96,082.21 thousand, 6,20,185.20 thousand, 4,23,774.67 thousand and 3,00,687.58 thousand, respectively, accounting for 67.56%, 72.76%, 68.87%, 71.79% and 75.16% of our revenue from contract with customers, respectively. Remuneration in countries like India is nearly ten times lower than that in USA and more than six times lower than that in UK. We believe our ability to develop and deploy our products in India provides us with significant cost advantages and increases our operational efficiency.
Growth of Indias economy
Demand for our products and services has benefited from the growth of Indias GDP and the e-commerce industry in particular. According to the Redseer Report, which has been exclusively commissioned and paid for by us in connection with the Offer, Indias GDP is expected to grow at a rate of over 9% annually. The Indian e-commerce industry is expected to experience significant growth in the coming years, with an estimated compound annual growth rate (“CAGR”) of 25%. The Government of India is taking active measures to accelerate usage of ecommerce, such as the Open Network for Digital Commerce
(“ONDC”), which connects consumers, sellers, and fulfilment partners in a network-centric model, reducing barriers to entry for new players, particularly local retailers, and providing customers with a wider range of choices. There has been a notable rise in the number of internet users, the increased adoption of direct-to-consumer (“D2C”) brands, an increase in drop-ship volumes, and the emergence of new commerce channels like social media, business-to-business (“B2B”), and the general rise in demand for convenience in India.
Demand for our products is correlated with Indias consumption growth, which will be driven by its young population, growing middle-income segment, availability of low-cost smartphones and low-cost, reliable internet. These trends are expected to result in Indias online shoppers reaching more than 350 million by the year 2027, driving growth of sectors such as e-commerce, D2C and social commerce, as per the Redseer Report, which has been exclusively commissioned and paid for by us in connection with the Offer. The e-commerce industry in India grew at over 36% annually from the year 2020 to 2022, and is estimated to further grow at a 25% from the year 2022 to 2027, as per the Redseer Report, which has been exclusively commissioned and paid for by us in connection with the Offer.
OUR MATERIAL ACCOUNTING POLICIES
Summary of material accounting policies
Use of estimates
The preparation of the Restated Financial Information in conformity with the principles of Ind AS requires the management to make judgements, estimates and assumptions that effect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the managements best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. In particular, information about the significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the Restated Financial Information.
Current versus non-current classification
The Company presents assets and liabilities in the Restated Summary of Assets and Liabilities based on current/ non-current classification. An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realised within twelve months after the reporting period; or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period;
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period; or
- The terms of the liability that could, at the option of the counter party, results in its settlement by the issue of equity instruments do not affect its classification.
The Company classifies all other liabilities as non-current.
Deferred tax assets/liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
Foreign currencies
The Companys Restated Financial Information are presented in INR, which is also Companys functional currency.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Company at the spot rates at the date the transaction first qualifies for recognition. However, for practical reasons, the Company uses an average rate if the average approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognised in Restated Summary of Profit and Loss with the exception of the following:
- Exchange differences arising on monetary items that forms part of a reporting entitys net investment in a foreign operation are recognised in profit or loss in the separate financial statements of the reporting entity or the individual financial statements of the foreign operation, as appropriate. In the Restated Financial Information that include the foreign operation and the reporting entity (e.g., consolidated financial statements when the foreign operation is a subsidiary), such exchange differences are recognised initially in OCI. These exchange differences are reclassified from equity to profit or loss on disposal of the net investment.
- Exchange differences arising on monetary items that are designated as part of the hedge of the Companys net investment of a foreign operation. These are recognised in OCI until the net investment is disposed off, at which time, the cumulative amount is reclassified to profit or loss.
- Tax charges and credits attributable to exchange differences on those monetary items are also recorded in OCI.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).
In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Group initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Company determines the transaction date for each payment or receipt of advance consideration.
Fair value measurement
The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company.
A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the Restated Financial Information are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
External valuers are involved for valuation of significant assets, such as properties and unquoted financial assets, and significant liabilities, such as contingent consideration. Involvement of external valuers is decided upon annually by the CFO. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The CFO decides, after discussion with the Companys external valuers, which valuation techniques and inputs to use for each case.
At each reporting date, the CFO analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Companys accounting policies. For this analysis, the CFO verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.
The CFO also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
Disclosures for valuation methods, significant estimates and assumptions (Notes 28, 31 and 33 of Restated Financial Information).
Quantitative disclosures of fair value measurement hierarchy (Notes 28 and 29 of Restated Financial Information).
Financial instruments (including those carried at amortised cost) (Notes 6, 10, 11, 12, 16 and 38 of Restated Financial Information).
Revenue from contract with customers
Revenue from contract with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
The Company has concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer when the payment is being made. The specific recognition criteria described below must also be met before revenue is recognized:
Revenue for Software as a Service Income (SaaS Income)
Revenues from SaaS Income comprises the following:
i) Fixed income per transaction unit and is recognised when related transactions are performed with customers. Each transaction unit is defined as single shipment and return shipment as performed by customers. Revenue from services is deferred till it is received by the customers and is disclosed as deferred revenue.
ii) Revenue from Other support fee is recognised when the company carries out certain customizations/modifications or other changes depending on the clients requirement.
iii) Revenue from professional fee is recognised upon rendering of professional services on a monthly basis.
Contract balances
The Policy for contract balances i.e. contract assets, trade receivables and contract liabilities are as follows:
Contract assets - A contract asset is the right to receive consideration in exchange for services already transferred to the customer (which consist of unbilled revenue). By transferring services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional. Contract assets are subject to impairment assessment.
Trade receivables - A receivable represents our Companys right to an amount of consideration that is unconditional
(i.e. only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in financial instruments - initial recognition and subsequent measurement.
Contract liabilities A contract liability is the obligation to deliver services to a customer for which the Company has received consideration or part thereof (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company delivers services to the customer, a contract liability is recognised when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract. Contract liabilities are primarily from deferred revenue and customer advance for which services are yet to be rendered on the reporting date either in full or in parts. Contract liabilities are recognized evenly over the period, being performance obligation of the Company.
Taxes
Current income tax -
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company shall reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Property, plant, and equipment
Property, plant, and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
Capital work in progress is stated at cost, net of accumulated impairment loss, if any.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follow:
Computers and data processing units: 3-6 years
Furniture and fittings: 10 years
Office equipment: 5 years
(Depreciation on assets purchased during the year is provided on pro rata basis from the date of purchase of fixed assets.)
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.
For intangible asset for finite life, the Company has considered the following:
Computer Software: 4 years
Internally Generated Technology: 5 years
The company carries out the impairment assessment of the intangible assets available at end of each year.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee - The company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets:
Right-of-use assets - The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies m section (k) Impairment of non-financial assets.
Lease Liabilities - At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
Short-term leases and leases of low-value assets - The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. As at the balance sheet date, the Company has only short term leases for which exemption has been availed.
Impairment of non-financial assets
Our Company assesses at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Companys of assets.
When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Companys CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which the entity operates, or for the market in which the asset is used.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement of profit and loss, except for properties previously revalued with the revaluation surplus taken to OCI. For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation surplus.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the assets or CGUs recoverable amount A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
Goodwill is tested for impairment annually near year end and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be revered in future periods.
As at balance sheet date, the Company has no goodwill.
Provisions
General
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Provision for bonus
Provision for bonus is recognised on time proportion basis over the period of service.
Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
In accordance with Indian law, the Company provides for gratuity, a defined benefit retirement plan (the “Gratuity Plan”) covering all employees. The Gratuity Plan provides a lump sum payment to vested employees on retirement or on termination of employment for an amount based on the respective employees salary and the years of employment with the Company.
The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method based on an actuarial valuation performed by an independent actuary.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods and the return on plan assets (excluding amounts included in net interest on net defined benefit liability).
Past service costs are recognised in profit or loss on the earlier of:
- The date of the plan amendment or curtailment, and
- The date that the Company recognises related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the Restated Summary of Profit and Loss:
- Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and
- Net interest expense or income
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company recognizes expected cost of short-term employee benefit as an expense when an employee renders the related service.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the reporting date. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer the settlement for at least twelve months after the reporting date.
Share-based payments
Employees (including senior executives) of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).
Certain employees of the Company are entitled to shares of AceVector Limited (formerly known as Snapdeal Limited), the holding company, upon the exercise of stock options which are granted under the stock incentive plan. The cost related to such grants is raised as a charge by AceVector Limited (formerly known as Snapdeal Limited) on the Company, while the corresponding credit is recorded as contribution to equity from parent. The Holding Company will be responsible for settlement and the Company do not have any responsibility for settlement of Employee Stock Option Scheme 2019 given by Holding Company. Therefore, the ESOPs has been classified as an equity settled share-based payment. The grant date fair value of ESOPs related to employees of the Company are recognised as employees expenses, over vesting period while the corresponding credit is recorded as contribution to equity from parent.
Equity Settled Transactions
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model.
That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Companys best estimate of the number of equity instruments that will ultimately vest. The Restated Summary of Profit and Loss expense or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Companys best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised is the expense had the terms had not been modified, if the original terms of the award are met. An additional expense is recognised for any modification that increases the total fair value of the share-based payment transaction or is otherwise beneficial to the employee as measured at the date of modification. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per equity share.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial assets contractual cash flow characteristics and the Companies business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under Ind AS 115. Refer to the accounting policies in section (e) Revenue recognition.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI) on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling.
The Companies business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
- Financial assets at amortised cost (debt instruments)
- Financial assets at fair value through other comprehensive income (FVTOCI) with recycling of cumulative gains and losses (debt instruments)
- Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
- Financial assets at fair value through profit or loss Financial assets at amortised cost (debt instruments)
A financial asset is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. The Companys financial assets at amortised cost includes trade receivables included under other current financial assets. For more information on receivables, refer to Note 10 of Restated Financial Information.
Financial assets at fair value through OCI (FVTOCI) (debt instruments)
A financial asset is classified as at the FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The assets contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. For debt instruments, at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or reversals are recognised in the profit or loss and computed in the same manner as for financial assets measured at amortised cost. The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value changes recognised in OCI is reclassified from the equity to profit or loss.
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under Ind AS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit and loss when the right of payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.
Financial assets at fair value through profit or loss
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Financial assets at fair value through profit or loss are carried in the balance sheet at fair value with net changes in fair value recognised in the statement of profit and loss.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch). The Company has not designated any debt instrument as at FVTPL.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L. Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Companys balance sheet) when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Companys continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of financial assets
Further disclosures relating to impairment of financial assets are also provided in the following notes:
Disclosures for significant assumptions see Note 33 of Restated Financial Information.
Trade receivables and contract assets see Note 10 of Restated Financial Information.
The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
The Company considers a financial asset in default when contractual payments are 180 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e. financial assets which are credit impaired on purchase/origination.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Companys financial liabilities include trade and other payables.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified in two categories:
Financial liabilities at fair value through profit or loss
Financial liabilities at amortised cost (loans and borrowings)
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss. The Company has not designated any financial liability as at fair value through profit and loss.
Financial liabilities at amortised cost (loans and borrowings)
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
Embedded derivatives
An embedded derivative is a component of a hybrid (combined) instrument that also includes a non-derivative host contract with the effect that some of the cash flows of the combined instrument vary in a way similar to a standalone derivative. An embedded derivative causes some or all of the cash flows that otherwise would be required by the contract to be modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss.
If the hybrid contract contains a host that is a financial asset within the scope of Ind AS 109, the Company does not separate embedded derivatives. Rather, it applies the classification requirements contained in Ind AS 109 to the entire hybrid contract. Derivatives embedded in all other host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss, unless designated as effective hedging instruments.
Reclassification of financial assets
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Companys senior management determines change in the business model as a result of external or internal changes which are significant to the Companys operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Compulsory Convertible Preference Shares (CCPS)
The Company had raised capital by issuing Compulsory Convertible Preference Shares (CCPS) through Series A to Series B. As per the terms of CCPS, the Company does not have any buyback obligation/contractual obligation to pay/repurchase CCPS/equity Shares in any circumstances. The conversion options in CCPS satisfies/needs fixed-to-fixed criterion under IND AS-32 and therefore classified as equity.
Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of Restated Summary of Cash Flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Companys cash management.
Restated Earnings per Equity Share
Basic earnings per equity share is calculated by dividing the net profit or loss attributable to equity holders of parent company (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period / year.
Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per equity share, the net profit or loss for the period attributable to equity shareholders of the parent company and the weighted average number of shares outstanding during the period / year are adjusted for the effects of all dilutive potential equity shares.
Cash flow statement
Cash flows are reported using the indirect method, whereby loss for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
PRINCIPAL COMPONENTS OF OUR RESTATED SUMMARY STATEMENT OF PROFIT AND LOSS
The following description sets forth information with respect to the key components of our Restated Summary of Profit and Loss statement:
Total Income
Total income comprises revenue from contract with customers and other income.
Revenue from contract with customers
Our revenue from contract with customers is SaaS Income.
265
Other income
Other income comprises of interest income on bank deposits, interest on income tax refunds, net gain on sale of mutual fund investment, profit on sale of property, plant and equipment, excess provision written back and other non-operating income, primarily includes brand promotion income, commission income and other miscellaneous income.
Expenses
Our expenses comprise of employee benefits expense, server hosting expense, depreciation and amortisation expense, finance cost and other expenses.
Employee benefits expense
Employee benefit expenses comprises of salary, wages, bonus, contribution to provident and other funds, gratuity expense, share-based payment expense, staff welfare, and recruitment and training expenses.
Server hosting expense
Server hosting expense comprises of server hosting expense.
Depreciation and amortisation expense
Depreciation and amortisation expense comprises of depreciation of property, plant and equipment and amortisation of intangible assets.
Other expenses
Other expenses predominantly comprise of advertising and publicity expenses, legal and professional charges, payment to auditor, bank charges, rates & taxes, traveling and conveyance expenses, rent, communication charges, exchange differences, insurance expense, consultancy charges, customer collection charges, brokerage and commission charges, CSR activity expenses, provision for impairment allowance, bad debts, repair and maintenance of building and others and miscellaneous expenses.
