Vertexplus Technologies Ltd Management Discussions

Annexure-IV

The Management of the Company is pleased to present its report on the Industry Scenario including on the Companys performance during the financial year 2022-23.

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

Global Economic Outlook

The IT & BPM sector has become one of the most significant growth catalysts for the Indian economy, contributing significantly to the countrys GDP and public welfare. The IT industry is expected to contribute 10% to Indias GDP by 2025. While entering financial year 2023-24, the tech companies will have to grapple with potential economic slowdown by trimming costs, increasing efficiency and staying agile and innovative to build a strong competitive position. Access to funds will remain selective as capital tries to find resilient companies which will be able to grow profitability. The emerging economies, encouragingly, appear to be outperforming developed economies in terms of growth rates, with India proving to be particularly resilient.

Indian economy

The Indian economy continues to push forward steadily, growing at 6.8% in 2022, nearly double the 3.4% growth witnessed at a global level. Agencies worldwide have projected India as the fastest- growing major economy in the year 2022 and 2023. Moreover, the Indian governments emphasis on increasing the disposable income of taxpayers in the Union Budget of FY 2023-24 is likely to support discretionary spending, which in turn should drive consumption. Additionally, the governments strong push for capital expenditure, with an increased capex outlay of 37.4% compared to the fiscal year 2022-23, is anticipated to stimulate growth, investments, and job creation. Strong domestic demand and supportive government policies are likely to sustain Indias status as one of the worlds fastest-growing major economies.

Summary of our Business

We are an ISO 9001:2015 and ISO/IEC 27001:2013 certified Information Technology company engaged in consulting, outsourcing, infrastructure and digital solutions and services. We collaborate with companies to fulfil their ever-evolving Information Technology needs and support their business with our enabling solutions to strengthen their current capabilities and build pathways for sustainable growth. The company has experience across various industry sectors.

Our Company was originally incorporated on October 20, 2010 as "VertexPlus Technologies Private Limited" under the provisions of the Companies Act, 1956 with the Registrar of Companies, Rajasthan.

Subsequently our Company was converted into Public Limited Company and name of company was changed from "VertexPlus Technologies Private Limited" to "VertexPlus Technologies Limited" vide fresh certificate of incorporation dated July 25, 2022 issued by the Registrar of Companies, Jaipur.

Our Company operates from its Registered Office situated at B-19, Ground Floor, 10-B Scheme, Gopalpura Road Jaipur -302018, India and development facilities at Jaipur and Noida. VertexPlus endeavours to bring together creativity and knowledge with positive business strategy to furnish the requirements of diverse customers with an inclusive range of products and services which are comprehensive and cost effective so that the client can focus on their core-competencies to improve or expand their businesses. VertexPlus has worked for numerous industries, realized their true potential and scale to global recognition. We power up enterprises to think beyond the ordinary through an integrated, intelligent, technology stack that automates the processes and accelerates the operations. From small programming assignments, to an intensely complex project, or a niche solution, we are fully equipped to develop dynamic, integrated applications & systems that enable business to succeed, scale, expand along the measures they set for current and envision for ahead. We ensure quality and time delivery in the most cost-effective manner in order to determine the success of complex enterprise projects through five delivery models

• Off-shore Model

• On-site Model

• Hybrid Model

• Global Model

• Strategic Partnerships

Our Promoter Mr. Sandeep Kumar Pahariya who has been instrumental in the growth of our business and actively advise us on finance, corporate strategy and planning. We have a strong management team with significant industry experience. Our Chairman and Managing Director, Mr. Sandeep Kumar Pahariya has 24 years of experience in IT industry thus vast experience of the Promoter has been instrumental in determining the vision and growth strategies for our Company. We further believe that our market position has been achieved by adherence to the vision of our Promoters and senior management team and their experience of over a decade in the industry in which our Company operates.

For the period ended September 30, 2022, our Companys Total Consolidated Income and Restated

Consolidated Profit after Tax were Rs. 1091.71 Lakhs and Rs. 91.26 Lakhs respectively. For the year ended March 31, 2022, our Companys Total Consolidated Income and Restated Consolidated Profit after Tax were Rs. 2132.04 Lakhs and Rs. 186.05 Lakhs respectively. For the year ended March 31, 2021, our Companys Total Consolidated Income and Restated Consolidated Profit after Tax was Rs. 2025.61 Lakhs and Rs. 104.98 Lakhs, compared to our Companys Total Consolidated Income and Restated

Consolidated Profit after Tax of Rs. 1978.33 Lakhs and Rs. 61.23 Lakhs respectively, over previous year ended i.e. March 31, 2020. For the period ended September 30, 2022, our Companys Total Standalone

Income and Restated Standalone Profit after Tax were Rs. 1029.69 Lakhs and Rs. 101.98 Lakhs respectively. For the year ended March 31, 2022, our Companys Total Standalone Income and Restated

Standalone Profit after Tax were Rs.1984.96 Lakhs and Rs. 182.60 Lakhs respectively. For the year ended March 31, 2021, our Companys Total Standalone Income and Restated Standalone Profit after Tax was Rs. 1883.00 Lakhs and Rs. 115.30 Lakhs, compared to our Companys Total Standalone Income and Restated Standalone Profit after Tax of Rs. 1733.39 Lakhs and Rs. 90.01 Lakhs respectively, over previous year ended i.e., March 31, 2020.