Our Results of Operations
The following table sets forth a breakdown of our restated results of operations for the six months periods ended September 30, 2023, and September 30, 2022, and for Fiscals 2023, 2022 and 2021, and each item as a percentage of our total income for the period / year indicated:
Particulars |
For the six months ended |
For the six months ended |
For Fiscal 2023 |
For Fiscal 2022 |
For Fiscal 2021 |
|||||
September 30, 2023 |
September 30, 2022 |
|||||||||
| in thousand | (%) of Total Income | in thousand | (%) of Total Income | in thousand | (%) of Total Income | in thousand | (%) of Total Income | in thousand | (%) of Total Income | |
Income |
||||||||||
| Revenue from contract with customers | 5,10,912.03 | 94.52 | 4,06,929.00 | 96.81 | 9,00,578.27 | 96.87 | 5,90,321.93 | 96.20 | 4,00,086.19 | 94.86 |
| Other income | 29,602.33 | 5.48 | 13,416.73 | 3.19 | 29,115.08 | 3.13 | 23,307.44 | 3.80 | 21,670.19 | 5.14 |
Total income |
5,40,514.36 | 100.00 | 4,20,345.73 | 100.00 | 9,29,693.35 | 100.00 | 6,13,629.37 | 100.00 | 4,21,756.38 | 100.00 |
Expenses |
||||||||||
| Employee benefits expense | 3,45,193.32 | 63.86 | 2,96,082.21 | 70.44 | 6,20,185.20 | 66.71 | 4,23,774.67 | 69.06 | 3,00,687.58 | 71.29 |
| Server hosting expense | 24,546.84 | 4.54 | 24,714.20 | 5.88 | 54,032.35 | 5.81 | 32,579.84 | 5.31 | 23,725.85 | 5.63 |
| Depreciation and amortisation expense | 6,407.38 | 1.19 | 2,956.05 | 0.70 | 5,825.60 | 0.63 | 4,530.72 | 0.74 | 2,853.01 | 0.68 |
| Finance cost | 673.38 | 0.12 | - | - | - | - | - | - | - | - |
| Other expenses | 78,927.50 | 14.60 | 72,612.50 | 17.27 | 1,61,052.04 | 17.32 | 83,567.24 | 13.62 | 40,532.11 | 9.61 |
Total expense |
4,55,748.42 | 84.31 | 3,96,364.96 | 94.29 | 8,41,095.19 | 90.47 | 5,44,452.47 | 88.73 | 3,67,798.55 | 87.21 |
Restated profit before tax |
84,765.94 | 15.69 | 23,980.77 | 5.71 | 88,598.16 | 9.53 | 69,176.90 | 11.27 | 53,957.83 | 12.79 |
| Current tax | 23,844.49 | 4.41 | 9,662.29 | 2.30 | 30,802.57 | 3.31 | 23,380.55 | 3.81 | 9,172.77 | 2.17 |
| Deferred tax | (2,401.94) | -0.44 | (2,762.93) | -0.66 | (6,968.85) | -0.75 | (14,306.97) | -2.33 | - | - |
Total tax expense |
21,442.55 | 3.97 | 6,899.36 | 1.64 | 23,833.72 | 2.56 | 9,073.58 | 1.48 | 9,172.77 | 2.17 |
Restated profit for the period/year |
63,323.39 | 11.72 | 17,081.41 | 4.07 | 64,764.44 | 6.97 | 60,103.32 | 9.79 | 44,785.06 | 10.62 |
Restated other comprehensive loss |
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| (a) Other comprehensive loss not to be | ||||||||||
| reclassified to profit or loss in subsequent | ||||||||||
| years | ||||||||||
| Re-measurement loss on defined benefit | (1,167.34) | -0.22 | (1,606.74) | -0.38 | (3,381.44) | -0.36 | (342.80) | -0.06 | (2,612.24) | -0.62 |
| plans | ||||||||||
| Income tax effect | 293.82 | 0.05 | 404.42 | 0.10 | 851.11 | 0.09 | 95.37 | 0.02 | 727.00 | 0.17 |
Restated other comprehensive loss for the |
(873.52) | -0.16 | (1,202.32) | -0.29 | (2,530.33) | -0.27 | (247.43) | -0.04 | (1,885.24) | -0.45 |
period/year, net of tax |
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Restated total comprehensive profit for |
62,449.87 | 11.55 | 15,879.09 | 3.79 | 62,234.11 | 6.70 | 59,855.89 | 9.75 | 42,899.82 | 10.17 |
the period/year, net of tax |
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Principal Components of our Statement of Profit and Loss
Income
Our income includes the following:
1. Revenue from contract with customers: Our revenue from contract with customers includes income from Software as a Service (“SaaS”).
2. Other income: Our other income primarily comprises of (i) interest income on bank deposits and income tax refund; (ii) net gain on sale of current investments; (iii) profit on sale of property, plant and equipment; and (iv) other non-operating income.
3. Interest income on bank deposits and income tax refund: Interest income on bank deposits includes the interest earned on fixed deposits during the respective periods and income tax refund includes the interest on the refund of income tax paid during the respective periods;
4. Net gain on sale of current investments: Gain on sale of current investments includes income from sales of investments, such as mutual funds, during the respective periods;
5. Profit on sale of property, plant and equipment: Profit on sale of property, plant and equipment includes sales proceeds in excess to the written down value of property, plant and equipment; and
6. Other non-operating income: Other non-operating income includes income from other miscellaneous income.
Expenses
Our expenses include the following:
1. Employee benefits expense: Employee benefits expense includes salary, wages and bonus, contribution to provident and other funds, gratuity expense, share-based payment expense, staff welfare, recruitment and training expenses;
2. Depreciation and amortisation expense: Depreciation and amortisation expense includes depreciation of tangible assets and amortisation of intangible assets;
3. Server hosting expense: This includes server hosting expense;
4. Other expenses: Our other expenses include
(i) Insurance expense;
(ii) Advertisement and publicity expense; (iii) Software services; (iv) Bank charges; (v) Consultancy charges; (vi) Customer collection charges; (vii) Brokerage and commission charges; (viii) Exchange differences (net); (ix) Provision for doubtful debts and advances; (x) Communication charges; (xi) Legal and professional charges; (xii) Payment to auditor; (xiii) CSR activity expenses; (xiv) Rates and taxes; (xv) Rent; (xvi) Repair and maintenance; (xvii) Travelling and conveyance expenses; and (xviii) Miscellaneous expenses
Six months ended September 30, 2023 compared to six months ended September 30, 2022
Income
The table below sets forth details in relation to our income for the six months ended September 30, 2023 and September 30, 2022:
Six-months ended |
Percentage Difference | ||
| September 30, 2023 Amount (in thousand) | September 30, 2022 Amount (in thousand) | (%) | |
Income |
|||
| Revenue from contract with customers | 5,10,912.03 | 4,06,929.00 | 25.55 |
| Other Income | 29,602.33 | 13,416.73 | 120.64 |
Total income |
5,40,514.36 | 4,20,345.73 | 28.59 |
Our total income increased by 1,20,168.63 thousand, or 28.59% to 5,40,514.36 thousand for the six months ended September 30, 2023 from 4,20,345.73 thousand for the six months ended September 30, 2022. This increase has been explained in further detail below.
Revenue from contract with customers
Our income from revenue from contract with customers increased by 1,03,983.03 thousand, or 25.55% to 5,10,912.03 thousand for the six months ended September 30, 2023 from 4,06,929.00 thousand for the six months ended September 30, 2022. This increase was primarily due to an increase in the number of our enterprise customers, coupled with an increase in the number of items that we processed by 92.46 million or 36.02% to 349.14 million during the six months ended September 30, 2023 from 256.68 million during the six month ended September 30, 2022.
Other Income
Our other income increased by 16,185.60 thousand, or 120.64% to 29,602.33 thousand for the six months ended September 30, 2023 from 13,416.73 thousand for the six months ended September 30, 2022. This increase was primarily due to the interest income on loan to Holding company, an increase in our interest income on bank deposit, and other non-operating income including net gain on sale of current investments due to higher cash and cash equivalent balance as compared to the previous period and higher interest rates as compared to the previous period, unwinding of discount on financial assets at amortised cost, and profit on sale of property, plant and equipment. For further information on interest income on loan to
Holding company, see “Significant Developments after September 30, 2023 that may affect our future results of operations” on page 277 of this Draft Red Herring Prospectus.
Expenses
The table below sets forth details in relation to our expenses for the six months ended September 30, 2023 and September 30, 2022:
Six-months ended |
Percentage Difference | ||
| September 30, 2023 (Amount in thousand) | September 30, 2022 (Amount in thousand) | (%) | |
Expenses |
|||
| Employee benefits expense | 3,45,193.32 | 2,96,082.21 | 16.59 |
| Server hosting expense | 24,546.84 | 24,714.20 | -0.68 |
| Depreciation and amortisation expense | 6,407.38 | 2,956.05 | 116.75 |
| Finance cost | 673.38 | - | - |
| Other expenses | 78,927.50 | 72,612.50 | 8.70 |
Total expense |
4,55,748.42 | 3,96,364.96 | 14.98 |
Our total expense increased by 59,383.46 thousand, or 14.98%, to 4,55,748.42 thousand for the six months ended September 30, 2023 from 3,96,364.96 thousand for the six months ended September 30, 2022. This increase has been explained in further detail below.
Employee benefits expense
Our employee benefits expense increased by 49,111.11 thousand, or 16.59%, to 3,45,193.32 thousand for the six months ended September 30, 2023 from 2,96,082.21 thousand for the six months ended September 30, 2022, primarily due to an increase in salary, wages and bonus, contribution to provident and other funds, share-based payment expense and gratuity expense. Our employee benefits expense as a percentage of revenue from contract with customers has reduced to 67.56% for the six months ended September 30, 2023 from 72.76% for the six months ended September 30, 2022. We had 319 full-time employees as of September 30, 2023, down from 327 full-time employees as of September 30, 2022. This reflects our capability to drive higher revenue with corresponding limited growth in employee strength due to standardisation of various processes and building automation in operations. The absolute increase in our employee benefit expense primarily reflects our investments in human capital towards readjustment of salaries and appraisals as well as stock-option grants in line with the current industry standards, apart from investment in technology and engineering human capital to enhance our existing products with more features, develop and maintain more integrations with a special focus on newer international geographies for the growth of the business, and development of new products for the Company, including UniShip and UniReco.
Server hosting expense
Our server hosting expense decreased by 167.36 thousand, or 0.68%, to 24,546.84 thousand for the six months ended September 30, 2023 from 24,714.20 thousand for the six months ended September 30, 2022, primarily due to optimisation of technology infrastructure leading to lower usage of resources while enabling the platform to service higher volumes of transactions. We witnessed an increase in the number of items processed by our clients through our platform from 256.68 million during the six months ended September 30, 2022 to 349.14 million during the six months ended September 30, 2023, which amounts to a growth of 36.02%. These optimisations helped us reduce the server hosting expense as a percentage of revenue from contract with customers to 4.80% for the six months ended September 30, 2023 from 6.07% for the six months ended September 30, 2022.
Depreciation and amortisation expense
Our depreciation and amortisation expense increased by 3,451.33 thousand, or 116.75%, to 6,407.38 thousand for the six months ended September 30, 2023 from 2,956.05 thousand for the six months ended September 30, 2022, primarily due to extension of rental lease for our office location to a period of more than 12 months.
Other expenses
Our other expenses increased by 6,315.00 thousand, or 8.70%, to 78,927.50 thousand for the six months ended September 30, 2023 from 72,612.50 thousand for the six months ended September 30, 2022, primarily due to an increase in software services by 6,096.02 thousand or 114.18%, consultancy charges by 2,389.30 thousand or 57.35%, customer collection charges by 319.60 thousand or 34.94%, legal and professional charges by 10,406.08 thousand or 277.64%, CSR activity expenses by 457.65 thousand or 156.54%, and travelling and conveyance expenses by 5,228.13 thousand or 106.21%. Some of these increase in expenses were offset by a decrease in other costs such as decrease in rent by 3,465.59 thousand or 39.96%, advertisement and publicity expense by 5,014.71 thousand or 21.50%, and miscellaneous expenses by 257.10 thousand or 49.44%. Furthermore, there has been a reversal in provision for doubtful debts and advances of 2,870.35 thousand during the six months ended September 30, 2023, as against a creation of provision for doubtful debts and advances of 5,555.39 thousand during the six months ended September 30, 2022, thereby partially offsetting the increase in expenses. We have optimised our advertisement and publicity expense to 3.58% of the revenue from contract with customers for the six months ended September 30, 2023 from that of 5.73% of the revenue from contract with customers for the six months ended September 30, 2022.
Restated total comprehensive profit for the period/year, net of tax
Due to the foregoing reasons, our restated total comprehensive profit, net of tax increased by 46,570.78 thousand, or 293.28%, to 62,449.87 thousand for the six months ended September 30, 2023 from 15,879.09 thousand for the six months ended
September 30, 2022.
Fiscal 2023 compared to Fiscal 2022
Income
The table below sets forth details in relation to our income for Fiscal 2023 and Fiscal 2022:
Financial year ended |
Percentage Difference | ||
| March 31, 2023 Amount (in thousand) | March 31, 2022 Amount (in thousand) | (%) | |
Income |
|||
| Revenue from contract with customers | 9,00,578.27 | 5,90,321.93 | 52.56 |
| Other Income | 29,115.08 | 23,307.44 | 24.92 |
Total income |
9,29,693.35 | 6,13,629.37 | 51.51 |
Our total income increased by 3,16,063.98 thousand, or 51.51%, to 9,29,693.35 thousand for Fiscal 2023 from 6,13,629.37 thousand for Fiscal 2022. This increase has been explained in further detail below.
Revenue from contract with customers
Our income from revenue from contract with customers increased by 3,10,256.34 thousand, or 52.56%, to 9,00,578.27 thousand for Fiscal 2023 from 5,90,321.93 thousand for Fiscal 2022. This increase was primarily due to an increase in the number of our enterprise customers and the increase in the number of items processed on our platform by 155.44 million, or 37.89%, to 565.69 million during Fiscal 2023 from 410.25 million during Fiscal 2022.
Other Income
Our other income increased by 5,807.64 thousand, or 24.92%, to 29,115.08 thousand for Fiscal 2023 from 23,307.44 thousand for Fiscal 2022. This increase was primarily due to the interest income on loan to Holding company and increase in income tax refund in Fiscal 2023. For further information on interest income on loan to Holding company, see “Significant Developments after September 30, 2023 that may affect our future results of operations” on page 277 of this Draft Red Herring Prospectus.