2. OUR COMPETITIVE STRENGTHS

Global Delivery Network

We comprehend global industry practices & business trends as we are already serving our clients coming from India and all parts of the world. We are constantly adopting new technologies to further augment our global business expansion and client acquisition from all over the world.

Leveraging the experience of our Promoter

Our Promoter Mr. Sandeep Kumar Pahariya is having vast experience in field of IT solutions and services which has contributed significantly to the growth of our Company. Under the management, our business has grown over the years and we have become a well-known name in the industry. Our management team is familiar with our business and understands our customers needs and requirements. They are committed to the development of our business and will continue to spearhead our Companys business operations and future plans so as to ensure the continuing success of our Company.

Existing client relationship

Our Company has earned reputation based upon which we have been successful in retaining our reputed clients. We believe that we constantly try to address customer needs around services offered by us in field of consulting, outsourcing, infrastructure and digital solutions. Our existing customer relationship helps us to get repeat business from our customers. This has helped us maintain a long-term working relationship with our customers and improve our customer retention strategy. We believe that our relationship with the existing customers represents a competitive advantage in gaining new customers and increasing our business.

Diversified customer base and revenue sources

We serve a diverse mix of end markets across several industry sectors. In our business, we serve a number of customers with variety of services. Since we cater to a diverse customer base, we have historically been able to pass a significant portion of increases in operating costs such as infrastructure cost, and other operating expenses through review.

Increasing the efficiency and knowledge of Employees

Our Company believes not only keeping up with latest technology developments and quick adoption of the same but also in investing in right set of people at various levels. We focus on providing latest infrastructure, technology and facilities to enable our employees to train further and obtain new skill sets. Presently our Company is floated by a group of professionals having interest in IT enabled services, digital media, technology consulting, providing business solutions etc. We also encourage & organize in-house technology discussion & knowledge sharing sessions to innovate new modes of development & incorporate new technologies to enhance our solution capability.

3. OUR BUSINESS STRATEGY

Expand our Current Business Relationships

Our goal is to build long-term sustainable business relationships with our customers to generate increasing revenues. We plan to continue to expand the scope and range of current services provided to our existing customers by continuing to build our expertise and extending our capabilities. Leveraging our market skills and relationships is a continuous process in our organization and the skills that we impart in our people give excellence to customers. We aim to do this by leveraging our marketing skills and relationships and further enhancing customer base. Our ability to maintain and improve the services we offer to customers enables us to generate stable revenue and minimize customer complaints. We now focus on upgrading the experience of customer to one of much greater engagement and satisfaction.

Optimal Utilization of Resources

Our Company constantly endeavors to improve service process, and will increase service activities to optimize the utilization of resources. We have invested significant resources, and intend to further invest in our activities to develop customized systems and processes to ensure effective management control. We regularly analyze our existing policies for providing our services and products which enables us to identify the bottlenecks and correct the same. This helps us in improving efficiency and putting resources to optimal use. We also intend to continue to build on our inclusive culture to ensure our employees remain engaged and committed to delivering exceptional service.

Enhance operational controls to ensure timely completion of Service

We continue to focus on enhancing operational controls and cost efficiencies through optimal service quality & cost management. Our ability to provide timely completion of service and quality service is key to our reputation and further expansion of our business. We also continue to implement various measures aimed at incremental improvement in operational efficiencies, such as deploying more professionals for providing services. We also continue to adopt industry best practices and training for our employees to provide best services to our customers.

To Build-Up a Professional Organization

We believe in transparency, commitment and coordination in our work, with our suppliers, customers, government authorities, banks etc. We have a blend of the experience and the sufficient staff for taking care of our day-to-day operations. We also consult with external agencies on a case-to-case basis on technical and financial aspects of our business. We will consistently put efforts among our group of experienced employees to transform them into an outstanding team of empowered professionals which will help in further accelerating the wheels of development of the Organization.

4. OPPORTUNITIES AND THREATS

OPPORTUNITIES

- Huge Growth Potential in our service segment

- Possibility of providing associated Services along with main service offering.

THREATS

- Increased Competition from Local & Big Players - Rapid change in technologies - Change in Government Policies

5. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

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

6. BUSINESS OUTLOOK

The Company believes that customers will continue to spend on IT, looking for better value from their IT spend and a deeper relationship with service providers. VertexPlus has built lasting relationships with clients and continues to build capabilities in high potential domains. On the margin front, while the Company is making investments for long term growth, some of which has already happened, it is also taking measures to improve profitability during FY24. Over the long term, the Company should be able to deliver good performance as its strategic initiatives begin to yield results.

7. THREATS, RISK AND CONCERNS

The Company is concerned about financial position, entry of new players in the market, rising competition from new entrants, uncertain business environment, fluctuation in rupee, and likely increase in the cost of capital due to volatile market conditions.