Expenses
The table below sets forth details in relation to our expenses for Fiscal 2023 and Fiscal 2022:
Financial year ended |
Percentage Difference | ||
| March 31, 2023 | March 31, 2022 | (%) | |
| Amount (in thousand) | Amount (in thousand) | ||
Expenses |
|||
| Employee benefits expense | 6,20,185.20 | 4,23,774.67 | 46.35 |
| Server hosting expense | 54,032.35 | 32,579.84 | 65.85 |
| Depreciation and amortisation expense | 5,825.60 | 4,530.72 | 28.58 |
| Other expenses | 1,61,052.04 | 83,567.24 | 92.72 |
Total expense |
8,41,095.19 | 5,44,452.47 | 54.48 |
Our total expense increased by 2,96,642.72 thousand, or 54.48%, to 8,41,095.19 thousand for Fiscal 2023 from 5,44,452.47 thousand for Fiscal 2022. This increase has been explained in further detail below.
Employee benefits expense
Our employee benefits expense increased by 1,96,410.54 thousand, or 46.35%, to 6,20,185.20 thousand for Fiscal 2023 from 4,23,774.67 thousand for Fiscal 2022, primarily due to increases in salary, wages and bonus, contribution to provident and other funds, gratuity expense, and costs associated with our share-based payment expense. Our employee benefits expense as a percentage of revenue from contract with customers decreased marginally to 68.87% for Fiscal 2023 from 71.79% for Fiscal 2022. The absolute increase in our employee benefits expense was in line with the increase in our employee headcount from 267 as of March 31, 2022 to 330 in March 31, 2023, corresponding primarily to: (i) readjustment of salaries and appraisals in line with the industry standards; (ii) investment in sales and operations human capital in select functions, including account management, customer success and customer support to service the needs of our growing client base, which witnessed a growth in enterprise clients; and (iii) investment in technology and engineering human capital to enhance our existing products with more features as per client needs, development and maintenance of more integrations with a special focus on newer international geographies for the growth of the business and increased deployment of human capital for development and launch of new products, including UniShip and UniReco.
Server hosting expense
Our server hosting expense increased by 21,452.51 thousand, or 65.85%, to 54,032.35 thousand for Fiscal 2023 from 32,579.84 thousand for Fiscal 2022, primarily due to an increase in the use of our platform and increase in items processed during this period. In addition to the usage, we also made enhancements to the platform, made investments in better client support and worked on new product development this year which led to an increase in server hosting expenses. We witnessed an increase in the number of items processed on our platform by 155.44 million or 37.89% to 565.69 million during Fiscal 2023 from 410.25 million during Fiscal 2022. Our server hosting expense as a percentage of our revenue from contract with customers continued to be in line with the expenditure incurred during the previous financial year, whereby it witnessed a marginal increase to 6.00% in Fiscal 2023 from 5.52% in Fiscal 2022.
Depreciation and amortisation expense
Our depreciation and amortisation expense increased by 1,294.88 thousand, or 28.58%, to 5,825.60 thousand for Fiscal 2023 from 4,530.72 thousand for Fiscal 2022, primarily due to addition of computers and data processing units of 4,977.99 thousand during this period.
Other expenses
Our other expenses increased by 77,484.80 thousand, or 92.72%, to 1,61,052.04 thousand for Fiscal 2023 from 83,567.24 thousand for Fiscal 2022, primarily due to an increase in insurance expense by 2,983.49 thousand or 39.76%, advertisement and publicity expense by 13,308.84 thousand or 51.08%, software services by 2,831.32 thousand or 30.15%, consultancy charges by 6,394.49 thousand or 272.41%, brokerage and commission charges by 3,053.81 thousand or 24.79%, provisions for doubtful debts and advances by 16,134.10 thousand or 163.05%, legal and professional charges by 4,484.12 thousand or 92.69%, rent by 14,702.67 thousand or 529.25%, and travelling and conveyance expenses by 12,570.91 thousand or
1134.51%. During Fiscal 2023, the advertisement and publicity expenses increased as compared to the previous year due to an increase in marketing activities, including large-scale events being organised in physical form such as Marketplace Conclave,
Saral, and other international events. During the said period, the frequency of physical travel also increased compared to the previous period as the impact of COVID-19 subsided.
Restated total comprehensive profit for the period/year, net of tax
Due to the foregoing reasons, our restated total comprehensive profit, net of tax increased by 2,378.22 thousand, or 3.97% to 62,234.11 thousand for Fiscal 2023 from 59,855.89 thousand for Fiscal 2022.
Fiscal 2022 compared to Fiscal 2021
Income
The table below sets forth details in relation to our income for Fiscal 2022 and Fiscal 2021:
Financial year ended |
Percentage Difference | ||
| March 31, 2022 Amount (in thousand) | March 31, 2021 Amount (in thousand) | (%) | |
Income |
|||
| Revenue from contract with customers | 5,90,321.93 | 4,00,086.19 | 47.55 |
| Other Income | 23,307.44 | 21,670.19 | 7.56 |
Total income |
6,13,629.37 | 4,21,756.38 | 45.49 |
Our total income increased by 1,91,872.99 thousand, or 45.49%, to 6,13,629.37 thousand for Fiscal 2022 from 4,21,756.38 thousand for Fiscal 2021. This increase has been explained in further detail below.
Revenue from contract with customers
Our income from revenue from contract with customers increased by 1,90,235.74 thousand, or 47.55%, to 5,90,321.93 thousand for Fiscal 2022 from 4,00,086.19 thousand for Fiscal 2021. Despite the worldwide spread of COVID-19, the increase in our revenue from contract with customers was primarily due to an increase in the number of our enterprise customers, coupled with an increase in the number items processed on our platform by 192.82 million or 88.68% to 410.25 million during Fiscal 2022 from 217.44 million during Fiscal 2021.
Other Income
Our other income increased by 1,637.25 thousand, or 7.56%, to 23,307.44 thousand for Fiscal 2022 from 21,670.19 thousand for Fiscal 2021. This increase was primarily due to an increase in our interest income on bank deposit and an increase in our other non-operating income. The aforementioned increase was offset by a lower amount of interest income being accrued on income tax refund in Fiscal 2022 as compared to Fiscal 2021.
Expenses
The table below sets forth details in relation to our expenses for Fiscal 2022 and Fiscal 2021:
Financial year ended |
Percentage Difference | ||
| March 31, 2022 Amount (in thousand) | March 31, 2021 Amount (in thousand) | (%) | |
Expenses |
|||
| Employee benefits expense | 4,23,774.67 | 3,00,687.58 | 40.94 |
| Server hosting expense | 32,579.84 | 23,725.85 | 37.32 |
| Depreciation and amortisation expense | 4,530.72 | 2,853.01 | 58.80 |
| Other expenses | 83,567.24 | 40,532.11 | 106.18 |
Total expense |
5,44,452.47 | 3,67,798.55 | 48.03 |
Our total expense increased by 1,76,653.92 thousand, or 48.03%, to 5,44,452.47 thousand for Fiscal 2022 from 3,67,798.55 thousand for Fiscal 2021. This increase has been explained in further detail below.
Employee benefits expense
Our employee benefits expense increased by 1,23,087.09 thousand, or 40.94%, to 4,23,774.67 thousand for Fiscal 2022 from 3,00,687.58 thousand for Fiscal 2021, primarily due to an increase in salary, wages and bonus, contribution to provident and other funds and gratuity expense during this period. Our employee benefit expense as a percentage of revenue from contract with customers decreased marginally to 71.79% for Fiscal 2022 from 75.16% for Fiscal 2021. The absolute increase in our employee benefits expense was in line with the increase in our employee headcount during this period from 191 as of March 31, 2021 to 267 as of March 31, 2022, corresponding primarily to: (i) readjustment of salaries and appraisals in line with the industry standards; (ii) investment in sales and operations human capital in select functions, including account management, customer success and customer support to service the needs of our growing client base; and (iii) investment in technology and engineering human capital to enhance our existing products with more features as per client needs and increased deployment of human capital for development and launch of new products, including UniShip and UniReco.
Server hosting expense
Our server hosting expense increased by 8,853.99 thousand, or 37.32%, to 32,579.84 thousand for Fiscal 2022 from 23,725.85 thousand for Fiscal 2021, primarily due to an increase in the use of our platform and increase in items processed during this period. In addition to the usage, we also made enhancements to the platform and continued to launch new features for our clients. We witnessed an increase in the number of items processed on our platform by 192.82 million or 88.68% to 410.25 million during Fiscal 2022 from 217.44 during Fiscal 2021.
Depreciation and amortisation expense
Our depreciation and amortisation expense increased by 1,677.71 thousand, or 58.80%, to 4,530.72 thousand for Fiscal 2022 from 2,853.01 thousand for Fiscal 2021, primarily due to an increase in depreciation of tangible assets which was partially offset by a decrease in amortisation of intangible assets due to addition in computers and data processing units during this period.
Other expenses
Our other expenses increased by 43,035.12 thousand, or 106.18%, to 83,567.24 thousand for Fiscal 2022 from 40,532.11 thousand for Fiscal 2021, primarily due to an increase in advertisement and publicity expense by 18,823.22 thousand, or 260.25% and brokerage and commission charges by 10,587.93 thousand, or 611.15% and travelling and conveyance expenses by 1,049.93 thousand, or 1806.80% as we increased focused on advertising our SaaS products through various means, including events as well as digital advertising, and experimented with channel partners to drive new client acquisition to capitalise on the post-covid opportunity as markets opened up and eCommerce received a boost, leading to new potential clients entering the market. In addition, there was an increase in our insurance expense by 4,163.86 thousand, or 124.64%, software services by 1,429.54 thousand, or 17.96%, consultancy charges by 1,987.38 thousand, or 552.05%, legal and professional charges by 2,019.28 thousand, or 71.65%, and rates and taxes by 1,223.11 thousand, or 39,582.85%. Our provision for doubtful debts and advances increased by 8,317.36, or 527.08%. These increase in expenses were partially offset by the decrease in rent by 4,464.45 thousand, or 61.64% and bad debts/ advances written off by 3,862.56 thousand or 100.00%.
Restated total comprehensive profit for the period/year, net of tax
Due to the foregoing reasons, our restated total comprehensive profit, net of tax increased by 16,956.07 thousand, or 39.52% to 59,855.89 thousand for Fiscal 2022 from 42,899.82 thousand for Fiscal 2021.
Liquidity and Capital Resources
Historically, our primary liquidity and capital requirements have been to finance the growth of our platform organically through investments in our service offerings, technology, infrastructure and team, and inorganically, through partnerships. We have met these requirements through cash flows from operations. As of September 30, 2023, we had 15,236.39 thousand in cash and cash equivalent and 1,24,797.54 thousand in trade receivables.
We believe that after taking into account the expected cash to be generated from operations and the proceeds from the Offer, we will have sufficient liquidity for our present requirements and anticipated requirements for capital expenditure and working capital for at least the next 12 months.
We typically pay our vendors within 60 days from the date we are invoiced. Our technology is built in house with support from open source technologies. Therefore, access to lower cost capital enables us to support our operations in the form of favourable working capital terms which results in stronger and stickier relationships with our clients, resulting in higher business volumes and facilitates our growth and enables us to continue to be asset light. Access to low-cost capital also positions us well for scaling and launching additional product offerings and increase our operational efficiency.
Cash Flows
The table below sets forth details in relation to selected information from our summary of cash flows for the period ended September 30, 2023 and September 30, 2022 and Fiscals 2023, 2022 and 2021:
Six months period ended |
Financial year ended |
||||
| September 30, 2023 Amount (in thousand) | September 30, 2022 Amount (in thousand) | March 31, 2023 Amount (in thousand) | March 31, 2022 Amount (in thousand) | March 31, 2021 Amount (in thousand) | |
| Net cash flow from/(used in) operating activities | (13,047.80) | (18,856.93) | 1,45,777.48 | 78,226.19 | 1,00,521.14 |
| Net cash from/(used in) investing activities | (2,35,213.18) | 10,899.17 | 1,03,406.06 | (1,37,834.09) | (33,403.71) |
| Net cash used in financing activities | (4,050.00) | - | - | - | - |
| Net increase/(decrease) in cash and cash equivalents | (2,52,310.98) | (7,957.76) | 2,49,183.54 | (59,607.90) | 67,117.43 |
| Cash and cash equivalents at the beginning of the | 2,67,547.37 | 18,363.83 | 18,363.83 | 77,971.73 | 10,854.30 |
| period/year | |||||
| Cash and cash equivalents at the end of the | 15,236.39 | 10,406.07 | 2,67,547.37 | 18,363.83 | 77,971.73 |
| period/year | |||||
Cash flows from operating activities
Six Months ended September 30, 2023
Net cash used in operating activities for the six months ended September 30, 2023 was 13,047.80 thousand. We had a restated profit before tax of 84,765.94 thousand, and our operating profits before working capital changes amounted to 79,605.03 thousand, which was primarily attributable to depreciation and amortisation expense of property, plant and equipment of
2,834.82 thousand, depreciation of right of use of assets of 3,572.56 thousand, Interest charges on lease liability of 673.38 thousand and share-based payment expense of 20,216.32 thousand, which was partially offset by reduction in provision for doubtful debts and advances of 2,870.35 thousand, Profit on sale of Property, plant and equipment of 72.38 thousand, Unwinding of discount on financial assets at amortised cost 88.93 thousand, interest income on bank deposits of 13,288.86 thousand, interest income on loan to Holding company of 15,427.70 thousand, and net gain on sale of mutual fund investment of 709.77 thousand. Our working capital adjustments primarily consisted of a decrease in trade payables and other payables of 9,283.04 thousand, decrease in other liabilities of 59,134.30 thousand, increase in trade receivables of 3,423.46 thousand, and increase in other assets of 6,284.66 thousand, which were partially offset by an increase in provisions of 10,567.99 thousand.
Six Months ended September 30, 2022
Net cash used in operating activities for the six months ended September 30, 2022 was 18,856.93 thousand. We had a restated profit before tax of 23,980.77 thousand, and our operating profits before working capital changes amounted to 31,099.00 thousand, which was primarily attributable to depreciation and amortisation expense of property, plant and equipment of
2,956.05 thousand, provision for doubtful debts and advances of 5,555.39 thousand and share-based payment expense of 10,817.61 thousand, which was partially offset by interest income on bank deposits of 12,210.82 thousand. Our working capital adjustments primarily consisted of a decrease in trade payables and other payables of 8,113.19 thousand, increase in trade receivables of 54,098.30 thousand, and increase in other assets of 9,330.17 thousand, which were partially offset by an increase in other liabilities of 17,444.28 thousand, and increase in provisions of 8,933.98 thousand.