Further, the state of business and policy environment in the country also has a cascading effect on the interest-rate regime, cost and availability of human resources.

8. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

For internal controls, VertexPlus has a well-established system that is appropriate for the size and scope of its business. These were created to offer a reasonable level of assurance regarding the recording and provision of accurate financial and operational data, compliance with applicable laws, protection of assets from unauthorised use, execution of transactions with the appropriate authorization, and adherence to corporate policies. The Company maintains an adequate system of Internal Controls including suitable monitoring procedures to ensure accurate and timely financial reporting of various transactions, efficiency of operations and compliance with statutory laws, regulations and Company policies. Suitable delegation of powers and guidelines for accounting have been issued for uniform compliance. In order to ensure that adequate checks and balances are in place and internal control systems are in order, regular and exhaustive Internal Audit of Office are conducted by the in-house Internal Audit Division and external professional audit firm. The Internal Audit covers all major areas of operations, including identified critical/risk areas, as per the Annual Internal Audit Programme. The Audit Committee of Directors periodically reviews the significant findings of different Audits, as prescribed in the Companies Act, 2013 and in the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

9. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Standalone Revenue from the operations of your Company for the year 2022-23 was Rs.2006.41 Lakhs against the revenue of Rs 1949.25 Lakhs in the previous year. Profit before Depreciation Interest & Tax for the current year was Rs. 346.15 Lakhs against Rs 336.49 Lakhs in the previous year. Profit after tax for the current year at Rs. 209.56 Lakhs. Detailed report on operations of and structure of Business of the Company has been included in Management Discussion and Analysis Report, which forms part of this Annual Report.

The consolidated revenue of the company from Operations is Rs. 2113.51 lacs as compared to Rs. 2086.02 lacs in the previous year and the consolidated profit of the company is Rs. 187.08 lacs as compared to Rs. 205.89lacs in the previous year.

10. HUMAN RESOURCES / INDUSTRIAL RELATIONS

Our Company believe that our employees are key contributors to our business success and its ability to maintain growth depends to a large extent on our strength in attracting, training, motivating and retaining employees. We focus on attracting and retaining the best possible talent. Our Company looks for specific skill-sets, interests and background that would be an asset for its kind of business.

As on March 31, 2023 our Company has 302 employees on payroll. The Breakup of Employees is as follows: -

Department	Employees
Management & Administration	46
Technology	212
Business Development	16
Support Staff	28

Our manpower is a prudent mix of the experienced and youth which gives us the dual advantage of stability and growth. Our work processes and skilled resources together with our strong management team have enabled us to successfully implement our growth plans.

11. ANALYSIS OF SIGNIFICANT CHANGES IN FINANCIAL RATIOS

As per the recent amendments to the SEBI Listing Obligations & Disclosure Requirements (LODR), we give below additional information in respect of financial parameters that are applicable to our company:

Detail of Significant changes (i.e. change of 25% of more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanation therefore as under:

Sr. No.	Particular	Numerator	March 31, 2023	March 31, 2022	Reason for Movements
(a)	Current Ratio	Denominator Current Assets Current Liabilities	2.54	1.93	Reason for increase in this ratio is due to increase in Current Investments (Short term FD).
(b)	Debt-Equity Ratio	Debt Equity Profit After Tax	0.29	0.36	Reason for Movement is not required as movement is not more than 25% The reason of decrease in this ratio is the IPO brought during the
(c)	Return on Equity Ratio	Average Shareholders Equity	13.65%	29.85%	year which generated the Securities Premium amount, thus increasing the Average Shareholders Equity.
(d)	Trade Receivables turnover ratio (in times	Net Credit Sales Average Trade Receivables	6.21	9.06	The reason of decrease is increase in Credit sales (Trade Receivable) during the year.
(e)	Net capital turnover ratio (in times)	Turnover Total Working Capital	1.72	10.55	The reason of decrease in this ratio is the IPO brought during the year which generated the several short-term FD, thus increasing the Net working capital.
(f)	Net profit ratio Return on	Profit After Tax Total Sales Operating Profit	10.44%	10.34%	Reason for Movement is not required as movement is not more than 25% The reason of decrease in this ratio is the IPO brought during the year which generated the
(g)	Capital employed	Total Capital Employed	15.08%	43.35%	Securities Premium amount, thus increasing the Average Shareholders Equity.
(h)	Return on investment.	Profit After Tax Initial Value of Investments Purchase of	27.00%	35.09%	Reason for Movement is not required as movement is not more than 25%
(i)	Trade Payable Turnover Ratio	Services & other Expenses Average Trade Payables	9.41	8.57	Reason for Movement is not required as movement is not more than 25%

12. ENVIRONMENT CARE, SOCIAL ACCOUNTABILITY AND QUALITY SYSTEM-

VertexPlus Technologies Limited is committed to maintaining the highest standards of social accountability & quality standards. Ensuring sound corporate governance is imperative to improve and retain investors trust

Cautionary Note

Certain statements in "Management Discussion and Analysis" section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Management envisages in terms of future performance and outlook.