Fiscal 2023
Net cash flow from operating activities for Fiscal 2023 was 1,45,777.48 thousand. We had a restated profit before tax of 88,598.16 thousand, and our operating profits before working capital changes amounted to 1,35,199.40 thousand, which was primarily attributable to depreciation and amortisation expense of property, plant and equipment of 5,825.60 thousand, provision for doubtful debts and advances of 26,029.46 thousand, share-based payment expense of 42,986.22 thousand, which was partially offset by interest income on income tax refund of 1,615.57 thousand, interest income on bank deposits of 22,122.89 thousand, interest income on loan to Holding company of 4,325.72 thousand, and net gain on sale of mutual fund investments of 175.86 thousand. Our working capital adjustments primarily consisted of an increase in trade payables and other payables of 18,113.01 thousand, and an increase in provisions of 16,353.51 thousand, which were partially offset by an increase in other liabilities of 84,831.96 thousand, an increase in trade receivables of 55,334.86 thousand and an increase in other assets of 18,075.12 thousand.
Fiscal 2022
Net cash flow from operating activities for Fiscal 2022 was 78,226.19 thousand. We had a restated profit before tax of 69,176.90 thousand, and our operating profits before working capital changes amounted to 82,692.76 thousand, which was primarily attributable to depreciation and amortisation expense of property, plant and equipment of 4,530.72 thousand, provision for doubtful debts and advances of 9,895.36 thousand and share-based payment expense of 21,212.98 thousand, which was partially offset by interest income on bank deposits of 22,123.20 thousand. Our working capital adjustments primarily consisted of an increase in trade payables and other payables of 29,784.92 thousand, increase in provisions of 7,220.27 thousand, increase in other liabilities of 13,084.10 thousand, and decrease in trade receivables of 17,135.65 thousand, which were partially offset by an increase in other assets of 23,562.32 thousand.
Fiscal 2021
Net cash flow from operating activities for the Fiscal 2021 was 1,00,521.14 thousand. We had a restated profit before tax of 53,957.83 thousand, and our operating profits before working capital changes amounted to 68,852.17 thousand, which was primarily attributable to depreciation and amortisation expense of property, plant and equipment of 2,853.01 thousand, provision for doubtful debts and advances of 1,578.00 thousand, bad debts/ advances written off of 3,862.56 thousand, and share-based payment expense of 22,140.78 thousand, which was partially offset by profit on sale of property, plant and equipment of 79.30 thousand, net gain on sale of mutual fund investment of 209.05 thousand and interest income on bank deposits of 15,251.66 thousand. Our working capital adjustments primarily consisted of an increase in trade payables and other payables of 6,072.41 thousand, increase in provisions of 26,186.22 thousand, and increase in other liabilities of 23,444.55 thousand, which were partially offset by an increase in trade receivables of 43,857.21 thousand and an increase in other assets of 15,019.41 thousand.
Cash flows used in/from investing activities
Six Months ended September 30, 2023
Our net cash used in investing activities for the six months ended September 30, 2023 was 2,35,213.18 thousand, which primarily comprised of loan to Holding company of 3,75,000.00 thousand, investment in property, plant and equipment of 918.90 thousand, purchase of mutual fund 2,35,000.00 thousand, and investment in bank deposits of 5,86,644.57 thousand, partially offset by redemption/maturity of bank deposits of 6,34,365.09 thousand, redemption of mutual fund of 2,95,882.63 thousand, interest received on bank deposits of 28,137.04 thousand, proceeds from sale of property, plant and equipment of 72.38 thousand and interest received on loan from related party of 3,893.15 thousand.
Six Months ended September 30, 2022
Our net cash flow from investing activities for the six months ended September 30, 2022 was 10,899.17 thousand, which primarily comprised of redemption/maturity of bank deposits of 83,500.00 thousand and interest received on bank deposits of 3,088.26 thousand, partially offset by investment in property, plant and equipment of 3,689.09 thousand, and investment in bank deposits of 72,000.00 thousand.
Fiscal 2023
Our net cash flow from investing activities for Fiscal 2023 was 1,03,406.06 thousand, which primarily comprised of redemption/maturity of bank deposits of 3,37,550.49 thousand, repayment from related party of 2,50,000.00 thousand, and interest received on bank deposits of 14,751.88 thousand, partially offset by loan to Holding company of 2,50,000.00 thousand, investment in property, plant and equipment of 5,027.32 thousand, investment in bank deposits of 1,83,871.99 thousand, and purchase of mutual fund of 59,997.00 thousand.
Fiscal 2022
Our net cash used in investing activities for Fiscal 2022 was 1,37,834.09 thousand, which primarily comprised of investments in property, plant and equipment of 8,478.93 thousand and investment in bank depositsof 5,54,653.68 thousand, partially offset by redemption/maturity of bank deposits of 4,02,700.00 thousand, and interest received on bank deposits of 22,598.52 thousand.
Fiscal 2021
Our net cash used in investing activities for Fiscal 2021 was 33,403.71 thousand, which primarily comprised of investments in property, plant and equipment of 3,264.56 thousand and investment in bank deposits of 1,98,100.81 thousand, partially offset by proceeds from sale of property, plant and equipment of 79.30 thousand, redemption/maturity of bank deposits of 1,18,050.41 thousand, redemption of mutual fund of 40,727.65 thousand, and interest received on bank deposits of 9,104.30 thousand.
Cash flows used in/from financing activities
Six Months ended September 30, 2023
Our net cash used in financing activities for the six months ended September 30, 2023 was 4,050.00 thousand, which comprised of interest and payment of lease liabilities.
Six Months ended September 30, 2022, Fiscal 2023, Fiscal 2022, and Fiscal 2021
Our Company did not have any cash flow from or used in financing activities for the six-months period ended September 30, 2022, and the Fiscals 2023, 2022 and 2021.
Financial Indebtedness
As of September 30, 2023, our Company does not have any outstanding or sanctioned funds-based facilities.
Contractual Obligations
The table below summarises the maturity profile of the Company financial liabilities based on contractual undiscounted payments as of September 30, 2023.
(in thousand)
| On demand | Less than 1 year | 1-3 years | More than 5 years | Total | |
| Lease liabilities | Nil | 12,780.07 | 33,175.00 | Nil | 45,955.07 |
| Trade and other payables | Nil | 82,043.13 | Nil | Nil | 82,043.13 |
Total |
Nil | 94,823.20 | 33,175.00 | Nil | 1,27,998.20 |
Our Company did not have any contingent liabilities as per Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets, as of September 30, 2023 and September 30, 2022, March 31, 2023, March 31, 2022, and March 31, 2021.
Capital Expenditures
Our historical capital expenditures were, and we expect our future capital expenditures to be, primarily used for leasehold improvements, computer systems, furniture and fixtures and plant and equipment. In Fiscals 2023, 2022 and 2021 and the six months ended September 30, 2023 and September 30, 2022, addition in property, plant and equipment was 5,027.32 thousand, 8,478.93 thousand, 3,264.56 thousand, 918.90 thousand and 3,689.09 thousand, respectively.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, derivative instruments or other relationships with other entities that would have been established for the purpose of facilitating off-balance sheet arrangements.
Related Party Transactions
We enter into various transactions with related parties. For further information, see “Summary of Offer Document Summary of related party transactions” on page 21 of this Draft Red Herring Prospectus.
Qualitative and Quantitative Disclosures about Financial Risk
Market risk
We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk comprises three types of risks (i) interest rate risk; (ii) foreign exchange risk; and (iii) price risk.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As majority of our financial assets and liabilities are either non-interest bearing or fixed interest-bearing instruments, our net exposure to interest risk is negligible. We do not have interest rate risks as there are no borrowings as on September 30, 2023, September 30, 2022, March 31, 2023, March 31, 2022 and March 31, 2021.
Foreign exchange risk
The Indian Rupee is our reporting currency. As a consequence, our results are presented in Indian Rupee and exposures are managed against Indian Rupee accordingly. Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Our exposure to the risk of changes in foreign exchange rates relates primarily to our operating activities where our revenue or expense is denominated in a foreign currency.
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. We are exposed to credit risk from our operating activities (primarily trade receivables) and from our financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. We only deal with parties that have good credit rating/worthiness given by external rating agencies or based on groups internal assessment.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds. Our exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. We maintain a balance between continuity of funding and flexibility.
Significant Economic Changes
Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations. See “- Significant Factors Affecting Our Results of Operations” on page 251.
Unusual or Infrequent Events of Transactions
Except as described in this Draft Red Herring Prospectus, there have been no other events or transactions that, to our knowledge, may be described as “unusual” or “infrequent”.
Known Trends or Uncertainties
Other than as described in “Risk Factors” and this “Managements Discussion and Analysis of Financial Condition and Results of Operations” on pages 26 and 245, respectively, to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on our revenue or income from continuing operations.
Future Relationship Between Cost and Income
Other than as described in the sections “Risk Factors”, “Our Business” and “Managements Discussion and Analysis of
Financial Condition and Results of Operations” on pages 26, 122 and 245 respectively, to our knowledge there are no known factors that might affect the future relationship between costs and revenue.
Seasonality
We experience seasonality in our business correlating to the seasonality patterns associated with e-commerce in India. For example, our customers generally hold special promotional campaigns during the festival and Diwali period in India from October to March every year. We typically observe peaks in transaction volumes immediately following these campaigns. Our other service offerings do not experience significant seasonality.
Recent Developments after September 30, 2023
Subsequent to the balance sheet date, there are no material adjusting/ non-adjusting subsequent events. The following are recent developments after September 30, 2023:
(i) The Shareholders of the Company, at their extraordinary general meeting held on October 27, 2023, approved:
a. Sub-division of 1 equity share of face value of 10 each fully paid up, into 1 Equity Share of face value of 1 each fully paid up, resulting to 10 Equity Shares of face value of 1 each fully paid up.
b. Issuance and allotment of bonus Equity Shares to its equity Shareholders in the ratio of 1:255 Equity Share of face value of 1 for every Equity Share of face value of 1, and authorised the Board of Directors to make appropriate adjustments with respect to such issue of bonus equity shares to the outstanding options granted to the employees of our Company under the ESOS 2019, and accordingly, all the outstanding options are adjusted subsequent to the reporting date.
(ii) Pursuant to (i) share purchase agreements dated December 19, 2023, our Holding company, AceVector Limited (formerly known as Snapdeal Limited) (“AceVector”) sold 1,14,64,384 Equity Shares (post considering impact of split of shares and issue of bonus shares) to Anchorage Capital Scheme I, Anchorage Capital Scheme II, Maduri Madhusudan Kela, Jagdish Jamnadas Moorjani, Vidhya Jagdish Moorjani, Mithun Hasmukh Soni, Rizwan Rahim. Koita, and Rajesh K Parikh, and (ii) share purchase agreements dated December 20, 2023, SB Investment Holdings (UK) Limited (“SIHL”) has sold 1,492 Series A CCPS held in our Company to Dilip Ramachandran Vellodi.
(Anchorage Capital Scheme I, Anchorage Capital Scheme II, Maduri Madhusudan Kela, Jagdish Jamnadas Moorjani, Vidhya Jagdish Moorjani, Mithun Hasmukh Soni, Rizwan Rahim Koita, Rajesh K Parikh and Dilip Ramachandran Vellodi are collectively referred to as the “Financial Investors”).
Pursuant to the Amended and Restated Shareholders Agreement dated December 20, 2023 (“SHA”), our Holding company, AceVector has agreed and acknowledged that SIHL will have the right to sell the Equity Shares and/or the Preference Shares, as applicable, held by it in our Company, to our Holding company, AceVector, at a pre-agreed valuation in case AceVector does not list its shares on the BSE or NSE or any internationally recognised stock exchange acceptable to SIHL (“Stock Exchanges”) by November 16, 2025.
Furthermore, pursuant to the SHA, our Holding company has agreed and acknowledged that the Financial Investors will have the right to sell the Equity Shares and/or the Preference Shares, as applicable, held by it in our Company, to our Holding company, AceVector at a pre-agreed valuation in case our Company does not list its Equity Shares on the Stock Exchanges by November 16, 2025.
(iii) Subsequent to the period ended September 30, 2023, the Holding company, AceVector has repaid the entire loan amount, including the principal and interest accrued thereon to our Company.
Significant Developments after September 30, 2023 that may affect our future results of operations
Except as stated above or elsewhere in this Draft Red Herring Prospectus, to our knowledge, no circumstances have arisen since the date of the Restated Financial Information as disclosed in this Draft Red Herring Prospectus which materially and adversely affect or are likely to affect our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next twelve months.
CAPITALISATION STATEMENT
The following table sets forth our Companys capitalization as at September 30, 2023, on the basis of amounts derived from our Restated Financial Information, and as adjusted for the Offer. This table should be read in conjunction with the sections titled “Risk Factors”, “Restated Financial Information” and “Managements Discussion and Analysis of Financial Condition and Results of Operations”, on pages 26, 187 and 245, respectively.
( in thousand, unless otherwise specified) |
||
Particulars |
Pre-Offer as at September | As adjusted for the |
| 30, 2023 | proposed Offer* | |
| Current borrowings (A) | Nil | [?] |
| Non-current borrowings (including current maturity) (B) | Nil | [?] |
Total borrowings (C=A+B) |
Nil | [?] |
| Equity share capital (D) | 228.10 | [?] |
| Instrument entirely equity in nature (E) | 1,659.70 | |
| Other equity (F) | 5,99,693.59 | [?] |
Total equity (G=D+E+F) |
6,01,581.39 | [?] |
| Ratio: Non-current borrowings / Total equity (B/G) | - | [?] |
Note: Our Company has pursuant to the Board resolution and Shareholders resolution, each dated October 27, 2023, sub-divided equity shares having face value of 10 each into 10 Equity Shares having face value of 1 each. Further, our Company has pursuant to the Board and Shareholders resolutions, both dated October 27, 2023 approved the issuance of 5,81,80,800 bonus Equity Shares at a ratio of 255 Equity Shares for one Equity Share held by our Shareholders. Basic EPS and Diluted EPS for period/ year and Net Asset Value (NAV) per equity share are considered post issue of bonus shares in accordance with Ind AS 33. Further, pursuant to the sub-division and the bonus issuance, appropriate adjustments to the conversion ratio of outstanding Preference Shares have been made and the conversion ratio accordingly stands adjusted to 2,560:1, i.e., 2,560 Equity Shares for every Preference Share held by such Preference Shareholder.
* The corresponding post Offer capitalisation date is not determinable at this stage pending the completion of the Book Building Process and hence have not been furnished. To be updated upon finalisation of the Offer Price.
FINANCIAL INDEBTEDNESS
Our Board is authorised to borrow such sums of money as may be required for the purpose of the business of the Company as prescribed under Applicable Laws. For details regarding the borrowing powers of our Board, please see “Our Management Borrowing Powers of the Board” on page 167.
As on the date of this Draft Red Herring Prospectus, our Company does not have any outstanding borrowings.
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